Overnight Tech: Watchdog finds fraud in FCC internet subsidies | Twitter taking on fake news | Uber, SEC discussed giving drivers equity

WATCHDOG FINDS FRAUD IN FCC PROGRAM: A Government Accountability Office (GAO) report released Thursday details significant fraud and abuse in the Federal Communications Commission (FCC) Lifeline program, which is designed to subsidize broadband and phone services for low-income households.

The GAO report, requested four years ago by Sen. Claire McCaskill (D-Mo.), detailed numerous instances of misuse and gaps in its oversight.

For example, investigators found that $1.2 million in program subsidies went to fake or deceased individuals.

The GAO tested 19 of the roughly 900 providers and found phone companies approved applicants for fraudulent individuals 63 percent of the time.

The eligibility of 36 percent of subscribers — 1.2 million of the 3.5 million program participants audited — could not be verified.

The government watchdog said providers’ use of subcontractors, which did not conduct necessary background checks or interviews, contributed to the inconsistencies.

The report found that a review mechanism to prevent abuse was vastly underperforming. A private, nonprofit corporation called the Universal Service Administrative Company audited less than one-tenth of one percent of participating carriers, the GAO said.

“A complete lack of oversight is causing this program to fail the American taxpayer — everything that could go wrong is going wrong,” McCaskill said. “We’re currently letting phone companies cash a government check every month with little more than the honor system to hold them accountable, and that simply can’t continue.”

The report also found that the FCC has never evaluated whether Lifeline in its 30-year history achieved its goals.

Not so fast: Rep. Frank Pallone Jr. (N.J.), the top Democrat on the House Energy and Commerce Committee, called for caution regarding the study’s findings. Pallone said that reforms had been implemented at the FCC since portions of the investigation were conducted, which he claimed “reined in a billion dollars in waste, fraud and abuse.”

“Lifeline has been a critical springboard for struggling families across the country for decades, and it would be a mistake to use this report as an excuse to rip away this essential service from struggling families and hardworking people,” Pallone said.

Read more here.

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A TRAVEL BAN: The White House is expecting “business as usual” when federal agencies begin implementing President Trump’s temporary travel ban Thursday at 8 p.m.

Officials are predicting a smooth rollout of the controversial policy because they said they worked with all the relevant agencies and stakeholders to provide clear guidance on the new travel restrictions, and because the ban will only apply to new visa applicants.

“We expect business as usual at the ports of entry starting at 8 p.m. tonight,” senior officials said during a press call on Thursday. “We expect things to run smoothly, and our people are well-prepared for this and they will handle the entry of people with visas professionally, respectfully and responsibly.”

Read more from our colleague Melanie here.

And we’ll be watching for any reaction from the tech world as the ban takes effect.

EQUITY FOR UBER DRIVERS?: Uber has met several times with the Securities and Exchange Commission (SEC) to talk about distributing equity in the company to its drivers, the company confirmed Thursday.

The ride-hailing giant’s drivers are considered independent contractors and not employees, which makes distributing equity to them more difficult.

Uber and other ride-hailing companies have taken criticism for their independent contractor arrangement with drivers, who don’t receive benefits and often make low wages.

Read more here.

TRADE SECRETS, THE CANADIAN SUPREME COURT AND GOOGLE: The Canadian Supreme Court ordered Google to remove a group of websites from its worldwide search results in a landmark decision that could have far-reaching consequences for the internet giant, the Globe and Mail reported.

The court case involved a dispute between two Canadian technology companies, Equustek Solutions Inc. and Datalink Technologies Gateways Inc. Equustek had accused Datalink of stealing its trade secrets and asked Google to remove them from its search index.

And on Wednesday, the court voted 7-2 to uphold two lower court orders for Google to drop Datalink.

TWITTER’S OWN FAKE NEWS BATTLE: Twitter is exploring ways to crack down on misinformation by crowdsourcing efforts to flag misleading tweets, the Washington Post reported. A Twitter spokesman, however, denied that such a feature was being tested. “We are not currently testing this nor do we have any current plans to ship it,” the spokesman told The Hill in an email. Two anonymous sources told the Post the initiative could take the form of a drop-down option that appears on every tweet, allowing users to flag posts with harmful, misleading or false information.

Read more here.

TECH FREEDOM’S POLICY SUMMIT: Tech Freedom, a broadband and cable company backed group, is hosting its annual policy summit on July 25th. The group, which advocates for free market and industry friendly positions, will host discussions on emerging tech like drones and artificial intelligence.

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Mexican politicians targeted with spyware, research shows

Facebook makes another change to stop fake news

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The Ringer: What Uber drivers want out of the app

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