The Federal Communications Commission’s (FCC or Commission) Enforcement Bureau (Bureau) has announced that the $200 million penalty proposed to be levied against Sprint to resolve an investigation into its alleged violations of the Lifeline program’s rules will be paid by its parent company, T-Mobile. The payment represents the largest fixed settlement amount to resolve an investigation in FCC history. The Bureau had alleged in reports that Sprint, prior to its merger with T-Mobile, had claimed around 885,000 Lifeline subscribers even though those subscribers were not using the service, potentially violating the Commission’s Lifeline non-usage rule.
Under the non-usage rule, Lifeline providers may only be reimbursed for a Lifeline subscriber if that subscriber has used the Lifeline service once in the last 30 days. This rule was meant to adequately protect the limited funds of the Lifeline program, which provides discounted phone and broadband services to low-income consumers. In addition to the penalty, Sprint also agreed to enter into a compliance plan.