FCC should take action to control fraud risks in its high-cost broadband program, GAO finds

The Government Accountability Office (GAO) recommended in a recent report that the FCC take action to control fraud risks in the $4.5 billion a year Universal Service Fund (USF) high-cost program. The USF provides subsidies to encourage deployment of modern communications networks capable of providing broadband service for consumers in rural, insular, and high-cost areas.

“There have been cases involving rate-of-return carriers receiving millions of dollars in improper payments from the high-cost program,” said the GAO. “For example, from 2002 to 2015, one such carrier received reimbursement for deploying infrastructure to areas where no consumers existed and, at the same time, received at least $27 million in reimbursement for ineligible costs, including a $1.3 million personal residence and a $43,000 sport utility vehicle.”

The GAO made five recommendations to the FCC which include following leading practices in GAO’s fraud risk framework, planning regular fraud-risk assessments tailored to the high-cost program, designing and implementing an anti-fraud strategy for the high-cost program with specific control activities, assessing the model-based support mechanism to determine the extent to which it produces reliable cost estimates, and considering whether to make use of the model-based support mechanism mandatory.

You can read GAO’s report here


FCC should take additional action to manage fraud risks in its program to support broadband service in high-cost areas (GAO, Oct. 2019)