Verizon made to pay $17.7 million by FCC

By:
Natalie Bannerman
Published on:

Verizon reaches a $17.7 million settlement with the FCC over the E-rate program investigation

It has been reported that Verizon will be made to pay $17.7 million by the Federal Communications Commission (FCC) and Justice Department.

According to Reuters, the payment is to settle an investigation by the FCC and Justice Department into potential violations of competitive bidding rules for a government program that helps bring broadband services to schools.

The investigation centred on Verizon’s participation in the E-rate program used by New York City schools. The program, is a government-backed scheme that provides subsidised broadband and internet service for schools and libraries in the United States and is funded through monthly fees on phone service.

The Federal Communications Commission and Justice Department, claim that Verizon had invoiced the FCC for consultant charges that were not allowed under an E-rate contract it had to supply the New York City Department of Education with its services., says CNBC.

On Tuesday 17 October, Verizon said "today's settlements fairly resolve years of work by Verizon and the government to return funding to the program."

The company said that it was a victim of fraud, citing the conviction of a former New York City Department of Education consultant, Willard Lanham saying: "Like the New York school system, Verizon was a victim of that fraud and five years ago helped to convict Lanham.”

Lanham who was sentenced to 37 months in prison in 2012, was charged with fraud. He created a subcontracting scheme through which he billed millions of dollars to the city school department for consultants he employed without the city or Verizon's knowledge.

As part of the settlement, Verizon has agreed to operate under a compliance plan for three years. It also surrendered any appeal rights to more than $100 million in E-rate subsidy payments.

FCC chairman Ajit Pai commented in a statement that the settlement was an "important measure that both enforces our rules and restores critical taxpayer dollars" to the Universal Service Fund.

In a related story Alan-Burkitt-Gray reports that Verizon aims to put 50% of women in top positions in the company by the year 2020.