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The Federal Communications Commission announced Tuesday that Sprint was receiving tens of millions of dollars in monthly government subsidies for 885,000 low-income subscribers who were not using the service and said that its Office of Enforcement was investigating.
The FCC employs to combat the abuses of the "Lifeline Program", which provides low-income consumers with a monthly subsidy of $ 9.25 for telephone or broadband services. The 885,000 subscribers account for nearly 30% of Sprint's Lifeline subscriber base.
The Democratic Commissar to the FAC, Geoffrey Starks, said the disclosure should convince the agency to suspend its review of the $ 26.5 billion merger between Sprint and T-Mobile US Inc. "until we found the solution ".
Sprint said it was "determined to reimburse federal and state governments for any subsidy payments collected" inappropriately, but added that payments would be "irrelevant to Sprint's financial results".
The company stated that the problem stemmed from the FCC's 2016 decision to approve radical changes to the Lifeline program, forcing Sprint to update its usage calculation method and, hence, the eligibility of Lifeline customers. Sprint said "an error occurred when implementing these new requirements in July 2017".
The company added that it has "hired an independent third party to review the results of our review and the effectiveness of our operational changes."
The FCC has stated that Sprint's "apparent non-compliance with the non-use rule" was uncovered as a result of an investigation by the Oregon Public Service Commission.
The 885,000 subscribers account for nearly 10% of all Lifeline subscribers.
"It is outrageous that a company is claiming millions of taxpayers' dollars for doing nothing." This reflects a careless disregard for the rules of the program and US taxpayers, said the president. of the FCC, Ajit Pai, in a statement.
In August, Pai distributed a draft order to approve the agreement reached between Sprint and T-Mobile, but it is still pending.
The US Department of Justice approved the merger in July, but the case faces a court challenge from 18 state attorneys general. A trial is scheduled for December 9 on this challenge.
The third and fourth largest wireless carriers in the United States have agreed to divest Sprint's prepaid business to Dish Network Corp., a satellite TV company, to create a fourth wireless carrier in the United States. Critics, including some state attorneys general, say competition will not increase and prices for mobile phone plans will rise.
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