US Telecoms Keep Getting Wrist Slaps For Repeatedly Ripping Off The US Government

from the we're-not-actually-fixing-the-problem dept

You may have to squint to see it, but tell me if you can detect the faint outline of a pattern here.

Last year, AT&T and Verizon paid $116 million to settle allegations they'd been ripping off state government agencies for more than a decade. Last March, an AT&T whistleblower stated that AT&T had been ripping off US schools for just as long, and that he was summarily fired when he brought that to the attention of his superiors (there's been no meaningful government inquiry into his claims). And this week, AT&T was required to strike a $1.5 million penalty to settle a lawsuit (pdf) accusing the company of, you guessed it, ripping off the local DC government for years. From the DC AG announcement:

"Today’s settlement resolves a lawsuit by the Office of the Attorney General (OAG) against AT&T for allegedly submitting false invoices that did not comply with contract requirements to provide cost optimization and the most cost-effective telecommunications plans available. Instead, AT&T knowingly invoiced the District for features, add-ons, and other services that failed to comport with this mandate, causing millions in improper charges that were paid with taxpayer funds."

You know, basically the same way AT&T treats its residential broadband and TV customers.

In many of these deals, the settlement itself barely comes close to actually covering the amount of money AT&T made ripping off governments and taxpayers. And the companies don't have to actually admit to any wrongdoing. Other times, nothing happens at all. In 2016, the Obama FCC attempted to fine AT&T $106,425 for repeatedly overcharging two school districts in Florida, only to have that inquiry gutted when Trump and Ajit Pai came to town. The FCC would have much of its consumer protection authority gutted by the Trump administration, at direct lobbyist behest, one year later.

While we like to insist the US isn't a corrupt mess, we've built a system where accountability, when it actually happens, is usually just viewed as a minor pest and the cost of doing business. To hold AT&T properly accountable you'd need government policies that encourage competition in consumer and government service broadband, better antitrust enforcement and tougher merger review, properly funded and empowered regulators, and lawmakers genuinely interested in consumer protection and fraud prevention, all things we're very much not doing consistently. In part because AT&T is politically powerful and doles out plenty of campaign contributions, but also because it's tethered to our intelligence and law enforcement systems.

That's not to say some regulators and governments haven't tried all the same. In just the last five years or so AT&T has been fined $18.6 million for helping rip off programs for the hearing impaired; fined $10.4 million for ripping off a program for low-income families; fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills; and fined $60 million for lying to customers about the definition of "unlimited" data. Again it's subtle, but maybe you see a pattern here?

In nearly every instance regulators will pat themselves on the backs for issuing "record" fines. But once these efforts wind their way through litigation, most of these fines are usually reduced, if not eliminated altogether. And they're collectively still a pittance compared to the money AT&T makes from being a natural monopoly across vast swaths of the country. But instead of directly targeting telecom monopolization and the rampant state and federal corruption that protects it from change, competition, and accountability, we dole out a parade of wrist slaps and then pat ourselves on the back for a job well done.

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Filed Under: false invoices, fcc, ftc, governments, overcharging, rip offs, scams, subsidies
Companies: at&t, verizon


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  • identicon
    ThatOtherOtherGuy, 24 May 2021 @ 8:15am

    Profit margin on crime

    If your company gets $50M in funding, doesn't do anything, and then pays a $10M penalty, your company just made $40M with an amazing 80% profit margin.

    Crime pays (if you are a US telecom)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 May 2021 @ 8:43am

    and because there are so many back hand payments being made to congress people, politicians, law makers and heads of security forces, wrist slaps are all they are going to get! although the US Telecoms (and broadband) companies are a massive problem, the even bigger problem are thos in power and control in government that allow them, no, actually benefit from them giving the shitiest services in the 'above 3rd world' countries!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 May 2021 @ 9:36am

    This is an absolute outrage! Why are the petty bureaucrats going after the saintly phone companies when Big Tech is running rampant!

    Google is curating the internet and not concealing mean things they say about me! Facebook is allowing people to talk behind my back where I can read about it! Twitter is allowing people to ... I dunno, but I'm sure they're saying Bad Things there also. And some of what people post in their websites and personal pages just aren't true! Why, if Google were really that good, they could conceal all the things that don't benefit me, even if they were false but especially if they were true!

    Politicians around the world are recognizing the danger of this sort of thing, but what is the FCC doing about it? Diddling and squatting and wasting their time persecuting the phone companies. It's so unfair! It's well known that child-abusers and other criminals never use the phone, and even if they did, it wouldn't be the phone company's fault! But does the FCC care? NO! Corruption, it's all corruption!

    Free AT&T, Verizon, Comcast, to innovate the U.S. into the millenium--a place where lawyers for all local tyrants and global corporations join together to crush the vicious excesses of Big Evil Tech!

    If you don't, the stock market will crash and children will starve in the streets, while Disney makes movies glorifying child-abuser violent pirates and drug-smugglers. THIS IS ALREADY HAPPENING, PEOPLE! IT MAY ALREADY BE TOO LATE!

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 24 May 2021 @ 10:41am

    Yet these purse string holding legislators, who were worried someone might get an undeserved $2000, seem to have no problem with doling out millions in fake charges & clawing back a pittance to make the rubes think they care.

    Its not a fine or a penalty unless it is on top of full repayment of what they stole, then magically they might learn the lesson.
    Instead we just keep handing them money & going through the motions.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 May 2021 @ 11:19am

    Payments for services rendered to the NSA

    I thought it was fairly transparent extortion at this point given Room 641A, the liability protections for "cooperation" and the lack of any legal requirements to actually provide anything without so much as a rubber stamp audit. The reason our internet is fucking shit and well defended from efforts against incumbents is quid-pro-quo to dodge anything beyond token efforts.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 24 May 2021 @ 1:41pm

    Rob a bank? Fined into the ground and jailed. Rob a state? Meh

    If the fine for an action is less than what you gained from it it's not a punishment it's a cost of doing business, no different or impactful than paying for office space and electricity.

    reply to this | link to this | view in chronology ]

  • identicon
    Richard Bennett, 24 May 2021 @ 5:24pm

    Wrist slaps, my favorite! Oooh! Slap me daddy! Slap me!

    reply to this | link to this | view in chronology ]


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