Major wireless carrier Sprint has agreed to settle its wiretapping costs suit by paying an amount of $15.5 million. The federal government had filed a case against the carrier for allegedly fraudulently inflating charges for court-ordered wiretaps.
The suit was filed last year in March in a US District Court in the city of San Francisco in the state of California. The case alleged that Sprint overcharged federal agencies such as the Federal Bureau of Investigation (FBI) and the Drug Enforcement Administration (DEA) $21 million for wiretapping operations that were conducted by the wireless carrier between January 2007 to 2010. The case had asked for three times the damages and unspecified civil fines.
However, just recently, the Department of Justice confirmed that Spring has agreed to settle, but for an amount that is far less than the federal government was asking. Furthermore, the carrier admitted to no wrongdoing nor any liability.
As one of the big four wireless carriers in the United States (alongside Verizon Wireless, AT&T, and T-Mobile), Sprint is often required by the federal government to provide information to the authorities for investigation purposes. Most of the time, the information is collected by the use of wiretapping methods that require equipment to be installed. Like carriers, Sprint typically bills the federal agencies an amount it deems reasonable. The problem is, nobody seems to be in agreement as to what amount is considered reasonable.
Based on a certain ruling made by the Federal Communications Commission (FCC) back in 2006, wireless carriers could only request to be reimbursed for the costs of conducting wiretapping operations, not for the upgrades to any equipment or for any facilities that are needed for such wiretapping activities. As investigated by the US Attorney's office and by the Office of the Inspector General, Sprint's billing is found to be in violation of that 2006 ruling by the FCC.
In the case that it filed, the Department of Justice claimed that the carrier had quietly continued to add upgrade related costs to its bills between 2007 and 2010. According to the complaint, Sprint had effectively inflated its charges by 58 percent, the total billing divided between the FBI, the DEA, Immigration and Customs Enforcement, and a host of other agencies.
Sprint, of course, disagrees with the findings of these investigations. According to the carrier, the federal government is unfairly applying the 2006 ruling to its advantage. Via an emailed statement, Sprint said that it provided "these services to the government at a below-cost price and does not agree with the allegations that the government discounts should have been greater. We believe the government's application of the regulation at issue is in error."
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