Enrollment data for the FCC’s broadband affordability program shows that some broadband providers and their sales agents are engaging in fraudulent behavior, according to a warning from the agency’s inspector general. The IG says fraudsters claim their customers have children who attend high-poverty schools in order to qualify them for the FCC Emergency Broadband Benefit (EBB) program.
The timing is key because the agency is preparing to transition the program from a pandemic relief subsidy to a permanent program under the new infrastructure law. The law slated $14 billion for a subsequent version of the pandemic subsidy, retitled the Affordable Connectivity Program. The monthly benefit will drop from $50 to $30.
One way to qualify for the subsidy is to have a child who is eligible for free or reduced-price school food under the USDA National School Lunch Program’s Community Eligibility Provision (CEP). These meals are available to any child who attends certain high-poverty schools and school districts, regardless of their family’s income. Under the subsidy program’s eligibility rules, if a household has a child who attends a qualifying CEP school, it can enroll for the FCC’s aid.
In a memo released last Monday, IG David Hunt alerted EBB providers, beneficiaries, and the public that the office is trying to combat waste, fraud and abuse. “Providers’ sales agents are enrolling households in the EBB program by falsely claiming the household includes a dependent child who attends a CEP school,” Hunt said.
The advisory provides examples where the number of EBB households enrolled based on CEP school participation outnumber the students actually enrolled in those schools “only six months into the EBB program.” For example, Hunt’s office cited a Florida school that had only 200 students, but 1,884 households had claimed eligibility because they said they had a child enrolled in the school.
“Sales agents who work for just a handful of EBB providers are responsible for the majority of this fraudulent enrollment activity,” Hunt’s office said in the memo. These agents are often paid commissions based on their enrollment numbers, it added. Such providers could face civil or criminal sanctions, the office stated in the document.
The memo also outlined other suspicious practices, such as dozens of households putting down a provider’s retail address as their home address. “A provider retail store should never serve as the home address for any EBB household, let alone nearly 50,” the IG said. It also found that approximately 1,700 households who qualified through a high-poverty school lived more than 100 miles away from the school they listed — indicative of fraud, notes the IG, who says students typically don’t live more than 50 miles from their school.
In response, the Wireless Competition Bureau said it will implement additional measures to verify student enrollment in eligible schools, such as by official school documentation, for both future applicants and current subsidy recipients. The agency also said it would refer bad actors to its enforcement bureau for investigation and recoup any funds that were improperly disbursed.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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