AT&T faces $1B settlement in mobile Internet access fee lawsuit

AT&T Mobility (NYSE:T) will have to work with state and local governments to pay back nearly $1 billion as part of a class-action settlement stemming from allegations that the carrier improperly levied taxes against customers on mobile Internet access fees, according to attorneys for the plaintiffs in the case. 

A federal judge in the U.S. District Court of Northern Illinois approved a proposed settlement in the case last week. According to lawyers at the Kansas law firm Bartimus Frickleton Robertson & Gorny PC, AT&T will be working with the firm to get state and local governments to repay a maximum of $956.16 million to customers.

"The number is not wrong," Edward "Chip" Robertson Jr., a lawyer at Bartimus Frickleton, told FierceWireless. "AT&T is just not writing a check."

As part of the settlement, AT&T did not admit any wrongdoing, but agreed to stop charging the taxes. "The settlement also requires us to help facilitate, on behalf of our customers, plaintiffs' efforts to seek tax refunds from state and local taxing authorities on behalf of the class," AT&T spokesman Marty Richter told FierceWireless.  "Any refunds will be passed along to the class--people who are our customers, and initially paid the taxes."

Richter said AT&T collected only those taxes that the company believed it was required to collect, and passed them along to state and local taxing authorities.

The law firm had filed lawsuits in all 50 states against AT&T, alleging that the carrier violated the Internet Tax Freedom Act, which bars state and local governments from levying taxes on Internet access between Nov. 1, 2003 and Nov. 1, 2014. Robertson said that the class in the case varies in size depending upon how it is counted. He said there are roughly 29 million contracts and 49 million individual phone numbers that are covered under the class period, which runs from November 2005 to September 2010.

For more:
- see this Dayton Business Journal article
- see this court ruling (PDF)

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