The Federal Communications Commission issues a $40 million fine to T-Mobile after the court found it had used "false ringtones" to deceive its rural customers.
It is surprising to discover that the so-called un-carrier resorted to underhanded methods to make it look like the rural calls were connected right on time. The company allegedly admitted that its services had failed to connect customers on time in some locations. It led to its decision to fill the gap with a ringtone that had subscribers believe the call had already been connected and that the other end just did not pick it up on time.
The FCC Gets Involved
According to the company, the method was used on calls that had taken longer to complete, which apparently numbered in hundreds of millions every year. Ongoing investigations done by authorities have not revealed the total number of connections that failed to complete due to the workaround.
"To settle this matter, T-Mobile admits that it violated the Commission's prohibition against the insertion of false ringtones and that it did not correct problems with delivery of calls to certain rural areas," the FCC's order stated.
Refund Unavailable
What makes the situation even worse is that customers are not going to receive a refund from the fine that T-Mobile is ordered to pay and apparently, the $40 million will all go to the U.S. Treasury. This development had caught the attention of Mignon Clyburn, the FCC commissioner, and criticized Ajit Pai, the FCC chairman.
Also, Clyburn reportedly called out Pai on his decision to limit the number of members who could vote on the order. The final verdict was still issued by the office's Enforcement Bureau even without the involvement of all its members.
"Prior consent decrees have included direct-to-consumer benefits, such as refunds and discounters, or notifications to customers who have been impacted. Despite demonstrating a clear and tangible consumer harm, in this decree, consumers are treated as a mere afterthought," said Clyburn.
What's Next
Market researchers believe that T-Mobile won't have any problem with the $40 million fine. The company confirmed that it had a really good fourth quarter in 2017 with 891,000 additional subscribers contributing to its massive revenue.
Moreover, the court ordered the network provider to also resolve the unwanted practices within 90 days and report to the FCC every year. The company is required to comply for the next three years to ensure compliance.
