updated 06:34 pm EST, Mon March 3, 2014
Sprint alleged to have overcharged for illegal equipment install
Wireless carrier Sprint is being sued by the US government for overcharging for its services in cellphone surveillance. Allegedly, the carrier submitted $21 million above and beyond its actual expenses (which it is entitled to). The government, however, is seeking triple damages -- $63 million -- as the violation by the carrier is charged to have been a willing and blatant violation of the Communications Assistance for Law Enforcement Act (CALEA), the law that allows Sprint to be reimbursed for reasonable expenses associated with data collection.
CALEA's stated purpose is to enhance the ability of law enforcement agencies to conduct electronic surveillance by requiring that telecommunications carriers and manufacturers of telecommunications equipment modify and design their equipment, facilities, and services to ensure that they have built-in surveillance capabilities, allowing federal agencies to monitor all telephone, broadband internet, and VoIP traffic in real-time.
The suit alleges that Sprint "knowingly included in its intercept charges the cost of financing modifications to equipment, facilities, and services installed to comply with CALEA." The suit has been filed in behalf of all federal law enforcement agencies.
Section 109 of CALEA requires the US Attorney General "pay telecommunications carriers for all reasonable costs directly associated with the modifications performed by carriers in connection with equipment, facilities, and services installed or deployed on or before January 1, 1995."
Between January 2007 and July 2010, Sprint submitted invoices, and was paid $35.1 million in intercept charge fees. The US Department of Justice claims that the invoices paid were inflated by illegal financing fees for CALEA equipment that should have already been paid for by the US government at the time of law enactment, and $21 million were unallowable and specifically prohibited by FCC mandate.
No trial has been scheduled. Neither Sprint nor the Federal government have released any statements commenting on the filing, which was made in the Northern District of California.