FCC to Migrate Subs Off Major Lifeline Provider
The agency said IM Telecom enrolled subscribers without their consent and violated non-usage rules
WASHINGTON, July 28, 2026 – Federal regulators are concerned a large provider of subsidized mobile service could be defrauding the government.
The Federal Communications Commission said Monday that IM Telecom would not be able to enroll new subscribers in the agency’s Lifeline program, which provides a $9.25 monthly discount on mobile service for low-income households.
IM Telecom has received $262 million in Lifeline funding since 2024, the agency said. Lifeline spends about $1 billion annually.
The FCC accused IM Telecom of evading rules that prevent payment for unused subscriptions, and transferring thousands of former subscribers back to the company after they had switched.
In addition to blocking new subscribers, the FCC said it was working with IM Telecom to transfer its remaining subscribers to other Lifeline providers. Earlier this month, “federal agents executed search warrants on multiple individuals associated with IM Telecom,” the FCC said.
“The FCC is taking immediate action today to block IM Telecom from enrolling new customers while we examine additional potential actions,” FCC Chairman Brendan Carr said in a statement. “Today’s step helps protect the program and makes clear that abuse and evasion of program rules will not be tolerated. Existing and legitimate IM Telecom customers can switch to another Lifeline provider.”
IM Telecom was bought by Texas-based KonaTel in 2019. KonaTel is trying to sell the company to California-based Excess Telecom, which already acquired a 49 percent stake in 2024, but the FCC has yet to approve the deal.
In the agency’s release, the FCC accused IM Telecom of “changing corporate control without obtaining required federal approvals.”
A KonaTel spokesperson did not respond to a request for comment, nor did an Excess Telecom spokesperson.
The FCC noted California and Oregon have also sent cease-and-desist letters to IM Telecom. Those states have historically used their own identity verification system, as opposed to the federal one, for Lifeline. California’s authority to do so was revoked by the FCC last year.
Carr has launched a review of Lifeline aimed at curtailing fraud. The agency proposed tighter subscriber eligibility requirements and other measures in February.
Consumer advocates are opposed to the measure, arguing the additional paperwork for subscribers, rather than providers, could lead to eligible participants throwing up their hands and dropping service.
