Wednesday, September 21, 2022

FCC Inspector General Warns Against Fraud in Broadband Spending Program

On September 8, the FCC's Office of Inspector General issued an advisory regarding the presence of ongoing fraud and threats the integrity of the Affordable Connectivity Program (ACP). That $14.2 billion program was established Infrastructure Investment and Jobs Act of 2021, in order to help qualifying low-income households be able to afford broadband Internet connections. But the Inspector General has called attention to a deceptive tactic being used whereby "a number of providers and their agents have enrolled many households into the ACP based on the eligibility of a single BQP [Benefit Qualifying Person]. A single BQP cannot be used to qualify multiple households for ACP support simultaneously."  

The Inspector General's advisory offered some examples of fraudulent enrollment through multiple uses of the same BQP, including more than 1,000 Oklahoma households being enrolled based on the eligibility of a single BQP. Although it deemed improper payment amounts low relative to the overall program size, the Inspector General wrote that "the data show use of this flagrant technique is steady to increasing, particularly for certain providers." The Inspector General issued the advisory in order to put providers on notice regarding that fraudulent tactic.

Additionally, the Inspector General's advisory noted that "[f]raud, waste, and abuse remains a serious problem for Commission programs." Indeed, it is important that the Commission continue to ensure that program dollars are spent as intended and benefitting the proper recipients. (Commissioner Brendan Carr issued a September 9 statement responding to the Inspector General's advisory and again raising his concerns about the need to take action to avoid future misuse of FCC program dollars.) 


Moreover, in public comments filed in February 2022, Free State Foundation President Randolph May and Senior Fellow Andrew Long called attention to the need for the NTIA to curb fraud, waste, and abuse in another program that was established through the Infrastructure Act, known as the Broadband Equity, Access, and Deployment (BEAD) Program. The BEAD Program will disburse $42 billion to the states for distribution for broadband infrastructure construction grants, to connect primarily unserved locations. According to the comments filed by President May and Mr. Long: 

In this unprecedented expenditure of taxpayer funds, the exercise of great care and discipline is necessary to ensure that waste, fraud, and abuse are prevented, or at least minimized. NTIA has the affirmative responsibility and duty to ensure that its oversight in conjunction with the states' implementation, stays focused on geographic areas that truly and objectively are unserved.

It is to be hoped that the BEAD Program spending will be safeguarded by NTIA as well as participating states and that program implementation will not necessitate concerns such as those raised by the FCC's Inspector General's advisory about the ACP Program.