AT&T settles CPUC claims, agrees to pay $30M

AT&T Inc., which controls the nation’s largest mobile-phone carrier Cingular, agreed pay more than $30 million and withdraw a U.S. Supreme Court challenge to end a highly controversial, seven-year-old case at the California Public Utilities Commission.
In addition to the record $12.14 million fine levied by the CPUC in 2004 and later upheld by state courts, AT&T, which acquired complete control of Cingular earlier this year when it purchased former joint-venture partner BellSouth Corp., will refund consumers approximately $18.5 million in early-termination fees collected from former customers from January 2000 through April 2002. AT&T also must contract with an independent claims administrator to review claims for refunds of additional ETFs paid by former customers to AT&T wireless agents for which records of payment no longer exist. ETFs-charged to subscribers to break service contracts-typically range between $150 and $200 per line.
In 2003, after a three-year investigation, a CPUC administrative law judge proposed the $ 12.14 million fine against then-Cingular Wireless L.L.C. for charging early-termination fees and prohibiting refunds during a period when the mobile-phone carrier aggressively marketed its service without disclosing network problems to customers.
The CPUC found that Cingular’s ETF practice was fundamentally unfair to its subscribers.
“Today, the CPUC approved a settlement agreement regarding a ruling concerning Cingular business practices during 2000-2002. While we have a strong case for appeal, it is time to move forward,” said Lauren Garner, a spokeswoman for AT&T.