Lawsuit Claims AT&T Is Overcharging
for E-rate Program
A class-action lawsuit has been filed claiming that AT&T is overcharging customers in order to fund telecommunications discounts for public libraries and schools.
The case could result in an award of “tens to hundreds of millions of dollars” for about 60 million AT&T customers, Dallas attorney Marc R. Stanley told the Associated Press. Stanley filed the suit February 6 in U.S. District Court in Los Angeles, the AP reported February 21.
On January 1 AT&T raised the surcharge it passes on to consumers for the universal service fund, which also subsidizes phone service for low-income and hard-to-reach customers, from 9.9% to 11.5%. The lawsuit claims that AT&T is keeping the difference; the company says the higher rate is necessary because the federal formula bases contributions to the fund on revenues from the previous six months, which have been declining.
AT&T spokeswoman Claudia Jones said the company wants the FCC to allow contributions to be based on projected revenues. The online CNet news service reported January 2 that AT&T had written the FCC in December to request such a change; the commission has announced that it would be conducting a review of the e-rate rules.
Posted February 25, 2002.
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