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National Wireless Independent Dealer Association

Should the FCC Pause Merger Review?

As posted earlier (link) Sprint took millions of dollars meant to subsidize phone and internet service for low-income consumer. In light of this, FCC Commissioner Geoffrey Starks has called on the agency to put its review of the T-Mobile / Sprint merger on hold until an investigation is resolved.

In a statement released yesterday, Starks said the alleged action, which “appears to be the worst case of Lifeline violations in FCC history,” directly impacts the FCC’s review of T-Mobile and Sprint’s proposed $26.5 billion merger.

“Given the enormity of the apparent wrongdoing committed here, we must pause our Commission review,” said Starks. “There is no credible way that the merger before us can proceed until this Lifeline investigation is resolved and responsible parties are held accountable.”

The FCC said it appeared Sprint had violated the program’s “non-usage” rule, which says providers can only be reimbursed for a Lifeline subscriber that has used the service at least once in the past 30 days, and requires providers to disenroll inactive subscribers after giving them 15 days’ notice.

“Why was it that an outside party brought this issue to the FCC’s attention – shouldn’t the FCC have uncovered this? Such apparent misconduct raises serious questions about the accuracy and completeness of both the company’s filings in the merger proceeding and our review,” he said.

“While immaterial to Sprint’s financial results, we are committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error. We are proud of the benefits we provide to eligible low-income individuals through discounted wireless service. We believe this program is valuable for underserved populations,” the statement said.

Starks said that how T-Mobile and Sprint planned to handle Lifeline “was a prominent part of their merger pitch, so I am alarmed and concerned about such a massive inaccuracy in a core part of the transaction.”

Read the entire article here

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