IBM agrees to pay US$24mln to settle FCC probes

International Business Machines Corp (NYSE:IBM) said it has agreed to pay US$24.25mln to resolve two investigations by the US Federal Communications Commission (FCC) over subsidies the company was awarded to connect schools and libraries to broadband internet networks. The payment by the computing firm will mark an end to the two probes, which have lasted for nearly 15 years and focused on IBM allegedly breaking the rules of the ‘E-Rate’ program, a service that provides discounted telecommunications services to schools and libraries, in connection with school districts in New York City and El Paso, Texas. The payment means IBM will return the cash to the Universal Service Fund, which runs the E-Rate program, although it will not admit wrongdoing despite the FCC saying its investigations had revealed the firm had not followed bidding rules in New York and had also provided ineligible equipment and services in El Paso. “As stewards of the federal fisc, we must protect the Universal Service Fund from waste, fraud, and abuse and ensure that funding is distributed in the most cost-effective manner”, FCC chairman Ajit Pai said in a statement. “Today’s settlement helps promote those important goals. The favorable result we achieved today reflects the hard work and dedication of a wide range of talented career staff from across the agency”, he added.