On July 28, 2016, the FCC released a Notice of Apparent Liability (NAL) citing AT&T’s non-compliance with the Lowest Corresponding Price regulation as it pertains to two school districts in Florida. The FCC ordered AT&T to refund the E-rate program $63,760. The FCC also announced it plans to fine AT&T $106,425 for the violation.
The FCC specifically stated, “The lowest corresponding price rule helps ensure that schools and libraries that participate in the FCC’s E-rate Program get the best rates available by prohibiting E-rate service providers from charging them more than the lowest price paid by other similarly situated customers for similar telecommunications services. The Commission alleges that AT&T charged the school districts prices for telephone service that were magnitudes higher than many other customers in Florida.”
- The FCC’s Notice of Apparent Liability can be viewed here.
- The FCC’s News Release can be viewed here
- FCC Commissioner Pai’s Dissent can be viewed here.
In a statement released July 28th, Joan Marsh, AT&T Vice President of Federal Regulatory, said that, “The FCC today issued a Notice of Apparent Liability alleging that AT&T apparently violated the Lowest Corresponding Price rule in the E-Rate program. The allegations lack merit and we look forward to making that case in detail in response to the NAL. Among other deficiencies, the NAL proceeds from the flawed premise that AT&T should have ignored regulations issued by the State of Florida when selling intrastate E-rate services in Florida.”
In recent years, USAC and the FCC have stepped up their efforts to audit service providers for compliance with the E-rate program’s Lowest Corresponding Price (LCP) requirements. USAC published updated LCP guidance in 2015 and has also recommended LCP-related recovery of funds from service providers in the past; however, the AT&T NAL is the most prominent action to-date.