Feds Send $1M a Year to This Felon's Rural Phone Company

Federal aid meant to connect far-flung Alaskans to the modern internet is instead pouring more than $1 million a year into a tiny phone company run by a convicted felon, all for service that many locals don't even use. ProPublica and the Anchorage Daily News report that 75-year-old Roger Shoffstall's Summit Telephone, serving rural areas outside Fairbanks, collects roughly $800 from the Federal Communications Commission per month for each internet customer, even as faster, cheaper options like Starlink draw people away and leave some subsidized lines literally unplugged. The money comes from the Universal Service Fund line on Americans' phone bills, a surcharge that has funneled $4.6 billion to Alaska telecoms since 2016—more than $600 per resident annually, the highest per-resident rate in the country—while the state still ranks last for land-based internet speeds.

ProPublica and ADN detail not only how Alaska carriers won unusually generous terms, but also how firms with checkered histories keep cashing in: For instance, GCI, the state's biggest telecoms company, settled fraud claims with the federal government—then two years later received a $466 million infusion from the same subsidy program it got into the fraud trouble over. Critics also say the FCC rarely checks whether the program actually works. "It's not proven how successful it is, because the FCC is not very good at auditing its program," says Daniel Lyons, an instructor at Boston College Law School who specializes in telecommunications and internet law. For the full investigation, including how Shoffstall kept getting paid through prison and probation, more here.