Monday, November 07, 2016

FCC seeks $21.7M fine, $3.5M refund from telecom company for defrauding rural health program

The Federal Communications Commission plans to fine a telecommunications contractor and its top executive $21.7 million for defrauding a government program designed to make high-speed internet available to rural health-care providers, mainly in Mississippi and Texas.

Network Services Solutions of Reno, Nev., allegedly violated competitive-bidding rules and used "forged and false documents to seek and obtain funding from the program," reports Joan Engebretson of Telecompetitor. "Network Services Solutions also will be asked to refund $3.5 million in improper funding that it allegedly received" from the Universal Service Fund, which funds telecommunications in rural areas.

The proposed fine "is the FCC’s first enforcement action involving that program and the first time the agency has proposed a fine for wire fraud in connection with a USF program," Engebretson reports. "The wire-fraud charges are based on the FCC’s allegation that Network Services Solutions used information contained in forged documents to cause administrators to make improper payments to the company via interstate wire."

Under the FCC's Rural Health Care Program, the USF pays service providers the difference between the higher rural rate for telecommunications services and the lower urban rate provided for similar services in the closest city with a population of 50,000 or more, an FCC press release said. It said NSS used forged urban-rate documents, gave a "valuable network server to a rural health care provider to influence its decision to award a contract,": improperly used "competitors’ confidential and proprietary information."

The allegations are contained in a Notice of Apparent Liability adopted Nov. 4. Anyone with information related to the matter can provide it at

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