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UNITED STATES GOVERNMENT

FEDERAL COMMUNICATIONS COMMISSION

OFFICE OF INSPECTOR GENERAL

 September 28, 2023 

FCC-OIG Advisory Regarding ACP Provider Noncompliance with Program 

Usage & De-Enrollment Rules 

Since the inception of the Emergency Benefit Broadband Program (EBB) and its successor, the 

Affordable Connectivity Program (together ACP), participating providers have claimed more 

than $10 billion to subsidize discounted devices and broadband service to low-income 

households. The Federal Communications Commission’s Office of Inspector General (OIG), 

whose statutory mandate is to protect the integrity of the FCC’s programs and operations by 

combating fraud, waste and abuse, previously identified enrollment fraud as the biggest threat 

to the integrity of the Lifeline program and the ACP. Today, OIG announces its growing alarm 

at the emergence of another major threat: significant provider noncompliance with program 

usage and de-enrollment rules. As described below, OIG’s concern originated from a recent OIG 

investigation of an ACP provider that improperly claimed $44.5 million in program funds on 

behalf of subscribers who were not using their ACP service. Subsequent OIG work further 

deepened this concern.

OIG issues this advisory to alert providers, consumers, and the public of our emerging concern 

that some providers are failing to comply with the ACP’s usage and related de-enrollment rules. 

We highlight this issue for stakeholders to address and prevent further program losses caused by 

this conduct, whether intentional or not. This is not the first time our office raised concerns 

regarding provider compliance with FCC program usage requirements.1 As in our previous 

advisories, providers, not low-income households, are responsible for the conduct we highlight. 

Background

In May 2022, OIG sent a warning letter to a large ACP provider (Provider X) regarding abusive 

and potentially fraudulent EBB enrollments made by its sales agents. OIG issues warning letters

to providers when we identify data and other evidence suggestive of fraud, waste or abuse, and 

1 https://www.fcc.gov/sites/default/files/oig_lifeline_usage_advisory_letter_01282020.pdf. In January 

2020, we issued a public advisory to alert Lifeline stakeholders to the potential for widespread carrier 

noncompliance with the Lifeline usage rule after the FCC announced Sprint claimed monthly subsidies for 

serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the 

service. Sprint repaid approximately $170 million in connection with that conduct. After acquiring 

Sprint, T-Mobile paid an additional $200 million civil penalty to resolve the Commission’s investigation. 

November 4, 2020, FCC Press Release, “T-Mobile Will Pay $200 Million Civil Penalty to Resolve Sprint 

Lifeline Investigation.”
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our office concludes our mission will be best served by a direct inquiry and dialogue. 

Specifically, OIG was concerned Provider X’s sales agents engaged in improper and abusive EBB 

program enrollments made in connection with the National School Lunch Program’s 

Community Eligibility Provision as described in our November 22, 2021, advisory. 

Later, in August 2022, OIG presented Provider X with an analysis of its claims data that raised 

serious questions regarding its compliance with EBB and ACP usage requirements. OIG 

requested Provider X demonstrate that it was compliant with those rules. After investigating, 

Provider X disclosed to OIG that it improperly claimed $44.5 million due to improperly 

implementing the usage requirements. Provider X also disclosed it received $2.6 million for 

improper enrollments associated with the National School Lunch Program’s Community 

Eligibility Provision and $2.3 million for claims associated with other compliance issues. In 

total, Provider X voluntarily repaid approximately $50 million (or one-third) of the total ACP 

funds it received for service claims between June 2021 and July 2022. 

