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Sprint Pays $30 Million For USF Overcharging
USF hits just keep on coming...
by Karl Bode Friday 14-Sep-2007 tags: legal · business · telco · trouble · Sprint Telecom · AT&T Midwest
Tipped by stevek1949 See Profile
Several users sent in this Associated Press report that says Sprint will be paying $30 million to settle a class action lawsuit alleging it overcharged in passing along a federally mandated phone service subsidy (aka the USF). The USF, into which Americans have dumped $44 billion over the course of a decade, was originally designed to provide subsidized phone service to rural areas (and subsidized data to some schools).

Unfortunately, the system has long been a corrupt mess because regulators failed to effectively track where the money actually goes -- be that into the pockets of operators or school districts. Sprint also just settled a $57 million class action suit alleging it recently targeted the elderly during a round of layoffs. While the settlement ends the USF case against Sprint, litigation against AT&T continues.

"The settlement covers long-distance customers who paid into the Universal Service Fund between Aug. 1, 2001, and March 31, 2003. Because of liability rules in antitrust actions, the settlement covers not only Sprint long-distance business and residential customers but also MCI long-distance business customers, AT&T long-distance business customers and AT&T long-distance residential customers in California."

Impacted business and residential users will share $25 million worth of calling cards, while the attorneys who managed the class action will net a cool $5 million. Several bills have proposed expanding the USF so that it subsidizes broadband deployment to rural areas, but it's pretty apparent (at least to those not benefiting financially) that the system needs a massive overhaul first.

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dcurrey
Premium
join:2004-06-29

How much did they keep.

Sprint settled for $30 million. Didn't mention how much they have been over charging us. My guess is they came out way ahead with this so called settlement.

retrogame

join:2003-04-14
Auburn, MA

Re: How much did they keep.

Especially since it's $25 millions dollars of calling cards and $5 million in cash to the lawyers. The $25 million in calling cards is retail value, which means Sprint gets away with "paying" alot less to settle.

tommy13v
Premium
join:2002-02-15
Niskayuna NY

Re: How much did they keep.

And I certainly could care less about a calling card. I simply wouldn't even use it.
dentman42
Premium
join:2001-10-02
Columbus, OH

Re: How much did they keep.

Wonder if calls made with the calling cards will get dropped as much as calls made with my Sprint PCS service did...

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4
said by tommy13v:

And I certainly could care less about a calling card. I simply wouldn't even use it.
Specially with the fees they have.
Connect fee
Maintenance fee
Payphone surcharge
Max call length
--------------------
Needless to say it doesn't take long to chew through a typical phone card.
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hottboiinnc
ME

join:2003-10-15
Cleveland, OH
Reviews:
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Re: How much did they keep.

Sprint is not the only calling card company that charges a pay phone surcharge. most if not all of them charge this along with a great deal of of them charge a connect fee. Most still round up to the nearest minute where a very few of them round up to the nearest 6seconds.

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

1 edit
said by retrogame:

Especially since it's $25 millions dollars of calling cards and $5 million in cash to the lawyers. The $25 million in calling cards is retail value, which means Sprint gets away with "paying" alot less to settle.
And the consumers in this case actually made out better than usual if the lawyers only got 16.7%. In class action lawsuits, the fees and especially the expenses make up a much larger percentage of the total award.

But the USF should just be ended. Being government controlled, it will never be fixed to the point where outright fraud isn't massive. Too little actually goes to why it was created. So, it is better that it be killed off and let the rural areas do the best they can. »Illegal USF Tax
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Ahrenl

join:2004-10-26
North Andover, MA

Re: How much did they keep.

Except that CASH wise consumers got 0% and the lawyers got 100%. This is like getting a $100 apple gift card for paying $200's too much for your Iphone.

RR Conductor
Happy 40th Amtrak
Premium
join:2002-04-02
Redwood Valley, CA
kudos:1

1 edit
said by Romney2012:

said by retrogame:

Especially since it's $25 millions dollars of calling cards and $5 million in cash to the lawyers. The $25 million in calling cards is retail value, which means Sprint gets away with "paying" alot less to settle.
And the consumers in this case actually made out better than usual if the lawyers only got 16.7%. In class action lawsuits, the fees and especially the expenses make up a much larger percentage of the total award.

