The Oklahoma Corporation Commission is seeking documents from a phone company that provides subsidized phones to low income individuals.
Sarah Terry-Cobo reports in the Journal Record that a Corporation Commission complaint against True Wireless alleges more than 2,800 violations and seeks $1.4 million in fines. Many of the violations have to do with verifying the eligibility of participants in the federal Lifeline program, which provides free or discounted phones for people who meet certain income requirements, are members of a Native American tribe, and participates in other federal programs like food stamps, Social Security disability, Medicaid or Section 8 housing.
Jacob McCleland: You're listening to the Business Intelligence Report, a weekly conversation among business news in Oklahoma. I'm Jacob McCleland and I'm talking with Sarah Terry- Cobo. She's the senior reporter at The Journal Record newspaper. Sarah, thanks for joining us.
Sarah Terry-Cobo: Hi Jacob thank you for having me. It's great to be here.
McCleland: Well let's talk today about True Wireless. They are a phone company that's run into trouble with Oklahoma regulators. Now you reported on this for us and the Journal Record last week. Now before we get into a True Wireless' problems with the Oklahoma Corporation Commission, tell us a little bit about this company. What niche do they serve?
Terry-Cobo: So they provide free or discounted cell phones to low income consumers. It's part of a federally-funded program called Lifeline. And former President Ronald Reagan originally started the service for landlines and then in 2005, President George W. Bush expanded it to cellphones. So people who are eligible often qualify for other assistance programs like housing assistance, nutrition assistance or Medicaid. You can get a higher subsidy if you receive assistance from a federal tribal program such as Bureau of Indian Affairs General Assistance and you live in an area that's been designated as tribal land. And a good portion of Oklahoma is considered tribal land.
McCleland: What's the problem that the Corporation Commission is uncovered here?
Terry-Cobo: Proving eligibility. So the company receives this subsidy from the federal government and the commission staff oversees the program. The company turns in their records to the commission and regulatory staff do checks on the documents to make sure that the person on the paper is really eligible. True Wireless has had several stipulation agreements previously where it was supposed to add extra people to do real time checking to verify if a potential customer is eligible. But it does not look like they are upholding their end of the deal, according to the complaint that the Commission has filed against the company.
McCleland: Explain this for us a little bit because True Wireless can set up tents to hand out their phones. But the company must inform the Corporation Commission daily about the tent locations and the Corporation Commission will send out plain clothes staffers to check on the tents. What have those staffers found.
Terry-Cobo: Well some of the issues that they have found when they're checking the records is not necessarily at the tents. So when they're checking these documents they found more than a thousand people who provided no documentation to show they were eligible. More than 1,000 had signed up at a location that was not reported to the agency and several hundred who had invalid documents. And the complaint says those problems were nearly identical to ones that were found in previous cases. And that's what resulted in the stipulation agreements to begin with.
McCleland: So what happens next here?
Terry-Cobo: Well they're in the discovery process now so commission staff has asked for more records and they're waiting for the company to turn over those documents. There will be a hearing before an administrative law judge and that's scheduled at the end of October. The commission staff are asking regulators to revoke True Wireless' carrier status to prevent them from operating here at all and about $1.4 million dollars in fines. And so ultimately, whatever the outcome has to be approved by a majority of that three member panel, the commission panel.
McCleland: Now I know this is a little bit down the road and speculative but what happens to a True Wireless' customers if regulators pull the plug on the company?
Terry-Cobo: Sure and the company does get due process and a chance to prove the commission staff are wrong. But if they do get shut down, then customers will get notified and they will need to switch to another provider of one of those Lifeline phones.
McCleland: Now the Federal Communications Commission has proposed that it could limit that Lifeline program to telecommunication companies that own their own network. The Center for Public Integrity reports that means you know companies like AT&T, Verizon and Sprint could continue to use the program but not companies, think like TracFone or I-Wireless. Those types of companies. About 70 percent of people nationwide who use the program would have to look elsewhere for phone service. Now if the FCC moves forward with this proposal, would True Wireless lose its ability to participate in Lifeline?
Terry-Cobo: Well I'm unclear on how that will effect True specifically, but the commission staff say they do have serious concerns about the proposed change and that it would have a major effect on customers here in Oklahoma who really depend on that program to have a cell connection. And cell phones aren't a luxury anymore. I mean for many people it's the only way to access the Internet, Apply for a job pay bills, that sort of thing.
McCleland: Sarah Terry-Cobo is the Journal Record's senior reporter. Sarah, thank you for your time.
Terry-Cobo: Absolutely it's my pleasure.
McCleland: KGOU and the Journal Record collaborate each week on The Business Intelligence Report. You can find this conversation at kgou.org. You can also follow us on social media on Facebook and Twitter @journalrecord and @kgounews.
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