The ACP Usage Rule

The Commission adopted the ACP usage and related de-enrollment rules as a safeguard against 

fraud, waste and abuse and to ensure taxpayer money is spent only to assist eligible subscribers 

who are actually using the service.2 Whenever a provider does not assess and collect a monthly 

fee from an ACP subscriber, the provider is required to (i) track that subscriber’s usage on a 

rolling thirty-day basis,(ii) send a notice if the subscriber has not used the service in a thirty-day 

period warning that their service will be terminated, and (iii) terminate that subscriber’s service 

if it remains unused at the forty-fifth day.3 Providers may claim reimbursement for any 

subscriber on the first of the month if that subscriber used their service in the prior thirty days 

or cured their non-usage prior to the de-enrollment deadline.4 

Under Commission rules, a subscriber uses the ACP service if they: 

(i) Make a call; 

(ii) Answer a call from a party other than the provider; 

(iii) Send an outbound text; 

(iv) Use data; 

(v) Purchase additional minutes; 

(vi) Purchase an additional data allowance; or, 

(vii) Respond to direct contact from the provider and indicate that he or she wants to 

continue service.

47 C.F.R. §54.407(c)(2), incorporated by reference in 47 C.F.R. 54.1808(c). 

Provider X returned $44.5 million after its investigation established it improperly claimed those 

funds for subscribers who had not used its ACP service, as defined by the FCC rules discussed 

2 Report and Order and Proposed Rulemaking adopting final rules for the Affordable Connectivity 

Program (January 21, 2022) (“2022 ACP Order”), para. 75; 2012 Lifeline Reform Order, para. 257. 3 2022 ACP Order, footnote 223 and 47 C.F.R. § 54.1809(c). The de-enrollment process became 

mandatory for most providers as of June 15, 2022. It became mandatory for providers that served fewer 

than 100,000 broadband subscribers and that also served some of those subscribers on tribal lands as of 

September 16, 2022. Prior to those dates, the usage rule in EBB and ACP only required that a subscriber 

use the service a single time in a month in order to be claimed, 47 C.F.R. § 54.1608(c). 4 47 C.F.R. § 54.1808(c).
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above. The potential magnitude of program waste prevented by requiring providers to ascertain 

that subscribers are actually using ACP service before they may seek reimbursement, is 

demonstrated by the size of Provider X’s initial improper claims and subsequent repayment. In 

short, the usage requirement plays an essential role in preventing significant program waste.

Though providers must certify, under penalty of perjury, that their subscribers used the service 

prior to making any claim for ACP reimbursement,5 contrary to OIG’s recommendations, the 

Commission does not require providers to report any objective metric of individual subscriber 

usage to demonstrate compliance with the rules above before disbursing program funds. 

OIG’s Broader Usage Concerns

OIG identified Provider X’s potential noncompliance with program usage rules through our 

analysis of NLAD and ACP claims data. Specifically, our analysis examined the percentage of its 

ACP subscribers for whom Provider X claimed program reimbursement each month during 

EBB. 

On the first day of each month, USAC sends each provider a list of subscribers who are enrolled 

with that provider on that date to determine the provider’s reimbursement claims for the prior 

month.6 Providers are responsible for identifying which subscribers on the monthly lists are 

eligible to claim for ACP reimbursement.7 USAC guidance also makes clear a provider may not 

seek reimbursement for providing ACP service to a subscriber who failed to use the service.8

OIG calculated each provider’s monthly claims rates by comparing the number of subscribers 

claimed by a provider each month against the number of subscribers on USAC’s monthly lists. 

We analyzed the results to look for trends. Provider X’s monthly claims rates were conspicuous 

as it repeatedly claimed reimbursement for all or nearly all its enrolled subscribers for many 

months. As this trend indicated potential noncompliance with the program usage rule, we 

requested Provider X demonstrate compliance.

OIG recently adjusted its analysis to accommodate new ACP rules—most significantly, 

mandatory de-enrollment of ACP subscribers for non-usage9—and re-analyzed the results for all 

ACP providers. We made a startling and troubling discovery: dozens of participating mobile 

broadband providers de-enrolled few, if any, ACP subscribers for non-usage and, like Provider 

X, claimed reimbursement for all or nearly all their ACP subscribers (the suspect providers). In 

some instances, these suspect providers de-enrolled less than one percent of the subscribers that 

many similarly-sized ACP providers de-enrolled for non-usage. Extensive experience with the 

Lifeline program and ACP and comparisons with other ACP providers suggest these suspect 

providers are likely noncompliant with ACP usage and related de-enrollment rules. 

