County suing telecom providers, seeking 911 surcharge fees

Kevin Pooley, pictured above in blue, at the county Legislature's committee on public safety.

OSWEGO COUNTY — Oswego County is joining six other upstate counties in a class action lawsuit against major telecommunications providers alleged to have withheld surcharge payments from municipalities, amounting to a “multi-billion-dollar” deficit.

A May 13 letter from the New York State Association of Counties (NYSAC), addressed generically to “Chief Elected Official,” alerted Oswego County leaders about a six-county class action lawsuit against four telecommunications companies facilitating 911 emergency services in their areas — Verizon, AT&T, Time Warner Cable and Frontier Communications — and invites them to join the suit.

The lawsuit, filed on May 1, alleges the companies failed to pay counties legally mandated reimbursement funds that offset the high costs of emergency response services. Other counties named in the lawsuit are Fulton, Nassau, Otsego, Schoharie, Sullivan and Wyoming.

“If you believe that Verizon, AT&T, Time Warner Cable, Frontier Communications or other telecommunications providers in your area have failed to collect and account for 911 surcharges as required by law — and/or if the providers made misrepresentations regarding the 911 surcharges collected and/or remitted — you should consider joining the lawsuit,” says the letter, signed by NYSAC Executive Director Stephen J. Acquario.

Similar missives have been sent to several upstate New York counties: officials from Greene, Essex and Seneca counties have all received the same notice in the last month and are weighing their options in joining the suit, according to reports from HudsonValley360, The Post-Star and The Finger Lakes Times, respectively. 

Oswego County added Windstream to the mix of telecommunications companies alleged to have withheld compensation funds, said Oswego County Director of Emergency Communications Kevin Pooley. Windstream, like the other companies initially included in the suit, provides telephone services for Oswego County’s emergency response network, Pooley said.

The county Legislature’s Public Safety Committee Monday voted unanimously in favor of joining the class action lawsuit, represented by New York City law firm Napoli Shkolnik, PLLC.

Emergency 911 services cost the county upward of $2 million in recent years — $2.256 million in 2017, $2.204 million in 2018 and a sum of $2.011 million is budgeted for 2019.

To offset high costs, state law says counties are entitled to a surcharge fee from telephone services on landline and wireless 911 services. These fees are “crucial to fund essential 911 emergency services,” according to the NYSAC letter.

Such 911 surcharges are calculated as a set fee per telephone number or telephone line.

“These surcharges have been instrumental in providing a means for counties to finance the significant cost of providing 911 emergency services,” the letter says.

Telecommunication companies may not have been as diligent as the law requires in collecting these surcharge fees from other customers, however, resulting in a multi-billion-dollar deficit, the suit claims. The complaint filed by the counties says the surcharge is contrary to the interests of telephone service providers because “doing so could negatively affect relationship with their customers.”

The complaint alleges these telephone service providers have neglected to collect the correct 911 surcharge or turned a blind eye against customers’ failure to pay it to appear more attractive than competitors who have been collecting the surcharge.

“The counties are the ultimate losers in this competitive game between telephone services providers, because far less than the full amount of the 911 surcharge due is collected —leading to deficits in funding, and local governments like the counties having to look to local taxpayers to fund 911 services,” the complaint alleges.

Reached by phone, a spokesperson for Verizon said the company does not comment during litigation.

“The 911 system is vital to the public’s safety and we take our 911 obligations seriously,” said a spokesperson for AT&T in an email to The Palladium-Times. “Our role is to collect 911 charges from our customers in New York and turn the charges over to the appropriate government entity. These entities believe our customers should have paid more 911 charges and now want to collect those amounts from us. We are simply the middleman, and New York law does not make telephone companies liable to the counties for 911 charges owed by their customers.”

A spokesperson for Frontier Communications said in a Wednesday email to The Palladium-Times that the company is "committed to doing [its] part to ensure effective 911 services in the communities [it serves]."

"We disagree with the allegations in the applicable law set forth in the complaint and have joined other New York telecommunications providers in filing a motion to dismiss the complaint," the spokesperson said.  

Pooley said one of the goals of the suit is to make the telecommunication service providers more forthcoming in their surcharge payouts for local governments reliant on their services.

“Some of the counties started digging in and found that the numbers just aren’t matching up,” Pooley told The Palladium-Times. “That’s been a lot of our struggles in New York state in trying to get these... 911 funds because there’s no upfront and transparent reporting on what they’re actually collecting.”

The county pays no upfront costs for legal representation from Napoli Shkolnik, PLLC. But the law firm requested a contingency fee of 25 percent of the amount recovered for counties.

Pooley told The Palladium-Times there’s no telling how much the county lost, how much it stands to gain through litigation or even which of the companies are liable to compensate the county, though each of the five companies do help to facilitate Oswego County’s 911 services.

At Monday’s Public Safety committee meeting, legislators from both parties voted in favor of joining the suit but groused about state officials leaving the county to head its own litigation process and, if their legal counsel proves successful in court, collect only three-quarters of what they’re due.

“It’s 25 percent of the money we should have gotten anyways,” Legislator Frank Castiglia, D-Fulton, said, though conceding he was in favor of the resolution. “Why isn’t the state doing this instead of us hiring a law firm who we have to give 25 percent when we should be getting 100 percent?” 

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