Nov 4, 2020 - Technology

T-Mobile to pay $200M to settle Sprint subsidies fraud claims

A photo of Sprint and T-Mobile signs on an office complex

Photo: Alastair Pike/AFP via Getty Images

T-Mobile will pay a $200 million civil penalty to the U.S. Treasury to resolve an investigation into whether Sprint was illegitimately drawing excess subsidies from the Federal Communications Commission's Lifeline phone program for low-income consumers.

Why it matters: It's the largest fixed-amount settlement the FCC has ever received to settle an investigation, the agency noted in its Wednesday announcement.

  • Sprint, as a subsidiary of T-Mobile after the two companies merged earlier this year, is now also under a consent decree with the FCC to hold it to better comply with the rules of the Lifeline program.

Background: The FCC's enforcement bureau has been investigating reports that Sprint, prior to its merger with T-Mobile, was claiming monthly subsidies for about 885,000 Lifeline subscribers who weren't actually using the service.

  • Lifeline is a federal program that makes phone and broadband more affordable for low-income Americans. Participating providers get a $9.25 subsidy per subscriber.
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