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AT&T settlement: prepaid phone cards

Overseas military personnel will get 60 minutes of calls homes to settle a state suit related to erroneous charges.

By LOUIS HAU
Published January 19, 2005

TAMPA - AT&T has agreed to provide a prepaid phone card to every Floridian serving with the U.S. military in Iraq, Kuwait and Afghanistan to settle a lawsuit filed by the state after the long-distance carrier erroneously billed Florida consumers more than $1-million in phone charges.

According to the terms of the settlement announced Tuesday, AT&T will provide up to 8,000 U.S. service members with phone cards, each of which will cover the cost of 60 minutes of calling time to the United States from Iraq, Kuwait and Afghanistan.

The company also agreed to pay state Attorney General Charlie Crist's office $250,000 for legal fees incurred during the case.

The settlement comes three months after a Leon County Circuit Court judge denied AT&T's request to halt the lawsuit and send the case to an administrative hearing under the authority of the Florida Public Service Commission.

"We're able to announce a very good settlement, we believe," Crist said at a press conference in Tampa.

He was accompanied by Maj. Gen. John Castellaw, chief of staff of the U.S. Central Command in Tampa, who said the phone cards would provide "a big boost" to the morale of U.S. service members.

In a statement, AT&T said it is "pleased to have reached an amicable resolution" of the lawsuit and added that the settlement "is not a finding or admission of wrongdoing."

AT&T has refunded 86,763 Floridians about $1.07-million for erroneous phone charges. Those customers were among about 1-million nationwide who were wrongly billed by AT&T early last year because of a computer system glitch.

The result was a public relations nightmare for the company. In Florida, hundreds of irate residents flooded Crist's office and the Public Service Commission with billing complaints. AT&T was the target of more than 2,200 service and billing complaints from Florida long-distance customers between January and November of last year, according to statistics collected by the PSC. (During the same period, Sprint received 635 complaints, while MCI received 390 complaints.)

Crist estimated the phone cards AT&T has agreed to provide are worth about $150,000 to $200,000. When added to the $250,000 in legal fees the company has agreed to cover, the value of the settlement announced Tuesday represented a fraction of the penalties originally sought by Crist's office. In a suit filed in April in Leon County Circuit Court, Crist had asked the court to impose civil penalties on AT&T of up to $10,000 for each billing error.

Crist said AT&T's agreement to provide phone cards to military personnel is unrelated to a case pending before the Federal Communications Commission about AT&T's decision not to pay certain regulatory fees on prepaid phone cards it had sold previously.

In a Jan. 13 letter to FCC chairman Michael Powell, U.S. Rep. John Dingell, D-Mich., a ranking member of the House Committee on Energy and Commerce, said AT&T has been conducting a lobbying campaign to pressure the FCC not to take action against the company by arguing that some of its prepaid cards were used by U.S. military personnel in Afghanistan and Iraq.

Crist said while AT&T offered calling cards under the Florida settlement, the suggestion to offer the cards to military personnel came not from the company but state Solicitor General Chris Kise.

Louis Hau can be reached at 813 226-3404 or hau@sptimes.com

[Last modified January 19, 2005, 00:32:23]