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COMMITTEE ON
HOMELAND SECURITY ANO GOVERNMENTAL AFFAIRS
WASHINGTON. DC 20510-6250
February 13,2012
The Honorable Julius Genachowski
Chairman
Federal Communications Commission
44512~Street S.W., Room 8-8201
Washington, DC 20554
Dear Chairman Genachowski:
As part ofthe Subcommittee's ongoing oversight of contract management, I am writing
to request infonnation and documents about contracts related to Lifeline, the program that
provides discounted landline services to qualified, low-income customers.
Since 1999. the Federal Communications Commission (FCC) has delegated the
administration ofLifeline to the Universal Service Administrative Company (USAC), a not-for 
profit corporation. USAC enters into agreements with private telephone companies who are
responsible for enrolling eligible customers in Lifeline.
l
In 2008, Lifeline was expanded to provide discounted prepaid wireless phones and
services. Since the expansion, there has been a substantial increase in the number ofcustomers
who participate in the program and the costs of Lifeline have increased from $800 million in
2008 to approximately $1.3 billion in 2010.
2
The overall costs ofthe program were expected to
exceed $1.5 billion in 2011.
3
I am pleased by the FCC's recent actions to reduce waste, fraud, and abuse in Lifeline.
These refonns include establishing a ational Lifeline Accountability Database to prevent
I Government Accountability Office, Telecommunications: Improvement Management
Can Enhance FCC Decision Making/or Universal Service Fund Low-Income Program (OCI.
2010) (GAO-I I-I I).
2 Lifeline is paid for by the Universal Service Fund (USF). The Telecommunications Act
of 1996 requires all telecommunications carriers providing interstate telecommunications
services to contribute to the fund. Usually, carriers pass their contribution on to their customers
in the form ofa fee that is added to their monthly telephone bill. Id.
3 Id.
0201
The Honorable Julius Genachowski
February 13,2012
Page 2
customers from receiving phones from multiple telephone companies and conducting
independent, bi-annual audits ofcompanies that receive more than $5 million in program
disbursements.
4
The FCC has also taken steps to eliminate nearly 270,000 duplicate
subscriptions from the program.
s
The proper management and oversight ofcontracts related to Lifeline may provide
additional opportunities to eliminate waste. fraud. and abuse from the program. To assist the
Subcommittee in understanding how the FCC uses contracts for Lifeline, I request that you
provide the following information and documents:
(I) A copy ofthe Memorandum of Understanding (MOU) between the FCC and USAC;
(2) The number ofcontractors employed by the FCC who perform work related to the
management or oversight of Lifeline, and the number, value, and scope ofall contracts
under which those contractors are employed;
(3) The number, value, and scope ofall contracts, MOUs, or agreements between the FCC or
USAC and other administrators of the program;
(4) The number, value, and scope ofall contracts, MOUs, or agreements between the FCC or
USAC and eligible telecommunications carriers;
(5) All audits, evaluations, or reports related to the performance ofUSAC and eligible
telecommunications carriers; and
(6) A list ofeligible telecommunications carriers who participated in the program during
FY2011 and the amount ofprogram disbursements received by each company.
The jurisdiction of the Subcommittee on Contracting Oversight is set forth in Senate Rule
XXV clause l(k); Senate Resolution 445 section 101 (108
1h
Congress); and Senate Resolution 73
(Ill'" Congress).
4 Id.
S Federal Communications Commission, FCC Reforms. Modernizes Lifeline Program for
Low-Income Americans (online at www.fcc,gov){accessedFeb. 6, 2012),
The Honorable Julius Genachowski
February 13, 2012
Page 3
I appreciate your assistance with this request. Please contact Margaret Daum with the
Subcommittee staffat (202) 224-4462 with any questions. Please send any official
correspondence relating to this request to kelsey stroud@hsgac.senate.gov.
Sincerely,
Claire McCaskill
Chairman
Subcommittee on Contracting Oversight
cc: Rob Portman
Ranking Member
Subcommittee on Contracting Oversight
Enclosure