Stacked principal-agent problems

The…Obama administration accused Sprint today of overcharging the government more than $21 million in wiretapping expenses.

Sprint, like all the nation’s carriers, must comply with the Communications Assistance in Law Enforcement Act of 1994, which requires telcos to be capable of providing government-ordered wiretapping services. The act also allows carriers to recoup “reasonable expenses” associated with those services.

Sprint, of Overland Park, Kansas, inflated charges approximately 58 percent between 2007 and 2010, according to a lawsuit (.pdf) the administration brought against the carrier today.

There is more here, hat tip goes to Vic Sarjoo.


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