Sep 10, 2018   SOURCE: PR NewsWire

Researcher to Hill: GAO Data Does Not Support "Waste, Fraud and Abuse" Rhetoric from FCC Targeting Wireless Resellers in Lifeline Program

PEMBROKE, Mass., Sept. 10, 2018 /PRNewswire/ -- Repeated assertions by senior Federal Communications Commission (FCC) officials that there is extensive "waste, fraud and abuse" tied to wireless resellers participating in the Lifeline program for low-income Americans are not supported by a review of a 2017 U.S. Government Accountability Office (GAO) report, according to Susan M. Gately, a telecommunications expert with 35 years of experience.

In a letter to key U.S. Senate and House offices offering assistance in evaluating the FCC claims made about Lifeline, Gately writes that "wireless resellers participating in the Lifeline program have often been characterized as 'unscrupulous actors' that are solely responsible for waste, fraud, and abuse in the current program. That characterization is a key basis for the FCC's proposal to exclude resellers from the Lifeline program in its latest Lifeline reform proposals adopted on November 16, 2017." But, Gately notes, such claims are "severely flawed."

Gately states: "The GAO report, however, in no way supports the Commission's assertions regarding the scale of waste, fraud and abuse within the program, let alone its allegations of 'unscrupulous' behavior by resellers."

In her letter, Gately reaches the following conclusion: "... reliance on the GAO report to portray the Lifeline program as fraught with 'unscrupulous carriers' and waste, fraud, and abuse is a misreading of that report. I am concerned the FCC's misinterpretation of the GAO data is distorting the focus of legitimate reform efforts. There is still time for Congress to work with the FCC to ensure that the Commission does not disconnect millions of veterans, elderly, disabled and many other Lifeline subscribers based on outdated data and inaccurate inferences. Protecting your vulnerable constituents does not need to conflict with the FCC's important mission to carry out important reforms such as the National Verifier to better protect universal service dollars. The Commission should re-dedicate its existing enforcement authority toward weeding out actual bad actors, rather than relying on flawed analyses of the GAO report to exclusively attack resellers."

The Gately letter - which was sent to Sen. John Thune, chair, and Sen. Bill Nelson, ranking member, Committee on Commerce, Science and Transportation, and Rep. Greg Walden, chair, and Rep. Frank Pallone, ranking member, Committee on Energy and Commerce, and Rep. Frank Pallone - is available online at https://smgcllc.wordpress.com/representative-work-product/.

In her letter, Gately notes the following:

    --  The GAO data is within the statistical error range. In fact, the widely
        publicized discussion of "deceased" subscribers found by the GAO
        represent 6/100ths of 1 percent or 0.06 percent) of the data analyzed -
        well below standard data error rates (which could have occurred in
        either the Lifeline data set or Social Security Death Index or both). As
        Gately notes: "In short, we don't know if this is a minor issue or if it
        is a data glitch."

    --  The GAO report contains no "smoking gun" in relation to wireless
        sellers. In fact, the GAO expressed concern with the number of carriers
        participating in the Lifeline program, known as Eligible
        Telecommunications Carriers (ETCs). The vast majority of Lifeline
        providers are wireline incumbent local exchange carriers - specifically
        the same rural carriers that comprise most of the participants in the
        high cost portion of the Universal Service Fund - not wireless carriers
        and not resellers. As Gately notes: "There is thus no basis for using
        the GAO report to single out legitimate resellers as 'unscrupulous
        actors.'"

    --  GAO relied on data set intended for other purposes. The Lifeline
        database GAO used for its analysis was not constructed or intended to be
        used as part of the Lifeline eligibility verification process; the
        information in that database was also not the basis for payments to
        Lifeline providers. Gately writes: "... the GAO data snapshot cannot be
        used to judge any supposed waste, fraud or abuse in Lifeline."

    --  GAO used flawed methodology to verify eligibility. GAO attempted to
        cross-match different fields within the Lifeline database against a
        dozen different state and federal government-maintained data sets that
        were being maintained for uses distinct from the Lifeline eligibility
        verification process. Gately points out: "Most of the instances in which
        GAO could not 'confirm' subscriber eligibility, are explainable by the
        process used, not by subscriber ineligibility."

Gately also notes that enrollment in the Lifeline program has dropped by more than 40 percent (more than seven million) since its peak in 2012, when program changes directed by the FCC were first put in place.

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SOURCE S. M. Gately Consulting LLC (Pembroke, MA)