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June 25, 2013
Enforcement Advisory No. 2013-4
LIFELINE PROVIDERS ARE LIABLE IF THEIR AGENTS OR REPRESENTATIVES
VIOLATE THE FCC's LIFELINE PROGRAM RULES
The FCC's Enforcement Bureau reminds Eligible Telecommunications Carriers
(ETCs) receiving federal universal service support from the Lifeline
program that they are liable for any conduct by their agents, contractors,
or representatives (acting within the scope of their employment) that
violates the FCC's Lifeline rules. ETCs, therefore, should take all
necessary steps to ensure that they and their agents, contractors, and
representatives scrupulously adhere to the Lifeline rules. ETCs could face
significant monetary penalties of up to $1.5 million for each failure to
The Lifeline program helps low-income Americans access affordable phone
service by providing discounts on basic monthly telephone service (either
wireline or wireless) for qualified subscribers. The Enforcement Bureau is
committed to rooting out waste, fraud and abuse in the Lifeline program,
and it is particularly concerned that some ETCs are failing to ensure that
their agents, contractors, and representatives adhere to the Lifeline
rules. Accordingly, the Bureau is aggressively pursuing possible
misconduct on the part of ETCs as well as their agents, contractors, and
What Do The Lifeline Rules Require? The Commission's Lifeline rules impose
detailed requirements on ETCs that offer Lifeline service, including
(without limitation) obligations to:
* implement policies and procedures to ensure subscribers are eligible
to receive Lifeline service;^
* confirm each subscriber's eligibility before activating Lifeline
* confirm each subscriber's eligibility before seeking reimbursement
from the Universal Service Fund for that subscriber;^
* require applicants to certify under penalty of perjury that they are
eligible and that their households do not already receive Lifeline
* keep records detailing the documents or data source used to determine
each subscriber's eligibility;^
* provide Lifeline service only to qualified individuals who do not
reside in households that already benefit from Lifeline service;^ and
* explain to subscribers that Lifeline is a government assistance
program and the service is non-transferable--that is, it may not be
sold or given to any other party.
We again emphasize that ETCs are liable for violations of these and other
Lifeline rules--and their liability extends to violations on the part of
their agents, contractors, and representatives.^ Therefore, if an ETC
retains an agent, contractor or representative to check eligibility
documentation, record details regarding the documentation applicants
provide, obtain applicant certifications, or engage in any other work
related to the Lifeline program, the ETC itself would be liable for any
act, omission, or failure on the part of the agent, contractor, or
representative that violates the Lifeline rules.
What Specific Laws Apply? The Communications Act, as amended, and the
Commission's Lifeline Reform Order provide that ETCs are liable for the
conduct of agents, contractors, and representatives in connection with the
work they are retained to perform.
* Section 217 of the Act provides generally that any "act, omission, or
failure" of an agent acting within the scope of its employment by a
common carrier "shall in every case be also deemed to be the act,
omission, or failure of such carrier."^
* Referring expressly to ETCs and their agents, the Lifeline Reform
Order states that while ETCs may contract with agents and
representatives in connection with providing Lifeline service, "the
ETC remains liable for ensuring the agent's or representative's
compliance with the Lifeline program rules."^
What Are The Potential Penalties? Violations of the Lifeline
rules--whether committed by an ETC itself or its agents or
representatives--may subject an ETC to monetary forfeitures of up to
$150,000 for each violation or each day of a continuing violation, up to a
maximum of $1,500,000 for any particular act or failure to act.^ Moreover,
in egregious cases a carrier may face revocation of its ETC status (and
thus its eligibility to participate and receive support in the federal
Lifeline universal service program) and/or revocation of its Section 214
authorization to operate as a carrier.^ In addition, false statements or
misrepresentations to the Commission may result in additional forfeiture
liability and may be punishable by fine or imprisonment under Title 18 of
the U.S. Code.
Need More Information? For more information about enforcement of the
Lifeline rules, please contact
Mindy Littell, Attorney, Investigations and Hearings Division, Enforcement
Bureau, at (202) 418-0789 or Mindy.Littell@fcc.gov. Media inquiries should
be directed to Mark Wigfield at 202-418-0253 or Mark.Wigfield@fcc.gov.
To request materials in accessible formats for people with disabilities
(Braille, large print, electronic files, audio format), send an e-mail to
email@example.com or call the Consumer & Governmental Affairs Bureau at
202-418-0530 (voice), (202) 418-0432 (TTY). You may also contact the
Enforcement Bureau on its TTY line at (202) 418-1148 for further
information about this Enforcement Advisory, or the FCC on its TTY line at
1-888-TELL-FCC (1-888-835-5322) for further information about Lifeline
Issued by: Acting Chief, Enforcement Bureau
^ 47 C.F.R. S 54.410(a).
^ Lifeline and Link Up Modernization and Reform, WC Docket No. 11-42,
Order, paras. 3-6 (WCB, rel. June 25, 2013).
^ Id. S 54.410(b)(1)(i), (c)(1)(i).
^ Id. S 54.410(d)(3)(vi).
^ Id. S 54.410(b)(1)(iii), (c)(1)(iii).
^ Id. SS 54.405(a), 54.409(c).
^ As noted in the Lifeline Reform Order, "[t]he Commission has
consistently found that `[l]icensees and other Commission regulatees are
responsible for the acts and omissions of their employees and independent
contractors,' and has held the regulated party responsible for violations
of the Commission's rules committed by agents." Lifeline and Link Up
Reform and Modernization, Report and Order and Further Notice of Proposed
Rulemaking, 27 FCC Rcd 6656, 6708-09, para. 110 (2012) (Lifeline Reform
^ 47 U.S.C. S 217.
^ Lifeline Reform Order, 27 FCC Rcd at 6708-09, para 110.
^ 47 U.S.C. S 503(b)(2)(B); 47 C.F.R. S 1.80(b)(2); Amendment of Section
1.80(b) of the Commission's Rules, Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 23 FCC Rcd 9845 (2008).
^ 47 U.S.C. S 214.
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FCC ENFORCEMENT ADVISORY
Federal Communications Commission
445 12^th St., S.W.
Washington, D.C. 20554
News Media Information 202 / 418-0500