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TheStreet Open House

TracFone Wireless, Inc. Signals Support For U.S. Sen. Mccaskill's Proposed Wireless Lifeline Audit

Stock quotes in this article: AMOV, AMX

MIAMI, May 16, 2013 /PRNewswire-USNewswire/ -- TracFone Wireless, Inc., issued the following statement today:

"As the leader of the federal Lifeline program, we welcome the call by U.S. Senator Claire McCaskill for an independent federal audit of any inefficiencies that may remain in the program.

In our view, all responsible Lifeline wireless service providers will embrace such additional scrutiny. In fact, we would encourage Sen. McCaskill (D-MO) and others in Congress to go further and impose additional common-sense reforms to improve the wireless Lifeline program. 

According to Federal Communications Commission (FCC) data, the 2012 Lifeline reforms (which were not implemented until April 2012) have had a profound effect on reducing waste, fraud and abuse of Universal Service Fund (USF) resources. Between April 2012 and end of calendar year 2012, USF savings totaled $214 million – for 2013 the total will be around $400 million, and that total savings by the end of 2014 will be $2 billion.

The FCC's Lifeline reforms are working, but additional steps must be taken to further streamline the program and reduce opportunities for waste, fraud and abuse. TracFone continues to recommend additional steps to both the FCC and the United States Congress as such additional steps are necessary to the overall success of the Lifeline program. These include:

  1. Require all federal agencies responsible for social service programs to work with the FCC in creating a national database for the purposes of customer verification.
  2. Require Lifeline providers to retain documentation of program-based eligibility provided to them by applicants for the service, and make that documentation available for audit. This would close an enormous loophole in the FCC's certification of eligibility rule.
  3. Prohibit the in-person distribution of handsets and require Lifeline providers not to send Lifeline customers handsets with airtime loaded onto the phones until the applicant's Lifeline eligibility has been verified as required by the FCC's rules.

We believe that it is worth noting that many of the eligibility requirements that have been adopted by the FCC were done so at the urging of TracFone Wireless. The FCC included such TracFone-backed reforms as:

  • The creation of a national database by 2013;
  • 60-day non-usage policy; and
  • Identity checks by using the individual's name, date of birth, Social Security Number and address.

TracFone has been a proven leader in preventing waste, fraud and abuse. To date, and with the assistance of TracFone, 11 states have created verification databases to enable Lifeline providers to access existing state databases. TracFone's continued commitment to form public/private partnerships with states to help create the national database is a critical and necessary component to the overall health and longevity of the Lifeline program, for years to come.

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