T-Mobile US agreed to pay the government $200 million to end an investigation into allegations Sprint illegally collected millions in funding from a subsidy programme for low-income mobile subscribers prior to the operators’ merger in April.
The Federal Communications Commission (FCC), which publicly announced it was probing the issue in September 2019 [1], noted the figure was the “largest fixed-amount settlement” ever levied in its history.
FCC chairman Ajit Pai stated the penalty “sends a strong message about the importance of complying with rules designed to prevent waste, fraud and abuse in the Lifeline programme”.
Last year, the regulator accused Sprint of violating Lifeline rules by claiming subsidy funds for 885,000 inactive customers, a move which would have allowed it to collect as much as $8.1 million per month.
At the time, a Sprint representative told Mobile World Live the issue stemmed from an error in how it calculated monthly subscriber usage under new Lifeline programme standards implemented in 2017. The operator pledged to repay the money [2].
Sprint became part of T-Mobile on 1 April upon completion of a $26 billion merger deal [3].
In addition to the financial penalty, T-Mobile also agreed its Sprint unit would implement a compliance plan to help avoid future Lifeline rule violations.
[1] https://www.mobileworldlive.com/featured-content/top-three/sprint-accused-of-subsidy-abuse
[2] https://www.mobileworldlive.com/featured-content/top-three/repayment-fees-user-declines-pull-sprint-into-the-red
[3] https://www.mobileworldlive.com/featured-content/top-three/legere-leaves-as-t-mobile-sprint-complete-merger
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