AT&T gets go-ahead to disconnect low-income customers

AT&T can begin disconnecting phone service for low-income customers who buy pre-paid service through a third-party reseller that hasn't paid its bills to AT&T, state regulators said today.

The N.C. Utilities Commission gave AT&T the go-ahead to disconnect customers served by Freedom Communications, also known as Tennessee Telephone Service. Freedom filed for bankruptcy in August and has just nine customers left in this state.

Freedom is one of seven companies AT&T has been trying to collect millions of dollars in unpaid bills. AT&T sells wholesale phone lines to the resellers, who in turn sell phone service to individual customers. Freedom owes AT&T $2.9 million in nine Southeastern states, including North Carolina.

In pre-paid service, customers pay up front for a month of service in the months they can afford to pay. AT&T sells wholesale phone lines to the resellers, who in turn sell phone service to individual customers.

Collectively the pre-paid resellers had more than 30,000 customers in North Carolina earlier this year, but those numbers have been dwindling as the niche phone companies struggle financially and don't market their services.

In September, the utilities commission authorized AT&T to disconnect low-income customers of LifeConnex, another reseller that specializes in selling pre-paid service to low-income customers. LifeConnex owed AT&T $1.4 million and failed to pay.