US Telecoms Keep Getting Wrist Slaps For Repeatedly Ripping Off The US Government

from the we're-not-actually-fixing-the-problem dept

You may have to squint to see it, but tell me if you can detect the faint outline of a pattern here.

Last year, AT&T and Verizon paid $116 million to settle allegations they'd been ripping off state government agencies for more than a decade. Last March, an AT&T whistleblower stated that AT&T had been ripping off US schools for just as long, and that he was summarily fired when he brought that to the attention of his superiors (there's been no meaningful government inquiry into his claims). And this week, AT&T was required to strike a $1.5 million penalty to settle a lawsuit (pdf) accusing the company of, you guessed it, ripping off the local DC government for years. From the DC AG announcement:

"Today’s settlement resolves a lawsuit by the Office of the Attorney General (OAG) against AT&T for allegedly submitting false invoices that did not comply with contract requirements to provide cost optimization and the most cost-effective telecommunications plans available. Instead, AT&T knowingly invoiced the District for features, add-ons, and other services that failed to comport with this mandate, causing millions in improper charges that were paid with taxpayer funds."

You know, basically the same way AT&T treats its residential broadband and TV customers.

In many of these deals, the settlement itself barely comes close to actually covering the amount of money AT&T made ripping off governments and taxpayers. And the companies don't have to actually admit to any wrongdoing. Other times, nothing happens at all. In 2016, the Obama FCC attempted to fine AT&T $106,425 for repeatedly overcharging two school districts in Florida, only to have that inquiry gutted when Trump and Ajit Pai came to town. The FCC would have much of its consumer protection authority gutted by the Trump administration, at direct lobbyist behest, one year later.

While we like to insist the US isn't a corrupt mess, we've built a system where accountability, when it actually happens, is usually just viewed as a minor pest and the cost of doing business. To hold AT&T properly accountable you'd need government policies that encourage competition in consumer and government service broadband, better antitrust enforcement and tougher merger review, properly funded and empowered regulators, and lawmakers genuinely interested in consumer protection and fraud prevention, all things we're very much not doing consistently. In part because AT&T is politically powerful and doles out plenty of campaign contributions, but also because it's tethered to our intelligence and law enforcement systems.

That's not to say some regulators and governments haven't tried all the same. In just the last five years or so AT&T has been fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills; and fined $60 million for lying to customers about the definition of "unlimited" data. Again it's subtle, but maybe you see a pattern here?

In nearly every instance regulators will pat themselves on the backs for issuing "record" fines. But once these efforts wind their way through litigation, most of these fines are usually reduced, if not eliminated altogether. And they're collectively still a pittance compared to the money AT&T makes from being a natural monopoly across vast swaths of the country. But instead of directly targeting telecom monopolization and the rampant state and federal corruption that protects it from change, competition, and accountability, we dole out a parade of wrist slaps and then pat ourselves on the back for a job well done.

Filed Under: false invoices, fcc, ftc, governments, overcharging, rip offs, scams, subsidies
Companies: at&t, verizon