A leading congressional committee opened a probe of AT&T, Charter, Dish Network, T-Mobile and Verizon on Wednesday, aiming to explore if these and other telecom giants are “abiding by the law” in administering a federal aid program that helps low-income families stay online.
The inquiry — commenced by Rep. Frank Pallone Jr. (D-N.J.), the chairman of the tech-focused House Energy and Commerce Committee — comes in the wake of a Washington Post investigation that found internet providers had unleashed price hikes, speed cuts and fraud risks in connection with the pandemic-era initiative.
The heightened scrutiny centers on the roughly $17 billion adopted by Congress since 2020 to help cash-strapped families and close the country’s digital divide. First called the Emergency Broadband Benefit, then rebranded last year as the Affordable Connectivity Program, the initiative pays stipends directly to telecom providers to lower qualified Americans’ monthly bills, sometimes to zero.
The aid has helped more than 14 million households cut costs, though the sign-ups reflect about a quarter of the roughly 49 million households eligible for help. The gap is due in part to telecom providers, whose tactics are laid bare in thousands of consumer complaints — and reams of other data — that The Post obtained under the Freedom of Information Act.
Responding to those findings, Pallone wrote to 13 companies Wednesday, noting he is “deeply concerned” that some “may not be adhering to the requirements of the program.” The chairman added that the allegations reflect “actions that are now explicitly prohibited by Congress and the FCC.”
And Pallone demanded details about the internet providers’ administration of the broadband benefits. The questions included the number of people they serve, the way they market their internet offerings and the complaints they have received from aggrieved customers. Pallone also inquired about their billing practices and their oversight mechanisms, including the extent to which agents are paid commissions for sales.
“The success of the current program, ACP, is crucial to making progress in our shared goal of connecting all Americans,” wrote Pallone, requesting answers by Nov. 9.
In separate statements, AT&T and Verizon acknowledged receipt of the letters and said they will respond accordingly. They each highlighted their commitment to the federal program. Charter pointed to its prior comments, which touted its own efforts to promote government broadband benefits. Dish and T-Mobile did not immediately respond to requests for comment.
Pallone’s letter reflected a broader, ongoing challenge facing the U.S. government as it seeks to keep close watch over the more than $5 trillion in emergency spending adopted since the start of the pandemic. The money helped rescue the economy from free-fall, but it has remained hard to track and subject to waste, fraud and abuse, The Post has revealed in The Covid Money Trail, a year-long series. That includes a wide array of misspending that has since drawn the interest of federal inspectors general.
The complaints about government internet subsidies date to the program’s earliest days, when it was known as the Emergency Broadband Benefit. Many consumers told the Federal Communications Commission beginning in early 2021 that telecom giants including AT&T, Charter and Verizon had forced them to make undesirable choices — agreeing to price hikes, speed cuts or other plan changes if they wanted to apply the federal benefit to their bills.
In response, AT&T attributed some of the issues to “technical challenges” made worse by the speed at which Washington implemented the benefit program. Charter said it had been clear with customers and achieved “significant participation,” while Verizon acknowledged it changed its policies amid a public backlash.
Meanwhile, the broadband benefits quickly became a source of potential fraud, The Post found. The telecom giants’ race to sign up subscribers — on top of long-known glitches in the government’s application system — opened the door for potentially tens of thousands of people to obtain federal aid they did not qualify to receive.
Much of the problem concerned roughly 200,000 families who received monthly internet benefits after claiming they had a child attending a high-poverty school. More than 143,000 of those beneficiaries signed up for the stipends on behalf of a student whose name they never supplied, according to data obtained by The Post. Nearly 20,000 applicants — some included children’s names, some did not — also named a school 50 miles or more away from their home address.
Some of the greatest fraud risks involved the low-cost carrier Boost Mobile, owned by Dish, which signed up 11,000 families based on students attending far-flung schools — including more than 400 students who lived thousands of miles away. Presented with The Post’s findings, a spokesman for Dish said Boost Mobile services were offered through “independent third-party retail outlets.” He added that the company has worked to improve its processes along with the FCC.
The telecom agency soon moved to tighten eligibility, as the FCC’s inspector general issued a series of sharp alerts about the risks of waste, fraud and abuse. On Capitol Hill, meanwhile, Democrats and Republicans looked to refashion their broadband benefits as a $14 billion effort called the Affordable Connectivity Program. The changes, overseen by the Biden administration, helped clamp down on abuse and spurred more enrollment. But they still opened the door for new headaches that consumers soon raised with the FCC.
In many cases, lesser-known low-cost carriers came to see the money as a business opportunity — and some adopted questionable 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 a consumer’s benefit away from another provider where they had hoped to apply the monthly discount, leaving them on the hook for a bill.
In a statement, Tara Darrow, a spokeswoman for Assurance and its parent company, T-Mobile, said there is “no instance where a customer could be enrolled in these programs without their permission.”
On Wednesday, Pallone acknowledged that “many issues have been resolved” since the U.S. government began offering broadband benefits at the height of the pandemic. He also praised telecom companies for participating in a program that is voluntary in nature. But he pledged strong oversight still to come, stressing he would make sure they “comply with the safeguards and consumer protection standards.”
Post expires at 1:38am on Friday April 28th, 2023