FCC Says It Will Charge AT&T Over $106K for Alleged E-Rate Violation

The Federal Communications Commission said late Wednesday that it plans to fine AT&T Inc. $106,425 for overcharging two Florida school districts for phone services when both districts should have received the lowest prices possible through the agency’s E-Rate program that provides affordable phone and internet access to schools and libraries.

The FCC said it will also order AT&T to repay $63,760 to the agency’s Universal Service Fund that powers the E-Rate program and others that aim to expand broadband deployment.

The FCC says AT&T violated the program’s “lowest corresponding price” rule that requires service providers to charge participating schools and libraries the lowest price paid by other similarly situated customers. The agency alleged that AT&T charged the Florida school districts prices for telephone service that were “magnitudes” higher than most customers in the state.  The commission claims one or both school districts paid more than anywhere else in Florida for one service.

“Charging school districts among the highest rates in the state for telephone or broadband internet service is outrageous,” FCC Enforcement Bureau Chief Travis LeBlanc said in a Wednesday night statement. “Schools and libraries across the country heavily rely upon federal and state funds to afford these critical services. We expect that every service provider will offer participating schools and libraries the same low rates that they charge to other similarly situated customers.”

AT&T pushed back on the FCC’s Notice of Apparent Liability on Thursday and said they would fight the charges.

“The allegations lack merit and we look forward to making that case in detail in response to the NAL,” Joan Marsh, vice president of federal regulatory at AT&T said in a Thursday statement. “Among other deficiencies, the NAL proceeds from the flawed premise that AT&T should have ignored regulations issued by the State of Florida when selling intrastate E-rate services in Florida.”

Republican FCC Commissioner Ajit Pai dissented on the NAL, arguing that under the law, the statute of limitation on charging a company is one year after any violation is complete. The last violation they had recorded was June 2015, Pai said.

“That’s a shame because the Enforcement Bureau became aware of AT&T’s conduct two full years ago, just as the statute of limitations was beginning to run and long before it expired,” Pai said in his dissenting statement. “That means we could have imposed a lawful forfeiture had we acted with alacrity (or even a modicum of urgency).”

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