FCC investigating Sprint for taking 'tens of millions' in low-income subsidies

FCC investigating Sprint for taking 'tens of millions' in low-income subsidies
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The Federal Communications Commission (FCC) said that it would investigate Sprint for pocketing tens of millions of dollars in subsidies meant to help low-income households get cellular and broadband service.

The commission said on Tuesday that it had learned Sprint was receiving subsidies under its Lifeline program for 885,000 subscribers who were not using the service.

“It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing,” FCC Chairman Ajit Pai said in a statement. “This shows a careless disregard for program rules and American taxpayers. I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy.”

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The Lifeline program gives participating service providers $9.25 a month to use towards providing cheap or even free offerings to low-income households. That means Sprint could have been taking in nearly $8.2 million a month for the 885,000 inactive subscribers that the FCC knows of. It’s unclear how long Sprint was receiving the subsidy for the inactive subscribers.

The FCC said it was first discovered in an investigation by the Oregon Public Utility Commission.

Lisa Belot, a spokeswoman for Sprint, said that the discrepancy was the result of an error stemming from the company’s efforts to comply with changes to the Lifeline program that the FCC passed in 2016.

“When the error was discovered, we immediately investigated and proactively raised this issue with the FCC and appropriate state regulators. We also engaged an independent third party to review the results of our review and the effectiveness of our operational changes,” Belot said in an email. “While immaterial to Sprint’s financial results, we are committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error.”

According to the FCC, the 885,000 inactive subscribers account for nearly 30 percent of Sprint’s Lifeline subscribers and nearly 10 percent of all Lifeline subscribers in the country.