T-Mobile has agreed to pay a civil penalty to settle an FCC Sprint Lifeline investigation dating back over a year. The Sprint Lifeline settlement is for $200 million.
The Lifeline program, administered by the FCC, pays service providers $9.25 a month toward the cost of providing voice and/or broadband service to low-income households.
Program rules require that service providers receiving Lifeline support must cancel service to anyone who does not use the service at least once in a 30-day period after first informing the customer. An FCC investigation last year found that Sprint had not done this for at least 885,000 Lifeline customers.
Sprint’s Lifeline offering was free to end users, which meant that customers had no incentive to cancel service if they were not using it. This also meant that Sprint could rake in $9.25 monthly for each of those customers at little or no cost.
T-Mobile inherited Sprint’s Lifeline problem when the two companies merged earlier this year.
Sprint Lifeline Settlement
According to an FCC press release, the Sprint settlement is the largest fixed-amount settlement the commission has ever negotiated to resolve an investigation.
In a prepared statement, FCC Chairman Ajit Pai said it is vital that the commission make the best use of taxpayer dollars.
“I’m pleased that we were able to resolve this investigation in a manner that sends a strong message about the importance of complying with rules designed to prevent waste, fraud and abuse in the Lifeline program,” said Pai.
Pai also thanked the Oregon Public Utility Commission, which first uncovered the Sprint Lifeline issues.
Although the FCC sometimes has difficulty enforcing settlements with fly-by-night little-known companies, the commission would seem to have a good chance of collecting from publicly held T-Mobile.