Pai Says Sprint Falsely Claimed Lifeline Subsidies

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The FCC said Tuesday it’s investigating whether Sprint claimed monthly subsidies for 885,000 Lifeline subscribers, even though they were not using the service. That would be a violation of a key rule—the “non-usage” rule—designed to prevent waste, fraud, and abuse in the Lifeline program.

If true, it would be “outrageous,” and show a “careless disregard for the program rules,” said FCC Chairman Ajit Pai in a statement. The Enforcement Bureau is looking into the issue. He wants the bureau to determine the full extent of the alleged problem and propose an appropriate remedy.

Lifeline helps make phone and broadband service more affordable for low-income consumers. Providers participating in the program receive a $9.25 monthly subsidy for most Lifeline subscribers, which the company must pass along to the consumers as a discount.

The Sprint issue came to light as a result of an investigation by the Oregon Public Utility Commission, according to the Chairman. Sprint says it has no intention of defrauding the government. Spokeswoman Lisa Belot told C-net the issue was the result of an error after the FCC implemented new rules in 2016. Sprint is working on a fix, according to Belot.

“When the error was discovered, we immediately investigated and proactively raised this issue with the FCC and appropriate state regulators,” Belot stated. “We also engaged an independent third party to review the results of our review and the effectiveness of our operational changes.” Sprint is “committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error,” she added.

September 25, 2019

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