AT&T Contests FCC's Claim That They Overcharged Schools

The United States' Federal Communications Commission exists not only to make and enforce rules, but also to help modern communications flourish in the states. This is the aim of an E-rate program that has existed for a while, but at least one telecom doing business stateside has run afoul of the FCC because of it. That telecom is AT&T. They stand accused of failing to adhere to the terms of the program in their dealings with schools in the Orange County and Dixie County districts of Florida. Specifically, the FCC claims that AT&T overcharged these school districts up to 400% compared to the rates they should have been getting.

In the terms of the E-rate deal, subsidies are paid into by regular customers of a telecom's business interests. These funds, approved for collection at a fixed rate by the FCC, are usually not subject to quite as many particularities of law when it comes to pricing. Those subsidies end up paying the difference so that a few privileged parties like public schools can get services at the lowest possible price. According to the laws surrounding the E-rates program, a service provider has to charge privileged parties the lowest rate that they would charge a non-privileged customer, like a large business, for comparable service. With all of the promotions and bulk pricing intact, this can result in significant discounts compared to what a privileged party would otherwise pay. In the case of the two school districts, AT&T claims that they did not play ball with the program in a way that would have favored them, price-wise.

According to AT&T, the school districts opted for month to month plan terms, and were made well aware that a lower-priced option was available. They also chose not to come together with their local E-rate consortiums and buy far cheaper service by pooling together for a bulk discount. Normally, AT&T could offer huge discounts on year-long plans compared to month to month deals. As it stood, AT&T contends that they were not outside of the terms of the deal, and that the school districts were paying the lowest rate that anybody under any circumstance who wasn't covered by the E-rate plan would have paid for month to month services. AT&T's blog post on the matter goes as far as to say that this case is an example of the FCC practicing "rulemaking through enforcement". The FCC served AT&T with a Notice of Apparent Liability regarding the case on July 27, asking AT&T to pay back $63,760 in subsidies they shouldn't have received in the counties, along with a $106,425 fine. Today, just shy of one month later, AT&T has put in their official response, leaving the ball in the FCC's court.

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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]