Tuesday, January 13, 2009

AT&T Settles Civil Contempt Claim

AT&T agreed to pay more than $2 million as part of a civil settlement with the Department of Justice. The payment resolves AT&T's alleged violations of two court orders entered in connection with AT&T's acquisition of Dobson Communications Corporation.

Under the consent decree entered by the U.S. District Court for the District of Columbia in March 2008, AT&T was required to divest mobile wireless telecommunications businesses in three rural service areas (RSAs) -- two in Kentucky and one in Oklahoma. According to the petition filed by the Department of Justice AT&T failed to fulfill its obligations by failing to separate confidential customer account information of the divested businesses from its own customer records and to take other actions needed to prevent unauthorized disclosure. The petition further alleges that AT&T, without authorization by the management trustee, waived early termination fees for several customers of the divested businesses to facilitate switching their wireless service from the divested businesses to AT&T.

Pending divestiture, a management trustee was appointed to oversee the businesses to be divested. Under the consent decree and a related court order, AT&T was required to take all steps necessary to ensure that the divested businesses were operated independently of AT&T and that AT&T did not influence how they were managed. AT&T was also required to take all reasonable efforts to preserve the confidentiality of information material to the operation of the divested businesses and not give unauthorized personnel access to such information.

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