AT&T Defunds 9-11 To Undercut Competitors

There are definitely times when you learn of a business practice where you think, "Wow, my opinion of AT&T could not go any lower." And then, BOOM. You find out that AT&T was intentionally underfunding a 9-11 call center in order to undercut its competitors in bids.

Yikes.

Did we mention that this is not an isolated case? AT&T has been busted in several jurisdictions for this practice.

Hat tip to Stop the Cap! for bringing my attention to a lawsuit brought by Hamilton County against AT&T for its practice of under-reporting the number of business lines it provides.

This practice allows it to undercut all competitors in the market, including the community fiber network run by Chattanooga's Electric Power Board. From the Times Free Press article:

The lawsuit claims that, since at least July 2001, AT&T has filed monthly and annual reports listing fewer business phone lines than they actually provide. Under Tennessee law, phone companies must pay $3 per month per line to pay for 911 access.

...

In a March phone service bid proposal for Hamilton County, AT&T stated it would not collect the $3 rate and instead collect $2 per line per month. That allowed the company to underbid the next lowest bidder by 69 cents per line per month, “unlawfully increasing its profits at the expense of revenue to support the critical emergency services that” 911 provided, according to court records.

A difference of $.69 may not seem like much, until you consider they may be providing 1,000 lines - which is a difference of $690/month or $8,280/year.

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It is an incredible racket. AT&T gets more high-margin customers, pays less in fees than competitors, and the only people who get hurt are those who depend on 9-11.

Just when you think AT&T is brilliantly evil (an accusation I tend not to make against many corporations no matter how much I disapprove of their practices), you have to consider how incredibly incompetent they are. They freakin' including this fraudulent activity in a bid for county services!!!

AT&T has settled out of court with other counties in Tennessee and Madison County, Alabama, for similar pratices.

Remember folks, AT&T is one of the of companies on whom Congress, the President, and FCC, are expecting to invest in America to build the broadband networks we need and run them in a way that does not cripple our economy. That is not a plan, it is an abdication of responsibility.