Delco Lawsuit Accuses Telephone Companies of Cutting 911 Fees

Delaware County officials are taking phone companies to court due to a dispute over tens of millions of dollars in uncollected fees that are supposed to help fund the county’s emergency services.

A lawsuit was filed against 19 telephone providers, including Verizon and Comcast, NBC10’s parent company, for $41.4 million the companies allegedly owe Delaware County in 911 services.

In Pennsylvania, 911 operations are funded in part by the phone calls residents make. Telephone companies are therefore required by state law to find out how many lines a business or residence has and charge 911 assessment fees in order to pay for 911 services.

“Telephone companies have a competitive problem,” said Joshua Wolson of the Dilworth Paxson Law Firm. “People who buy telephone services are price conscious. Cutting 911 fees allows the companies to lower the price to the customer without taking any money out of their own pockets. When one company does it, all the others in the marketplace feel compelled to match.”

Members of the Delaware County Council held a press conference Monday and announced they were suing the Pennsylvania telephone service providers for allegedly failing to bill, collect and remit the proper 911 assessment charges. The lawsuit also accuses the companies of undercharging businesses and seeks to collect a total of $41.4 million that should have gone to the county's 911 operation over the past six years.

“The gap has become a burden to the County’s general fund and to our taxpayers,” said John McBlain, a member of the Delaware County Council.

Data obtained through Phone Recovery Services, a telecommunications firm, revealed the telephone service providers named in the lawsuit misrepresented the types and number of phone lines which the 911 assessments are applied and under-billed customers, according to the lawsuit. This ultimately led to less funding for the county’s 911 system, according to officials.

Phone Recovery Services estimated there were 811,698 active phone lines in Delaware County. Service providers remit 911 surcharges on 230,811 lines leading to a shortfall of 572,566 lines, according to the lawsuit. The under collection of 911 fees for each line resulted in a gap of $6.9 million, officials said.

Officials say Delaware County spent $15.5 million to support its 911 system in 2014 with $8.6 million coming from 911 fees assessed by the telephone service providers. Local taxpayers meanwhile contributed another $6.9 million from the county’s general fund, according to officials.

“The county and the taxpayers should not have to subsidize this gap. This is a tax burden on all of our residents, but it especially impacts our seniors and lower income residents,” said Mario Civera Jr., Chairman of the Delaware County Council.

The lawsuit was filed on Monday. Dilworth Paxson attorneys are representing the county while Phone Recovery Services is assisting with data analysis. Tax dollars are not being used to fund the lawsuit, according to Delaware County officials. Officials also say the county won’t owe any funds to either firm if the lawsuit is unsuccessful.

NBC10 reached out to both Verizon and Comcast for comment on the lawsuit.

“Comcast takes its tax and fee collection obligations seriously,” a spokesperson for Comcast wrote. “We will review this complaint when we receive it.”

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