Senate approves regulations to reduce abuse in ‘Obama phones’ program

The Senate this week approved legislation establishing regulations for the Lifeline Program – a federal program administered by the Oklahoma Corporation Commission. The program, widely known as ‘Obama phones’, provides phone service for qualifying low-income individuals.

Sen. Rob Standridge, Senate author of House Bill 2165, said the bill would require that phone service providers participating in the program verify the eligibility of their customers. The measure would also limit recipients to one phone line. The Oklahoma Corporation Commission would enforce fines established by the legislation.

“The state of Oklahoma doesn’t have a choice as to whether it participates in this program, but we should do whatever we can to ensure it is responsibly administered. Otherwise, it will only continue creating opportunities for fraud and abuse,” said Standridge, R-Norman. “By establishing meaningful guidelines at the state level, we can help adequately regulate the program, ultimately saving taxpayer dollars. This is one instance where the state Legislature can do something to stem the tide of federal waste.”

Standridge noted that Oklahoma telephone companies YourTel America Inc., and TerraCom LLC recently agreed to pay significant penalties resulting from an FCC investigation related to their participation in the program. The FCC found the two companies failed to adequately document individuals enrolled in the program, resulting in numerous participants receiving duplicate wireless or landline services. The Oklahoman in February reported the two companies agreed to pay penalties totaling more than $1 million.

Underscoring the potential for abuse in the system, Oklahoma companies received $236 million in connection with the Lifeline program in 2012, according to the Oklahoma Corporation Commission.

Rep. Jon Echols, primary author of HB 2165, said the bill would bring accountability to the program.

“This legislation gives the Oklahoma Corporation Commission some additional enforcement authority and creates badly-needed requirements for more information and verification of true eligibility from the phone service providers,” said Echols, R-Oklahoma City. “There is documented abuse of the program from providers who have given out duplicative lines and not done enough to verify the continuing eligibility of their customers served by the program.”

House Bill 2165 was approved Tuesday by a vote of 41-0. The measure will now return to the House for further consideration.