Alleged Forgery Leads to Further Calls for Reform from Sen. McCaskill

Senator Claire McCaskill (D-MO) sent another letter to Acting FCC Chairwoman Mignon Clyburn calling for further reforms of the Lifeline program, and threatening to eliminate the program if the agency fails to take further action to address waste, fraud and abuse, such as referring allegations of fraud to the Department of Justice for criminal investigation.  The letter notes that the program has expanded in recent years, citing the $2.2 billion in funding last year as evidence that last year's reforms are insufficient.

The letter was spurred by another Scripps Howard report in the media on the Lifeline program, this time alleging that third party contract agents selling the Lifeline services of TerraCom and YourTel forged signatures on applications for Lifeline service.  At an industry event today, TerraCom's COO noted that just because an agent submitted an application to the ETC does not mean that the application was fully processed and funding requested therefor.

Sen. McCaskill's letter faults the FCC for not implementing sufficient reforms, and points to 2012 funding levels as demonstrating that further action is needed.  The reforms, however, only became effective in the third and fourth quarters of 2012, meaning that much of the cost savings is not reflected in year-end figures.  In fact, recent estimates are that Lifeline funding for 2013 has been slashed to approximately $1.6 billion -- a reduction of nearly 30%.