Lifeline Program Paid Sprint for Customers Who Didn't Use Service, FCC Says

Those subscribers were nearly 30 percent of Sprint's Lifeline subscriber base and nearly 10 percent of all Lifeline subscribers, the agency said. The Lifeline program's non-usage rules require providers after 15 days' notice to de-enroll subscribers who don't use their phones at least once in 30 days. An Oregon Public Utility Commission probe brought the Sprint matter to light, the FCC said. Sprint is "committed to reimbursing federal and state governments for any subsidy payments" collected in error, a spokesperson said Tuesday. "The misconduct today, if true, amounts to corporate malfeasance," FCC Commissioner Geoffrey Starks said in a statement. He said Tuesday's announcement "directly impacts" the agency's review of the proposed deal between Sprint and T-Mobile. He said the review shouldn't go forward until the Lifeline investigation is resolved and responsible parties held accountable. The company said it discovered an implementation error after the company made system updates in mid-2017 in how it calculates Lifeline usage and eligibility after the FCC "approved sweeping changes" to the program. Sprint investigated "and proactively raised this issue with the FCC and appropriate state regulators," the spokesperson said. "We also engaged an independent third party to review the results of our review and the effectiveness of our operational changes." Opponents of Sprint/T-Mobile could question "whether, in light of these findings, Sprint is qualified to own its licenses. If it is not, then the question becomes what is the remedy," New Street's Blair Levin told investors Tuesday. A new round of litigation could further delay the deal's closing, Levin wrote.