The Oklahoma Corporation Commission lacks the power to enforce federal rules for a low-income telephone program called Lifeline, an attorney for Icon Telecom Inc. said Wednesday.
The company responded to a complaint by public utility division staff alleging Icon failed to properly verify and track customers who signed up for discounted telephone service under the state's Lifeline program.
In a hearing to dismiss the case, Icon's attorney, George Makohin, said the Federal Communications Commission is the only agency that can hold the company in contempt for violations of federal rules.
“This commission cannot clothe itself in federal authority,” Makohin said of the Corporation Commission.
Public utility division staff filed the complaint in August listing more than 40,900 violations, including numerous instances of customers with the same post office boxes, dates of birth or mailing addresses. Many of the violations said Icon had failed to collect customer birth dates or partial Social Security numbers for identity verification under federal rules. Just one Lifeline service is allowed per household.
Much of Wednesday's hearing dealt with arguments over enforcement and jurisdiction under the state's Lifeline program and a federal version of the program.
The programs, which provide reimbursements to phone companies offering Lifeline service, are funded from state and federal Universal Service Fund surcharges on telephone customer bills.
Oklahoma Lifeline paid $3.8 million in reimbursements to phone providers operating in Oklahoma in fiscal year 2013. The companion federal Lifeline program paid out more than $218 million in federal reimbursements in Oklahoma in 2012.
Makohin said the state changed its customer verification requirements for Lifeline under a law passed by the Legislature in May, but the complaint listed violations of FCC rules from late 2012 and early 2013. The FCC implemented its own customer verification requirements in mid-2012. Some of the duplicate subscriber lists referenced by the complaint predate the new federal rules, he said.
“There's been a huge rule change; the staff, instead of asking Icon about it, simply decided to file a contempt action,” Makohin said.
Makohin said Icon has a pending FCC compliance plan, which allows it to continue receiving federal Lifeline reimbursements. Icon received $25.7 million in federal Lifeline reimbursements in 2012, according to data from the Universal Service Administrative Co., which administers the fund.
Attorneys for the public utility division and the attorney general's office said the commission had jurisdiction under regulatory powers granted by the Oklahoma constitution and state law. They said Icon had agreed to abide by state and federal Lifeline rules when it applied to be an eligible telecommunications carrier in Oklahoma to receive reimbursements.
“The purpose of the federal regulations is to ensure there is not waste, fraud and abuse,” said Nicole King with the attorney general's office. “Many of the allegations set forth in the complaint address the duplication issue of numerous dates of birth that are identical, numerous addresses that are identical, numerous violations of addresses which are to P.O. boxes.”
Administrative Law Judge James L. Myles took the issue under advisement and will issue a decision later.