UPDATE: Senate toughens provisions against ‘Lifeline’ phone abuses

OKLAHOMA CITY– On a 41-0 vote, a strong bipartisan majority in the state Senate has passed an amended version of House Bill 2165, legislation intending to improve regulations of the federal Lifeline Program, which is administered by the Oklahoma Corporation Commission.

Sen. Rob Standridge, R-Norman, told CapitolBeatOK that the Senate’s technical changes — explicitly limiting participants to one device, and enhancing penalties for fraud could bring fiscal savings to the state administration of Lifeline. 

Standridge commented, The state of Oklahoma doesn’t have a choice as to whether it participates in this program, but we should do whatever we can to ensure it is responsibly administered.  Otherwise, it will only continue creating opportunities for fraud and abuse.

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.

In a statement sent to CapitolBeatOK, House sponsor Rep. Jon Echols, R-Oklahoma City, 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.

There is documented abuse of the program from providers who have given out duplicative lines and not done enough to verify the continuing eligibility of their customers served by the program.

In Oklahoma, two phone service companies TerraCom LLC and YourTel America Inc.  paid a total of $1 million in fines to the Federal Communications Commission after investigators that the firms were issuing phones right and left without documentation of need. The Lifeline program has allowed companies to collect reimbursements ranging from $9 to $34 per subscriber.

During earlier House debate, Echols pointed to instances of individuals receiving phones who had not even asked for them. In 2012, the state commission says, $236 million was garnered for the Lifeline program, with those resources drawn from the Universal Service Fund, a tax on telecom subscribers.

One report found Lifeline spending had quadrupled form 2008-2012. Dramatic expansion of costs during the Obama administration has led some analysts to redub Lifeline the “Obamaphones” program. 

Fraud potential is even higher in Oklahoma than other states, Echols has said, because the U.S. government program allows payment of extra dollars “to individuals living on land that was originally part of an Indian reservation, meaning there is more money to be had through fraud in Oklahoma than in many states.”

The amended version of H.B. 2165 is expected to pass easily in the state House, where Rep. Echols shepherded an earlier version of the bill to 92-0 passage. 

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