One of five telecom companies under review by the Oklahoma Corporation Commission for business practices in the Lifeline phone program has been cleared by state regulators after paying $11,000 in reimbursements.
Corporation Commissioners approved an order Tuesday to close a review by the commission's public utility division into TerraCom Inc. of Oklahoma City. Regulators opened investigations in February after finding several wireless companies failed to properly keep track of customers in the Lifeline program for low-income households.
Dale Schmick, TerraCom's chief operating officer, said the company's review involved extensive consultation and collaboration with Oklahoma regulators. The company operates in 14 states.
“TerraCom has clearly demonstrated that our practices are compliant, and we are committed to maintaining these high standards so that we can continue to deliver crucial telephone service to those who need it most here in Oklahoma and around the country,” Schmick said in a statement.
The review confirmed TerraCom's discovery that it mistakenly collected $11,132 in Lifeline reimbursements from the Oklahoma Universal Service Fund from May 2011 to October 2012.
Among the changes TerraCom made to its business practices were bringing its outsourced sales team back into the company and providing more training to its employees, according to the commission order.
“Subscriber data is analyzed and reviewed at a minimum of three times before filings are made for reimbursement for supported services,” Schmick said in a filing. “Duplicate information automatically fails our auditing process, and even data that successfully passes our initial review is still manually analyzed for concerning patterns and possible duplication issues.”
Earlier this year, TerraCom agreed to pay $402,000 to the federal government for improper reimbursements under a federal version of the Lifeline program.
The company also agreed to pay another $440,000 to settle a Federal Communications Commission enforcement action. Its affiliate, YourTel America Inc., agreed to pay $198,000 in federal reimbursements and penalties. Neither TerraCom nor YourTel America admitted wrongdoing.
State regulators praised TerraCom for its cooperation in their review, saying in regulatory filings the company gave full access to the necessary documents and personnel.
“It is also important to again note that TerraCom was proactive in identifying issues to the OCC and the FCC,” said Teena May, a regulatory analyst with the Corporation Commission's public utility division. “While this does not negate prior issues, it shows a desire to improve the process and maintain their standing as an honorable Lifeline program provider.”
Matt Skinner, a spokesman for the Corporation Commission, said the public utility division continues to pursue its reviews of three other wireless Lifeline providers: Easy Wireless of Florida; Assist Wireless of Texas; and True Wireless of Tennessee. Another company in the review, Icon Telecom Inc., stopped doing business in September after drawing fire from state and federal regulators.
Funding for the Lifeline program comes from federal and state Universal Service Fund fees added to most telephone customer bills. Phone companies whose customers qualify for Lifeline can get monthly federal reimbursements from $9 to $34 per subscriber. Oklahoma's Lifeline program pays $1.17 in monthly reimbursements to phone companies with qualifying customers.
Lifeline allows just one subsidized wireless or landline phone line for each household. Participants have to meet low-income guidelines or be eligible for several types of public assistance such as food stamps.