(CN) – The 10th Circuit upheld a $16 million award for Californians who claimed that AT&T overbilled them through mandatory “universal connectivity” fees that were supposed to be used to help provide phone service to rural and low-income customers.
The plaintiffs were part of a multi-district class action challenging AT&T’s billing practices, particularly a monthly “universal connectivity charge” that AT&T contributes to the Universal Service Fund, a federal program designed to provide phone service to rural and low-income customers.
The class claimed that AT&T did not contribute all the funds it collected from the universal connectivity fee to the program.
AT&T argued that it never promised that all the money would go to the fund.
The Denver-based federal appeals court agreed with the federal judge’s finding that AT&T’s description of the connectivity charge formed a promise under New York law.
AT&T described the fee as a “monthly charge to Customers to recover amounts AT&T must pay into” the Universal Service Fund.
“Accordingly, the phrase constitutes a valid promise under New York law,” Judge Michael Murphy wrote.
AT&T had claimed it was too difficult to predict the amount it was required to pay to the fund “due to the methodology used to calculate its contribution level.”
Nonetheless, Murphy held that AT&T should have had a mechanism in place to prevent overbilling.