October 18, 2013 1:24 PMpost, supporting Dr. Anna Marie Kovacs' excellent study for the Internet Innovation Alliance. I had "so-so" success, and--with what's been going on in Washington for the past few weeks--I can't blame anyone that mistakenly interpreted my post as a serious endorsement of government-imposed inefficient investment in order to prop up the economy. Dr. Kovacs' study deserved better, and if you'd like to see better, please read this excellent discussion of the study by Richard
Among the if-you-didn't-know-better-you'd-swear-it-was-made-up news from last week, a group of Republican House members--after imposing a minimum of $160 million per day in costs to U.S. taxpayers (not counting long term credit cost affects) from shutting down the government for what Sen. John McCain described as a "fool's errand" based on an inability to understand how the government works--sent a letter to the FCC complaining about a program [Lifeline] that they contend "continues to symbolize everything that is wrong with Washington."
Did you get it? Republican House members shut down the government--at a minimum cost of $160 million a day--because they failed to understand that the U.S. system of government requires the majority of both houses of Congress, and the approval of the President, to not only enact a law, but also to repeal a law--in this case "Obamacare." Then, these same lovable rapscallions send a letter to the FCC (where no one is working at the time) to protest the "Obamaphone" program--because that program represents "everything that is wrong with Washington." Pot-Kettle-Black much, gang?
One of the many, subtly-hilarious parts of the movie "Willy Wonka and the Chocolate Factory" is when Willy, played by Gene Wilder, offers a nauseous parent a "rainbow drop" candy which will allow her to "spit in 7 different colors." "Violet Beauregard", a gum-chewing, bossy little girl offers the unsolicited comment (while digging her finger up one nostril) "spitting is a dirty habit." Willy looks at Violet, and responds, "I know a worse one." Here, take a look for yourselves.
In this vignette, the woman getting sick is the low-income consumer, Acting Chair Clyburn is like Willy Wonka, and the House Republicans are like Violet--we'll just call her "Marsha"
Aside from the fact that these Republican House members seem to erroneously believe that every law the President is charged with enforcing must be cited with the prefix "Obama", i.e., Obama-Constitution, Obama-Bill of Rights, etc., they are clearly taking aim at any government program that could even arguably threaten them for the crown of "biggest waste of taxpayer money." Nonetheless, even the broken clock is right twice a day, so let's consider the basis for their ill-timed concerns.
In addition to a steady cascade of (mostly-unsubstantiated) negative publicity, the FCC recently imposed notices of apparent liability (NALs) against 5 Lifeline providers for approximately $14 million for submitting inaccurate and duplicative requests for reimbursement. It should be noted, though, that the FCC is not alleging that the providers in question defrauded the Fund by this amount. However, we should take away the understanding that the FCC is very serious about making sure that carriers submit accurate reimbursement requests.
The amount of the alleged overpayments by the Lifeline Fund to the carriers is relatively small, compared to the amount of "fines and penalties"--which are punishment for the violations that led to the overpayments. In total, the 5 carriers received $73,250 in overpayments, resulting from duplicative claims for reimbursement from a total of 2,753 customers (out of over 19 million enrolled in Lifeline).
So, to be clear, these Republican House members are not outside their rights to raise questions about the Lifeline program and its administration. They were, however, outside their rights to assume their conclusion--that the Lifeline program is not worth, or not possible to repair--before they even asked their questions. Nonetheless, even if they weren't right about their conclusions or even most of their questions, they do seem to exhibit ever so slightly more intuition about how markets work than the Commission.
And, while this ever so slight recognition of market incentives isn't in itself going to change the direction of the Lifeline program, it is a start to figuring out how the Commission is--if it ever is--going to get the Lifeline program firmly on the road to reform that it started over 2 years ago, that will eventually include databases to check inter-company duplicates and to be able to perform eligibility verification online as additions to its arsenal of best practices to protect program integrity. So, be sure and check in next week to part 2 of this "very special" Telecomsense series, to hear me expound on something I am very familiar with.