The Federal Communications Committee (FCC) has ordered T-Mobile to pay up for Sprint’s unfounded claims of providing subsidies to low-income customers
T-Mobile has agreed to pay off a fine incurred by its subsidiary Sprint after the latter was investigated for claims of providing subsidies for 885,000 low-income customers via the FCC’s Lifeline Programme.
The Programme itself dates back to 1985 and provides discounts to low-income customers in an effort to ensure that all Americans have access to connectivity services. Today, this means that these customers are eligible for as much as $9.25 a month in federal funding for their connectivity bills – for many customers, this subsidy makes their service free each month.
But the issue here arises when the number of subsidies being provided are misreported by operators. Sprint is accused of claiming subsidies for 885,000 Lifeline subscribers, even though these subscribers ostensibly did not exist.
The rules of the Lifeline Programme specify that subscribers must have used the service for which they are being subsidised at least once in the past 30 days if the operator is to be reimbursed by the Treasury. It also states that subscribers to the Programme are de-enrolled after 15-days’ warning if they are not using the subsidised service.
These allegations towards Sprint first came to light in 2019, with some believing the revelation would further hamstring the already much-delayed merger process. But it seems that T-Mobile are happy enough to pay the $200 million fine imposed by the FCC in order to make this issue disappear. T-Mobile must also join a compliance plan to ensure they follow the rules of the Lifeline programme in future.
”While we inherited this issue with our merger, we are glad that it is now resolved,” said T-Mobile in a statement. ”We look forward to continuing to deliver reliable and affordable network connectivity to consumers across the country who depend on it.”
Naturally, a $200 million fine is no small fee, but it is a drop in the ocean for the newly merged T-Mobile. Such a fee seems like a small price to pay for a relatively clean slate with the FCC.