LCW published a Special Bulletin on a recent U.S. Supreme Court case regarding E-Rate reimbursement for schools. On February 21, 2025, the U.S. Supreme Court issued a unanimous decision in Wisconsin Bell, Inc. v. United States ex rel. Heath. The Court ruled that E-Rate reimbursement requests qualify as “claims” under the False Claims Act (FCA) when any portion of the funding comes from the federal government.
The E-Rate Program was established under the Telecommunications Act of 1996 and subsidizes telecommunications services for schools and libraries. Funds come from telecommunications carriers and are administered by the Universal Service Administrative Company under Federal Communications Commission (FCC) regulations. Todd Heath, a telecommunications auditor, alleged that Wisconsin Bell overcharged schools in violation of the “lowest corresponding price” rule, resulting in inflated reimbursement claims.
Wisconsin Bell argued that E-Rate funds were not government money subject to the FCA. The Supreme Court disagreed. It affirmed the Seventh Circuit’s ruling that federal contributions, including Treasury transfers and penalties, made the funds “government-provided.”