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As far as the modem thing goes, probably incompetence. However, there were quite a few scams which involved adding $1 or $2 charges to the phone bills of millions of customers on the theory that most people wouldn't bother to fight it.
If I remember correctly, this is why you have a line of text on your phone bill assuring you that your phone cannot be disconnected over a billing dispute. This is probably a combination of a response to a regulatory decision over the various phone scams and the fact that you can now move to a different local carrier.
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