O’Rielly Warns that Regulatory Burdens May Hinder Lifeline Participation
USF contractors face aggressive audits, investigations, fines and prosecutions.
WASHINGTON, June 16, 2025 – Former FCC Commissioner Michael O’Rielly, a Republican, warns that the agency’s allegedly overzealous regulatory approach may hinder the success of the Lifeline service.
The Lifeline service, part of the FCC’s Universal Service Fund, was established in 1985 to provide low-income Americans with subsidies to help cover the cost of phone or internet service. Subscribers to the program receive a discount on qualifying monthly telephone services, broadband Internet, or bundled voice-broadband packages purchased from participating wireline or wireless providers.
According to the FCC, “The discount helps ensure that low-income consumers can afford 21st century connectivity services and the access they provide to jobs, healthcare, and educational resources.”
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USF contractors, who act as intermediaries linking individuals to service providers, are paid for each eligible person they enroll in the Lifeline program. The FCC's Universal Service Administrative Company (USAC) cross-references these contractors' invoices with various records and data to verify adherence to the complex regulations of the program.
However, O’Rielly claims in an op-ed published by Townhall that “the guidance and calculations by USAC auditors are anything but clear”. Furthermore, because the Lifeline program contractors rely on the accuracy of consumer data from outside sources to meet USAC compliance and audit requirements, there are often inconsistencies in the data, sparking enforcement proceedings.
There are a number of reasons for inadequate or inconsistent data between a contractor’s invoice and USAC auditors, each of which could result in the Lifeline program contractor being charged with civil or criminal fraud.
During both the Obama and Biden administrations, the FCC and the Department of Justice attempted to exploit these technicalities to gain media attention, but “well-meaning USF contractors have been caught up in aggressive audits, investigations, fines and prosecutions — and others have taken notice,” says O’Rielly.
Companies who actively or hope to work with the FCC now must decide whether or not their business is worth all of the regulatory traps the Commission has set.
“The FCC needs to recalibrate its accountability measures to ensure that every investigation is fair and allows for due process,” O’Rielly urges. “And for those who are found to be non-compliant, penalties must be proportionate.”
