Proposed Online Signup of Lifeline Customers Poses Risk of Fraud, Commenters Say

The American Public Communications Council said the FCC should act with care on a seemingly “innocuous” request by Virgin Mobile to be allowed to sign customers up for the federal Lifeline program online or through automated voice response, without talking to a sales representative for the prepaid mobile provider. The District of Columbia’s Public Service Commission expressed similar concerns about risks of Universal Service Fund fraud. Comments on the petition were due at the FCC last week.

Allowing “Virgin Mobile to sign up customers without some form of live interaction may foster an increased opportunity for abuse of USF Lifeline funding resources,” the council said. “While the requested methods … may well be technologically efficient means of accomplishing these functions, the absence of any form of live human interaction raises real concerns as to the accuracy and validity of the resulting service activations and self-certifications.” The risk should be clear, it said. “Intuitively, allowing persons to obtain free wireless service without having to interact with a live person increases the chances for abuse. There is an ‘anonymous’ aspect to the modified processes now sought for approval that will likely embolden individuals to attempt to ‘game the system.'"

The District commission said it “supports the goal of reaching additional Lifeline-eligible customers through wireless Lifeline services.” But it warned that “the additional application processes proposed by Virgin Mobile may increase the possibility of fraud in the Lifeline program.” Granting the petition would complicate efforts to ensure that customers are eligible for Lifeline service and not receiving service from another provider, the commission said.

In a March 4 letter to the Wireline Bureau, Virgin Mobile asked to change the way it enrolls Lifeline customers. “The current application process imposes a delay between a prospective customer’s request for an application and the opportunity to complete and verify the form,” the letter said. “Many legitimate customers find it too difficult to pursue an extended process to obtain essential wireless services.” The changes that the company seeks would make “the enrollment and verification process more straightforward, ensuring that all applications are carefully reviewed and efficiently processed,” it said. Virgin said its revised processes wouldn’t threaten the program’s integrity: “Applicants will be required to provide all of the information currently required under existing enrollment procedures, including their name, residential address and relevant eligibility criteria. The online enrollment form will also include a section for applicants to electronically sign the application and explicitly certify under penalty of perjury that they are head of the household and receive Lifeline service only from Assurance Wireless by Virgin Mobile.” The company didn’t file comments last week.

Also last week, CTIA said the FCC should dismiss a petition by Colorado E-911 authorities seeking rejection of TracFone Wireless’s self-certification of E-911 compliance as the company seeks certification as an eligible telecommunications carrier there. Once certified as an ETC, Tracfone’s Lifeline service would qualify for reimbursement under the Universal Service Fund. Replies on the petition were due last week. Colorado authorities “are asking the Commission to reject a certification that TracFone is not required to make,” CTIA said. “The FCC’s designation of TracFone -- and thus, the FCC’s requirement for state 911 law compliance certification -- was specific to the 11 states for which TracFone petitioned and for which the Commission is the entity that certifies ETC status. Colorado does not fit into either of those categories.” CTIA said the state laws that the Colorado authorities rely on “make no mention of prepaid wireless services” like TracFone’s.