FCC Removes Provider from ACP Successor Programs

The provider failed to provide evidence that it did not violate ACP rules, said the FCC.

FCC Removes Provider from ACP Successor Programs
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July 11, 2024 – The Federal Communications Commission removed K20 Wireless and its CEO Krandon Wenger from the Affordable Connectivity Program and any successor program on Wednesday.

The pandemic has prompted a new era of funding for broadband infrastructure.

In May, the FCC released a Notice of Apparent Liability alleging that the company and Wenger had “engaged in serious, willful misconduct in violation of multiple ACP rules.” The notice outlined that the company had improperly transferred ACP subscribers using false information, including falsely marking non-tribal areas as Tribal lands, and transmitted certified reimbursement requests containing false information. 

The notice found K20 and Wenger “jointly and severally liable for these apparent violations.” 

Households could qualify for ACP benefits on the basis of a member of the household participating in other low-income benefit programs like free and reduced-price school lunch programs, food stamps, and Medicaid. Agency investigators found that K20 transferred ACP subscribers without notice or consent, changed subscriber’s existing non-tribal addresses to false addresses on tribal lands and then requested tribal lands for support for those subscribers for whom the company did not confirm eligibility. 

Wenger submitted an ACP reimbursement request in May 2023 for over 1,600 tribal addresses. Tribal lands were entitled to a $75 monthly subsidy through the now-lapsed program as opposed to other eligible households which were subsidized to a $30 monthly subscription. In addition, bank transcripts show that K20 made large transfers from its account used to receive ACP reimbursement to Wenger and his family for personal use, said the order.

In response to the notice, K20 filed a request for the FCC to consider Wenger’s age, educational background, and inexperience in the telecommunications industry when considering enforcement mechanisms. However, the FCC said that “to date, K20 and Wenger have not provided any evidence that K20 and Wenger did not engage in the conduct described in the [notice].”

K20 is not the first ISP to be removed from the ACP and subsequent programs. In May, the FCC removed Tone Communications and City Communications. The FCC proposed in January a $14-million fine against Tone and a $16-million fine against City. The companies had one month from that notice to respond justifying why they should continue to be allowed to participate in the ACP, but the agency was not convinced.

The ACP ran out of money in May. In 2021, Congress gave the ACP about $14.2 billion and although the program retained bipartisan support on Capitol Hill, lawmakers failed numerous times to find a compromise budget for the program, which provided the vast majority of recipients with $30 monthly Internet discounts.

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