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Businesses The Almighty Buck

Sprint Took FCC Cash For 'Serving' 885,000 People It Wasn't Actually Serving (arstechnica.com) 46

An anonymous reader quotes a report from Ars Technica: Sprint has been caught taking millions of dollars in government subsidies for "serving" 885,000 low-income Americans who weren't using Sprint service, the Federal Communications Commission said today. Sprint violated the Lifeline program's "non-usage rule" that requires providers of free, subsidized plans to de-enroll subscribers who haven't used their phones recently, the FCC said. "It's outrageous that a company would claim millions of taxpayer dollars for doing nothing. This shows a careless disregard for program rules and American taxpayers," FCC Chairman Ajit Pai said. "I have asked our Enforcement Bureau to investigate this matter to determine the full extent of the problem and to propose an appropriate remedy."

Sprint has admitted the mistake and said it will pay the money back. Like the FCC's other universal service programs, Lifeline is paid for by Americans through fees imposed on phone bills. The FCC said Sprint's violation "initially came to light as a result of an investigation by the Oregon Public Utility Commission." Because of that investigation, the FCC said it "has learned that Sprint Corp. claimed monthly subsidies for serving approximately 885,000 Lifeline subscribers, even though those subscribers were not using the service." The 885,000 subscribers that Sprint wasn't actually serving "represent nearly 30% of Sprint's Lifeline subscriber base and nearly 10% of the entire Lifeline program's subscriber base," the FCC said.
The FCC didn't say exactly how much money Sprint received through its violation of the non-usage rule, but one month's worth of $9.25 payments for 885,000 subscribers would amount to $8.2 million.
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Sprint Took FCC Cash For 'Serving' 885,000 People It Wasn't Actually Serving

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  • by rednip ( 186217 ) on Tuesday September 24, 2019 @06:24PM (#59232086) Journal
    If I stole $8 million a month from the government, I'd be spending ten years in Federal prison and the rest of my life working fast food.
    • I'm not usually on board with the "I hate corporations!!" people, but isn't this..fraud? Plain and simple fraud? Seems like this should not be a fine but an actual criminal complaint against whoever implemented this.
      • by sit1963nz ( 934837 ) on Tuesday September 24, 2019 @07:09PM (#59232172)
        Ohh...you....
        Its only fraud when the little people do it, when you are rich and powerful , so long as you do not rip off those in power it's called "astute business decisions". The only crime is actually being caught, and being caught is not a criminal offence as such.
        Now all they have to do is say sorry, promise to reviews business practices (ie not get caught again), pay back about 10% of what they took as a fine, make a donation to the relevant political party and all gets forgiven.
      • How do you single anyone out of the amorphous blob that is the corporation, and prove that they willingly broke the law/defrauded the tax payers? (short of a crazy long discovery process to find a memo in a haystack that may or may not exist.)

        But that's the entire point of a corporation -- individual profits without individual responsibility. You really have to screw up (i.e. directly piss off an AG somewhere) to even run the remote risk of being held accountable.

        • How do you single anyone out of the amorphous blob that is the corporation

          Have you ever worked for a corporation? They are not amorphous at all. People are assigned specific responsibilities, decisions are documented, and contracts have signatures of real identifiable people.

          Once the Feds launch an investigation, the executives will turn on each other like drowning rats, giving the investigators plenty of documentation for indictments.

        • All the better. The US govt has deep pockets and lots of lawyers. Dig in deep, the investigation itself will cost Sprint 10s of millions.
        • by sconeu ( 64226 )

          But corporations are people. Therefore it should be possible to put a corporation into prison, etc...

      • by jrumney ( 197329 )

        Yes, it is fraud. Sprint executives need to have a meeting with VW executives, where they can share tips on personal safety in the showers.

      • by rtb61 ( 674572 )

        Not implemented, that is another charge. This long term borrowing by any name is stealing, those who actually did should do the appropriate custodial sentence appropriate for the amount stolen. Those individuals who actually pushed those computer buttons, idiots stealing money for other people. They can reduce their sentences by substantiating those who instructed them to carry out those crimes and they get prosecuted and they get the opportunity to reduce their sentence by passing the buck on up and on it

      • "I'm not usually on board with the "I hate corporations!!" people, but isn't this..fraud? Plain and simple fraud?"

        Worse, it's wire fraud. There's prison time for every single one of those 885000 cases.

    • If I stole $8 million a month from the government, I'd be spending ten years in Federal prison and the rest of my life working fast food.

      It depends on how judiciously you spent part of that $8 million on lawyers and lobbyists.

    • If I stole $8 million a month from the government, I'd be spending ten years in Federal prison and the rest of my life working fast food.

      Most fast food chains have government contracts that would keep you from being hired in fast food.

    • by brunes69 ( 86786 )

      Exactly - so lets put the guy who made a coding mistake in prison for 10 years.

      Or... who are you asking to send to prison?

      • Their accountants.

        If anyone should have noticed, it's their finance department which balances the books. If your programmers make an error that's bringing in an extra $8m/month, they are not going to notice. But the people balancing the books definitely should know where all the money comes from.

