Letter from Commissioner Pai to Chris Henderson, CEO of USAC

Thank you very much for your letters regarding the waste, fraud, and abuse that has riddled the Universal Service Fund's Lifeline program since wireless resellers began participating in this program in earnest in 2009. My inquiry concerns the ability of unscrupulous wireless resellers to avoid the safeguards of the National Lifeline Accountability Database (NLAD) altogether.

A wireless reseller may seek federal funds for subscribers who aren't subject to federal safeguards at all. Theses "subscribers" might be actual customers whose Lifeline eligibility has not been verified through the NLAD. Or they might be phantom customers who do not even exist. In either case, the reseller can get away with receiving federal funds unless they're caught after the fact. If American taxpayers are to have faith in the Universal Service Fund, they must know that the Lifeline program only supports actual, eligible subscribers, not phantoms. To that end, I request that you provide my office with the following information.