Verizon, FCC settle E-Rate investigation for $17M

Steinbach school
The settlement follows an investigation into Verizon’s involvement with New York City schools’ use of the E-rate program.

Verizon has agreed to pay $17 million to settle an FCC investigation in New York over possible violations of competitive bidding rules for the E-Rate program that subsidizes telecom services for local school districts.

The settlement follows an investigation into Verizon’s involvement with New York City schools’ use of the E-rate program.

Under the terms of the settlement, Verizon will pay $17.3 million to the Universal Service Fund through the FCC settlement and $354,634 to the U.S. Treasury through the Justice Department settlement. Additionally, Verizon will surrender any claims against the Universal Service Fund it may have to approximately $7.3 million in undisbursed E-rate support for products and services provided to the New York City Department of Education between Funding Years 2002 and 2013.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceTelecom!

The Telecom industry is an ever-changing world where big ideas come along daily. Our subscribers rely on FierceTelecom as their must-read source for the latest news, analysis and data on the intersection of telecom and media. Sign up today to get telecom news and updates delivered to your inbox and read on the go.

Verizon will also surrender any rights to appeal to USAC or the FCC for expensive E-Rate support—valued around $100 million—for the products or services provided to the New York City Department of Education. As part of the FCC’s settlement, Verizon will also operate under a compliance plan for three years.

RELATED: AT&T fined $106K for overcharging schools in Florida under E-rate program

While the Commission adopted the consent decree in May 2017, it has not been released until today to allow for a global settlement which includes the U.S. Department of Justice. The Department of Justice settlement with Verizon was submitted to the Court for approval in the Southern District of New York today.

In line with the U.S. Department of Justice Civil Fraud Section and U.S. Attorney’s Office for the Southern District of New York, the Commission’s Enforcement Bureau conducted its investigation.

On a related note, former New York City Department of Education consultant Willard “Ross” Lanham was convicted by a federal jury sitting in the Southern District of New York. In December 2015, the Commission settled a related investigation with the New York City Department of Education.

Verizon is not the only telco that’s faced FCC fines over issues with the E-Rate program.

AT&T, for one, was fined $106,425 last July for charging two Florida schools what the FCC says is the highest telecom rates in the state, violating the regulator's "lowest corresponding price" rule.

The FCC alleged that AT&T violated the lowest corresponding price rule from at least mid-2012 to mid-2015, when it charged the school districts in Orange County and Dixie County, Florida.

Read more on

Suggested Articles

Service providers and cloud operators are ramping up their SD-WAN managed services offerings to keep pace with the demand from enterprises.

The U.S. hyperscaler cloud market had a growth spurt in the third quarter of this year with a 26% increase year-over-year in revenue, according to a r

Juniper Networks announced on Monday new capabilities for its Mist and Contrail solutions that were designed to help its enterprise customers.