Southwestern Bell has said it broke no laws or regulations, and under the proposed settlement, will not have to alter the way it collects fees. Any money left over will go into the state's Telecommunications Infrastructure Fund, which is used to help get Internet access for local communities, libraries and school districts. The settlement centers on tax money customers would have paid anyway, Tillotson said. We were faced with the problem that this isn't money that would have been in customers' pockets. Southwestern Bell collects the taxes from customers and passes all the money to the municipalities.
Customers pay the fees in monthly bills.
The lawsuit alleged Southwest-ern Bell charged customers using an outdated tariff, approved by the PUC in 1978. That tariff was based on a percentage of the phone company's gross receipts, generally, how much money Southwestern Bell collected from customers within the city limits for basic phone service. In the early 1990s many cities started charging companies flat annual rates based on what the company historically paid, rather than a percentage, Tillotson said. Southwestern Bell has said the 1978 tariff did cover the new calculations and the Legislature passed a law last year dictating how franchise fees can be collected. Southwestern Bell officials did not return phone calls by The Associated Press on Thursday.