Since SoftBank bought the majority of Sprint in 2013, the company has been burning through cash pretty quickly. Part of that is due to the excessive plan to improve their network. Which is much needed. Now the company has been hit with a pretty hefty fine from the FCC. This is a $1.2 million fine, and it's due to a 6-month outage for 911 calls. The Sprint network was unable to handle 911 calls properly from those with hearing difficulties. Sprint was neglecting the Captioned Telephone Service. This is the service that is used to provide closed-captions for emergency calls. They let this system continue to not work for around six month. So anyone that had hearing difficulties during that period could not get through. That's definitely not a good look for Sprint. Once more, the FCC offers a subsidy for carriers to maintain these services. So Sprint continued to collect that subsidy while letting the service remain down.
Due to this, Sprint is now required to pay up. And it's a pretty hefty fine, although not as hefty as some recent ones for AT&T. But when you're hardly turning a profit like Sprint is, the $1.2 million fine is going to hit them pretty hard. They will also need to ensure that this functionality for 911 calls are running properly in the future.
The FCC has been fining US carriers left and right in 2014. With Verizon being fined $3.4 million, T-Mobile at $17.5 million and AT&T being fined a whopping $100 million. While, Verizon and T-Mobile's fees were due to their emergency calling system, AT&T's was due to misleading customers about unlimited data and throttling their grandfathered customers. AT&T's fine still remains the largest fine in FCC history.
Hopefully Sprint has learned from this and will ensure that the Captioned Telephone Service will be working properly so they don't get fined again, as the next fine is likely to be higher. Sprint has also stated that they plan to pay back the cash they collected from the FCC in subsidies for keeping the Captioned Telephone Service available. We'll have to see how this impacts their earnings over the next few quarters. It definitely won't help.