Two tables below demonstrate the patterns OIG observed using enrollment, de-enrollment, and 

claims data from ten anonymized ACP providers. In both tables, Column B shows the total 

number of ACP subscribers ever served by the provider, and Column C shows the total 

5 47 C.F.R. § 54.1808(c)(2). 6 https://www.usac.org/wp-content/uploads/about/documents/acp/Training-Slides/ACP-Claims_April21.pdf

7 Each provider is also required to select “a reason code” in NLAD for each subscriber on the list who the 

provider does not claim. Id. 

8 Id.

9 47 C.F.R. § 54.1809(c)
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subscribers de-enrolled by the provider for any reason, including non-usage.10 Column D shows 

the percentage of subscribers the provider has de-enrolled for any reason, including non-usage. 

Finally, Column E indicates the providers’ average monthly claims rate.11

Table 1 illustrates the data described above for five providers that are broadly representative of 

participating mobile broadband providers that serve 10,000 or more ACP subscribers (the 

representative ACP providers).12 Table 2 shows the same data for five suspect providers. 

Table 1: De-enrollment and Claims Data for 5 Representative ACP Providers

A B C D E

Anonymized 

Provider Name

Total 

Subscribers 

(ENROLLs + 

TRANSFERINs), 

rounded 

Total 

Subscriber 

DEENROLLs, 

rounded 

Ratio of 

Subscriber Deenrollments to 

Total 

Subscribers 

(C/B) 

Avg 

Monthly 

Claims 

Rate 

Provider 1 6,600,000 2,600,000 39.4% 87.3%

Provider 2 5,100,000 1,600,000 31.4% 89.0%

Provider 3 2,600,000 750,000 28.8% 91.2%

Provider 4 1,200,000 420,000 35.0% 78.2%

Provider 5 46,000 15,000 32.6% 93.1%

Providers 1-5, the representative ACP providers, de-enrolled 28.8%-39.4% of their total 

subscribers. De-enrollments for non-usage typically comprise nearly half the representative 

ACP providers’ de-enrollments. These providers claimed an average of 78.2%-93.1% of their 

subscribers each month. These patterns are representative of most participating mobile 

broadband providers.

10 When a provider de-enrolls a subscriber, the provider is required to report a reason for the deenrollment in NLAD, including non-usage, per USAC guidance. Not all providers appear to follow USAC’s 

guidance. Out of an abundance of caution, we analyzed ACP providers’ total de-enrollments in NLAD 

which include de-enrollments for non-usage. Were we to confine our analysis to providers’ reported deenrollments for non-usage, the conduct of the suspect providers would appear even more pronounced. 

This is another problem that should be addressed by USAC and the Commission. The accuracy of NLAD 

data is essential for ensuring and policing program integrity. 11 This data is based on NLAD and ACP claims data from May 2021 through August 2023. 12 Approximately half of all ACP households receive subsidized mobile broadband service. More than 98% 

of those households receive their service from participating mobile broadband providers that serve 

10,000 or more ACP subscribers. 
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Table 2: De-enrollment and Claims Data for 5 Suspect ACP Providers

A B C D E

Anonymized 

Provider Name

Total 

Subscribers 

(ENROLLs + 

TRANSFERINs), 

rounded 

Total 

Subscriber 

DEENROLLs, 

rounded 

Ratio of Subscriber 

De-enrollments to 

Total Subscribers 

(C/B) 

Avg 

Monthly 

Claims 

Rate 

Provider 6 1,400,000 23,000 1.6% 98.6%

Provider 7 620,00 7,200 1.2% 99.8%

Provider 8 250,000 6,600 2.6% 99.7%

Provider 9 69,000 620 0.9% 100.0%

Provider 10 18,000 310 1.7% 100.0%

The contrast between the two sets of providers is clear. Providers 6-10 de-enrolled only 0.9%-

2.6% of their subscribers, a tiny fraction of the de-enrollments by Providers 1-5, while claiming 

reimbursement for all or nearly all their subscribers. For example, Provider 4 enrolled 200,000 

fewer subscribers than Provider 6 but de-enrolled 18 times as many subscribers. Similar 

comparisons may be drawn between the other providers in the two sets. The data is clear that 

Providers 6-10 (and the other suspect providers) are outliers. 

