In order to settle an investigation relating to two call outages in 2017 to emergency number 911, AT&T Inc. (T - Free Report) has decided to pay a fine of approximately $5.3 million to the Federal Communications Commission (“FCC”). The company has also pledged to take corrective actions to avoid recurrence of the incidents that have hurt its credibility.
The outages pertain to two separate events, one in March 2017 that lasted about five hours and the other in May that lasted 47 minutes. While the first incident affected 12,600 unique users, the second affected 2,600, preventing them to make emergency calls to 911. When the charges were levied against AT&T, FCC investigation revealed that the outages were the result of its planned network changes inadvertently interfering with the routing of 911 calls.
The FCC further accused the company of failing to clearly notify all the affected users about the cause of the outage after the March incident. Throughout the review proceedings, AT&T actively cooperated with the federal regulator and acknowledged its shortcomings. The company also vouched to provide round-the-clock access to emergency call routing services to 911 and remains committed to its customers.
AT&T is not the only telecommunications firm that has agreed to pay settlement charges to the FCC. In April 2014, several carriers were involved in an outage that affected 11 million users. These included Verizon Communications Inc. (VZ - Free Report) and CenturyLink, Inc. (CTL - Free Report) among others. While Verizon agreed to a pay a fine of $3.4 million for a six-hour 911 outage that affected about 750,000 consumers in California, CenturyLink paid $16 million. An FCC probe had revealed that the outage was caused by a preventable software coding error at a call management center in Colorado.
T-Mobile US, Inc. (TMUS - Free Report) was another casualty in this sphere, with two separate outages in August 2014 affecting about 50 million customers. It agreed to pay a fine of $17.5 million to the FCC to amicably settle the issue.
AT&T has underperformed the industry in the past year with an average loss of 15.7% compared with a decline of 6.6% for the latter.
This Zacks Rank #3 (Hold) stock is likely to script a turnaround in the future with the successful integration of Time Warner assets like HBO, CNN and TNT. You can see the complete list of today’s Zacks #1 Rank stocks here.
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