FCC Plans to Fine AT&T for Apparently Violating E-Rate Price Rule; Telco Disagrees
The FCC proposed to fine AT&T $106,425 for apparently violating a "lowest corresponding price" rule by overcharging two Florida school districts under the E-rate program, said an agency release Wednesday. Commissioners approved notice of apparent liability (NAL) 3-2, with Republicans…
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Ajit Pai and Mike O'Rielly dissenting. The rule helps ensure school and library E-rate participants "get the best rates available," but the commission alleges AT&T for several years charged the Orange County Public Schools and Dixie District Schools telephone service prices "that were magnitudes higher than" what other Florida customers pay, said the release, which noted the commission also plans to order AT&T to repay $63,760 in apparently improper E-rate support. “Charging school districts among the highest rates in the state for telephone or broadband internet service is outrageous,” said Enforcement Bureau Chief Travis LeBlanc. The NAL said AT&T offered no reason for repeated price increases, other than one reason that was blacked out in the text of the item. "We are left to conclude that AT&T sought to maximize profits at the expense of the Districts and at the expense of the publicly-funded E-rate program," the NAL said. Joan Marsh, AT&T vice president-federal regulatory, in an email Thursday 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.” Pai said in a statement he agreed AT&T "may have violated" the rule, but he said the bureau's handling of the investigation had "fatally compromised" the FCC's ability to fine the company due to a one-year statute of limitations. The last relevant charges AT&T made to the school districts were on July 1, 2014, for Dixie, and June 1, 2015, for Orange, and its last related filing was on Oct. 27, 2014. "So even in the best-case scenario, the statute of limitations ran out 56 days ago, on June 1," he said. He disputed arguments in the NAL that the violations are continuing because the forms haven't been corrected and AT&T has retained excessive reimbursements. "That cannot be right." he said.