The watchdog centers on the nearly $17 billion in funding approved by Congress through 2020 to help low-income families and close the nation’s digital divide. First called the Emergency Broadband Benefit, then renamed last year as the Affordable Connection Program, the program pays fees directly to phone providers to reduce qualified Americans’ monthly bills, sometimes to zero.
The aid has helped more than 14 million families reduce costs, although registrations show only about a quarter of the estimated 49 million households eligible for aid. The gap is due in part to phone providers, whose tactics are revealed in thousands of consumer complaints — and other information — that The Post obtained under the Freedom of Information Act.
In response to the findings, Pallone wrote to 13 companies on Wednesday, noting that he was “deeply concerned” that some “may not be following the program’s requirements.” The chairman added that the allegations reflect “actions now expressly prohibited by Congress and the FCC.”
And Pallone sought information about Internet providers’ administration of broadband benefits. Questions included the number of people they served, how they marketed their online offerings and the complaints they received from aggrieved customers. Pallone also asked about their billing practices and oversight practices, including the extent to which agents are paid sales commissions.
“The success of the current program, ACP, is critical to making progress toward our common goal of connecting all Americans,” Pallone wrote, asking for answers on November 9.
The Covid Money Trail
It was the largest emergency spending in US history: Two years, six laws and $5 billion aimed at ending the deadly coronavirus pandemic. This money has protected the US economy from collapse and put billions of weapons in stock, but it has also invited unprecedented levels of fraud, abuse and opportunism.
In a year-long investigation, the Washington Post is following the trail of covid money to find out what happened to all that money.
In separate statements, AT&T and Verizon acknowledged receipt of the letters and said they would respond accordingly. They all highlighted their commitment to the government system. Charter pointed to its previous comments, which highlighted its efforts to improve federal broadband benefits. Dish and T-Mobile did not immediately respond to requests for comment.
Pallone’s book reflects a broader, ongoing challenge facing the U.S. government as it seeks to scrutinize more than $5 billion in emergency spending since the pandemic began. This money helped rescue the economy from free fall, but it remains difficult to track and is subject to waste, fraud and abuse, The Post revealed in the Covid Money Trail, a year-long series. That includes a variety of abuses that have drawn the attention of the agency’s inspector general.
Complaints about government internet subsidies date back to the program’s early days, when it was known as the Broadband Emergency Benefit. Many consumers have told the Federal Communications Commission since early 2021 that telecommunications giants including AT&T, Charter and Verizon have forced them to make unpopular decisions — agreeing to price increases, speed reductions or other changes in plans if they want to use the company’s profits on their bills. .
In response, AT&T said some of the problems were “technical challenges” made worse by the speed with which Washington implemented the benefits program. Charter said it was clear to customers and gained “significant participation,” while Verizon admitted it had changed its policies amid public backlash.
Meanwhile, broadband benefits quickly became a source of potential fraud, The Post found. The social media giants’ race to sign up subscribers — despite known bottlenecks in the federal application process — has opened the door for tens of thousands of people to receive federal aid they shouldn’t have.
Most of the problem was affecting about 200,000 adopted families monthly internet benefits after they say they have a child who attends a very poor school. More than 143,000 of those beneficiaries registered for stipends in the name of the student who did not give his name, according to data obtained by The Post. About 20,000 applicants — some included children’s names, some did not — also named a school 50 miles or more from their home address.
Some of the biggest fraud cases involved low-cost carrier Boost Mobile, owned by Dish, which registered 11,000 families based on students attending remote schools — including more than 400 students who live thousands of miles away. Presented by The Post’s findings, a Dish spokesperson said Boost Mobile services are offered through “independent third-party stores.” He added that the company has worked to improve its processes and the FCC.
The telecommunications industry quickly moved to tighten compliance, as the FCC’s inspector general issued a series of sharp warnings about the dangers of waste, fraud and abuse. On Capitol Hill, meanwhile, Democrats and Republicans are looking to reform their broadband benefits as a $14 billion effort called the Affordable Care Act. The changes, directed by the Biden administration, helped reduce abuse and spurred more enrollment. But they still open the door to new headaches that consumers have recently raised with the FCC.
In many cases, little-known low-cost carriers have come to see the money as a business opportunity – and some have used dubious marketing tactics to sign up new subscribers. A discount brand owned by T-Mobile, called Assurance Wireless, repeatedly signed up families for federal benefits in ways that later led those customers to complain to the FCC, according to documents obtained by The Post. In some cases, they told the agency, the company’s tactics had the effect of switching the customer’s profits from another provider when they hoped to use the monthly discount, leaving them on the hook for credit.
In a statement, Tara Darrow, a spokeswoman for Assurance and parent company T-Mobile, said there was “no instance where a customer could be enrolled in these plans without their consent.”
On Wednesday, Pallone acknowledged that “many problems have been solved” since the US government began providing broadband benefits during the pandemic. He also praised the phone companies for participating in the voluntary program. But he promised stricter monitoring to come, stressing that he would ensure they “comply with safeguards and consumer protection standards.”