Sprint took millions of dollars meant to subsidize phone and internet service for low-income consumers, even while those consumers were not using the service – at least according to the FCC. FCC chairman Pai called it a “careless disregard” for taxpayers and commission rules and called on the agency’s enforcement arm to conduct a full investigation.
“It’s outrageous that a company would claim millions of taxpayer dollars for doing nothing,” Pai said.
Sprint called accepting the payments an “error” said it is “committed to reimbursing federal and state governments” for any subsidies it should not have taken.
The FCC’s Lifeline program offers a discounted service for low-income consumers on either a phone or broadband plan. But in 2016, the commission added the limit to prevent misuse of funds – if customers don’t use their service for 30 days, providers must begin the process of removing them from the program.
According to the FCC, Sprint failed to do that for 885,000 subscribers. This represents nearly 30% of Sprint’s Lifeline customers and nearly 10% of all Lifeline subscribers.
The issue began in July 2017, Sprint says, when “an error occurred” as it tried to implement the 30-day un-enrollment requirement. Sprint says that, after the error was noticed, it “immediately investigated” and informed the FCC and state regulators.
The 30-day rule is meant to prevent companies from signing up subscribers who won’t use their service, then collecting the $9.25 monthly subsidy anyway.
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