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AT&T Violated Rule Requiring Low Prices For Schools, FCC Says (arstechnica.com)

Posted by msmash on from the don't-be-evil dept.

Jon Brodkin, reporting for Ars Technica: AT&T overcharged two Florida school districts for phone service and should have to pay about $170,000 to the U.S. government to settle the allegations, the Federal Communications Commission said yesterday. AT&T disputes the charges and will contest the decision. The FCC issued a Notice of Apparently Liability (NAL) to AT&T, an initial step toward enforcing the proposed punishment. The alleged overcharges relate to the FCC's E-Rate program, which funds telecommunications for schools and libraries and is paid for by Americans through surcharges on phone bills. The FCC said AT&T should have to repay $63,760 it improperly received from the FCC in subsidies for phone service provided to Orange and Dixie Counties and pay an additional fine of $106,425. AT&T prices charged to the districts were almost 400 percent higher than they should have been, according to the FCC. AT&T violated the FCC's "lowest corresponding price rule" designed to ensure that schools and libraries "get the best rates available by prohibiting E-Rate service providers from charging them more than the lowest price paid by other similarly situated customers for similar telecommunications services," the FCC said. Instead of charging the lowest available price, "AT&T charged the school districts prices for telephone service that were magnitudes higher than many other customers in Florida," the FCC said. Between 2012 and 2015, the school districts paid "some of the highest prices in the state... for basic telephone services."

8 of 58 comments (clear)

  1. Where will the money go? by Atticka · · Score: 2

    Why doesn't the $170K go directly to the school district? I doubt the FCC has anything to do with ensuring the school districts budgets are compensated.

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  2. For those who may have forgotten by Anonymous Coward · · Score: 2, Insightful

    The old AT&T was broken up into seven smaller companies for very good reasons in the early 80s. Over time, those seven companies have coalesced, and we now have just two left: AT&T and Verizon. It is high time to break them up again lest the monster will arise again.

    1. Re:For those who may have forgotten by dgatwood · · Score: 3, Interesting

      Are you kidding? The breakup removed Bell's ability to prevent people from attaching arbitrary non-Bell equipment to the phone lines, which made modems practical, which basically made the Internet viable. It also made multiple long distance carriers available to a lot more people than had options previously, which was responsible for a lot of the cash that Sprint eventually used to build a cellular network. So basically, we have the Internet and multiple cellular carriers because the government broke up Ma Bell.

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    2. Re:For those who may have forgotten by Anonymous Coward · · Score: 2, Informative

      The carterphone decision in 1968 - long before the breakup in January of 1982 - is what allowed devices to be hooked up to the pots

      from Wikipedia:
      This particular device was involved in a landmark United States regulatory decision related to telecommunications. In 1968, the Federal Communications Commission allowed the Carterfone and other devices to be connected directly to the AT&T network, as long as they did not cause harm to the system. This ruling (13 F.C.C.2d 420) created the possibility of selling devices that could connect to the phone system using a protective coupler, and opened the market to customer-owned equipment.

  3. How many times... by Anonymous Coward · · Score: 2, Insightful

    Do these communication providers have to get caught with their hands in the cookie jar before real action is taken to punish and prevent them from doing this? I'm talking rate regulation, maximum entitled profit, and punitive damages awarded to the state to regulate, and jail time for knowing violators. If you're not sure you're ripping off your customer, give them a better deal.

    This is a true tragedy of the commons. You rarely see this kind of nonsense with actual, regulated utilities. Communication is so integral to modern life's success and survival it ought to be equitably regulated to ensure access.

    1. Re:How many times... by MillionthMonkey · · Score: 3, Funny

      Don't you worry. After this election we'll eliminate oversized regulatory agencies like the FCC that are full of unelected, unaccountable bureaucrats who make it harder for small businesses like AT&T to come up with new business models (such as throttling websites that don't pay extortion fees).

  4. Ajit Pal by whoever57 · · Score: 2
    And once again, Ajit Pal shows clearly where his whole head is stuck:

    The NAL was issued by the FCC's Democratic majority, with Republicans Michael O'Rielly and Ajit Pai dissenting.

    Has this guy ever objected to any action by a telecom company?

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    1. Re:Ajit Pal by DRJlaw · · Score: 2

      And once again, Ajit Pal shows clearly where his whole head is stuck:

      From Ars:
      "Pai issued a statement saying he agrees "that AT&T may have violated that rule in Florida" but says the FCC acted too late, after the one-year statute of limitations. The FCC decision claims that AT&T's 'violations are continuing because the forms have not been corrected and AT&T has retained the excessive reimbursements,' even though the last charges were collected on June 1, 2015."

      It's not stuck in the same place in this case. Using a novel theory to essentially eliminate the statute of limitations for an offense doesn't exactly make my heart sing.