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T-Mobile to pay $200M FCC fine in Sprint investigation

T-Mobile to pay $200M FCC fine in Sprint investigation
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T-Mobile will pay a $200 million fine to the government to settle a Federal Communications Commission (FCC) investigation into the company’s subsidiary Sprint failing to comply with FCC rules about a program for low-income consumers, the agency said Wednesday

The announcement came after an investigation into reports that Sprint, before its merger with T-Mobile, was claiming monthly subsidies for serving about 885,000 subscribers to the Lifeline program, which helps provide affordable service for low-income customers, even though those subscribers were not using the service, the FCC said. 

In addition to paying the $200 million civil penalty, Sprint agreed to enter into a compliance plan to help ensure future adherence to the FCC’s rules for the Lifeline program, according to the announcement. 

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“While we inherited this issue with our merger, we are glad that it is now resolved,” T-Mobile said in a statement. “We look forward to continuing to deliver reliable and affordable network connectivity to consumers across the country who depend on it.” 

The investigation regarded Sprint’s compliance with the Lifeline program’s “non-usage” rule, which reimburses providers of service for a Lifeline subscriber if that subscriber has used the service at least once in the past 30 days. It also requires providers to de-enroll subscribers who don't use their phones after giving them a 15-day notice. 

The rule is “meant to protect Lifeline from wasting taxpayer funds on a service that isn’t used to benefit individual consumers,” according to the FCC. 

Providers who participate in the program receive a $9.25 monthly subsidy for most Lifeline members, which must be passed along to consumers as a discount. 

The FCC said the matter regarding Sprint’s failure to comply with the rule came after an investigation by the Oregon Public Utility Commission. 

A spokesperson for T-Mobile was not immediately available for comment.