T-Mobile USA has agreed to pay a $40 million fine after admitting that it failed to complete phone calls in rural areas and used "false ring tones" that created the appearance that the calls were going through and no one was picking up.

"To settle this matter, T-Mobile admits that it violated the Commission's prohibition against the insertion of false ring tones and that it did not correct problems with delivery of calls to certain rural areas," states an order issued by the Federal Communications Commission today.

T-Mobile will pay the $40 million fine into the US Treasury. FCC Commissioner Mignon Clyburn criticized the commission for not getting refunds for customers.

T-Mobile admitted that it used the fake ring tones on "hundreds of millions of calls" each year, the FCC said. It's not clear how many of these calls weren't completed at all, because T-Mobile used the fake ring tones on many types of calls that took longer than usual to complete.

The FCC order explains why fake ring tones are a violation of a commission rule that has been in effect since January 2014:

False ring tones cause callers to believe that the phone is ringing at the called party's premises when it is not. A caller may then hang up, thinking no one is available to receive the call. False ring tones also create a misleading impression that a caller's service provider is not responsible if the call fails. False ring tones are a problem on calls to rural areas and are a symptom of the problems of impaired quality and completion of calls to rural areas.

T-Mobile was already using fake ring tones for several years before that rule took effect. The company continued inserting fake ring tones into calls despite the new rule.

No refunds for affected customers

"There is absolutely nothing in this consent decree to compensate consumers," Clyburn said in a statement about the T-Mobile penalty. "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 penalty is too small "to address massively deceptive and harmful violations of the Commission's rules likely impacting billions—yes, billions—of telephone calls to rural areas over the past several years," Clyburn said.

The fine is also "dwarfed by larger, unpaid fines recently proposed against individual robocallers," and the compliance plan that T-Mobile must follow "does not contain any concessions that would explain such a massive discount," she wrote.

Clyburn, one of two Democrats on the Republican-majority commission, also criticized Chairman Ajit Pai for not letting the full commission vote on the T-Mobile order. The order was issued by the commission's Enforcement Bureau without a vote of the full commission even though "the Chairman's office was directly engaged in negotiating this item," she wrote.

FCC investigation

Call-completion problems are more common in rural areas than urban ones. The FCC said it opened an investigation into T-Mobile after getting "complaints that T-Mobile callers were unable to reach consumers served by three rural carriers in Wisconsin." The complaints began in June 2016.

T-Mobile investigated the complaints as well and filed reports with the FCC describing its investigations. "In each instance, T-Mobile reported that it had handed the call off to an intermediate provider for delivery and that any reported problems had been 'resolved,'" the FCC said.

But the FCC said it continued to receive complaints about failing calls, and the problems extended beyond Wisconsin. "Call-completion complaints filed directly with T-Mobile showed patterns of problems with call delivery to consumers in at least seven other rural areas," the FCC said.

Rural call completion problems significantly harm the public interest because "[t]hey cause rural businesses to lose revenue, impede medical professionals from reaching patients in rural areas, cut families off from their relatives, and create the potential for dangerous delays in public safety communications," the FCC said.

Fake ring tones

The FCC order explains that T-Mobile has been using fake ring tones for a decade. In 2007, T-Mobile "began using servers that included a 'Local Ring Back Tone' (LRBT) for calls from certain customers that took more than a certain amount of time to complete," the FCC said.

When T-Mobile migrated to different servers in 2013, the carrier "began using the LRBT only for the out-of-network calls from its customers that were routed via Session Initiation Protocol (SIP) trunks and that took more than a certain amount of time to complete," the FCC said.

T-Mobile acknowledged that it "continued its practice of using the LRBT on such calls (and expanded the LRBT to cover such calls on additional SIP routes) after the FCC rule prohibiting the practice went into effect in January 2014," the FCC said. "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."

Although T-Mobile used the fake ring tones for years both before and after the FCC outlawed them, T-Mobile claimed in a statement to CNBC and other media outlets that it was "unintentional." The statement from T-Mobile's public relations squad praises the company twice before acknowledging the years-long mistake.

"T-Mobile is committed to all of our customers across the country," T-Mobile said. "Our actions have always been focused on better serving our customers, and the ringtone oversight, which was corrected in January 2017, was unintentional. We have settled this matter—and will continue to focus on our mission."

January 2017, when T-Mobile fixed the problem, was about six months after the FCC started receiving complaints.

T-Mobile's compliance plan will involve training for employees, better procedures for investigating call-completion complaints, and regular compliance reports to the FCC, among other things. The requirements will remain in effect for three years.