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Two Oklahoma Lifeline Providers Pay Over $1 M To Resolve FCC Probe

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Released: February 26, 2013

NEWS
Federal Communications Commission

News Media Information 202 / 418-0500

445 12th Street, S.W.

Internet: http://www.fcc.gov

Washington, D. C. 20554

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.
See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

FOR IMMEDIATE RELEASE

:

NEWS MEDIA CONTACT

:
February 26, 2013
Mark Wigfield, 202-418-0253
E-mail: mark.wigfield@fcc.gov

TWO OKLAHOMA LIFELINE PROVIDERS TO PAY MORE THAN $1 MILLION TO

RESOLVE FCC INVESTIGATION

Enforcement Action Brought Under New FCC Lifeline Rules That Eliminated $214 Million in


Waste, Fraud, and Abuse in 2012


Washington, D.C. – Two affiliated Oklahoma companies participating in the FCC’s Lifeline
program for low-income consumers – TerraCom, LLC and YourTel America, Inc. – have agreed
to pay more than $1 million in reimbursements and voluntary contributions to t he U.S. Treasury.
The payments resolve an FCC Enforcement Bureau investigation into whether the companies
violated program rules.
The enforcement action was brought under the FCC’s new Lifeline rules guarding against waste,
fraud, and abuse, which made clear that only one Lifeline subscription is allowed per household
and initiated a process to scrub carrier rolls for duplicates.
“Today’s enforcement action sends a clear message: the FCC will not tolerate waste or fraud in
the Lifeline program,” said Enforcement Bureau Chief Michele Ellison. “Fundamental reforms
of the program’s rules are allowing us to vigorously pursue those who had abused the system –
and safeguard this vital program for low-income Americans who truly need it.”
An FCC examination of subscriber rolls in Oklahoma in the summer of 2012 revealed that
TerraCom and YourTel customers had received duplicative wireline and wireless support. The
Enforcement Bureau then launched an investigation into the companies’ practices, including into
whether the companies submitted inaccurate information to the program administrator. To
resolve the investigation, TerraCom and YourTel must reimburse the FCC’s Lifeline program
$416,000 plus interest for duplicative payments. The companies have also agreed to make a
voluntary contribution to the U.S. Treasury of $600,000.
In order to prevent future violations, TerraCom and YourTel have agreed to a robust compliance
plan that will govern their receipt of Lifeline funds for the next three years. Among other things,
the companies must establish internal procedures to ensure accurate record keeping and
appropriate claims for Lifeline support; provide annual training to their employees on
compliance with FCC rules; develop and distribute a detailed compliance manual; and file
regular compliance reports with the FCC describing and certifying to their compliance efforts.

The companies will also designate a senior corporate manager to oversee the process as
compliance officer, and must report any non-compliance within 15 days of discovery.
Since it was launched in 1985, Lifeline has helped ensure that low-income consumers can afford
basic telephone service by providing monthly service discounts. Over the years, the program has
succeeded in increasing the percentage of low-income households with phone service from 80%
to over 90%, providing a communications lifeline for some of our most vulnerable citizens to
jobs, family, emergency services and more. However, changes in 2005 and 2008 allowed
discounts on low-cost wireless plans without adequate safeguards, causing rapid growth in the
program and leading to significant waste, fraud, and abuse.
The FCC began reforming Lifeline in 2010, culminating in a complete overhaul in January
2012. To date, the FCC’s new rules have eliminated more than 1.1 million duplicate
subscriptions, saved nearly $214 million in 2012, and are on track to save over $2 billion by the
end of 2014. The reforms will preserve Lifeline for those who truly need it.
YourTel Consent Decree and Order: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-13-
286A1.pdf
Terracom Consent Decree and Order: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-13-
285A1.pdf

-FCC-
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