Analysis of 2017 GAO Report Finds Results Flawed, Outdated

Susan M. Gately and Helen E. Golding, two authors who have been evaluating matters related to the operation of the FCC’s universal service fund since its inception and have written extensively on opportunities for waste, fraud, and abuse in the High Cost Fund portion of USF, released an analysis in February 2018 entitled An Analysis of the “Unconfirmed” and “Deceased” Subscriber Findings in the 2017 GAO Lifeline Report.

The analysis found that ongoing references to GAO’s 2017 Lifeline Report, now itself almost a year old, ignore that it analyzed a snapshot of Lifeline data that is more than three years old – data from 2014 not 2017. The snapshot was taken in the midst of a period of dramatic changes to Lifeline program subscriber verification processes and enrollment numbers. Any problem subscribers that GAO did identify in the 2017 Report were likely off the Lifeline rolls three years ago (and it is not even clear the subscribers that GAO failed to confirm back in 2014 were, in fact, ineligible at that time to receive the Lifeline program benefit).

  • Enrollment in the Lifeline program has dropped by more than 40% (more than 7-million) since its peak in 2012, when program changes directed by the FCC began being implemented.
  • More than 1.5-million subscribers were dis-enrolled during 4Q14 and 1Q15 alone (the quarter when GAO sampled the data discussed in the 2017 Report and the next quarter).
  • The much referenced “deceased” subscribers found by GAO represent 6/100ths of 1%
    (0.06%) of the data analyzed – well below standard data error rates (which could have occurred in either the Lifeline data set or Social Security Death Index or both).
  • GAO’s analysis was conducted on a snapshot of data from a newly constructed database; corrections resulting from a “scrubbing” of that data completed in the months following GAO’s snapshot were not included in the data it used.
  • The Lifeline database GAO used for its analysis was not constructed or intended to be used as part of the Lifeline eligibility verification process; the information in that database was also not the basis for payments to Lifeline providers.
  • GAO attempted to cross-match different fields within that Lifeline database against a dozen different state and federal government-maintained data sets that were being maintained for uses distinct from the Lifeline eligibility verification process.
  • Most of the instances in which GAO’s could not “confirm” subscriber eligibility, are in hindsight, explainable by the process used – not by subscriber ineligibilty.
  • GAO expressed concern with the number of carriers participating in the Lifeline program (known as ETCs). The vast majority of the Lifeline providers are wireline incumbent local exchange carriers – specifically the same rural carriers (RLECs) that comprise most of the participants in the high cost portion of the Universal Service Fund – not wireless carriers and not resellers.

View the full report here.