Following a decision last week by a federal judge in Wisconsin to send a whistleblower case from 2008 to trial, an AT&T subsidiary could be forced to repay millions it received in federal subsidies for providing internet services to schools and libraries.
The case, United States ex rel. Heath v. Wisconsin Bell, Inc., was originally filed by Todd Heath, a whistleblower, in 2008. He claimed that the company was overcharging schools and libraries for broadband services, more than allowed by the Federal Communication Commission’s E-Rate program. More than 17 years of litigation later, Judge Lynn Adelman of the U.S. District Court for the Eastern District of Wisconsin last Thursday denied AT&T’s motion for summary judgment, allowing the case to proceed to trial in January.
Central to the case is a debate over whether money dispersed through the E-Rate program counts as federal funds under the False Claims Act. The claims law only allows for the recoup of funds distributed by federal entities to private companies, and whistleblowers can use the law to sue companies if they are defrauding the government through false claims about the dollar value of a contract or subsidy.
To answer this question, the courts had to determine if the Universal Service Administrative Company — the private, nonprofit corporation established by the FCC’s Universal Service Fund to oversee and manage the fund’s revenue and distribution — was considered a quasi-federal entity. Earlier rulings...
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