Issues

Obamaphone Scam Results in $90 Million of Fines

'Lifeline' program comes under greater scrutiny

Multiple companies face FCC fines totaling $90 million for their part in a government funded cell phone scam, KMOV reports:

People who weren’t low income were being targeted with an opportunity to sign up for a government-funded cell phone. It came from Cintex Wireless, based in Maryland.

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Cintex attorneys insisted they were following the rules but, on Wednesday, the FCC slapped them with a $9.5 million fine for allegedly breaking the rules.

News 4 exposed another company who was sending phones to St. Louis residents who never signed up; all courtesy of the government, with sign ups through Life Wireless, a division of Telrite.

The FCC slapped this company with a $22 million fine.

Another company, Global Connection was also hit with a $12 million fine on Wednesday.

Over the past 90 days, 11 different providers have faced 90 million in fines with Wednesday’s announcement. Those companies have to pay up or appeal.

The ‘Lifeline' program has been cited by some in Congress as a prime example of fraud and waste within the federal government.

Despite handing down extensive fines for abuse of the program, FCC Chairwoman Mignon Clyburn has maintained the prospect of ending the entitlement is "illogical," according to the The Hill:

In a speech last month, she said the idea of ending the cellphone portion of Lifeline is "one of the most illogical things" she's heard since her appointment.

"Even suggesting this is taking a major step backwards and ignores the critical telecommunications needs of needy Americans and is out of step with the communications evolution," she said at the time.