Oreillynet, The Prepaid Press, and the Fractals of Change all report that AT&T is seriously overbilling troops in Iraq for long-distance. While the wholesale rate for calls to the U.S. is less than one cent a minute, AT&T Is billing the soldiers stationed there $.21 a minute. Worse, they're allegedly blocking competing calling card 800 numbers, the report claims - something that's illegal here in the United States.

From Fractals of Change: "I asked Gene if the soldiers could simply use Skype on computers or Vonage ATAs. He said his son’s experience was that the IP available to the troops (which is not provided by AT&T) is barely adequate for email so not an option for voice.

If you recall this ISP Planet report, the lag in Baghdad is particularly nasty. "There's bandwidth at the last mile but no connectivity," says one DOD contractor in Iraq. "We had 1 Gbps within the palace, but the CNN.com page would take 30 seconds to paint because it went over three satellite hops at 7200 ms latency each."

According to the Pre-Paid Press, AT&T nets some $46 million a year from the deal, and the American Legion is now trying to apply pressure on lawmakers. Keep in mind this in an "old" AT&T business deal - hopefully one that can be examined by the "new" AT&T and Ed Whitacre.