  • Mixed feelings (Score:5, Insightful)

    by Local ID10T ( 790134 ) <ID10T.L.USER@gmail.com> on Tuesday September 24, 2019 @06:32PM (#59232098) Homepage

    Sprint violated the Lifeline program's "non-usage rule" that requires providers of free, subsidized plans to de-enroll subscribers who haven't used their phones recently, the FCC said.

    On the one hand, that is a unfair rule: it would not be fun to find out that your free/subsidized phone service was cut off because you hadn't used it enough -especially if you don't find out it was cut off until you actually need to use it.

    On the other hand, sprint trying to profit from taxpayers by claiming to be helping the poor is shameful behavior.

    • Sprint violated the Lifeline program's "non-usage rule" that requires providers of free, subsidized plans to de-enroll subscribers who haven't used their phones recently, the FCC said.

      On the one hand, that is a unfair rule: it would not be fun to find out that your free/subsidized phone service was cut off because you hadn't used it enough -especially if you don't find out it was cut off until you actually need to use it.

      On the other hand, sprint trying to profit from taxpayers by claiming to be helping the poor is shameful behavior.

      /agreed

      I could see this being an honest mistake.

      I could also see this as a mistake that could seem honest.

      I could see 30 days being an unreasonably short period of time especially if people are using these as emergency phones.

      I could also see 30 days with a 15 day warning being missed by children that parents had given their "free" phone to. (not the intended purpose)

      But what kid is not going to use a phone at all in 45 days? And what adult that had been given notice is going to let their "emergency phone"

    • Re:Mixed feelings (Score:5, Interesting)

      by Anonymous Coward on Tuesday September 24, 2019 @07:57PM (#59232280)

      On the one hand, that is a unfair rule: it would not be fun to find out that your free/subsidized phone service was cut off because you hadn't used it enough -especially if you don't find out it was cut off until you actually need to use it.

      So much this. I was hospitalized for 5 weeks and when I arrived home tried to call the local pharmacy to fill prescriptions I was given on discharge, only to find out my service was terminated for not using it for 30 days.

      Nearest neighbor lives over a mile away, I no longer drive or own a car, and this was during the depths of a Minnesota winter. I was also almost out of food. It was almost 2 weeks before somebody stopped by and I ended up back in the hospital from not having meds and also from severe malnourishment from surviving on old, stale, saltine crackers. Lucky to still be alive.

      • I highly recommend carrying around a cheapo feature phone or budget smartphone for this exact reason. You can get them for $30-$50 (I recommend Nokia/HMD Global for budget phones in general). You do not need an active cell subscription to use emergency services. If you are within range of any cell tower, you can dial 911. Cell carriers are legally obligated to provide access to their services to anyone for emergency services. I don't even think you need a SIM card (not 100% sure on that, but if you do, you
  • I bet Ajit will fine them a whole $50,000. That'll teach them.

    • He has a committee investigating a possible decision to eventually enact a policy regarding fraud but since this action took place prior to the implementation of the policy Sprint has no culpability to either return the money or face fines. Meanwhile, the committee is going to spend six months having catered meetings and then take a quiet vacation to the Bahamas where the policy proposal will be quietly buried under martinis and ample bosoms.
  • Ajit Pai would be looking the other way.

  • by bobstreo ( 1320787 ) on Tuesday September 24, 2019 @07:03PM (#59232158)

    AT&T, Tmobile, and Verizon for the same practice.

    And as far as the FCC saying:

    "It's outrageous that a company would claim millions of taxpayer dollars for doing nothing. ..."

    The quote should end in "When they could be claiming billions of taxpayer dollars"

    • "it's outrageous that a regulatory body made up of former industry executives could be counted on for any kind of meaningful fine, punishment, or deterrence from future actions contrary to the public good"

  • With as much crime involving coporations and government, one would think, maybe, this is just a setup and retribution is just around the corner, nah.
  • shutdown the FCC (Score:3, Interesting)

    by js290 ( 697670 ) on Tuesday September 24, 2019 @07:42PM (#59232248)

    Your distinction, pictured pic.twitter.com/dXGVBM6mNi [t.co]

    — Jon Boguth (@jonboguth) July 18, 2019 [twitter.com]

  • ""It's outrageous that a company would claim millions of taxpayer dollars for doing nothing."

    Physician heal thyself.

  • "It's outrageous that a company would claim millions of taxpayer dollars for doing nothing."
    I doubt they are that ignorant of how corporations run these days.
    We already know Pai is a lying scuzzbag working for the interest of the corporations, so this basically comes off as an attempt to distance himself from the fallout.
  • The 885,000 subscribers that Sprint wasn't actually serving "represent nearly 30% of Sprint's Lifeline subscriber base and nearly 10% of the entire Lifeline program's subscriber base," the FCC said.

    There are 9 million low income adults enjoying free cellphone service at an estimated $10/month? Wow.

    • by Pascoea ( 968200 )
      Yes. That was the clear takeaway. 9M of the estimated 43M people living in poverty are living the high life on their free cellphone. Looks like Ken just discovered the hole in our $4,746,000,000,000 budget!
  • If the motherfuckers don't go to jail for this crime it will just keep on happening.
  • About the merger, seems Sprint overstayed subscribers and income so a further discount would be a new negotiation point.

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