Sprint Sued by US Government for Overcharging on Wire-Tap Costs
Published on: 4th Mar 2014
USA based Sprint is facing a lawsuit from the US Department of Justice that is seeking to recover costs for wiretapping customers that it says should never have been billed to the government agencies.
The issue dates all the way back to a decision in 1994, when the government ordered telecoms companies to upgrade their wiretapping equipment to make it easier for law officials to monitor suspect lines.
The telecoms operators argued over who should pick up the additional costs, and it wasn't until 2006, when the telecoms regulator, the FCC finally ruled that the extra costs have to be born by the telecoms networks.
The DoJ lawsuit alleges that Sprint continued to add charges for its network upgrades between 2007 and July 2010 in contravention of the FCC ruling. It says that charges were inflated by 58% above where they should have been.
"Because Sprint's invoices for intercept charges did not identify the particular expenses for which it sought reimbursement, federal law enforcement agencies were unable to detect that Sprint was requesting reimbursement of these unallowable costs," the Justice Department said in the lawsuit.
The over billing is said to come to around USD21 million, but the company could be liable for USD63 million if found guilty.
Sprint denies the claims, saying that the charges are fair and reasonable, and should be reimbursed by the government.
The company said it plans to defend the matter "vigorously."