FCC fines T-Mobile $200M over Sprint’s alleged abuse of low-income subsidies

T-Mobile Sprint merger

T-Mobile was hit with a $200 million fine due to subsidies claimed by Sprint prior to the companies merging.

Josh Miller / CNET

US telecom giant  T-Mobile will pay a $200 million fine as part of a settlement to resolve a probe into Sprint’s alleged abuses of a federal program aimed at low-income subscribers, the Federal Communications Commission announced Wednesday. 

The settlement comes after an FCC audit found the Sprint, which merged with T-Mobile earlier this year, was claiming monthly subsidies for 885,000 customers as part of the federal Lifeline program, even though those subscribers weren’t using the service. 

Lifeline directs $1.5 billion per year to help low-income families pay for phone service by giving out a $9.25-per-month subsidy. Originally intended to provide discounts on landlines, the program has since been expanded to include wireless and broadband services.

“I’m pleased that we were able to resolve this investigation in a manner that sends a strong message about the importance of complying with rules designed to prevent waste, fraud, and abuse in the Lifeline program,” FCC Chairman Ajit Pai said in a statement.

T-Mobile didn’t immediately respond to a request for comment.

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