Supreme Court safeguards E-rate discounts

The U.S. Supreme Court ruled unanimously on Friday that the federal E-rate program that funds internet connections in education is subject to a major anti-fraud statute, the False Claims Act (FCA), potentially bolstering schools that have been allegedly overcharged by telecommunications companies. Whistleblower Todd Heath alleged in 2008 that telecommunications provider Wisconsin Bell overcharged schools and libraries by not offering them discounted rates required under the E-rate program and submitting reimbursement requests for higher amounts than E-rate should have paid. The FCA allows civilians to bring lawsuits against companies on behalf of the government when federal money is at stake. Writing for the court in Wisconsin Bell Inc. v. United States ex rel. Heath, Justice Elena Kagan rejected Wisconsin Bell’s arguments because the government provided part of the funds that schools and libraries applied for. “In the years in which those requests were made, the Government transferred more than $100m from the Treasury into the pool of funds used to pay E-Rate subsidies. That is enough to create a ‘claim’ under the Act, and to allow a suit alleging fraud to go forward,” she wrote. The Schools, Health and Libraries Broadband Coalition hailed the ruling, which sends the case back to the 7th U.S. Circuit Court of Appeals. “By clarifying the applicability of the False Claims Act to E-rate reimbursements, the Court helps ensure that schools and libraries are able to obtain prices that are no higher than the rates charged to similarly situated customers. This ruling helps improve the efficiency of the Universal Service Fund and the E-Rate program,” commented executive director John Windhausen.