As noted above, de-enrollments for non-usage typically comprise about half of de-enrollments 

by large mobile broadband ACP providers. We strongly suspect Providers 6-10 are not 

complying with program usage and related de-enrollment rules, because as reflected in Column 

D, those providers have barely de-enrolled any subscribers at all. Stakeholders should be 

concerned these data patterns also signal these providers’ failure to comply with other program 

rules and requirements.13 

Elevated rates of abandoned service are a persistent and pervasive characteristic of low-income 

subsidy programs like the Lifeline program and the ACP. Though some providers may ascribe 

higher rates of subscriber retention to higher quality service, more generous data packages or 

other service features, these are at best incomplete explanations for the aberrant data patterns 

we observed. Finally, OIG’s concerns are not based solely on data analyses: OIG investigators 

have collected additional evidence that clearly demonstrates several suspect providers have 

repeatedly claimed reimbursement for furnishing discounted service to specific subscribers who 

were not using their service. To avoid compromising ongoing OIG investigations, we cannot 

provide additional details regarding this evidence at this time. 

While many of the suspect providers identified by OIG individually serve a small percentage of 

total ACP households, several currently purport to serve hundreds of thousands of ACP 

households. As a group, these suspect providers have enrolled more than 3.7 million ACP 

households and currently serve more than 1.7 million ACP households. Cumulatively, the threat 

to program integrity posed by their likely noncompliance is significant.

13 We understand that many stakeholders may seek additional details regarding OIG’s analysis and 

conclusions. The goal of this advisory is to highlight and address usage noncompliance among ACP and 

Lifeline program providers. For providers determined to defraud the program, sharing additional details 

regarding our methodology, benchmarks and findings may lead to further noncompliance that is more 

challenging to detect. We must balance these competing risks.
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Next Steps and Remedial Action

ACP rules require all providers to implement policies and procedures to comply with all 

program rules.14 Providers relying on third-parties to monitor usage compliance are liable for 

violations of the ACP rules, and their liability extends to violations by their agents, contractors, 

and representatives.15

All ACP and Lifeline providers should urgently examine their usage monitoring procedures now, 

fully disclose any noncompliance to our office and the Commission and promptly repay any 

federal funds improperly received. Our office will not rely solely on warning letters to combat 

this serious threat to program integrity. We continue to investigate and will target ACP 

providers that flout program usage requirements for appropriate legal sanctions, including 

criminal prosecution.

In addition to provider responsibility, as noted above, the Commission does not require 

providers to regularly report any information to demonstrate subscribers are actually using the 

subsidized service before disbursing program funds. OIG has repeatedly urged the Commission 

to adopt such a requirement. While the Commission asserts that usage reporting may implicate 

privacy concerns, it should explore objective reporting options and codify requirements that 

demonstrate the government is paying for service that subscribers are actually using without 

undermining laws protecting consumer privacy. We encourage the Commission and Congress 

to work together to eliminate obstacles that preclude the agency from confirming the subsidized 

service is truly benefitting low-income households.

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Fraud, waste, and abuse remains a serious problem for Commission programs. OIG provides 

objective, independent investigations, audits and reviews of FCC programs, including programs 

administered by the Universal Service Administrative Company (USAC). OIG is committed to 

our mandate and will continue to use a full range of tools to expose and combat fraud, waste and 

abuse in FCC programs. OIG encourages anyone with information regarding fraud, waste or 

abuse in any FCC program, to report such allegations via the OIG hotline. 

Report Waste, Fraud & Abuse using the FCC OIG Hotline: 

Telephone: (202) 418-0473 

Toll Free: (888) 863-2244 

FAX: (202) 418-2811 

E-Mail: hotline@fcc.gov

14 47 CFR § 54.1801(f).

15 Id.