DoJ: AT&T must pay $2M fine: Penalty linked to acquisition of Dobson

The Department of Justice said AT&T Inc. must pay more than $2 million to settle a government lawsuit alleging violations of two court orders in connection with the company’s $2.8 billion purchase of Dobson Communications Corp. last year.
“It is imperative that companies fully abide by their court-ordered obligations in order for our settlements to be effective in preserving competition and protecting consumers,” said Deborah Garza, acting assistant attorney general in charge of the department’s antitrust division. “When companies fail to comply with a court order, the antitrust division will take swift and certain action to ensure that companies fulfill their responsibilities.”
The DoJ said the $2 million-plus civil settlement, which is subject to court approval and partially covers the cost of the investigation, involves a court-approved March 2008 consent decree in which AT&T – parent company of the No. 2 mobile-phone carrier – was required to divest wireless licenses in three rural areas in Kentucky and Oklahoma. However, according to the DoJ, AT&T allegedly failed to separate confidential customer account information of the divested assets from its own records and to institute additional safeguards to protect subscribers’ privacy.
“Consequently, AT&T personnel obtained unauthorized access to the divested businesses’ competitively sensitive customer information and in some situations used it to solicit and win away the divested businesses’ customers,” the DoJ said a press release. “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.”
“We take seriously our obligation to comply with consent decrees and are happy to have this matter resolved,” said Marty Richter, AT&T spokesman. “As noted in the stipulation, there is no admission or determination of wrongdoing. We felt it was in the best interest of everyone to simply put this matter behind us.
Verizon Wireless picked up a pair of markets in Kentucky from AT&T Mobility as part of the required divestitures in late 2007, while MTPCS L.L.C. acquired portions of an RSA in Oklahoma.
The DoJ said the Federal Communications Commission assisted with the investigation. The two agency’s approved the AT&T Mobility-Dobson deal in late 2007. The transaction was announced earlier that year.
Article updated Jan. 14 to include comment from AT&T.