But the USF should just be ended. Being government controlled, it will never be fixed to the point where outright fraud isn't massive. Too little actually goes to why it was created. So, it is better that it be killed off and let the rural areas do the best they can. »Illegal USF Tax
Said by somebody who has no clue nor idea of the needs of rural and small town America. How about we rural areas cut off your food, water, electricity and other raw goods, and let you cities "do the best you can" ?
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Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

Re: How much did they keep.

said by RR Conductor:

Said by somebody who has no clue nor idea of the needs of rural and small town America. How about we rural areas cut off your food, water, electricity and other raw goods, and let you cities "do the best you can" ?
Notice they always throw in the personal attacks when they don't have a leg to stand on. The people in the cities pay market rates for those products without special taxes to help out. If rural areas want broadband don't expect usurious USF taxes to help out.
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Feedloader

join:2005-08-19
Cleveland, TX

1 edit

Re: How much did they keep.

said by Romney2012:

said by RR Conductor:

Said by somebody who has no clue nor idea of the needs of rural and small town America. How about we rural areas cut off your food, water, electricity and other raw goods, and let you cities "do the best you can" ?
Notice they always throw in the personal attacks when they don't have a leg to stand on. The people in the cities pay market rates for those products without special taxes to help out. If rural areas want broadband don't expect usurious USF taxes to help out.
Every pays more than market rates for good, transport costs of those goods would be unimaginable without the boondoggle of its time, the Interstate system. The nation footed the bill to get rural goods to urban america, now it goes the other way. America pays to get urban services in rural America.

So because we don't live in urban America, we are lesser citizens? We don't deserve the same luxuries you get? That is what I read between the lines when I see the let them fend for themselves argument.
To have the same level of living we will get paid less, but pay more for the same services, probably of lesser quality (Satellite Broadband for example). Rarely do I argue for a more socialist POV, but we are not lesser citizens because of where we live, we deserve the same luxuries you do thus the USF is a necessary evil. We ourselves pay it too. The USF however does need a check and balance system, to monitor abuse. If need be, put people out in the field to check these area's to make sure the USF isn't being used for projects not meeting guidelines.

Although perhaps the tax code simplification through the FairTax would solve the entire USF debate.... Use some ex IRS workers to monitor the USF accounts.

Edit- Also the calling card to pay back affected users is a sham. How many people use calling cards anymore with so much of the nation having cell phones? Screw the cards, give rebate checks, because they took stole money, not minutes, from people....
MGD
Premium,MVM
join:2002-07-31
kudos:9
Yes indeed, how many of these will end up being used, and Sprint's net cost will be considerably lower than that.

It is hard to find any class action settlement where the the victims didn't get tokens, and the lawyers got the cash.

MGD

idjk

@sprintlink.net
Give me a billion and I will be happy to pay a 900 million fine!
stevephl

join:2000-11-27
Colorado Springs, CO

Illegal USF Tax

The best case scenario now would be too repeal the USF law and stop taxing the American public with this illegal tax. I am sure the rural areas now have phone service, which they should be responsible for funding themselves not the rest of the country. A note most rural areas are not an impoverished third world country but fairly affluent especially compared to most other countries, too that end they can provide their own telephone service.


en102
Canadian, eh?

join:2001-01-26
Valencia, CA

Re: Illegal USF Tax

With Wireless and Internet (cable or DSL), USF is becoming less of an issue.
Boonie Telecom can go out of business or charge more.
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Dezbend
Premium,MVM
join:2001-04-20
I agree that the USF is excessive, but what about rural areas where dial tone by it self is $98.00 (LaGrange WY for example)? and what of the schools that do get money from the USF to pay for communications? Will you create a new tax (corrupt free I hope) to help these legitimate causes or are they on their own?
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PAB

join:2007-07-27
Woodridge, IL

Re: Illegal USF Tax

Rather than eliminating the USF, it should be overhauled with strict oversight. One post here said "they can provide their own phone service" (?????) If the USF was used with some legitimacy, it could do wonders for rural America bringing broadband to these area's and not just dial tone.
Sammer

join:2005-12-22
Canonsburg, PA

Re: Illegal USF Tax

The lack of strict oversight was deliberately built into the USF by members of congress so what makes you think they want to change that.
stevephl

join:2000-11-27
Colorado Springs, CO
I would completely eliminate these types of taxes. It is a steal from Peter to Pay Paul scenario and it is not fair to the tax payers. The local school districts can fund these types of programs from the local tax base the fair way to do so. In extreme cases the Federal government has other monies already collected to deal with this. I am more lenient towards schools then private individual subsidized phone service.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
Reviews:
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In Ohio we actually have the ODoE that has a network set up for the school's Internet and putting the school's voice services on to it. It's funded by the ODoE and MSN (at least MSN had a hand it in at one time). all of our 88 counties are split up into regions and each region is responsible for connecting the schools together and then to their NOC which connects back to the state. All on T-3s and Fiber. The school districts pay very very little if any at all. Many of these regions actually have enough money from the State to lay their own dark fiber between all the schools back to the NOC.

