AT&T has agreed to pay $6.9 million to the Federal Communications Commission for over-billing its low-income support program, known as Lifeline. Lifelife allows households with low incomes to receive discounts on phone service, but customers have to verify with their phone company that they qualify for the program each year. An audit of AT&T discovered that in 2012 and 2013, it had failed to remove customers from the list who were no longer eligible for Lifeline. In the majority of cases, customers were only given one additional month of support from Lifeline, though other issues were discovered as well. AT&T ended up billing the FCC for those customers, and it now appears to be paying that back as part of the civil penalty it's agreed to.
The FCC is also fining Southern New England Telephone, formerly an AT&T subsidiary and now part of Frontier, a total of $4 million for the same issue. It also failed to remove Lifeline enrollment from subscribers who no longer qualified for it in 2012 and 2013. Both AT&T and SNET will also have to instate compliance officers and draft plans to ensure that this does not occur again in the future.
In a comment emailed to The Verge, AT&T said: "We discovered this issue in the course of an internal review, voluntarily reported it, and reimbursed the Universal Service Fund about a year ago. We also have implemented process enhancements so this does not happen again." Frontier / SNET has not yet responded to a request for comment. Though the commission views Lifeline as an important program, it's currently working to overhaul it help people access a more modern utility: the internet. That overhaul is still a work in progress, however.