Verizon, AT&T to pay $127M for allegedly overcharging government agencies

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Verizon and AT&T have agreed to pay a combined $127 million to settle lawsuits alleging that they overcharged California and Nevada government entities for wireless service. The lawsuit was filed in 2012 and resulted in a settlement approved on Thursday last week by Sacramento County Superior Court, the plaintiffs' law firm, Constantine Cannon, announced.

"Verizon will pay $76 million and AT&T $51 million to settle claims that, for more than a decade, they knowingly ignored cost-saving requirements included in multibillion-dollar contracts offering wireless services to state and local government users in California, Nevada, and other states," the announcement said. "Sprint and T-Mobile previously reached settlements totaling $11.7 million. Combined, the four major telecom providers will pay $138.7 million to settle allegations in the lawsuits." Those numbers do not include what the carriers agreed to pay in attorneys' fees, which is $23.45 million from Verizon and $13 million from AT&T.

The contracts required that carriers bill government entities "at the 'lowest cost available' and that the carrier[s] identify 'optimized' rate plans that best suited actual usage patterns that drive cost," the law firm also said. The lawsuits alleged that the carriers' contract violations "cheated California and Nevada government entities out of hundreds of millions in savings," the law firm said.

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