DoJ Accuses AT&T (T) of Swindling Money from FCC
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Just like chess, try to think about three steps ahead -- particularly for a giant, public telecom company.
According to it's website and a smattering of other reports Thursday, the U.S. Department of Justice filed a lawsuit against AT&T (NYSE: T) over improper billing. On its official website, the DoJ specifically cites AT&T improperly billed the Federal Communications Commission (FCC) for its provision of Internet Protocol (IP) Relay services.
For those not in the know, here's what the DoJ defines IP Relay as: "...a text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider."
The DoJ said AT&T did not adopt a registration system for identifying whether a caller was located in the U.S. or not. From the DoJ filing, "The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States."
It gets worse. The DoJ goes on to accuse AT&T of continuing to use the system despite knowing it was all just a big sham: "The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume."
The FCC reimburses IP Relay providers about $1.30 per minute.
Even worse is the end of the letter, a little gut-check for AT&T: "Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable."
Ugh.
Shares are down about 0.3 percent Thursday.
According to it's website and a smattering of other reports Thursday, the U.S. Department of Justice filed a lawsuit against AT&T (NYSE: T) over improper billing. On its official website, the DoJ specifically cites AT&T improperly billed the Federal Communications Commission (FCC) for its provision of Internet Protocol (IP) Relay services.
For those not in the know, here's what the DoJ defines IP Relay as: "...a text-based communications service designed to allow hearing-impaired individuals to place telephone calls to hearing persons by typing messages over the Internet that are relayed by communications assistants (CAs) employed by an IP Relay provider."
The DoJ said AT&T did not adopt a registration system for identifying whether a caller was located in the U.S. or not. From the DoJ filing, "The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States."
It gets worse. The DoJ goes on to accuse AT&T of continuing to use the system despite knowing it was all just a big sham: "The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume."
The FCC reimburses IP Relay providers about $1.30 per minute.
Even worse is the end of the letter, a little gut-check for AT&T: "Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable."
Ugh.
Shares are down about 0.3 percent Thursday.
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