Verizon agrees to $5 million settlement with FCC

Verizon agreed to pay a $5 million settlement stemming from its initial failure to investigate why some customers' calls were not getting through to rural areas. 

The Federal Communications Commission announced the settlement Monday, the fourth of its kind since the commission adopted rules on the subject in 2013. 

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The settlement includes a $2 million fine to the Treasury Department and $3 million to invest in rural call competition. The phone company also agreed to a number of reforms that include creating a rural call competition czar, filing reports with the commission and limiting its use of third-party providers to route calls. 

The settlement dates back to allegations in 2013. The FCC adopted rules at the time to help combat the problem of long-distance and mobile calls failing to get through to customers in rural areas. Those calls must be physically routed from carriers to local phone companies. 

The FCC said a large part of the problem stemmed from long-distance and wireless carriers using third-party providers to route the calls, which reduced cost and, in some cases, also reduced quality. 

The commission's 2013 order required carriers to provide reports to the FCC on the rate of calls completed in those areas and also required carriers to investigate any problems they found. The FCC determined Verizon initially failed to investigate 26 instances of persistently low call rates in some rural areas at the time. 

The settlement stems from those 26 cases. The settlement points out that Verizon did eventually look into those cases, finding "the low call answer rates were not attributed to Verizon's network."