CTIA Says Carriers Shouldn’t Have to Pay Back Katrina Money
CTIA and two Louisiana Public Service Commission members asked the FCC to reverse a requirement by the Universal Service Administrative Co. (USAC) that AT&T, T-Mobile and TracFone repay money they got for providing free wireless service after Hurricane Katrina almost five years ago. The carriers provided service under an emergency FCC program that provided $39 million in Lifeline money to help hurricane victims and temporarily made each an eligible telecommunications carrier (ETC). A USAC audit later found that the carriers had failed to provide adequate documentation.
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USAC’s demand for reimbursement “is the perfect example of the old adage, ‘no good deed goes unpunished,'” CTIA said in comments filed late Monday at the FCC. “Unless corrected, USAC’s mistaken interpretation of the Katrina Lifeline program will set a dangerous precedent in future disasters and place superfluous paperwork requirements between those in need and those willing to help."
Lambert Boissiere, a member of the Louisiana PSC, filed a letter this week at the FCC in defense of the carriers. “From my perspective, T-Mobile, as well as other carriers that participated in the Katrina Program, went to great lengths during a tumultuous and difficult time to assist hurricane victims,” he said. “The efforts made by the FCC, T-Mobile and other participating carriers should be lauded. Therefore, I would hate to see T-Mobile or any company penalized for an act of kindness performed after a disaster of unprecedented proportion, when our City and State needed so much help."
Louisiana Commissioner Foster Campbell also said the carriers had performed an important service during a tough time for the state. “Should the FCC uphold USAC’s findings and recommendations, the Commission could discourage carriers from participating in future emergency relief programs, to the detriment of consumers and the public interest,” Campbell wrote.
Seeking review of the USAC decision, AT&T said Cingular, its wireless affiliate in 2005, had provided a free wireless handset and a package of at least 300 minutes of use to almost 20,000 Katrina victims after it was made a temporary ETC. USAC asked for reimbursement after an audit because Cingular failed to keep letters from the Federal Emergency Management Agency certifying that each recipient was eligible for support.
"It was clear to Cingular at the outset that if it chose to participate in this laudable temporary program, its compliance with the special rules that the Commission established in its Hurricane Katrina Order would be reviewed in an audit,” AT&T said in a request for review filed at the Wireline Bureau. “Thus, Cingular developed a comprehensive set of methods and procedures that it required its employees to follow to ensure that it was providing the Hurricane Katrina Order Lifeline benefit only to qualified individuals.” Cingular created a special Hurricane Katrina Lifeline database for employees to use “to confirm that a customer (and household) requesting free service under the program had not already received a Katrina Lifeline package from Cingular,” the carrier said. In the audit, USAC examined 120 subscriber bills and handset invoices to ensure that each got a handset as promised, AT&T said. “In other words, USAC validated that Cingular passed along the full amount that it received from USAC to 100 percent of its Katrina Lifeline subscribers."
Cingular worked with vendors to scan customer documentation on Katrina and Lifeline -- forwarded from company stores -- and to process requests that were mailed in, AT&T said. “For reasons that remain unclear, Cingular does not have copies (electronic or paper) of all of the documents that its employees forwarded to the scanning vendor,” AT&T said. “In particular, Cingular does not have electronic or paper copies of the FEMA documentation.”
So USAC demanded reimbursement for all money paid. AT&T warned that if the FCC upholds “what is essentially USAC’s strict liability decision” and upholds a full recovery, the commission would “chill future participation in Katrina Lifelinelike Programs."
T-Mobile said it provided handsets and service to 51,600 Katrina victims even as it struggled to restore its network in the Gulf region. As with AT&T, USAC demanded full reimbursement because T-Mobile didn’t have FEMA letters on file for those it helped. “Carriers participating in the Katrina Program were never required to retain victims’ FEMA documentation or other corroborating documentation and thus had no notice of such Requirements,” T-Mobile said. The FCC’s Katrina order required carriers serving as temporary ETCs to “maintain all necessary documentation,” but neither the order itself nor USAC “explained or defined” how to meet this requirement, T-Mobile said.
"T-Mobile materially complied with the requirements of the Katrina Program by implementing a reasonable process for establishing customers’ eligibility,” the carrier said. “The absence or purported inadequacy of certain documents requested by USAC during the audit process does not demonstrate that T-Mobile erred or otherwise improperly granted Lifeline assistance to ineligible Katrina victims.” Prepaid provider TracFone took a similar position in a filing at the FCC.