I’ve seen several recent stories talking about fraud in the ACP program. The stories say that unscrupulous ISPs are enrolling folks into ACP and then continuing to bill the FCC after customers no longer are getting broadband service. It’s not hard to believe that this is true.
We heard similar stories for years about the FCC’s Lifeline program which is funded by the Universal Service Fund. The big complaint for Lifeline fraud was that carriers would sign up customers that weren’t eligible for the program. The FCC took some major steps to address this issue by creating the National Lifeline Accountability Database (NLAD). This database is populated by the federal agencies that operate the programs that are used to qualify a household for Lifeline. By all accounts, this database got rid of a lot of the problems since the FCC won’t process payments for customers who are not included in the database.
But the current accusation that ISPs are billing for service that isn’t being delivered is a lot more troublesome. Other than minor infractions caused by billing errors, any ISP doing this is committing criminal fraud. This is a lot harder for USAC, the agency that handles Lifeline and ACP, to monitor and uncover.
I have a suggested fix for the problem. I would wager that most of the supposed ACP fraud is coming from cellular carriers. The ACP monthly $30 subsidy can be applied to either a cellphone plan or to home broadband. In some parts of the country, that subsidy can now be as high as $75 – which is going to invite even more fraud. My suggestion is that we stop using ACP to subsidize cellular service. The underlying concept of ACP is to get better broadband to folks, and I don’t care how you try to justify it – cell phone data is not a substitute for home broadband. Many people claim that they only use their cellphone as a broadband connection, but if they are more than a casual broadband user, they are probably getting most of their broadband through WiFi connections on somebody else’s broadband connection.
ACP should be used to subsidize home broadband. The Quello Center, which is part of the Department of Media and Information at Michigan State University, released a definitive study in 2022 that showed that students without home broadband and a computer at home struggle to become computer literate. One of the most startling findings was that an 11th grader without home broadband has about the same level of computer literacy as an eighth grader with home broadband.
I don’t want to sound heartless. I know that subsidies on cell phones provide a much-needed service to a lot of people. But the cellphone service being subsidized by ACP is not broadband – it’s limited access to the Internet. There ought to be a different program to provide subsidized cellphone service to those who need it.
I would guess that eliminating the cellular companies from ACP would eliminate most of the fraud. Many of the cellular companies participating in ACP do not own cellular networks and are reselling wholesale service from somebody else. These are not facility-base carriers or ISPs.
There may be landline ISPs also committing fraud, and if so, I hope that USAC and the FCC nails them. But most ISPs I know are not going to endanger their network business by chasing extra dollars through fraud. Any network owner that does this should be penalized with huge fines and also prohibited from participating in any federal broadband program for at least a decade. That means no ability to win grants or subsidies. That would mean no ability to sell services using the Schools and Library funds or the Rural Healthcare funds.
I am sure that there are cellular carriers participating in ACP who are good actors and are not committing fraud. But bad actors are endangering the whole program that is vital for millions of low-income households to get affordable broadband. It’s really hard to make a case that cellular service is equivalent to a home broadband connection, and we should stop pretending that it is. Eliminating cellular carriers from ACP probably instantly eliminates most of the fraud problem and would have the additional benefit of extending the life of the ACP fund.
4 replies on “ACP Fraud”
Pretty much agreed. Cellular service should not be part of ACP, if there needs to be subsidies there they should be a separate program.
Side note, cellular home ‘broadband’ cuts into effective mobile use. If you move around a lot during the day, you can likely ‘feel’ where carriers are selling home broadband on the cell network… because the cell network degrades massively.
Not to mention obvious net neutrality issues with prioritized services like 1080p streaming limits… though I’m really not opposed to some throttling like that on subsidized services, I don’t believe that USF should be funding entertainment and gaming..
Obviously a complex issue but the idea that everything can be free or discounted but unencumbered provides… well let’s just say it’s not good to have premium products subsidized by taxpayers.
I hear you, and I’m not receiving any subsidies. But our alleged broadband (TMobile 5G) is so lousy and unreliable that I am, in fact, using my cell phone as a hot spot to run my business and everything else I use my computer and devices for, including streaming.
We have no competition around here; Comcast is the only cable company that “serves” the area, and my brother pays $250/month for it. Outrageous.
I currently work as an agent, enrolling consumers in the ACP program with cellular devices. This is a much needed program for our community, especially the homeless who would have no access to the internet if cellular devices were unavailable. Bringing yourself out of poverty isnt easy for anyone but without access to the internet it’s exponentially more challenging. You can’t even apply for a job or gain access to many social services without online applications these days. I pray that options will continue to be available.
With that said, the fraud in this industry is disheartening and extremely frustrating for me and the customers I serve. We have had an ongoing issues with other agents signing people up for accounts without their permission or telling the customer that they didn’t qualify when infact the customer did qualify. The agent activates the account then sells those device and active service to 3rd parties to line their pockets. About 1 of 10 enrollments i process get deactivated because a previous provider reactivates their prior service and turns their new service off, leaving the customer with no service whatsoever.
This sort of gets into the discussion of ‘what is acceptable internet access’? The homeless people that need a phone and some connectivity to take calls for food, housing, or jobs etc don’t need 100Mbps of service, they need <5Mbps. These aren't the same people that need to get their kids online to get homework done.
No plan will be able to service everyone, so blanket plans shouldn't be expected to. The cost to deliver 3-5Mbps to a budget smart phone so that the homeless is much less than that to provide streaming services so making efforts to deliver that 'home experience' to people dramatically decreases the number of people that can be served. The cost to a verizon or tmobile to give a few Mbps of access on a sim card and completely block streaming intertainment is very very low.
I don't argue that those at the bottom need basic connectivity because essentially all jobs, housing, and social services require it, but they definitely don't need netflix. Making a system that has a substantial cost (streaming netflix for many hours over a cell network has real cost and consequence for the provider) means far few people can get critical baseline access for the same dollars. Basic connectivity for calls, txt, applications, and even online forums like facebook where jobs and programs can be found can be delivered for an incredibly cheap price because it's not demanding on the networks. Verizon could do this for $5/m and still be in the black.
Point is that programs like the ACP set a bar that cripples it's use for other things like homeless folks that need basic access. We should be working on different programs to support that. Further, ACP shouldn't be built around streaming netflix. It's quite absurd to at least half of the population that the government ie taxes should pay for your entertainment.