AT&T, Verizon settle $116M lawsuit for overcharging government customers

Verizon and AT&T said they will settle a lawsuit alleging they overcharged state and local government customers in California and Nevada.

Under the terms of the agreement, as reported by the Associated Press, Verizon will pay $68 million and AT&T Mobility $48 million. Sprint and T-Mobile previously agreed to pay a combined $9.6 million.

At issue was a component in the operators' contracts that said they would charge the lowest available cost and would tailor their rates based on customers' usage patterns. The California Attorney General's Office investigated the issue and decided not to sue. But the case was taken up by Jeffrey Smith, whose firm OnTheGo Wireless found that the operators were not providing the lowest possible prices. His firm will get about 40% of the settlement.

Others receiving money from the settlement will include the state of California, the California State University and University of California systems, Los Angeles County, and Sacramento, San Diego, San Francisco and Riverside city and county governments.

The case comes as all the big US wireless network operators work to capture more revenues from state and local government customers. For example, Verizon and AT&T's FirstNet are now battling for public-safety users around the country, while T-Mobile's business division is working to spin up sales opportunities for the company in sectors ranging from healthcare to education.

AT&T, in a statement emailed to Light Reading, projected an air of fiscal prudence and, somehow, victimhood: "We complied with our contracts and the law, and we deny any wrongdoing," the statement said. "However, nearly eight years after the suit was filed, the parties have decided to settle rather than continue costly and time-consuming litigation."

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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