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FCC to fine AT&T for overcharging Fla. districts

Two districts overpaid for telecommunications costs, the FCC alleges

AT&T charged two Florida school districts some of the highest telecommunications rates in the state and will face a fine for violating federal law and the Federal Communications Commission’s (FCC) “lowest corresponding price” rule, the FCC said in a statement.

The rule ensures that schools and libraries participating in the FCC’s E-rate program are able to obtain the best rates available by prohibiting E-rate service providers from charging them more than the lowest price paid by other similarly-situated customers for similar telecommunications services.

The FCC said it plans to fine AT&T $106,425. The FCC alleges that AT&T charged the school districts prices for telephone service that were magnitudes higher than many other customers in Florida. One or both school districts paid the highest price in all of Florida for one service, while other customers paid much less. In addition to the fine, the FCC plans to order AT&T to repay $63,760 it apparently improperly received from the Universal Service Fund as a subsidy for these services.

In a Notice of Apparent Liability, the FCC alleged that AT&T violated the lowest corresponding price rule from at least mid-2012 to mid-2015, when it charged the school districts in Orange County and Dixie County, Fla., prices well above what other customers in the state paid. In addition, in each of these years, AT&T apparently incorrectly certified its compliance with the E-rate program’s rules. These certifications caused the Universal Service Fund to subsidize the school districts’ services at greatly inflated prices and allowed AT&T to receive at least $63,760 in federal support that it should not have received.

In a statement provided to Ars Technica, AT&T VP Joan Marsh said “the allegations lack merit and we look forward to making that case in detail in response to the NAL. 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.”

“Charging school districts among the highest rates in the state for telephone or broadband internet service is outrageous,” said Enforcement Bureau Chief Travis LeBlanc. “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.”

The federal E-rate program helps schools and libraries receive discounts on telecommunications services such as internet access, internal connections, maintenance costs, and internal broadband services. The FCC voted to modernize the E-rate in 2014 and directed the Enforcement Bureau to allocate additional resources to enforcing the lowest corresponding price rule in order to maximize the E-rate’s benefits.

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