IURC launches investigation of TerraCom business practices

TerraCom is ready to defend its practices

INDIANAPOLIS - The state is seeking answers from a company that provides cellphones to low-income families in Indiana.

The Indiana Utility Regulatory Commission is asking Oklahoma-based TerraCom to answer questions from commissioners about its marketing and subscriber-verification process

"The investigation is not to be taken lightly," said IURC spokesman Danielle McGrath.

TerraCom responded with an email statement to the Call 6 Investigators about the investigation and the preliminary hearing scheduled for Thursday.

Chief Operating Officer Dale Schmick said the company will welcome the opportunity to respond to the commission’s questions. Read the full statement here.

The IURC is the watchdog over companies like Oklahoma-based TerraCom.

The IURC has a state-issued certificate which allows it to participate in the service known as Lifeline.

Lifeline lets eligible families, based on income, receive a free cellphone with 250 minutes each month.

TerraCom and nine other state-approved phone providers get paid for every family they sign up to the service.

"Anytime taxpayer money is involved, we want to make sure it is spent appropriately and currently under our watch,” McGrath said.

In April, the IURC sent TerraCom a notice of that they were the focus of an investigation.

The commission said it was unusual for TerraCom to have added almost 30,000 people in less than a year.

Regulators also want an assurance that the company is not allowing more than one person in each household to receive a Lifeline phone.

That problem happened in Oklahoma and the Federal Communications Commission forced TerraCom to refund $416,000 to the program and to defend its practices.

Schmick said TerraCom is ready to defend its practices.

"We have a comprehensive series of protections in place to ensure that we are verifying the identity of applicants and their eligibility for participation in the Lifeline program prior to enrollment, as well as verifying compliance with the one phone line per household rule," Schmick said.

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