AT&T's Title II status could help it reap $12M in interstate overcharges

AT&T (NYSE: T) may be one of the loudest opponents of the FCC's effort to reclassify ISPs under Title II of the Communications Act as part of new net neutrality rules, but a ruling about a voice services dispute with two rural telcos shows that Title II could work in its favor.

The regulator has leveraged Title II to justify a move that AT&T should be awarded damages for being overcharged by two Michigan-based rural telcos for interstate access services.

Now the FCC has to set how much money AT&T should receive from Great Lakes Comnet (GLC) and Westphalia Telephone Company (WTC).

"We agree with AT&T," the FCC wrote in its order. "We find that GLC violated the Commission's Rules governing competitive local exchange carrier tariffs for interstate access services, and that the tariff therefore is unlawful. We also grant AT&T's claim in Count III that WTC unlawfully billed for services prior to May 2013 that GLC provided."

Initially, AT&T asked for a $12 million refund and wants to avoid paying an additional $4.3 million that Westphalia and Great Lakes claim the telco owes them.

In its ruling, the FCC said that it has authority to argue that AT&T was billed unlawfully because of Section 201(b) of the Communications Act.

This is the part of Title II that says: "All charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful."

Interestingly, AT&T, Verizon (NYSE: VZ) and other telcos maintain that Section 201 of the Communications Act will drive rate regulation of broadband service. Although the FCC said that it won't set specific price caps or tell service providers what they can charge for service, consumers can complain to the FCC if their provider is overcharging them for service.

According to an Ars Technica report, AT&T isn't the only telco that's benefitted from existing Title II regulations.

Verizon, another outspoken critic of applying Title II to broadband services, ironically used its common carrier status for POTS services to build its FiOS fiber-to-the-home (FTTH) network. Besides leveraging Title II to get access to utility poles and rights-of-way to string up fiber, Verizon raised consumer phone rates to fund the fiber build.

For more:
- Ars Technica has this article
- see the FCC order

Related articles:
FCC's Wheeler: There were 'no secret instructions' from the White House to implement Title II regulation
FCC releases net neutrality order, industry preps lawsuits
AT&T, Verizon say FCC net neutrality move will stifle broadband investment, raise prices
FCC says proposed net neutrality rules will withstand legal challenges from AT&T, Verizon

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