»www.mcoecn.org/ is the MGT body of the service
»www.oecn.k12.oh.us/ is the part that actually is the IT department state wide.

RR Conductor
Happy 40th Amtrak
Premium
join:2002-04-02
Redwood Valley, CA
kudos:1

1 edit
Okay, go ahead, and may we rural areas cut off your food, water and electricity to you? Yeah, you have a lot of money and people, you can produce it all youself. You need to look outside your tiny view of the world, and realize there are others outside.

You remind me of a cartoon I saw. It showed this wealthy man, he built this huge house, added security on it, etc. He also was a "why should I pay for things I never use MYSELF" guy? Well, one day his fool proof, expensive systems failed, and his house was being robbed and in the process it was set on fire, he called for help....Well, the recording he heard said "sorry, due to a lack of funding, our police, fire and other public services were ended".
stevephl

join:2000-11-27
Colorado Springs, CO

Re: Illegal USF Tax

RR Conductor,

I spent over twenty years living and traveling overseas most countries I visited or lived in were much poorer then the poorest counties in the US. We are the most affluent country in the world. My point being that even rural areas which incidentally I live in now can afford telephone and Internet services without demanding other people subsidize their life styles. Living in a Socialist state I can understand your position, "Others owe me a living and benefits" attitude but it doesn't cut it anymore. I pay more then my fair share of taxes. All I am saying if you choose to live in the boonies you should also take responsibility for financing your own services as well. No one is providing me payments for my telephone service or Internet service, I vote in the positive on all local school bond issues so my property taxes are fairly high now. I work my rear end off to provide my family with the necessities of life.
Most food is not grown by conglomerates because the little guy sold off his farm land back int he sixties at highly inflated prices I had a lot of relatives involved in farming and ranching providing food.
But my real question to you is; why do you think you or rural areas need the USF fund in order to produce food, supply water and generate electricity? Please educate me sorry I am only a country boy. I grew up in rural America for the most part, but I lived in San Diego back in the early to early 80's, San Francisco, Seattle, Philly well you see the point I have lived in large cities, small towns and rural county areas.
Your obvious class envy shows through.
Services such as schools, fire, police are funded through taxes that is not the issue, please do not confuse the issue (unless your easily confused
The issue here is the illegal collection of monies from people which include even people living in rural areas across all economic classes to the exclusive use by a small segment of the population. I and my neighbors all decide we want a new fire station in the area do we demand that the entire US pay a "Tax" to subsidize our fire station? No of course not we just raised our property taxes to fund a bond for that construction. The USF is a bad idea. Most people in this country do not have a problem supporting those less fortunate but do have a problem when they are forced into contributing. Incidentally because I have chosen to live in a rural area surrounded by cows, horses, and Antelope I get my services from the city several miles away too that end I pay a premium for those services including water, gas and electricity. I do not demand anyone else support my utility bills why do you?
I provide my own security here, all of the neighbors help each other the way it was intended to work.
You seem to have some issues here maybe you should go sit on a couch and talk about your issues with someone who is able to help you!
I wish you well though

Steve

collusion

@rcn.com

How are IXCs colluding? LD is imploding.

The collusion allegation is bogus. The suit alleges the IXCs colluded by fixing the USF line item on customers bills, but doesn't acknowledge that end-user prices have plummeted. Why? Wireless and RBOCs. The claim is equivalent to taking change out of your left pocket and putting a fraction of that change into your right pocket. How are consumers harmed?

brooklynman4

join:2004-09-07
Brooklyn, NY

Re: How are IXCs colluding? LD is imploding.

They gonna see how fast they gonna sprint when there cuastomers leave em lol.
bjeff

join:2007-09-14
Enfield, IL

ATT

THAY SHOULD PAY MORE

tc1uscg

join:2005-03-09
Saint Clair Shores, MI

Re: ATT

What is interesting is how the media ignores how the states are misspending fee's charged by TELCO's. Think many people heard about Michigan using the 911 service fund collected by all the major wireless telco's got used to offset the states general fund shortfall. Sad thing was, there wasn't enough cash in the 911 pocket to clear the shortfall.

sprint sucks

@cableone.net

sprint garbage

LOL, the only way sprint can make new money today is to sue. That piece of shit company needs to be sued into oblivion for the shitty service they offer.

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