Five companies were fined for fraud of the ObamaPhone, which is actually a program called Lifeline. “Congress first enacted the Lifeline program in 1985, during the Reagan administration. In 2005, under President George W. Bush, the FCC expanded the program to cover cellphone service.” [source] Lifeline was a way for low-income to still have dial-tone for 911 and medical reasons. It has been sprinkled with fraud — like almost any government program, including USF and the ARRA.

“According to the FCC, TracFone Wireless, Icon Telecom, Assist Wireless, Easy Wireless and UTPhone all abused the system by collecting duplicate subsidies for “thousands” of accounts, something the FCC says the companies should have been aware of. The companies are not only facing $14.4 million in fines, but they’ll need to repay all the duplicate monies taken from the program.” [DSLReports]

I just noticed that Lifeline is a USAC program. Maybe USAC doesn’t spend enough time auditing the billions that it administers.

“The Lifeline program offers participating carriers a subsidy of up to $10 per month per subscriber, and the program is part of the $9 billion Universal Service Fund, which the FCC is in the process of reforming,” per Fierce.

Tracfone is owned by Mexican billionaire Carlos Slim and is one of the largest MVNOs in the US. According to Engadget, TracFone responded with a statement that their fine “involves less than $8,000 and fewer than 850 people — a drop in the 4 million person Lifeline-customer bucket.”

A discussion on the FISPA listserv was about the pricing of DSL. Pricing is one of the hardest things a business does. If there is already a market for the service – like DSL – and a market leader – like AT&T – then how do you price your service relative to the leader?

A lot of it comes down to the story you tell, the value you provide, and the brand you develop.

Tech Dirt has an article titled “Saying You Can’t Compete With Free Is Saying You Can’t Compete Period”. Most software is freemium. Most products have competitors. “The zero is blinding everyone.”

Peter Drucker said that a business has only 2 duties: Innovation and Marketing. Most tech companies only work on the tech part. You need to be more like Dropbox or even Salesforce. Salesforce was a struggling ASP for years before it pivoted its story and the market caught up to their service.

It is only about price IF you don’t explain your value. I will say that if free was the end all, Skype and NetZero would have won.

Gary Kim has college level article about competing with free.

I know that retail is having some serious problems right now. Amazon and Big Boxes are kicking their butts into bankruptcy.So many industries have been disrupted by the Internet – car buying, newspapers, movies, music, book stores, and so much more. But by examining these other industries, we can take away some lessons we can use to improve our own business. That is what I tried to do with this slide deck.