FCC Won’t Penalize T-Mobile (NASDAQ:TMUS), and Verizon (NYSE:VZ) For Exaggerating 4G Coverage

T-Mobile (NASDAQ:TMUS), Verizon Communications (NYSE:VZ), and US Cellular might have exaggerated their 4G coverage in rural areas. This is according to the Federal Communications Commission probe, but the agency will not punish the carriers.

FCC will not penalize carriers for exaggerating coverage

However, the FCC is planning to give an enforcement advisory to the carriers, reminding them of penalties related to filings that break federal law. The FCC stated that exaggerating the broadband coverage is misleading and can result in misallocation of the limited universal service funds.

Throughout the investigation, the commission staff conducted speed and coverage tests in rural communities nationwide. They wanted to establish whether there were sufficient download speeds in areas the carriers indicated has 4G coverage. The commission found out that only 62.3% of the drive tests met the required thresholds. Verizon and T-Mobile achieved the threshold at 60% at the time while US Cellular attained only 45%. Interestingly the commission did not receive 4G signals in 16.2% of Verizon, 21.3% of T-Mobile, and 38% of US Cellular’s tests.

Besides penalizing the carriers, the FCC recommends that a team should be assembled to audit the mobile broadband maps filed by the carriers. This requires the companies to submit exact ground evidence on the performance of the network. The evidence from the probe did not a breach of the Mobility Fund Phase II data collection requirements.

Small carriers covering rural areas complained

In 2017 the FCC asked the carriers to file their mobile broadband maps and data showing their 4G LTE coverage. This was to help the FCC determine the areas eligible for the $4.5 billion Mobility Fund over 10-years. Small carriers indicated then that the big carriers had exaggerated their 4G coverage thus preventing the small carriers from getting funding to improve the connectivity in areas with poor service. Without correct coverage maps, the MF-11 could have gone to waste.

T-Mobile has stood by its coverage maps but indicates that there is a need to improve their collection procedures for broadband coverage data.

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