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AT&T Collects $10M Annually from CIA Contract to Access Vast Database of Calling Records

Phillip Dampier November 7, 2013 AT&T, Consumer News, Public Policy & Gov't Comments Off on AT&T Collects $10M Annually from CIA Contract to Access Vast Database of Calling Records

spy phoneThe taxpayer-funded Central Intelligence Agency is paying AT&T more than $10 million annually for its “voluntary help” with counter-terrorism investigations in return for open access to the company’s vast trove of calling records, including international calls placed by Americans.

No court order or subpoena was required to start the partnership, according to an article in today’s New York Times. The CIA provides AT&T with the telephone numbers of overseas terrorism suspects and in return the phone company provides records of calling activity, possibly identifying associates.

With interconnection agreements between telephone companies standard operating procedure, AT&T has been able to collect calling records from any foreign or domestic calls that pass through its equipment, even if neither party is an AT&T customer.

Despite AT&T’s claims of robust privacy protection, Americans are not promised anonymity or privacy when requests arrive from law enforcement officials. But only recently have phone companies voluntarily provided calling data that in earlier years would have required a court order to divulge.

rethink attBy law, the CIA is specifically prohibited from collecting intelligence on the domestic activities of U.S. citizens, so the agency imposes its own safeguards on the surveillance program. AT&T provides the agency with calling times, duration of the calls, and the phone numbers of both the originating and called party. It does not divulge the contents of the calls. The CIA is granted full access to AT&T logs involving foreign to foreign calls, but if either party is in the United States, AT&T will mask certain digits of the U.S. telephone number. If more information is required, the CIA will refer the matter to the Federal Bureau of Investigation (FBI), which has jurisdiction the CIA lacks. The FBI can then subpoena AT&T directly for the missing details.

AT&T would not comment on national security matters, but the newspaper reminded readers AT&T has a history of making life very easy for government surveillance programs:

AT&T has a history of working with the government. It helped facilitate the Bush administration’s warrantless surveillance program by allowing the N.S.A. to install secret equipment in its phone and Internet switching facilities, according to an account by a former AT&T technician made public in a lawsuit.

It was also one of three phone companies that embedded employees from 2003 to around 2007 in an F.B.I. facility, where they used company databases to provide quick analysis of call records. The embedding was shut down amid criticism by the Justice Department’s inspector general that officers were obtaining Americans’ call data without issuing subpoenas.

And, for at least the past six years, AT&T has embedded its employees in federally funded drug investigation offices to analyze call records, in response to subpoenas, to track drug dealers who switch phones. A briefing document for that program said AT&T had records of calls handled by its switches — including “a tremendous amount of international numbers that place calls through or roam on the AT&T network” — dating back to 1987, and described efforts to keep its existence “under the radar.”

AT&T Agrees to $3.5 Million Settlement of Hearing Impaired Overbilling Scam; Fraudsters Made 95% of Calls

Phillip Dampier November 7, 2013 AT&T, Consumer News, Public Policy & Gov't, Wireless Broadband Comments Off on AT&T Agrees to $3.5 Million Settlement of Hearing Impaired Overbilling Scam; Fraudsters Made 95% of Calls

att relayAT&T has agreed to pay an extra $3.5 million in addition to the $18.25 million already paid to settle Justice Department claims the company knowingly overbilled the government for reimbursement of fraudulent international relay calls usually made by scammers originating from countries like Nigeria.

The government joined a whistle-blower lawsuit in a Pittsburgh court in March 2012 after learning as many as 95 percent of relay service calls were initiated by ineligible individuals using a service intended for the hard of hearing.

AT&T was accused of knowingly allowing and profiting from fraudulent use of its relay service, collecting $1.30 a minute in reimbursement from a ratepayer-funded account administered by the government. The lawsuit claimed virtually all of the relay traffic was initiated by swindlers using untraceable text messaging.

Under the scam, an overseas individual pretending to be deaf would text message an AT&T relay operator to connect a call to a U.S. business or individual. Operators were compelled to relay any messages sent over the texting system, even if they suspected the calls were fraudulent. A large percentage of the calls originated in Nigeria and often involved placing orders with U.S. companies using stolen credit cards or counterfeit checks. Any subsequent investigation would reach a dead-end at one of AT&T’s relay operator centers, where the voice calls originated.

The federal government accused AT&T of profiting from the fraudulent calls and not suitably screening users to verify eligibility. The rules mandate individuals must certify they are deaf or hard of hearing and that they are United States residents. The federal government said AT&T skirted those requirements “out of fears that fraudulent call volume would drop after the registration deadline.”

