One of largest telecom companies in the world, wireless carrier Verizon, have agreed to pay $25 Million to the US government as a settlement after an investigation into the company’s billing practice by The Federal Communications Commission. In addition Verizone will pay back about $53 million to subscribing customers. The payment is the largest settlement in the industry’s history.
“It will serve as a significant deterrent to others in the future.”
The Federal Communications Commission says that it has reached a record $25 million settlement with Verizon 
Wireless over the company’s wrongly charging customers mysterious internet fees over the past several years.
The payment will go to the US Treasury.
It is the largest settlement in FCC‘s history, and marks the ending of FCC’s 10-month investigation into overcharges at Verizon Wireless, the agency says in a news release.
However, a FCC spokeswoman declined to comment on whether the settlement also ends the agency’s other billing inquiries, The Washington Post writes.
Verizon Wireless’s total costs associated with false fees have reached $77.8 million – one of the largest payouts for false business practices in the communications services industry.
Verizon said earlier this month that it would refund about 15 million subscribers $52.8 million for those unwanted data charges. Verizon partly attributed the problem to a software glitch in phones.
“In these rough economic times, every $1.99 counts.”
Julius Genachowski
“People shouldn’t find mystery fees when they open their phone bills — and they certainly shouldn’t have to pay for services they didn’t want and didn’t use,” FCC Chairman Julius Genachowski says in a statement. Adding: “In these rough economic times, every $1.99 counts.”
Verizon Wireless says in a news release that its overcharges were “inadvertent.”
“We accept responsibility for those errors, and apologize to our customers who received accidental data charges on their bills,” Verizone says.
Genachowski also says that the large settlement is meant to send a signal to other communications services providers.
According to telecom analysts, it seems like the FCC is ramping up regulatory pressure on companies to protect consumers.
“It will serve as a significant deterrent to others in the future.”
Genachowski has indicated that he will look into regulatory fixes for the growing fines associated with breaking long-term service contracts.
Earlier this month, the FCC began an exploration into regulations that would require cellphone service providers to alert users when they are close to going over their monthly allotted voice, text and data limits.
In a survey, the agency said 30 million cellphone users said they experienced “bill shock,” with extra charges on their monthly bills for data overcharges and other fees.
“It will serve as a significant deterrent to others in the future,” the FCC chairman says.
G20 meeting in Washington
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On a personal account: I’m not quite sure who Genachowski is referring to when he says; “every $1.99 counts.”
The customers? Or the US government?
And, by the way, the US government is not the only government in the world that is looking into “regulatory fixes” at the moment as national debt is mounting…
Related Articles
- You: Post Tech: Verizon Wireless pays FCC $25Mln for years of false data charges (washingtonpost.com)
- Verizon Wireless settles with FCC for $25M over ‘mystery fees’ probe (nj.com)
- Solved! Verizon to pay $25 million fine over “mystery fees” (arstechnica.com)
- Verizon Wireless to Pay for Mystery Fees (businessweek.com)
EconoTwist's 
Another BP CDS Blowout Today?
Reports stemming from the presidential commission investigating the Gulf of Mexico oil spill indicate that Halliburton and BP were aware of flaws in the cement used to seal the well’s bottom. Halliburton’s CDS spreads started to move Thursday – what will happen on Friday?
“The distribution of the burden, unlike hardened cement, is still fluid.”
Otis Casey
Halliburton and BP may have been aware of flaws in the cement used to seal the well’s bottom, according to an official report. CDS on Halliburton started out moderately wider on the headlines, but is currently about 38 bps wider than yesterday’s close. Anadarko and Transocean are essentially unchanged. But this can change quickly.
The market’s reaction on BP CDS will come in Friday’s London session
“Whether the report constitutes a ‘smoking gun’ or not remains to be seen, but it has that potential. Litigation risk is high even if the total amount is uncertain. The distribution of the burden, unlike hardened cement, is still fluid,” vice president Otis Casey at Markit writes in a comment.
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Back in May, it was the Transocean CDS that got the biggest kick.
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