Skip to main content

FCC OIG: Fraud in Broadband Subsidy Program Is Big Problem

Pile of money
(Image credit: Wikipedia)

The FCC has identified hundreds of thousands of dollars in fraud connected to one of the broadband subsidy programs the government has put billions of dollars into, and says there may be more where that came from.

According to the FCC Office of Inspector General (OIG), some providers of Affordable Connectivity Program (ACP) services--it did not name names--have applied for money to serve multiple households simultaneously based on the same eligible user, which is not allowed under the program.

The $14.2 billion ACP program (https://www.nexttv.com/news/fcc-approves-rules-for-acp-broadband-subsidy) provides up to $30 per month toward broadband service (up to $75 for tribal communities) and up to $100 toward a broadband access device, excluding smart phones.

To be eligible, a household has to meet at least one of a number of criteria, including making 200% or less of the federal poverty level. For example, the poverty level for a family of four is $26,500, so any family of four making $53,000 or less would qualify for the benefit. Other criteria include Pell Grant recipients and those eligible for free and reduced lunch programs and Medicaid.

OIG said its analysis of the program "clearly show that a number of providers and their agents [a doze [benefit qualifying person]."

Also: FCC Approves ACP Rules

The FCC said the most egregious example was more than a thousand households in Oklahoma enrolled in the program based on the name and social security number of a single, 4 year old child who received Medicaid benefits, which is one of the qualifying triggers. Three different providers claimed more than $365,000 in total based on that 4-year-old.

The FCC says the example is not isolated and the practice appears to be growing, with about a dozen providers so far identified as claiming reimbursements for fraudulent enrollments.

The FCC said the dollar figure is relatively low, certain providers appear to be holding steady or ramping up the fraud.

The OIG issued an advisor to put all providers on notice, concluding that "Fraud, waste, and abuse remains a serious problem for Commission programs."

Also: FCC OIG Warns of Ongoing Lifeline Fraud

“For nearly two years now, I have been sounding the alarm on the potential for massive levels of fraud in the federal government’s broadband funding programs," said FCC Commissioner Brendan Carr. "And I have been pushing for additional oversight and safeguards to ensure that we not only prevent bad actors from illegally lining their pockets with federal dollars but that these funds reach the families that Congress intended to benefit."

He pointed out that the OIG last year warned of fraud in the FCC's COVID-19-related Emergency Broadband Benefit (EBB) program on what he called virtually a national scale.

“Whatever we are doing to deter this type of fraud is not working," he said. "More action is needed to safeguard these federal dollars and ensure that they deliver on the goals Congress has set out.” 

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.