The Federal Communications Commission’s Enforcement Bureau imposed a $200 million fine on T-Mobile in connection with Sprint's non-compliance with rules pertaining to waste, fraud, and abuse in the Lifeline program for low-income consumers.
The payment is the largest fixed-amount settlement the FCC has ever secured to resolve an investigation.
Prior to its merger with T-Mobile, Sprint was claiming monthly subsidies for serving approximately 885,000 Lifeline subscribers even though those subscribers were not using the service, in potential violation of the Commission’s “non-usage” rule. The matter initially came to light as a result of an investigation by the Oregon Public Utility Commission. In addition to paying a $200 million civil penalty, Sprint agreed to enter into a compliance plan to help ensure future adherence to the Commission’s rules for the Lifeline program.
The Lifeline program helps make phone and broadband service more affordable for low-income consumers. Providers participating in the program receive a $9.25 monthly subsidy for most Lifeline subscribers, which they must pass along to consumers as a discount. For most mobile Lifeline consumers served by Sprint and many other providers, the subsidy makes the service free to the consumer.
“Lifeline is key to our commitment to bringing digital opportunity to low-income Americans, and it is especially critical that we make the best use of taxpayer dollars for this vital program,” said Chairman Ajit Pai. “I’m pleased that we were able to resolve this investigation in a manner that sends a strong message about the importance of complying with rules designed to prevent waste, fraud, and abuse in the Lifeline program. In addition to the great work of our Enforcement Bureau team, I would like to thank the Oregon Public Utility Commission for its efforts in this case. States play an important role in helping low-income consumers get access to affordable communications through Lifeline and making sure the program is run efficiently.”
