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Oklahoma Corporation Commission staff begins review of low-income phone subsidy program

Reimbursements to phone companies under the federal Lifeline program quadrupled in Oklahoma from 2008 to 2012 as companies signed up low-income customers for subsidized wireless or landline service.
by Paul Monies Published: February 21, 2013

Dale Schmick, chief operating officer for Terracom, said the company was confident it would be able to demonstrate it is in compliance with the program. Terracom, which operates in 16 states, has been providing Lifeline service in Oklahoma since 2004, he said.

“Even though the phrase ‘show cause' sounds disconcerting and is not to be taken lightly, we feel very confident that ultimately the commission will concur that we are in full compliance,” Schmick said.

Customers may suffer because of a few bad companies operating in the Lifeline program, he said.

“In any industry, there's going to be people that don't run their business the right way,” Schmick said. “No matter what business you're in, those people are always a problem; they're always a concern. It's the same case in this situation. I fully applaud the commission investigating, figuring out if it's a problem, and doing something about it.”

Review in August

The state has 41 phone companies eligible to receive Lifeline funds, said Corporation Commission Spokesman Matt Skinner. Twenty companies offer wireless Lifeline service, 14 offer landline service and seven companies offer both.

Corporation Commission staff began a review in August of Oklahoma telecom providers taking part in the federal Universal Service Fund.

The review covers Lifeline and other Universal Service Fund programs to help subsidize telephone and Internet service to rural areas, schools, libraries and hospitals.

The Federal Communications Commission last year adopted several reforms to cut down on waste and abuse in the Lifeline program. The FCC said 92 percent of low-income households had phone service last year, up from 80 percent when the Lifeline program began in 1985.

“But the program faces real challenges, including rules that have failed to keep pace as consumers increasingly choose wireless phone service, and that creates perverse incentives for some carriers,” the FCC said as it announced the package of reforms.

Among the reforms are a national eligibility database to allow verification of customer eligibility and a separate database for companies that would prevent multiple phone companies from receiving reimbursements from the same subscriber.

by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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