At issue in the court case is a rule established at the program’s inception that requires providers to set rates for schools and libraries at the lowest prices offered to comparable customers. The theory was that bargain rates would help schools in less-wealthy areas provide their students with access to the Web.
An investigation in 2012 by ProPublica found that the preferential pricing rule had been widely neglected by AT&T and the Federal Communications Commission, which oversees the program. The result was that many schools were paying more than the program’s framers envisioned, draining the federal fund and limiting the reach of the subsidies.
AT&T said then, and reaffirmed in a recent email to ProPublica, that it complies with the requirement that it charge such customers what is known as the “lowest corresponding price.”
Heath, whose consulting work involves helping school districts obtain refunds from telecom overcharges, first sued Wisconsin Bell, a unit of AT&T, in 2008, alleging that the company routinely withheld information about the available lower rates from public school and library customers and billed them at higher levels. He filed it as a whistleblower case, meaning he would secure a percentage of any damages if Wisconsin Bell were found liable or reached a monetary settlement.
While that case made its way through the court system, Heath in 2011 filed another whistleblower lawsuit in Washington against AT&T and 19 of its subsidiaries for allegedly defrauding E-Rate from 1997 to 2009.