Abusive “Obamaphone” Lifeline program expanded to include broadband
DENVER—The so-called “Lifeline” Obamaphone program will now be expanded to create “Obamaband,” which will begin providing free broadband service at taxpayer expense. Federal Communications Commission (FCC) commissioners voted for the expansion 3-2 despite the fraudulent activity and waste in the program discovered by CBS 4. The vote “outraged” Ajit Pai, one of five commissioners, who says, “if we don’t take action, fraud like this will persist.”
“The approved Obamaband expansion is an example of government propping up fraud-laden programs on the backs of middle-class American families. The fact is the program leads to waste, abuse and fraud, all things people do not want to see their family’s money go toward,” said Jonathan Lockwood, executive director of Advancing Colorado, a free market advocacy group. “Instead of perpetuating the cycle of dependency, fraud and abuse, and expanding a failed program like this, we should put an end to the ‘lifeline’ of corruption.”
CBS 4 revealed last year that a vendor in Denver had employees who volunteered to use someone else’s food stamp card to secure a free phone and service for a CBS 4 producer who was in fact ineligible for the program. Insufficient controls and the fact that roughly one-third of U.S. households are eligible for a subsidy that typically covers wireless voice service, the cellphone and even some data usage, is said to be what led to the abuse discovered by investigations.
“The CBS4 story highlighted the fact that in places there are no safeguards, workers are signing up people using fraudulent certifications,” Pai told CBS 4 in an interview. “There are no safeguards to make sure the dollars are spent wisely. In the middle of Denver at a tent this fraudulent activity was going on. If it can happen in Denver it can happen anywhere.”
The “Lifeline” program grew from $800 million in 2009, to a $1.6 billion program today, and is funded by a universal tax every cellphone user pays on their monthly bill. Consumers pay over 17 percent extra per month on their own phone bills to support universal service programs, including “Lifeline.”
According to the U.S. Government Accountability Office, the number of families participating in the problem-plagued program, even after reform in 2012, grew from seven million in 2008 to 12 million. In Colorado, in the first half of 2014 alone, the Obamaphone program dealt out about 117,000 free plans.