The FCC announced today that it is opening an investigation into Sprint for taking subsidies on the Lifeline program, but not providing any service. However, Sprint says that is not entirely true.
In a statement to AndroidHeadlines, Sprint noted that "in 2016, the FCC approved sweeping changes to the Lifeline program. These changes required Sprint to update how it calculates usage and therefore eligibility of Lifeline customers. An error occurred when these new requirements were implemented in July of 2017."
Sprint went on to inform us that once the error was discovered, it "immediately investigated and proactively raised this issue with the FCC and appropriate state regulators." Sprint also brought in an "independent third party to review the results of our review and the effectiveness of our operational changes."
Sprint will reimburse the government for subsidy payments
Sprint is being the bigger man here, and stating that it is "committed to reimbursing federal and state governments for any subsidy payments that were collected as a result of the error."
The changes were put in place to keep companies from taking advantage of this subsidy. It was essentially a 30-day de-enrollment requirement, which cause the error. The way it was supposed to work was that if the customer did not use the service within 30 days, the customer would be removed from the program. And Sprint would no longer get the subsidy. The FCC says that Sprint did not de-enroll nearly 885,000 customers that didn't use the service, but in fact that was an error on the part of the FCC.
It's going to take some time before Sprint is able to see how much of the subsidy it needs to pay back, especially since it was an error created by the FCC (and former Chairman, Tom Wheeler – who was head of the FCC under President Obama).
This wasn't Sprint's fault, in fact it did everything that it could to raise the concern of this error to the FCC and even brought in an independent third party to investigate the issue, two years ago. But the FCC chose to ignore it.
Sprint also noted in its statement to AndroidHeadlines that they "are proud of the benefits we provide to eligible low-income individuals through discounted wireless service. We believe this program is valuable for underserved populations."
Chairman Pai has been scaling back Lifeline, calling it a waste of taxpayer money
The FCC Chairman, Ajit Pai, has been working to scale back the Lifeline program since taking office in January 2017.
He has continuously criticized the program as being a huge fraud and waste of taxpayer money. Making it no surprise that he's investigating the program and going after Sprint.
Despite the fact that he has already sided with Sprint on the merger with T-Mobile. Though it has not yet been voted on by the FCC commissioners, it has been "approved" by Pai.
The FCC investigation into Sprint using Lifeline could cause a lot of issues for the Lifeline program. As mentioned, chairman Pai is already not a fan of Lifeline, and we've seen what he's done with things he doesn't like already. Anyone remember Net Neutrality? Yeah, Pai axed that almost as soon as he took office.