The growing crackdown on the alleged underpayment of 911 surcharges or fees continued this month with Gwinnett and Cobb County, Georgia filing lawsuits in state and federal court alleging 15 phone providers failed to collect millions in fees from customers to support the counties’ 911 systems. As we noted in October, scrutiny surround the alleged underpayment of 911 fees started with private plaintiffs bringing false claims act lawsuits in a number of jurisdictions. More recently, however, government entities responsible for 911 systems have started filing lawsuits directly against service providers.
In Pennsylvania and now in Georgia, counties are investigating a variety of phone providers, including providers of ILEC, CLEC, and VoIP services. The allegations remain similar to those brought by private plaintiffs’ false claims act suits, namely that phone providers are underreporting the number of active lines they provide to multi-line customers by treating exchange access lines (which allows a single circuit to support multiple 10 digit telephone numbers) as a single telephone line. Thus, the counties argue providers can reduce the 911 fees passed through to multi-line (primarily business) customers and gain a competitive advantage by offering lower rates to their business customers.
The recent lawsuits filed in Georgia underscore the importance of understanding and complying with 911 fee laws and regulations in each jurisdiction in which a provider operates. The rules governing 911 fees are frequently unclear, particularly when applied to newer technologies, such as VoIP, SIP Trunking and Cloud-based communications accessed via SIP, MPLS and other network access methods. Nonetheless, governments seeking to ensure sufficient funding of their emergency services agencies are keen to pursue funding through expansive interpretations of existing rules, then leaving it up to the courts to decide whether their or the industry’s interpretation is correct.
Some states have attempted to address the difficulty in assessing 911 fees to multi-line end users by adopting a 911 ratio for exchange access lines. These ratios attempt to determine how many 10 digit numbers can be allocated to an exchange access line for purposes of 911 fee collection. Other states, such as Georgia, have not adopted ratios for exchange access lines. And, at least according to the lawsuits filed by Gwinnett and Cobb County, Georgia imposes a 911 fee on each 10 digit telephone number assigned by a provider.
Because the rules surrounding the assessment and collection of 911 fees vary from state to state, and sometimes county to county, phone providers should invest in robust compliance monitoring to keep up with their 911 fee obligations. Otherwise, providers risk costly litigation and investigation expenses. Providers also may be required to pay past underpayments directly, as opposed to passing such regulatory fees through to customers.
If your company is named in a 911 fee lawsuit or receives notice of a 911 fee investigation, the company should immediately contact experienced telecommunications counsel. If you have questions about your company’s compliance with 911 fee laws and regulations in the jurisdictions in which your company operates, please contact Jonathan S. Marashlian at firstname.lastname@example.org or Michael P. Donahue at email@example.com.