“Taxpayers must not bear the cost of abuses of the Telecommunications Relay system,” said David J. Hickton, U.S. Attorney for the Western District of Pennsylvania. “Those who misuse funds intended to benefit the hearing- and speech-impaired must be held accountable.”

Today, the Justice Department announced AT&T agreed to pay another $3.5 million to resolve civil allegations under the federal False Claims Act.

AT&T said through a spokesperson settling the case was the “most productive course” of action.

AT&T, Verizon Among the Biggest ‘Pay to Play’ Campaign Contributors and Lobbying Spenders

lobbyist-cashAT&T and Verizon are among the biggest tech company spenders in Washington, paying millions every quarter to lobby federal and state lawmakers on how they can make life easier for the telecom giants.

AT&T increased their lobbying budget by a whopping 23 percent in the third quarter, easily beating year over year spending of $3.5 million in the third quarter of 2012. In just three months this year, AT&T spent $4.3 million lobbying lawmakers on regulatory relief, retiring the rural landline network, reform of cell tower placement policies, and trying to keep the FCC from gaining new oversight powers.

Verizon Communications had lobbying costs of $3.09 million last year at this time. This year, it reduced that amount by two percent, spending $3.04 million. But Verizon Wireless upped its political spending by 19 percent, from $1.1 to $1.2 million. Taken together, Verizon spent a collective $4.24 million on lobbying in the last three months. Verizon lobbied on some of the same issues AT&T did.

In contrast Google spent $3.4 million, Facebook spent $1.4 million, and Microsoft spent $2.2 million.

“Once again the lobbying disclosures demonstrate the sad truth about the state of our democracy,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “When the government is open for business, policymaking is all about who has the cash and is willing throw it around.”

USA Today reported Verizon has also once again achieved a 0% effective tax rate during the past 12 months, which means any owed taxes will be offset by a variety of accounting tricks:

A big reason that Verizon’s effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company’s sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company’s taxes down, says Jonathan Schildkraut of Evercore. But there’s also a distortion caused by the company’s 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon’s effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone’s stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.

The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. “They are slow at getting at these issues,” Yee says.

AT&T U-verse Adds Over 100 Channels to Its TV Everywhere App

Phillip Dampier October 22, 2013 AT&T, Consumer News, Data Caps, Online Video 1 Comment

att uverse onlineAT&T has expanded its TV Everywhere service to cover more devices and networks, adding more than 20 channels available for streaming outside of the home.

AT&T U-verse live TV streaming is available to customers subscribing to a U-family or higher U-verse TV package, and can be viewed on a growing number of devices including iPad/iPhone (iOS) and more than 25 current generation Android smartphone models.

Many, but not all popular cable networks are available for streaming, as are most premium movie channels.

But the biggest change subscribers are looking for is streaming those cable channels outside of the home on the go. Most cable carriage agreements still restrict out-of-home streaming, but providers are negotiating to drop that restriction.

“By making live TV content available across devices we’re enabling our customers to watch TV on their terms when and where they want it,” said Mel Coker, chief marketing officer, AT&T Home Solutions, in a statement. “U-verse has always been about delivering a TV experience built around our customers, and this enhancement gives them even more flexibility and control.”

The networks now available for out-of-the home viewing:

AXS TV, Big Ten Network, CNN, Disney Channel, Disney Jr., Disney XD, Encore, Encore-West, Encore Action, ESPN 1/2/3, ESPN U, Fox News Channel, Fox Business Channel, HDNet Movies, HLN, NFL Network, NFL RedZone, Showtime (All variants), Starz (All variants), The Movie Channel, The Movie Channel West, TMC Xtra, and TMC Xtra-West.

All online viewing from a U-verse broadband connection counts against AT&T’s U-verse monthly usage cap of 250GB, presently unenforced in most areas.

Accidentally Leaked U-verse Pricing No Bargain: 45Mbps $76, 300Mbps $199

Phillip Dampier October 21, 2013 AT&T, Broadband Speed, Competition, Consumer News, Google Fiber & Wireless Comments Off on Accidentally Leaked U-verse Pricing No Bargain: 45Mbps $76, 300Mbps $199

An enterprising reader of the Broadband ReportsAT&T Forum stumbled on proposed pricing for AT&T’s faster speed services for U-verse and, presumably, their planned fiber-to-the-home rollout in Austin, Tex.:

UVerse

The prices are no bargain in comparison to the $70 a month Google charges Kansas City residents for 1,000/1,000Mbps service, but on the lower end, AT&T’s 45Mbps U-verse option is comparable to Time Warner Cable’s 50/5Mbps tier, which now sells for $65-75 a month on a one-year promotion:

twc speed

Time Warner Cable’s latest broadband offers

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