Illustration by Alex Castro / The Verge
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, according to the Federal Communications Commission. FCC chairman Ajit 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.
The FCC’s Lifeline program offers a $9.25-per-month subsidy for low-income consumers on either a phone or broadband plan. But in 2016, under former FCC chairman Tom Wheeler, the commission added a key 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 subsidy program.
Sprint failed to do that for 885,000 subscribers, the FCC says. This represents nearly 30 percent of Sprint’s Lifeline customers and nearly 10 percent of all Lifeline subscribers. The commission doesn’t say how long Sprint had failed to remove customers from its rolls.
One of Pai’s first acts as chairman was to begin scaling back the Lifeline program. He’s criticized the program as rife with fraud and abuse; the commission’s inspector general said that 18.5 percent of payments have been improper.
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.
Sprint is in the middle of a merger with T-Mobile, which would see T-Mobile absorb the company. It’s been approved at a federal level and by the FCC, but it still faces review from a number of states.
The Verge has reached out to Sprint for comment.