T-Mobile Fined $200 Mln In Sprint Lifeline Investigation

Telecom major T-Mobile has agreed to pay $200 million penalty to the U.S. Treasury to resolve Sprint Lifeline investigation, according to the Federal Communications Commission.

The investigation was related to T-Mobile unit Sprint’s compliance with the Commission’s rules regarding waste, fraud, and abuse in the Lifeline program for low-income consumers.

The Lifeline program helps to make phone and broadband service more affordable for low-income consumers. Under the program, providers participating receive a $9.25 monthly subsidy for most Lifeline subscribers, which they must pass along to consumers as a discount. The subsidy makes the service free to most mobile Lifeline consumers.

It was found that Sprint, prior to its merger with T-Mobile, was claiming monthly subsidies for serving around 885,000 Lifeline subscribers even though those subscribers were not using the service, in potential violation of the Commission’s “non-usage” rule. The FCC’s Enforcement Bureau’s investigation followed an investigation by the Oregon Public Utility Commission.

The “non-usage” rule is meant to protect Lifeline from wasting taxpayer funds on service that isn’t used to benefit individual consumers.

In a statement, the Enforcement Bureau noted that Sprint, which was merged with T-Mobile earlier this year, agreed to enter into a compliance plan to help ensure future adherence to the Commission’s rules for the Lifeline program.

According to the agency, the payment is the largest fixed-amount settlement the Commission has ever secured to resolve an investigation.

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