AT&T, SNET to Pay $11 Million for Overbilling Phone Program

AT&T and its former subsidiary, Southern New England Telephone (SNET), have agreed to pay $10.9 million in penalties for overbilling a 30-year-old telephone program that supports low-income consumers, the Federal Communications Commission announced this week.

An FCC investigation revealed that AT&T and its affiliates continued to service landline subscribers in the agency’s Lifeline program without recertifying customers’ eligibility within the required 35 days, according to an FCC news release. The agency said it discovered customers were given an extra month of Lifeline support even though they no longer qualified for the program, and AT&T improperly claimed reimbursement for the services.

“We discovered this issue in the course of an internal review, voluntarily reported it, and reimbursed the Universal Service Fund about a year ago,” AT&T said in an emailed statement. “We also have implemented process enhancements so this does not happen again.”

SNET admitted that while an AT&T affiliate it neglected to timely take customers off the Lifeline program in 2012 and 2013 and failed to maintain sufficient certification records, according to the SNET consent decree. AT&T made the same admissions in its consent decree.

Last year in a $2 billion deal, Frontier Communications Corp. acquired AT&T’s wireline business, statewide fiber network and U-verse operations in Connecticut. Frontier didn’t immediately respond Thursday to a request for comment on the consent decree.

Under the agreement with the FCC, SNET has agreed to pay $4 million; AT&T will fork over $6.9 million.

AT&T and SNET also will develop Lifeline-related compliance plans that include “designating a senior corporate manager to serve as a compliance officer, developing a comprehensive compliance plan, and reporting regularly to the Enforcement Bureau on compliance,” the FCC said.

Established in 1985, Lifeline helps ensure Americans have basic phone service and provides eligible households up to $9.25 per month in discounts.

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