As a former attorney at the Federal Communications Commission in Washington, DC, who is now a whistleblower attorney combating fraud in Huntsville, Alabama, I’ve followed this case with great and geeky fascination.
On February 21, 2025, the U.S. Supreme Court issued an (increasingly rare) unanimous decision in Wisconsin Bell, Inc. v. United States ex rel. Heath, a case with significant implications for whistleblowers considering False Claims Act (FCA) litigation. The ruling clarifies that companies receiving funds from the Federal Communications Commission’s (FCC) E-Rate program are subject to FCA liability, opening the door for individuals with insider knowledge of fraud to step forward.
If you work for a telecommunications provider, a vendor, or even a school district participating in the E-Rate program and you have evidence of fraudulent billing practices, this decision could be a game-changer. Here’s what you should know about the ruling and how it strengthens whistleblower claims under the FCA.
The False Claims Act and the E-Rate Program
The False Claims Act is the federal government’s primary tool for combating fraud involving taxpayer funds. It allows private individuals—known as relators—to file lawsuits on behalf of the government when they discover fraudulent claims for payment. Successful whistleblowers can receive a percentage (15% to 30%) of the government’s recovery, sometimes amounting to millions of dollars.
The E-Rate program, administered by the Universal Service Administrative Company (USAC) under FCC oversight, provides subsidies for schools and libraries to secure affordable internet and telecommunications services. These funds come from the Universal Service Fund (USF), which is funded by contributions from telecommunications carriers. A crucial aspect of the program is the lowest corresponding price rule, which ensures that schools and libraries pay no more than what a similarly situated non-residential customer would pay.
The Supreme Court’s Ruling: A Win for Whistleblowers
At the heart of Wisconsin Bell was whether reimbursement requests from the E-Rate program could be considered “claims” under the FCA. Wisconsin Bell argued that because E-Rate funds come from private carrier contributions, rather than directly from congressional appropriations, the FCA should not apply.
The Supreme Court flatly rejected that argument. The justices ruled that because the U.S. Treasury had transferred over $100 million into the E-Rate program—including funds collected from penalties and enforcement actions—the federal government had provided a portion of the money. That meant the FCA applied, and the whistleblower’s case could proceed.
This decision is significant because it confirms that programs funded by regulatory mechanisms—like the E-Rate program—are still subject to FCA scrutiny when government funds are involved. It removes a common defense used by companies accused of defrauding these programs.
What This Means for Potential Whistleblowers
If you have knowledge of fraud within the E-Rate program, this ruling strengthens your ability to pursue an FCA case. Here’s why:
- Clear FCA Applicability – The Supreme Court’s ruling eliminates ambiguity about whether the FCA covers E-Rate fraud. Companies can no longer argue that because USAC is a private administrator, FCA claims do not apply.
- Broad Definition of Government Funds – Even if funds originate from private contributions, the key factor is whether the federal government exercises control over them. If government enforcement actions, penalties, or oversight play a role in funding the program, the FCA can be triggered.
- Stronger Protections for Whistleblowers – The ruling reinforces the role of qui tam lawsuits in exposing fraud. The FCA provides protection against retaliation for whistleblowers, making it safer for employees, contractors, and insiders to come forward.
Signs of E-Rate Fraud: Do You Have a Case?
If you work in the telecommunications industry, a school district, or a company that interacts with E-Rate funding, here are some red flags that could indicate FCA violations:
- Overcharging Schools and Libraries – Charging higher rates to E-Rate participants than other similarly situated customers.
- False Certifications – Misrepresenting compliance with E-Rate program rules, including the lowest corresponding price requirement.
- Kickbacks or Bid-Rigging – Engaging in anti-competitive practices to manipulate bidding for E-Rate contracts.
- Inflated or Duplicate Reimbursement Requests – Submitting false invoices or double-billing for services.
If you have encountered any of these practices, you may have grounds for an FCA whistleblower case.
Why Act Now?
Fraud against the E-Rate program diverts vital resources away from schools and libraries that need them most. By coming forward, you not only stand to receive a financial reward, but you also help protect the integrity of government programs designed to benefit students and communities.
Additionally, whistleblower cases are subject to strict deadlines. The FCA contains a first-to-file rule, meaning that if someone else files a similar claim before you, you may be barred from recovery. If you suspect fraud, it’s critical to speak with an experienced FCA attorney as soon as possible.
How We Can Help
As attorneys experienced in FCA litigation, FCC regulations, and E-Rate compliance, we can help assess the strength of your case and guide you through the legal process. From filing a qui tam complaint under seal to working with the Department of Justice, we ensure that your rights are protected every step of the way.
If you have information about E-Rate fraud or other government contract fraud, contact us today for a confidential free consultation. The Supreme Court has made it clear: the FCA applies, and whistleblowers play a critical role in ensuring government funds are used properly.
And because the FCC was my first job out of law school, telecom cases make me nostalgic!
Don’t let fraud go unchecked. Be the change. Speak up today
