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. 

“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.

Tags FCC Federal Communications Commission Merger of Sprint Corporation and T-Mobile US Sprint T-Mobile Telecommunications

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