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Sprint to pay $15.5M to settle suit over wiretap costs

Feds alleged the company overcharged for wiretapping by $21 million, but the two reach a settlement for much less.

Sprint settles with feds on allegations it overcharged for wiretapping. Sprint

Sprint has agreed to pay $15.5 million to settle a case brought by the federal government alleging the wireless carrier fraudulently inflated charges for court-ordered wiretaps.

The case, filed in March 2014 in US District Court in San Francisco, alleged that government agencies like the FBI and Drug Enforcement Agency were overcharged $21 million for wiretaps conducted by Sprint between January 2007 and 2010. It asked for triple the damages and unspecified civil fines.

But in a settlement announced by the Department of Justice on Thursday, Sprint agreed to pay much less than the government asked for. And Sprint is not admitting any wrongdoing or liability.

Sprint is one of the largest wireless carriers in the US and at times is required to hand over information to the authorities for investigations. Typically this information is gathered through wiretaps that need equipment installation -- and carriers bill law enforcement agencies for "reasonable expenses." At issue is just what "reasonable" means.

A 2006 FCC ruling clarified that carriers could only ask to be reimbursed for the cost of performing a wiretap, not of upgrades to equipment or facilities needed to do so. An investigation by the Office of Inspector General and US Attorney's office concluded that Sprint had violated that 2006 FCC ruling.

Sprint, for its part, disagrees. "We believe the government's application of the regulation at issue is in error," Sprint said in an emailed statement confirming the settlement agreement.