UPDATE: OK ‘Lifeline’ changes signed into law
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Published: 10-Jun-2013

OKLAHOMA CITY – A few weeks after studying widespread evidence that the federally established (but state-regulated) “Lifeline” program had become riddled with waste, fraud and abuse, the Oklahoma Legislature has passed and the governor has signed legislation analysts project could save taxpayers millions of dollars. 

The federal program, financed by telecommunications taxes, was established to provide telephone service to low-income individuals.

It drew scrutiny across the nation after news reports that individuals were getting duplicate landlines and/or cell phones on the taxpayers’ dime.

In Oklahoma, one report found state Lifeline spending had quadrupled from 2008-2012. Dramatic expansion of costs during the last four eyars led some analysts to redub Lifeline the “Obamaphones” program.

The new law enacting significant limits on the program in Oklahoma will restrict access to free cell phone service to low-income people, in keeping with the vision for the program in its early years.

House Bill 2165 is among the hundreds of bills Gov. Mary Fallin signed this year. Lead sponsors of the bill were state Sen. Rob Standridge, R-Norman, and state Rep. Jon Echols, R-Oklahoma City). 

Although technical in nature, amendments passed in the state Senate strengthened the anti-fraud reforms that originated in the House, explicitly limiting participants to one device, and enhancing penalties for fraud

The new provisions might lower costs within Oklahoma for Lifeline, which is administered by the state Corporation Commission. 

The legislation enjoyed overwhelming bipartisan support.

After the toughened measure cleared the Senate 41-0, it sailed through the House on a 95-0 vote one week before the Legislature adjourned. Gov. Fallin signed the bill within 48 hours of it reaching her desk. 

The Commission regulates much of the oil and gas industry, power companies and telecommunications companies. The three commissioners – who are elected statewide – are, like the legislative sponsors, conservative Republicans.

Sen. Standridge cheered the governor’s signature on the bill, saying, “By establishing meaningful guidelines at the state level, we can help adequately regulate the program, ultimately saving taxpayer dollars. This is one instance where the state Legislature can do something to stem the tide of federal waste.” 

Rep. Echols said, “This legislation gives the Oklahoma Corporation Commission some additional enforcement authority and creates badly-needed requirements for more information and verification of true eligibility from the phone service providers.”

Echols argued, when the measure first cleared the House in March, “The Lifeline program was originally created to provide free landline phone service to the poor and elderly, but the program is currently giving tax dollars away to pay for duplicate landlines and cell phones.”

Two past providers – TerraCom LLC and YourTel America, Inc., paid $1 million in fines to the Federal Communications Commission after investigators found they were issuing phones without any documentation of need. The two firms had been collecting $9 to $34 per “subscriber.” 

Savings could be significant. In 2012, the Corporation Commission says, $236 million was garnered for the Lifeline program, with those resources drawn from the Universal Service Fund, a tax on telecom subscribers. 

You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.

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