But the justices didn't rule on the question of whether all E-Rate funds are government cash.

WASHINGTON, Feb. 21, 2025 – The Supreme Court unanimously ruled Friday that companies can face heightened penalties for false reimbursement claims to the Universal Service Fund’s E-Rate program, allowing a whistleblower fraud suit to move forward.

Wisconsin Bell, an AT&T subsidiary, had argued the False Claims Act (FCA), which calls for triple damages for fraudulently seeking government funds, didn’t apply to the USF because it’s funded by fees on telecom companies. The company was sued under the FCA by telecom auditor Todd Heath, who alleged Wisconsin Bell overcharged schools participating in E-Rate.

The court didn’t rule on whether all of the roughly $8 billion the USF spends every year was government money. The decision hinged on the fact that delinquent debt and penalties collected by the Justice Department for infractions were deposited into the fund from the Treasury.

“The requests at issue qualify as claims because, in the years they were submitted, the U. S. Treasury deposited money into the Fund for disbursement to those entitled to E-Rate subsidies,” Justice Elena Kagan wrote for the court.

The Schools, Health & Libraries Broadband Coalition cheered the ruling, calling it a win for schools and libraries that rely on E-Rate for connectivity. The program provides internet discounts for those institutions.

“By clarifying the applicability of the False Claims Act to...

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