Lawyer: County was in the dark
There was almost no way Butler County officials could have noticed the county was missing out on nearly $11 million that phone companies were supposed to be paying it during the past six years, said a lawyer representing the county in a lawsuit.
“There’s absolutely no culpability on behalf of Butler County or other counties in Pennsylvania,” said Timothy Carson, an attorney with Dilworth Paxson of Philadelphia.
The county on Feb. 10 filed suit against 15 phone companies for $10.9 million, claiming the companies have not been billing and collecting 911 surcharges for the county.
Under state law, phone companies are supposed to add a surcharge for 911 services to every phone line.
The companies then are supposed to send that money to the counties that the phone lines are in to pay for their 911 centers.
Data obtained by the county suggested up to 15 telephone companies may have misrepresented the types and number of phone lines the 911 assessments are applied to, causing “significant” under billing. The suit said the misrepresentation results in a lot less funding for the county’s 911 system.
The county spent $3.1 million in 2014 to run the system, with $1.7 million coming from 911 fees and $1.4 million coming from general tax money.
Carson said a lack of public audit authorization, as well as confidentiality provisions, in both the state’s old and new law let phone companies keep under billing from being noticed.
“Each one of the laws have very extensive confidentiality provisions,” Carson said.
In June 2015, a new law came into effect.
Under the old law, each line is supposed to generate $1 to $1.50. The phone company is supposed to bill the user for that amount, collect it and send the money to the county.
The new law charges $1.65 per line, and it also contains provisions for the Pennsylvania Emergency Management Agency to audit the telephone companies.
Carson said the phone companies “fool around with the definition” of what counts as a line.
For the purposes of the lawsuit, Carson said residential landlines and cell phones are not where the problem lies. The issues stem from medium to large commercial accounts.
For example, in an office building, a few lines may go into the building, but they are split up into many more lines. However, Carson said the phone companies may only charge the fee on the initial lines going into the building.
The billing, collection and remittance of these fees are entirely the work of the phone companies.
“It is totally in their control,” Carson said.
He said there may have been some suspicion on the county’s end if it noticed the amount of money it was getting from the phone companies was getting smaller each year, but he said the county would not have been able to get any hard evidence as to why.
Carson said the $10.9 million the county is suing for is based on an estimated amount of money the county may have been missing out on.
The estimate is based on a methodology that Phone Recovery Systems — which is assisting the county and the law firm — created.
Dilworth Paxson is representing several counties in the state in similar cases. Because different phone companies are involved, each county Dilworth Paxson is representing is filing suit separately. Carson said it may be possible cases are consolidated later at some point.
Mike English, county solicitor, said the suit was filed after he became aware of the issue through officials from other counties and through the statewide county commissioners organization CCAP. English said he contacted Dilworth Paxon after he learned it was representing other counties on the same issue.
He agreed it would have been hard for the county to know it was missing out on so much money.
“We don’t get those records,” English said.
Because of the confidentiality provisions in the law, he said the collection of the fees by the phone companies was akin to being on the “honor system.”
County Controller Ben Holland agreed there was little the county could do.
“The onus here is on the telephone company,” Holland said.
He said this issue likely was not on anyone’s radar at the county. He said a specific, extensive audit may have generated some suspicion that something was off.
The defendants named in the county’s lawsuit are: CenturyLink Communications, the United Telephone Company of Pennsylvania, Consolidated Communications of Pennsylvania Company, Consolidated Communications Enterprise Services, Core Communications, Intermedia Communications of Florida, Verizon Pennsylvania, Level 3 Communications, Telcove of Eastern Pennsylvania, AT&T, Teleport Communications America, US LEC of Pennsylvania, Bandwidth.com CLEC, Comcast Phone of Pennsylvania and Peerless Network of Pennsylvania.
