In its press release dated 12/11/13, the FCC announced that it has proposed nearly $44 million in fines against three companies that appear to have violated FCC rules protecting its Lifeline program against waste, fraud and abuse. Including the eight Lifeline enforcement actions brought by the FCC in the past 90 days, these most recent three fines bring the total amount proposed to $90 million over that period.
These actions are a direct result of the FCC’s comprehensive reforms to the Lifeline program last year. Those reforms provided clear, enforceable rules to prevent and combat waste, fraud and abuse, and empower the FCC’s Enforcement Bureau to crack down on violations. The companies and proposed fines are:
- Cintex Wireless ($9,461,978)
- Telrite Corporation ($22,399,761)
- Global Connection ($11,702,695)
In these cases, the carriers knew or should have known, based on their own internal data, that they were not entitled to support for these duplicates under Lifeline program rules. The penalties proposed are in addition to recovery of universal service funds paid to the carriers for duplicative Lifeline service. The companies have 30 days to pay or contest the proposed fines. See press release here.
The base forfeiture amounts used to calculate the fines are as follows:
The FCC uses a three-part forfeiture framework for Lifeline collection violations that imposes: (1) a base forfeiture of $20,000 for each instance in which an ETC files a FCC Form 497 that includes ineligible subscribers in the line count (a violation of certification requirement contained in Section 54.507(d) of its rules); (2) a base forfeiture of $5,000 for each ineligible subscriber for whom the ETC requests and/or receives support from the Fund (a violation of Sections 54.407, 54.409, and 54.510 of its rules); and (3) an upward adjustment of the base forfeiture equal to three times the reimbursements requested and/or received by the ETC for ineligible subscribers e.g., see FCC Notice of Apparent Liability for Forfeiture.
See our detailed Q & A article regarding the FCC’s enforcement of Lifeline Rules from Amy Gross FCC Serious About Lifeline Rules dated 11/7/13 .
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