United States ex rel. Heath v. Wis. Bell, Inc.

United States ex rel. Heath v. Wis. Bell, Inc.

Opinion

 [*858]  DECISION AND ORDER

Relator Todd Heath brings this qui tam action under the False Claims Act ("FCA") alleging [**2]  that defendant Wisconsin Bell Inc. fraudulently obtained subsidies by falsely certifying that it was providing telecommunications services to schools and libraries at the lowest rate charged to similarly situated customers. See 47 U.S.C. § 254(h)(1)(B); 47 C.F.R. § 54.511(b). Wisconsin Bell moves for summary judgment. The parties have also brought motions for the exclusion of expert witnesses, motions to restrict documents, and a motion to set a briefing schedule for a possible motion for sanctions.

I. THE E-RATE PROGRAM

Wisconsin Bell is a common carrier that receives subsidies under the Education Rate ("E-rate") Program. Congress established the E-rate program as part of the Telecommunications Act of 1996. Under the program, the government pays 20-90% of the price of certain telecommunications and information services provided to eligible schools and libraries. 47 C.F.R. § 54.505. To receive a subsidy, a common carrier must annually certify that it is charging the school or library the lowest corresponding price.

The "Lowest corresponding price" or "LCP" is the lowest price that a service provider charges "similarly situated" nonresidential customers for "similar services," unless the Federal Communications Commission or equivalent state commission finds that the LCP is "not [**3]  compensatory." 47 C.F.R. §§ 54.500, 54.511(b). "Similarly situated" is not a defined term in the regulations but the FCC has provided guidance on which customers are similarly situated. See Meza Morales v. Barr, 973 F.3d 656, 664-65 (7th Cir. 2020) (Deference to agency guidance is appropriate where regulation is ambiguous). In general, schools and libraries must be in a provider's geographic service area (i.e., "the area in which [it] is seeking to serve customers with any of its [E-rate] services") to be considered similarly situated. In the Matter of Fed.-State Joint Bd. on Universal Serv., 12 F.C.C. Rcd. 8776, ¶ 487, 1997 FCC LEXIS 5786 (1997) ("First Report and Order"). Further, customers are not "similarly situated" when they are differentiated by factors "clearly and significantly" affecting cost, including but not limited to traffic volume, mileage from a switching facility, and length of contract. Id. at ¶ 488.

II. SUMMARY JUDGMENT STANDARD

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