T-Mobile will pay $40 million as part of a settlement with the FCC for playing ringing sounds to mislead customers into thinking their calls were going through when in fact they had never connected in the first place. The company admitted it had done so “hundreds of millions” of times over the years.

The issue at hand is that when someone is trying to call an area with poor connectivity, it can sometimes take several seconds to establish a line to the other party — especially if a carrier itself does not serve the area in question and has to hand off the call to a local provider. That’s exactly what T-Mobile was doing, and there’s nothing wrong with it — just a consequence of spotty coverage in rural areas.

But what is prohibited is implying to the caller that their call has gone through and is ringing on the other end, if that’s not the case. Which is also exactly what T-Mobile was doing, and had been doing since 2007. Its servers began sending a “local ring back tone” when a call took a certain amount of time to complete around then.

As the FCC estimates it, and T-Mobile later confirmed:

Because T-Mobile applied this practice to out-of-network calls from its customers on SIP routes that took more than a certain amount of time on a nationwide basis and without regard to time of day, the LRBT was likely injected into hundreds of millions of calls each year.

It’s not just a bad idea: it’s against the law. In 2014 the FCC’s Rural Call Completion Order took effect, prohibiting exactly this practice, which it called “false audible ringing”:

[O]ccurs when an originating or intermediate provider prematurely triggers audible ring tones to the caller before the call setup request has actually reached the terminating rural provider. That is, the calling party believes the phone is ringing at the called party’s premises when it is not. An originating or intermediate provider may do this to mask the silence that the caller would otherwise hear during excessive call setup time. As a result, the caller may often hang up, thinking nobody is available to receive the call. False audible ringing can also make it appear to the caller that the terminating rural provider is responsible for the call failure, instead of the originating or intermediate provider.

Users and carriers complained after this rule took effect, and also sought remedy with T-Mobile directly. The FCC looked into it and T-Mobile reported that it had solved the problem — but complaints continued. It became clear that the company had been violating the rule for years and in great volume and had not in fact stopped; hence the settlement and $40 million penalty.

T-Mobile will also have to take action within 90 days to stop the practice (if it hasn’t already) and issue regular reports to the FCC every year for the next three years that it is still in compliance. You can read the full consent decree here (PDF).

Update: FCC Commissioner Clyburn points out in a separate statement that despite evidence of widespread consumer harm, there’s nothing for users in the settlement.

[T]here is absolutely nothing in this consent decree to compensate consumers. Prior consent decrees have included direct-to-consumer benefits, such as refunds or discounts, or notifications to customers who have been impacted.

Despite demonstrating a clear and tangible consumer harm, in this consent decree, consumers are treated as a mere
afterthought.

The $40 million civil penalty, which will be paid to the U.S. Treasury, is dwarfed by larger, unpaid fines recently proposed against individual robocallers—and the volume of potential violations here outpaces any robocalling action the Commission has taken. And the compliance plan does not contain any concessions that would explain such a massive discount.

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