As for AT&T, as recently as 2007 it issued its employees a 61-page “eRate Compliance Training” manual, used as part of an annual required course for employees. The pricing rule is not mentioned.
In its statement to ProPublica, the company spokesman said, “AT&T has implemented training and procedures to ensure compliance with all eRate requirements.”
Unequal pricing
Working out of his modest home in Waupun, Wis., Todd Heath runs a niche business: He takes a cut from any refunds he manages to obtain for telecom customers, mainly schools. In 2008, Heath wondered why schools he represented, in small cities like Kaukauna, West Bend and Fond du Lac, were paying far more than others for essentially the same services from the same company: Wisconsin Bell, a unit of AT&T.
The schools were all in the eRate program, and it wasn’t long before Heath accused the company of violating the lowest-corresponding-price rule. His complaints are now in federal court.
Under whistleblower laws, if the suit results in a financial settlement, Heath stands to gain a portion of that money.
Heath’s complaint alleges that in 2005, school districts in Burlington, Grafton, Cudahy and Altoona paid as much as 80 percent more for the “identical” central office exchange service from Wisconsin Bell than did the Fond du Lac School District.
Also that year, according to the court complaint, Milwaukee, West Bend and Sheboygan were paying far higher rates for office exchange services than what was available under an agreement between Wisconsin Bell and the state of Wisconsin that allowed schools and libraries to get the same favored rate the state was getting. For example, the Wisconsin state contract price for a service called ISDN/PRI, which integrates voice and data into a single line, was $390 per month, according to the complaint. But schools in Fond du Lac, Hartford, Kaukana, Kimberly and West Bend were billed at prices ranging from $640 to $1,268 per month, the complaint states.
Heath’s complaint asserts that “Wisconsin Bell routinely has withheld information about these available rates from public school and library customers, and it has billed almost all of them at much higher rates, sometimes three times as high as LCP,” or lowest corresponding price.
The allegation that Wisconsin Bell hid the state rates from schools is wrong, the company says, because the contract rates were “publicly known.”
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