If you’re a traditional telephone customer, you might be paying for a dead man’s subscription.
In January, the Office of Inspector General at the Federal Communications Commission found that the Universal Service Fund was riddled with fraud. Its Lifeline Program, meant to deliver broadband discounts to low-income households, was paying California companies for dead subscribers. Sadly, this kind of irresponsibility affects personal budgeting.
No surprise then that American consumers feel they pay too much for their phone bills. It’s high time for Congress to act.
Within the Lifeline Program, fraud is nothing new — it’s embedded deep within its structure. Broadband service providers collect USF payments for each low-income household they claim to serve, while traditional telephone customers pick up the tab. A dubious honor system is all that Lifeline beneficiaries — the living ones — can count on.
With a system like that, it’s no wonder the USF is in dire straits. Consumers are fed up with paying too much to keep a poorly designed program afloat. They are voting with their wallets, and their choice is to ditch traditional telephone service, which bankrolls the antiquated government program. As consumers cut the cord and those dollars dry up, businesses are going back to the well for more taxpayer dollars, and some advocates are calling for consumers to pay more into the dwindling fund.
Consumers should not be forced to pay into a system that has clearly failed them: discovering dead subscribers was hardly a one-off. Nearly 10 years ago, only 64 percent of Lifeline beneficiaries were verifiably eligible. Then, as far back as the 1990s, a fake service provider defrauded millions in USF dollars. It would be wholly irresponsible of Congress to consider saddling more consumers with such a broken system.
Cutting subsidies for dead people would immediately save consumers money, and the House and Senate are considering bills to do just that. This no-brainer solution is only the starting point.
Congress has an opportunity to not let a crisis go to waste. To ensure the Lifeline program serves consumers in a sustainable, responsible way, Congress should also reform how the USF is funded.
Since fraud thrives without oversight, Congress should seek to improve transparency by bringing the USF completely in-house. Subjecting it to routine budgetary decisions, instead of charging consumers through their service providers, would immediately bring its finances under closer scrutiny by lawmakers.
The most egregious instances of fraud and the bad actors that perpetrate them would be exposed, and Congress would be better positioned to catch the less obvious instances going forward. With better information, fund administrators can block abuse and safeguard USF dollars.
This restructuring has been proposed before as a bill in 2023 and a report in 2024, but these efforts stalled with the expectation that a 2025 Supreme Court ruling would settle the issue. However, the USF’s funding structure remains intact, and reform is still needed, prompting the Senate USF Working Group to request comments late last year.
As policymakers continue to hash out the details, they should prioritize transparency and accountability for bad actors, including ending high monthly fees for telephone users and ending the practice of sending money to the grave.
Finally, Congress should also stop duplicating its efforts. In a scramble to put as many people online as possible, the government has rolled out program after program over the years with little to no coordination. The result has been overlapping agencies, funds and programs that all race toward the same goal: to ensure universal communications service for all. This is a worthwhile goal, but each new poorly designed program diverts resources from better-functioning ones.
If Congress could resist impulsive spending, it could consolidate its mess into leaner programs that actually work. Instead, America has been saddled with duplicative — even contradictory — subsidy programs to build more broadband, including a poorly designed Lifeline program that funnels money away from the consumers it is meant to serve.
Years of waste, fraud and abuse in America’s broadband systems mean Congress needs to step up. It can start by studying and cutting overlapping programs. That will free up the money to fund programs that actually work.
Fraud in government programs is a tale as old as time. And when broadband payouts are made to the dead, it’s at the expense of the living. But America’s communications industry does not have to keep limping along on a broken system. Congress can stop paying fraudsters, bring the USF under regular appropriations, and deliver a more focused effort to get consumers online.
Stop the fraud, but fix the system, too.
