IBM to address FCC probes on subsidies. Agrees to pay 24.25 million


IBM has agreed to pay $ 24.25 million (approximately Rs. 180 crore) to settle an investigation by the Federal Communications Commission (FCC) into subsidies to connect schools and libraries to broadband.

Of IBM Payment fixes both FCC Allegations of violating “e-rate” program regulations regarding New York City and El Paso school districts have been around for almost 15 years. Under the agreement, the e-rating program will be funded by the Universal Service Fund. IBM agreed to repay Rs 24.25 million (approximately Rs 180 crore), but did not admit wrongdoing.

The FCC stated that IBM did not meet the competitive bidding requirements in New York for the year 2005-2008, and that in 2001 El Paso provided unqualified equipment and services.

IBM said in a statement that “it has acted appropriately in support of the e-Rate program, but we are pleased to have reached this solution with an interest in resolving long-term issues amicably.”

IBM says the e-Rate program has provided Internet connectivity to thousands of US schools and libraries and millions of American students.

FCC Chairman On Ajit The Commission said that “the Universal Service Fund must be protected from waste, fraud and abuse and that funds must be distributed at very low cost.”

All telecommunication carriers are paid into the Universal Service Fund, which pays to connect people in rural areas, to provide subsidies to low-income Americans through the Lifeline program, to expand services on tribal lands, and to help schools and libraries through the e-rate program.

© Thomson Reuters 2020

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