Rural Health Care Investigation Results in $1M Settlement

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DRS Global Enterprise Solutions (DRS) has entered into a Consent Decree with the FCC’s Enforcement Bureau (Bureau) to resolve an investigation into whether DRS violated the FCC’s Rural Health Care (RHC) rules on rural rates. The FCC’s rules establish three methods for a service provider to determine its rural rate. In 2018, the Bureau initiated an investigation into DRS’ participation in the RHC and particularly the “detailed economic analysis” DRS used to develop its rural rates used in a telecommunications service contract with an Alaskan non-profit. The Bureau found that the DRS methodology did not conform with the FCC’s rules and DRS failed initially to accurately disclose its rural rate calculation method, but the Bureau also found there to be no evidence of bad faith. As part of the Consent Decree, DRS agreed to pay a settlement amount of $1 million and to implement a number of enhanced compliance measures, including designating a compliance officer and filing certain compliance and noncompliance reports over three years.

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