Armstrong has agreed to pay $6.5 million in a settlement involving allegations that the company had violated FCC regulations regarding telecommunications subsidies for the past 15 years.

According to a press release, the FCC established the Universal Service Fund (USF) to ensure everyone has access to an efficient nationwide communication service at reasonable charges.

The High-Cost Program is one of four programs the USF is comprised of, which aims to ensure customers in rural, insular and high-cost areas have access to modern communication networks capable of providing comparable voice and broadband service, both fixed and mobile, at rates reasonably comparable to those in urban areas.

In pursuit of that, the program provides federal funds to eligible telecommunications carriers that receive subsidies to expand connectivity infrastructure within the U.S.

It was alleged that between 2008 and 2023, five incumbent local exchange carriers (ILECs) owned by Armstrong failed to comply with FCC regulations governing what costs they were allowed to report for the purpose of claiming subsidy payments from the government.

As a result, these ILECs received greater subsidy payments than they were entitled to.

"When providers like the Armstrong Group fail to follow federal law and FCC regulations, they jeopardize not only critical government programs but also consumers' ability to access a modern lifeline rapid, reliable and efficient telecommunications services," said U.S. Attorney Eric G. Olshan for the Western District of Pennsylvania. 

As a result of the settlement, Armstrong entered into a corporate compliance agreement with the FCC requiring the company to adopt concrete changes in its internal controls and implement cohesive oversight and monitoring mechanisms.

The settlement includes the resolution of claims brought under the whistleblower provisions of the False Claims Act. The whistleblower will receive $1,267,500 as his share of the recovery.

The claims resolved are allegations only since there has been no determination of liability.