AT&T Fined For Price Gouging Poor Via Government Program

AT&T Fined For Price Gouging Poor Via Government Program

Cellphone monopolist AT&T has been fined $10.9 milling by the FCC for overcharging the government on phone plans for the poor.

The regulator said the telco over-billed the U.S. government between 2012 and 2013 while fulfilling a contract for the Lifeline service. Lifeline is where the cell networks offer discounted or free phone plans to people on low incomes, and then bill the U.S. government to make up the difference.

The FCC alleges that AT&T's Southern New England Telephone (SNET) subsidiary charged the government for providing Lifeline service to citizens who were, based on their income, ineligible for the plan.

Exactly how much AT&T overcharged isn't known – but the cash has been paid back according to the company.

"American consumers trust that the companies who receive federal funds will use that money appropriately," said FCC enforcement chief Travis LeBlanc. "We expect companies to be vigilant in protecting public funds and complying with FCC rules."

AT&T offered the hollow sounding 'this was just a big misunderstanding' excuse.

"We discovered this issue in the course of an internal review, voluntarily reported it, and reimbursed the Universal Service Fund about a year ago," the telco stated. "We also have implemented process enhancements so this does not happen again."

Under the terms of the FCC's settlement, AT&T will pay $6.9 million, while SNET will cover $4 million. The companies must also adopt FCC-written compliance plans that make sure customers who don't qualify for the discounted plans can not do so.

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