FCC forces T-Mobile to pay $200 million fine for subsidiary Sprint’s fraud
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T-Mobile has agreed to pay a $200 million fine to resolve an investigation into subsidiary Sprint, which was caught taking millions of dollars in government subsidies for "serving" 885,000 low-income Americans who weren't using Sprint service.
Sprint admitted the violations in September 2019, about six months before T-Mobile completed its purchase of Sprint. Today, the Federal Communications Commission announced the $200 million settlement, which T-Mobile will pay to the US Treasury.
The $200 million is in addition to money that Sprint previously agreed to pay back to the FCC's Lifeline program, which provides $9.25-per-household monthly subsidies to companies that offer discounted telecom service to people with low incomes. Sprint had taken the money from Lifeline in violation of the "non-usage rule" that requires providers of free, subsidized plans to de-enroll subscribers who haven't used their phones recently. When the FCC investigation was announced last year, the commission said that the "885,000 subscribers represent nearly 30 percent of Sprint's Lifeline subscriber base and nearly 10 percent of the entire Lifeline program's subscriber base."