Internet

The Federal Government Has Been Subsidizing Phone and Internet Access for Dead People

A bipartisan group of senators wants an investigation into the government's latest disastrous internet intervention.

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Skeleton working on laptop
Elnur/Dreamstime

Lifeline—a federal program that is supposed to subsidize telephone and broadband internet service for low-income Americans—has been handing out subsidies to millions of ineligible recipients, including thousands of dead people.

Now a bipartisan group of senators wants answers.

On Monday, the leadership of the Senate's Homeland Security and Government Affairs Committee sent a letter asking the Government Accountability Office (GAO) to hand over any specific findings of fraud they've found in the Lifeline program for "further investigation and possible enforcement action."

This request was prompted by a June GAO investigation of Lifeline, which is funded by the Federal Communications Commission (FCC). The report found that 1.2 million participants' eligibility could not be verified, that 5,510 were receiving multiple subsidies, and that another 6,378 were dead. In all, taxpayers could be paying $138 million annually in potentially fraudulent payments.

Even by the feds' standards, the lack of accountability here is shocking. It highlights the inherent dangers that accompanies any government foray into the internet business.

Under Lifeline, individuals earning below 135 percent of the federal poverty line, or who are receiving benefits from Medicaid, SNAP, or a similar program, are eligible for a $9.25 monthly subsidy on their internet or phone bill. That subsidy comes in the form of lower bills from participating phone and/or internet providers, who the government reimburses based on the number of Lifeline participants they have signed up.

The Universal Service Administration Company (USAC)—a private nonprofit—administers the program, handing out $1.5 billion in subsidies to 12.3 million people in 2016.

In its 2017 report, the GAO found several "weaknesses" in the program design. Notably, the government relies on service providers to conduct eligibility checks for Lifeline, and "companies may have financial incentives to enroll as many customers as possible."

Indeed, providers have absolutely no incentive to check eligibility adequately. Enrolling more Lifeline participants means a provider receives more subsidies. Servicing more Lifeline participants also allows a provider to raise prices, as the federal government, not their customers, will eat the increased costs.

Sure enough: When GAO staff submitted fraudulent Lifeline applications to 19 Lifeline service providers, 12 accepted them into the program.

On a macro level, GAO examined the eligibility of some 3.5 million Lifeline beneficiaries in six states. The eligibility of over a third could not be verified. And as mentioned above, more than 11,000 were ineligible either because they were receiving multiple subsidies or because they were dead.

GAO notes that "these numbers likely understate the number of people reported dead who were reenrolled in Lifeline," due to inadequate record keeping.

The FCC has failed time and again to implement procedural safeguards or even evaluate the effectiveness of the program. The commission promised to review USAC's performance a year after contracting with them to administer the program; then it didn't. In 2005 the FCC awarded a contract to the National Academy of Public Administration to study the administration of the program, then inexplicably cancelled that contract.

Not only is Lifeline poorly administered, the GAO concluded, but it is probably unnecessary, since it "may be an inefficient and costly mechanism to increase telephone subscribership." Most low-income households receive phone service without any need of a Lifeline subsidy, and many current participants would likely maintain phone service in the absence of the assistance.

The same can be said of Lifeline's relatively new mission of increasing broadband access. Pew Research Center found that internet usage went from 52 percent to 84 percent from 2000 to 2015. The gains for low-income Americans was even more pronounced, with those earning less than $30,000 a year increasing from 34 percent in 2000 to 74 percent in 2015—all without the aid of Lifeline.

This isn't the only government foray into the internet business to have ended in disaster. As part of Obama's stimulus program, the feds spent $4.7 billion on grants to local broadband projects to increase access and speed. Some $594 million in program funds were eventually suspended after revelations of undocumented expenditures, wasteful projects, and simple graft.

Local governments' internet interventions have often been disastrous too, with one recent study finding that most municipal broadband networks are operating at a loss.

Lifeline still has its defenders. FCC Commissioner Mignon Clyburn has claimed that cutting the program would deny people "access to critical services like 911." Access to 911 is a great thing, but it is a little too late for those Lifeline clients who are dead.

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  1. Once given, you can’t remove an entitlement, even for the dead. Besides, the living-impaired are going to need that internet access for when we finally start voting online.

    1. Well, why can I NOT reach my dead friends and relatives on that them thar internet?!? WTF are their web sites, blogs, Facebook pages, or at least their friggin’ email addresses?!?! If Government Almighty is gonna subsidize their internet connections, you’d at least expect that Government Almighty would let us know where their email addresses are!

      Or is that private, confidential info?

      1. The more I think about this, the more it really, really, REALLY pisses me off!!

        If we can NOT get our Congress-Slimes to fix our inter-realm interconnects, maybe we’d better take it up with the other side(s)! We’re paying for access; where’s our access to the Dearly Departed Departments of Heaven, Hell, and Purgatory?!? They’ll start hearing from me, for one, really soon!

        Now… What ARE the email addresses to God and Satan? And who IS the Big Boss in Purgatory, anyway?!?!

        1. Well,folks, sorry for the scant progress so far, in finding out who to contact here, other-realm-wise. If you are as outraged as I am, though, you might want to get started now, with what little I have so far… Only one “snail mail” address, is all I have rounded up so far. But here ya go! (Clue me in, please, if y’all find more).

