Program spent millions on phone service for 116,000 dead people, mostly in California

The Federal Communications Commission will overhaul the government’s decades-old Lifeline Program after discovering nearly $5 million has been spent on providing free phone and internet services to thousands of dead people, most of them in California.

The FCC’s reforms target states, among them California, that opt out of the federal verification process required to qualify for the free services. The move has ignited a battle between FCC Chairman Brendan Carr and California Gov. Gavin Newsom, a likely 2028 Democratic presidential candidate.

“It should go without saying that only beneficiaries that are both living and here legally should qualify for benefits under this program. But the data to date shows that this is not the case,” Mr. Carr said.

Mr. Newsom’s press team accused the FCC of politically targeting the state and the governor.

“We take program integrity seriously. But it’s misleading — and political — to single out California. This is a nationwide issue, not a California scandal,” Mr. Newsom’s press team said last week.

California, however, was found to be the main offender in an FCC audit of the Lifeline program.

Lifeline providers have pocketed $5 million from the federal government over the past five years for phone or internet service to 116,000 dead people in the three opt-out states, the audit found.

More than 80% of the fraud, involving nearly 95,000 people, was traced to California, one of the three states allowed to opt out of the strict federal verification program.

The audit found 20,000 deceased Lifeline subscribers in Texas and another 2,200 in Oregon, the two other states that opt out of federal verification.

At least 16,774 dead people, and potentially as many as 39,362, from the three states were first enrolled in the Lifeline program after their deaths, the audit found. More than 77,000 died after enrolling in the program, but others continued to collect the benefit illegally.

In September alone, more than 11,000 dead people were enrolled in the program in the three opt-out states at a cost of about $100,000.

The $1 billion federal program, created in the 1980s, is paid for by the Universal Service Fund, which is managed by the FCC.

Telecommunications companies subsidize the fund with a percentage of their revenue and pass along the cost to consumers through an extra monthly charge on their phone and internet bills.

The program provides a $9.25 monthly subsidy to households with incomes below 135% of the poverty level, as well as households receiving food stamps or enrolled in Medicaid or other social welfare programs. Qualifying households and individuals on tribal lands are eligible for a monthly benefit of $34.25.

Adults are eligible for the benefit if they have children and are earning below 200% of the poverty level. The 2026 poverty level for a family of four is $33,000.

The federal government doesn’t supply the phones, but many participating carriers offer free or heavily discounted smartphones.

The FCC audit identified multiple instances of the same person enrolling in the program across multiple states.

The audit found more than 270,000 instances from December 2020 to September 2025 in which “an opt-out state subscriber was claimed two or more times in the same month,” with identical names, dates of birth and Social Security numbers.

The FCC paid phone providers $5.5 million to subsidize benefits for those subscribers.

The program has long been riddled with fraud, and the FCC has taken various actions over the years to tighten verification and crack down on misuse of funds.

During the Obama administration, program recipients nicknamed the free devices provided by the carriers “Obama phones,” even though the Lifeline program was created during the Reagan administration.

The term has endured. TAG Mobile in August offered consumers a list of “Free Obama phone models,” eligible under the Lifeline program.

The FCC is scheduled to vote later this month on proposed rules to crack down on fraud.

The changes include “enhanced requirements” intended to ensure that the Lifeline Program serves only “legal, living and eligible Americans.”

In many states, individuals and households are eligible for additional Lifeline benefits. California, for example, provides eligible Lifeline recipients with an additional $16.50, unlimited talk and text, and a monthly data allowance.

As Mr. Carr moves to crack down on fraud, his changes to the Lifeline Program have intensified a clash with Mr. Newsom over California’s verification process.

On Sunday, the FCC blocked California from using its own verification process to run the Lifeline program, although it wasn’t a direct result of the audit’s findings.

In November, Mr. Newsom signed a bill to eliminate the requirement that California applicants provide a Social Security number, making it easier for illegal immigrants to receive the benefit.

The California law also blocks the federal government, particularly immigration enforcement officials, from accessing information about Californians enrolled in the Lifeline program.

As of Sunday, Californians can still qualify for the Lifeline program but must apply through the federal verification system and provide a Social Security number and other information.

“California is all for sending your taxpayer dollars to people here illegally,” Mr. Carr said. “And Governor Newsom recently signed a bill that makes it effectively impossible for the FCC to ensure that the federal Lifeline dollars we administer go to their intended recipients.”

The FCC will consider several rule changes at its Feb. 18 meeting, including restrictions on the benefits available to U.S. citizens and qualified legal immigrants, and new verification procedures to improve the program’s integrity, including a ban on any state opting out of the federal verification process.