Verizon, Comcast, others sued by Alabama company over failure to pay $214M in 911 fees

Phone Recovery Systems filed a lawsuit in Massachusetts against Verizon Communications (NYSE: VZ), Comcast  (NASDAQ: CMCSA) and other phone companies claiming that the firms have failed to pay the state $214 million in fees to support the 911 system.

According to the Boston Globe, Phone Recovery Systems has filed similar lawsuits against other states and counties and recently signed agreements to help several Pennsylvania counties pursue 911 fees.

In the Massachusetts lawsuit, Phone Recovery accuses the landline service providers of reducing the 911 fees they collect and not paying enough to support the system.  However, the phone companies claim that the lawsuit is meritless and have asked for it to be dismissed.

Most states rely upon the monthly fees collected by telephone service providers from their customers to pay for the 911 system.  In Massachusetts that fee was recently raised from 75 cents to $1.25 per customer because the state's emergency phone number system is being upgraded to allow for new services.

Interestingly, Phone Recovery Systems' lawsuit does not target wireless providers which also collect the 911 fees from their customers.

According to the lawsuit, Massachusetts collected 911 fees from 2.9 million landline numbers in 2013, but there are about 7 million landline phones in use in the state. According to the Globe, Phone Recovery Systems President Roger Schneider claimed that phone companies are "lowballing" the 911 fees collected because technological advances now allow them to have a single copper phone line support as many as 23 phone numbers at once, but they are only collecting a single 911 fee.

Since 2012, Schneider said his company has filed these types of lawsuits in dozens of jurisdictions. Phone Recovery Systems uses software that estimates how many landlines and Internet phone lines are in a state or county. If that number doesn't match the amount being paid to the 911 system, the company then tries to sue using whistleblower statutes.

Verizon did not reply to a request for comment from the Globe.  In a statement, a Comcast spokesman said the company "takes its tax and fee collection obligations seriously."

Earlier this year a similar lawsuit was filed by Philadelphia suburb Delaware County against 19 Pennsylvania telecom providers for $41.4 million in 911 fees.

For more:
- see this Boston Globe article

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