          Satan J. Trump
          1600 Pennsylvania Avenue NW.
          Washington, D.C. 20500

  2. It’s all worth it, just to see the smile on Mr. Skelton’s face there.

  3. Once again, total fail.

  4. FCC Commissioner “Filet” Mignon Clyburn should bet his job he can verify the recipients.

  5. Well I’m glad SOMEONE has been reading Gogol.

  6. The Federal Government Has Been Subsidizing Phone and Internet Access for Dead People

    Even the dead deserve to communicate with the living at fair prices…

  7. The report found that 1.2 million participants’ eligibility could not be verified, that 5,510 were receiving multiple subsidies, and that another 6,378 were dead. In all, taxpayers could be paying $138 million annually in potentially fraudulent payments.

    The Universal Service Administration Company (USAC)?a private nonprofit?administers the program, handing out $1.5 billion in subsidies to 12.3 million people in 2016.

    Sad.

    This article is propaganda.

    Actual, verified fraud rate is about 1 in 1000 – irrelevant.

    Of the 1.2mil that *were not* verified by the report, not *could not be verified*, we don’t know how many *were not* eligible.

    Even positing that every single one not verified was in fact ineligible, a 10% inefficiency rate in a government program sounds like a resounding success.

    1. More propaganda:

      Local governments’ internet interventions have often been disastrous too, with one recent study finding that most municipal broadband networks are operating at a loss.

      Lifeline still has its defenders. FCC Commissioner Mignon Clyburn has claimed that cutting the program would deny people “access to critical services like 911.” Access to 911 is a great thing, but it is a little too late for those Lifeline clients who are dead.

      It’s a “disaster” when “most” instances of a government program aren’t making a profit? What? Besides the IRS, what percentage of governement services operate at a profit?

      And yes, the 1 in 2000 of users who are dead don’t get much benefit from 911 service.

      What about the 99.95% of users who are still alive?

      There is plenty to criticize in government. Maybe even this program. Reason should stick to honest criticism instead of dishonest propaganda and snark.

    2. a 10% inefficiency rate in a government program sounds like a resounding success

      Sarc?

  8. Why should they be subsidizing phone access and internet access for anyone?

    I believe you can get online for free at the local Library…

    1. I believe you can get online for free at the local Library…

      Until Trump and those EVUL RETHUGLIKKKANZ get done closing down all the libraries and burning all the books. Oh, and you know who else burned books, right? /sarc

      1. The library?

      2. Qin Shi Huang?

  9. Under Lifeline, individuals earning below 135 percent of the federal poverty line, or who are receiving benefits from Medicaid, SNAP, or a similar program, are eligible for a $9.25 monthly subsidy on their internet or phone bill.

    Lifeline still has its defenders. FCC Commissioner Mignon Clyburn has claimed that cutting the program would deny people “access to critical services like 911.”

    Right, because there’s no way anyone making less than 135% of the poverty line could scrape together an extra $9.25 a month to make up for the loss of the subsidy. It’s not like they could just forgo a couple of trips to McDonalds a month or something, and it would be cruel to ask them to make such a sacrifice. /sarc

  10. The trouble is that the federal government is running way too many of these piddling little programs to allow for any reasonable amount of accountability to the public.
    It’s one of the primary reasons why government needs to be smaller and do less. If it’s doing a million tiny things, nobody can possibly pay attention to all of them, and the government can’t effectively monitor itself since it has a vested interest in it’s own growth. You can’t expect voters to be aware of things like the “Lifeline” program.

    All of this makes these programs far too easy to abuse. On top of which, there’s not financial incentive to put programs in place to verify eligibility properly. You can bet this wouldn’t happen at Verizon or Comcast. They would damn well make sure nobody is getting free internet.

  11. RE: The Federal Government Has Been Subsidizing Phone and Internet Access for Dead People
    A bipartisan group of senators wants an investigation into the government’s latest disastrous internet intervention.

    So?
    What have you against dead people?
    If they can vote in Chicago, then why shouldn’t we subsidize their internet and phone bills?
    You people are so insensitive to the dead that its truelyappalling!
    How do you live with yourselves?

  12. Because I think of it every time I see the name “Lifeline”, here is the video to Don Johnson’s “Heartbeat” – http://www.dailymotion.com/video/x29w06

    1. Listening while reading the article really helps

  13. Any land or cellular phone can make an emergency (911) or operator call. We don’t need individual subsidies for that.

    I’m not sure if this is by law or a benefit of telephone providers. So long as the phone is still physically or wirelessly connected it can dial emergency.

  14. I’d say the “weakness” in the program here is that it even exists.

  15. Hey, even the dead have rights even if they are dead rights.

    So many people want to remove dead people’s voting rights and now you are trying to take away their federally-given benefits. It’s a cruel world.

  16. From an ex-state-employee: The way it works. State agencies accept all applicants without question and defer to future audits to determine eligibility and reimbursement claims – which may or may not happen. That’s how state disability applications are handled as well…the doctors are not contacted to verify applicants because physicians don’t appreciate the extra paperwork, so the state just issues the payments for later audits to catch and try to collect the blood from the proverbial turnip.

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