GAO's Lifeline Report Highlights Importance of Ongoing Program Reforms but Fails to Demonstrate Systemic Fraud

WASHINGTON — On Thursday, the Government Accountability Office (GAO) released the results of its investigation into Lifeline, an FCC universal service program that provides a modest subsidy so that poor people can access telephone and internet services.

The GAO analyzed data from 2012 through 2014 to attempt to confirm participant eligibility, acknowledging that this time period coincided with implementation of the FCC’s 2012 and 2014 reforms to reduce waste, fraud and abuse, and prior to its 2016 reforms, which made internet services part of the subsidy program. The 2016 reforms also initiated efforts to make the program more efficient. The GAO was unable to confirm the eligibility of 30 percent of Lifeline users it examined. Notably, the GAO did not determine these individuals were ineligible, but was simply unable to verify whether providers had complied with eligibility guidelines. And the FCC strengthened these guidelines after the period of the GAO inquiry.

The GAO also conducted undercover investigations, submitting 21 Lifeline applications using false information and fabricated supporting documents. The GAO underscored that the tests were “for illustrative purposes to highlight any potential internal control vulnerabilities and are not generalizable.” According to the GAO, it procured service from 12 of the 19 Lifeline providers under false pretenses.

Free Press Deputy Director and Senior Counsel Jessica J. González made the following statement:

“Although the GAO was able to leverage its expertise to deceive certain Lifeline providers, by its own admission this effort doesn’t prove that this essential program is plagued by fraud. Nor does the GAO’s failure to confirm the eligibility of 30 percent of its sample prove that those subscribers are actually ineligible.

“Unfortunately, some staunch opponents of programs that help the poor will exploit this report to elevate their attacks on Lifeline and malign Lifeline users. These critics will continue to disdain the tremendous opportunities Lifeline has provided for millions of people — and the millions more whose lives we can improve with the Commission’s newly minted broadband Lifeline offerings.

“Comparatively speaking, Lifeline is an incredibly lean Universal Service Fund program. And the FCC’s 2016 reforms, most notably the National Verifier, are still in the process of being implemented. Everyone is against fraud in government programs and certainly the report illuminates a few kinks that the FCC has already endeavored to work out, but the time period for this investigation predates the 2016 reforms, making this analysis less relevant as we look to Lifeline’s future. We must put politics aside and devote ourselves to expedient implementation of the FCC’s 2016 Lifeline Modernization Order, and not use this report as a political opportunity to concoct untrue stories of waste, fraud and abuse at the expense of poor people, many of whom are people of color, who rely on Lifeline to meet their basic needs.”

On May 10, Free Press and its Voices for Internet Freedom partners co-hosted a community forum with FCC Commissioner Mignon Clyburn in Los Angeles’ Skid Row neighborhood. Dozens of Los Angeles locals spoke that night about the difficulties they face in connecting to telephone and internet services, and the transformative role that communications access can play in their lives.

Susan Price said when she was unhoused she learned that she could not find a homeless shelter without internet access.

Takouie Daglian said that without Lifeline she wouldn’t be able to afford telephone services, which she has used to access emergency medical assistance and other health-care services.

Melissa Baranic, a fifth-grade teacher, said many of her students don’t have home internet access because it’s too expensive, which puts them at a tremendous educational disadvantage. “Parents shouldn’t have to choose between internet access and food for their families,” Baranic said.

Lourdes Pablo said she needs the internet to connect to jobs and distant relatives, but can’t afford to pay the high fees.