Cellular providers participating in the Lifeline program, which makes phone and broadband access more affordable for low-income consumers, receive a monthly subsidy of $9.25 per subscriber. They’re expected to pass this along as a discount to the customer, but it looks like Sprint (now owned by T-Mobile) must have missed the memo. In fact, the company claimed subsidies for over 885,000 Lifeline subscribers who weren’t currently using the service — and now the FCC wants its money back.
After investigations by the Oregon Public Utility Commision and the Federal Communications Commission, Sprint was discovered to be claiming the monthly subsidies for around 885,000 inactive Lifeline subscribers, which violates the Commission’s “non-usage” rule. That regulation states that providers can only receive the subsidy if a subscriber has been active at least once in the past 30 days.
The FCC says the $200 million dollar civil penalty is the largest fixed-amount penalty in the commission’s history. Though the infractions occurred before T-Mobile bought Sprint, the carrier will be coughing up the coin from its own pockets, and has also agreed to enter into a “compliance plan” to make sure that it adheres to the Lifeline program rules in the future. Hopefully this will send a message to other carriers like Verizon who participate in Lifeline that lying doesn’t pay in the long run.