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Monday, April 21, 2025

Supreme Court Confirms That the Federal Claims Act Applies to the FCC's E-rate Program - Mintz

Last Friday, in Wisconsin Bell, Inc. v. United States ex rel. Heath, the Supreme Court unanimously held that requests for funding from the FCC’s E-rate program are “claims” for purposes of the False Claims Act (FCA), settling a split among federal courts that arose due to the unusual funding mechanism for the program. The crux of the Court’s decision was that the federal government provided at least some of the funding for the E-rate program by (i) generating funds through enforcement activity and (ii) depositing those funds from the Treasury into the program account. The ruling could pave the way for an increase in FCA cases against recipients of funding from FCC broadband funding programs like the E-rate, RDOF, Lifeline, and the Rural Healthcare programs, which are funded from the same pool of monies.

Background on the USF and its E-rate Program

E-rate is one of the programs funded by the federal Universal Service Fund (USF). The USF annually distributes approximately $9 billion in funding to a variety of programs that support broadband networks and services in rural areas and reduce retail prices for entities such as schools and libraries. Rather than congressionally appropriated tax dollars, which fund most federal programs, the USF is funded primarily from assessments, called “contributions,” imposed under FCC rules on providers of telecommunications and VoIP services. These contributions are collected by a private entity, the Universal Service Administrative Company...



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