As part of its effort to fight abuse of a phone program for low-income households, the Federal Communications Commission has proposed $4.8 million in penalties against an Oklahoma telephone company.
The commission said Icon Telecom Inc. should have known it enrolled 938 ineligible households for the federal Lifeline program in September 2012. Only one Lifeline service per household is allowed.
Icon has 30 days to appeal for a reduction or cancellation of the proposed penalties.
“Icon learned this morning that the FCC issued an order seeking to impose significant penalties on Icon for apparent duplicate consumer enrollments,” the company said in a statement Tuesday. “While Icon no longer participates in the Lifeline program, Icon will continue to work with the FCC to address any and all compliance issues as expeditiously as possible.”
The proposed penalties are in addition to more than $32,000 that Icon has paid back the administrator of the Lifeline fund for duplicate accounts. Icon received more than $25.7 million in federal Lifeline reimbursements in 2012, according to data from the Universal Service Administrative Co.
The FCC also took action Monday against four other phone companies for alleged rules violations in the Lifeline program, proposing total penalties against those companies of $9.4 million. Among them were Assist Wireless LLC and Easy Telephone Services, both of which do business in Oklahoma. The commission also proposed penalties against TracFone Wireless Inc. and UTPhone Inc.
FCC Commissioner Ajit Pai said federal Lifeline reimbursements to phone companies grew to $2.2 billion in 2012, up from $817 million in 2008. He said a “significant amount” of that growth was due to increased waste, fraud and abuse.
“The substantial abuses of the Lifeline program deserve a significant response,” Pai said in a statement. “A slap on the wrist is not sufficient when the same company seeks Lifeline support more than once in the same month for the same person.”
Oklahoma has its own version of the Lifeline program for low-income households. Last month, Icon announced it was pulling out of both the federal and state versions.
The Oklahoma Corporation Commission approved an emergency order Sept. 18 telling Icon it had to give Lifeline customers in Oklahoma 30 days notice that it was stopping their service. Icon has appealed the Corporation Commission order; a hearing is set for Oct. 10 in Oklahoma City.
Corporation Commission staff filed “show-cause” applications in February against five phone companies, including Icon, doing Lifeline business in Oklahoma. The staff wanted to know more about how the companies verified customers in the program. A later enforcement action against Icon said commission staff found more than 40,900 possible violations of federal Lifeline rules for duplicate customer reimbursements.
Brandy Wreath, director of the commission's public utility division, said the FCC's action on Monday vindicated the separate actions of Corporation Commission staff in Oklahoma.
“We were pleased to see the FCC investigating the program,” Wreath said. “We were pleased to see them uncovering similar issues that we were finding.
“We're looking at it more from the standpoint of the businesses that are staying in Oklahoma have good practices for ongoing protection. We will keep moving forward with our investigations to ensure Oklahomans are protected for the long run, not just during this time of heightened awareness.”
Both the state and federal Lifeline programs are funded from Universal Service Fund surcharges on telephone customer bills. The federal Lifeline program offers eligible phone companies up to $34 per subscriber in monthly reimbursements; the state program offers $1.85 per subscriber in monthly reimbursements.