WTF Sprint Suit?

As a number of outlets have reported, the government is suing Sprint for $63 million under the False Claims Act, claiming the telecom overbilled federal law enforcement agencies by charging for its CALEA modification costs in its wiretap charges.

On May 12, 2006, the Federal Communications Commission (FCC) resolved a dispute between law enforcement agencies and telecommunications carriers, and ruled that carriers were prohibited from using their intercept charges to recover the costs of modifying equipment, facilities or services that were incurred to comply with CALEA.


Despite the FCC’s clear and unambiguous ruling, Sprint knowingly included in its intercept charges the costs of financing modifications to equipment, facilities, and services installed to comply with CALEA. Because Sprint’s invoices for intercept charges did not identify the particular expenses for which it sought reimbursement, federal law enforcement agencies were unable to detect that Sprint was requesting reimbursement of these unallowable costs.

By including the unallowable costs of financing CALEA modifications in their intercept charges, Sprint inflated its charges by approximately 58%. As a result of Sprint’s false claims, the United States paid over $21 million in unallowable costs from January 1, 2007 to July 31, 2010.

Now, maybe this is just what it appears. Maybe this really is just about Sprint charging for CALEA changes they weren’t permitted to. The LEAs lay out

But I can’t help but wonder whether something else is going on.

Consider, for example, that the CALEA settlement was signed on May 12, 2006, just 12 days before the phone dragnet started. As I’ve noted, the first two phone dragnet orders compensated providers for charges incurred (which is not provided for in the Section 215 statute). And the period during which Sprint allegedly overcharged the government — 2007 to 2010 — is solidly in the middle of the dragnet.

In any case, in the middle of the biggest debate on surveillance in some time, DOJ is calling more attention to it. And DOJ wants a jury trial for this.

8 replies
  1. orionATL says:

    i’d guess just more doj intimidation of those who won’t comply easily, similar to the suit against joe nocera.

    given what the banks have raked in fraudulently and doj turned a blind eye to, this is p’nuts. so first question has got to be: did sprint tell gov to fuccoff or otherwise refuse to fall in line, and over what issues.

    i’d guess the call for jury trial is a bluff based on assumption sprint won’t want it’s co-operation with gov aired publicly for fear of customer and stock losses.

    but perhaps there is actually some integrity involved in this doj move; that isn’t impossible after all :)

  2. orionATL says:


    miz wiki says:

    “… Acquisition by SoftBank Corporation

    On October 14, 2012, the Japanese telecommunications company SoftBank announced it intended to purchase 70% of Sprint Nextel Corporation for $20.1 billion.[22] SoftBank states that Sprint will remain a separate entity, will remain a CDMA carrier and will continue executing Sprint’s plan to become an all-LTE carrier by 2017.[23] On April 15, 2013, Dish Network announced a higher bid for Sprint Nextel than the offer placed by SoftBank, with an $25.5 billion offer. On June 18, 2013, DISH retracted its bid and decided that it would instead focus on its intent to purchase Clearwire, however on June 26, 2013, DISH also retracted its bid for Clearwire, leaving the road clear for Sprint Nextel to acquire the company. The United States Federal Communications Commission approved SoftBank’s acquisition of a stake in Sprint. The FCC’s acting chairwoman Mignon Clyburn and commissioner Ajit Pai both gave statements vociferously supporting the acquisition, saying the deal “serve[s] the public interest”.[24] July 10, 2013 – SoftBank completes acquisition of Sprint Nextel Corporation for $21.6 billion for 78% stake in the company. The new company is now known as the Sprint Corporation. On August 6, 2013, SoftBank purchased approximately 2% more shares of Sprint Corporation, increasing its ownership stake in the company to 80%.[25] …”

    “…Law compliance

    As required by law in the United States, in response to court orders and warrants, Sprint Nextel provided law enforcement agencies with its wireless subscribers’ GPS locations over 8 million times in one year between September 2008 and October 2009.[39] The disclosures occurred by way of a special, secure portal which Sprint developed specifically for government officials, which enabled users to automatically obtain Sprint customers’ GPS locations after the request has been reviewed and activated by Sprint’s surveillance department.[citation needed]…”

  3. abby says:

    I like the way you hunt.

    Now, I know telecoms were killing their contract employees rushing to improve cell systems across the nation, much like the Domers built oilpipe faster than you could say, “Was there an open bid for that government work?” Then I see AT&T have sold away their own cell tower systems and are leasing them back, so loath are they to stand beside their own timely work.

    My town told At&T to stick two fake palm trees where the sun don’t shine. We protested the noisy diesel systems cooling our jet streaming texts as both noise and health hazards and also showed property values naturally dropped under their shade. We had no idea about all the SPYING!

  4. What Constitution? says:

    I dunno, maybe the Feds are on to something here with this invocation of the False Claims Act to try to recover three times the amount of our tax dollars paid to contractors based on false contractor claims. What part of that $52 Billion per year we’ve been paying for the NSA “Collect It All” Surveillance State is tied to the “this will make you Safer” reassurances of Booz Allen and their ilk? Those folks have billed big bundles under the auspices of that premise. For that matter, are there any invoices that we can use to get to the American Enterprise Institute for treble the costs of the invasion of Iraq?

  5. jo6pac says:

    I don’t know if my tin-foil-hat is on to tight but with Softbank in talks with T-Mobile, just may be att and verizion asked doj to bother them.

  6. Rayne says:

    What’s the chances the overbilling was a form of protest designed to make the spying more visible? Or that the lawsuit is a clumsy method to allow more transparency through discovery?

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