Thousands have reportedly asked the US for free internet – in the name of a child

In total, the potentially fraudulent activity may have resulted in about $1.4 million in abuse, according to federal investigators. The government sent that money directly to telecommunications companies, which by law accept federal benefits on behalf of their subscribers and apply the rebates to customers’ bills. None of the companies that processed the suspect applications and received federal funds are named in the report.

But the FCC’s inspector general on Thursday described the case as a serious threat, one that, if left unaddressed, could undermine the roughly $14 billion in subsidies Congress passed last year. And its results offered a stark reminder of the myriad problems that plagued its decades-old predecessor — an initiative to provide a low-cost phone service that had been riddled with fraud over the years.

The FCC did not immediately respond to a request for comment.

David L. Hunt, the agency’s inspector general, said in a statement that telecom providers that seek “program support each month after failing to properly train and monitor their sales agents’ enrollment activity will be held accountable.”

Lawmakers approved the Affordable Connectivity program in a bipartisan vote last November as part of a sweeping $1.2 trillion bill to improve the nation’s infrastructure. The benefit system bolstered a broadband initiative passed earlier in the coronavirus pandemic as Congress sought to ensure hard-hit, cash-strapped Americans could maintain their Internet connections at a time when life, work and school had migrated online.

Known as ACP, the program’s guidelines are generous. Families can qualify if they already receive other government aid, including low-cost health insurance under Medicaid and low-income education awards known as Pell Grants, or if their income does not exceed 200 percent of the federal poverty line. The monthly benefit of up to $30 can go to a wide variety of plans nationally, and the subsidy itself is larger — up to $75 — for those living on tribal lands.

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Since its passage, more than 13 million subscribers have signed up, representing about a quarter of the total number of Americans estimated to be eligible. The gap reflects the challenges the government faces in reaching unconnected communities — and navigating them through what can be a complicated application process. Hoping to increase enrollment, Vice President Harris has launched a nationwide effort in recent months to publicize the program.

In doing so, however, the government has faced a challenge: encouraging participation while fending off criminals who might be inclined to steal aid from Washington. The potential scams uncovered by the inspector general of the FCC, revealed in a report Thursday, put that task in sharp relief.

The alleged fraud hinges on a critical provision of the program: An entire household is eligible for monthly broadband subsidies, even if only one person, including a child or dependent, meets the criteria for participation. A family could receive a $30 monthly credit, for example, if they have a student who receives free and reduced lunch — even if their parents receive no other federal aid.

To receive help in this way, applicants for broadband credits are asked to provide the name of the child or other relative for whom they qualify. But telecom companies and the US government apparently failed to catch repeated cases where households used the same child or other relative’s name and address – and in some cases even their same partial social security number – and still received monthly benefits.

In Oklahoma, 1,042 households got their broadband help by saying they had a 4-year-old child — the same 4-year-old — who was receiving Medicaid benefits. The child’s name, date of birth and the last four digits of their Social Security number “were used over and over again,” according to the FCC, which said the transactions began in December.

Nationally, the FCC’s top watchdog discovered 11 other cases in which apparently qualified applicants had been used to obtain benefits hundreds of times each. In Texas, for example, an unnamed telecommunications company enrolled 997 households in the government’s Internet program, even though each of the applicants included the same 18-year-old.

In his warning, issued Thursday, the inspector general acknowledged that the total amount of inappropriate payments “remains low” — but stressed that the data shows that “the use of this egregious technique is steadily increasing, particularly for certain providers.”

The findings marked the latest warning from the FCC’s top watchdog, who this year has highlighted potential predatory practices by telecom companies and specific cases of stolen or misused funds. Some of the warnings and enforcement efforts involved an earlier iteration of the Internet subsidies, called the Emergency Broadband Benefit, that Congress passed as part of the 2021 US bailout.

But fraud targeting public telecom programs long predates the pandemic and more recent efforts to ensure Americans can afford Internet access. For decades, a wide variety of threats drained money from the decades-old program known as Lifeline, which provides low-cost phone service to needy Americans. The FCC issued a series of massive penalties — including a $200 million fine against Sprint in 2020 — for abuses that allowed ineligible subscribers to obtain public benefits. In its wake, the FCC, mainly under Republicans, tightened it to the point where critics believed it discouraged enrollment.