Sprint fined $16m for sticking it to The Man: Telco 'overcharged' Feds for phone wiretaps
I gouged the law and the law won
Sprint has agreed to pay a $15.5m fine after it was accused of overcharging the Feds when carrying out court-ordered wiretaps.
The US Department of Justice (DoJ) claimed the American telco had gouged cops and g-men between 2007 and 2010: Sprint allegedly over-billed them by at least $21m for setting up wiretaps to record phone conversations, pen registers (devices that record all numbers called from a telephone line) and trap devices (which log incoming calls to a telephone line).
According to the DoJ, Sprint not only charged agents for performing the wiretaps, but also tried to recoup the costs of having to build a network enabling those calls to be wiretapped.
The row dates back to 1994, when US Congress enacted the Communications Assistance in Law Enforcement Act, a law requiring carriers to upgrade their networks to allow law enforcement agencies to snoop on calls and gather subscriber logs and conversation records.
In 2006, US watchdog the FCC updated the law with a declaration that while law enforcement agencies can be billed for costs of carrying out individual wiretaps, the carriers themselves must cover the costs of the upgrades rather than charging the Feds.
Still, the DoJ said, Sprint decided to tack on the extra costs of upgrading its networks when it billed law enforcement agencies for performing wiretaps.
Under the terms of an out-of-court settlement announced on Friday, Sprint will pay a $15.5m (£10.5m) penalty, but will not have to admit to any wrongdoing or liability in the case.
The settlement sheds light on the little-seen economic side of the wiretapping world. Until now, most of the attention has been given to the privacy angles, with human-rights campaigners arguing that large-scale surveillance is unconstitutional. What has not been discussed so much is the costs that both wireless carriers and law enforcement will incur due to the mass-surveillance programs. ®