The technology giant IBM entered into an agreement with Federal Communications Commission (FCC) and will disburse US $ 24,25 million (approximately R $ 126,5 million in direct conversion) to end two investigations involving grants awarded to connect schools and libraries to the broadband connection. The resolution of the case was released last Wednesday (23).

In recent years, IBM has provided communications services to the New York City Department of Education and the Independent School District of El Paso, Texas, using E-Rate subsidies - a government program that offers discounts on telecommunications services, access internet and internal connections to qualified schools and libraries.


According to the rules of the E-Rate program, candidates must seek competitive proposals from possible service providers, considering the prices of products and services as the main factor for selection. This is precisely so that federal funds are distributed in a fair and transparent manner.

However, the investigations - which lasted about 15 years - accuse the technology company of failing to comply with the bidding rules in New York for the years 2005 through 2008, and of providing ineligible equipment in El Paso in 2001.

Computers in the library
IBM has failed to comply with E-Rate policies when providing services to educational institutions in the United States. Photo: stevecoleimages / iStock

"As federal tax administrators, we must protect the Universal Service Fund from waste, fraud and abuse and ensure that funding is distributed in the most economical manner," said FCC President Ajit Pai.

IBM does not admit irregularities

Despite not admitting the irregularities, IBM agreed to return the more than $ 24 million to the Universal Service Fund, which finances the E-Rate program.

In a statement, the company said it had "acted appropriately in support of the E-Rate program, but in the interest of amicably resolving an old issue, it is pleased to have reached this agreement".

In addition to the refund, IBM agreed to train its employees on the Commission's competitive bidding policies and eligibility requirements before submitting new proposals to the government program.

Street: Reuters