ORLANDO, Fla. -- A federal jury could soon decide whether phone service provider AT&T will have to reimburse Orange County Public Schools for more than $1.2 million in overcharges.

OCPS filed a lawsuit against AT&T in Orange County Court, but it was recently reassigned to federal court in Orlando.

Service providers such as AT&T are federally mandated to charge school districts and libraries a lower rate for service through what's called the E-rate program.

In a lawsuit, OCPS alleges AT&T "…charged Orange County Schools some of the highest prices in the state over a number of years."

The district alleges AT&T then filed paperwork with the government, "inaccurately claiming that it complied with the FCC rules."

Diego "Woody" Rodriguez, general counsel for Orange County Public Schools, said the overcharges total more than $1.2 million. It's money the district says could have been used in classrooms and helping to teach students.

In a district with 209,000 students -- it's the ninth-largest in the nation -- $1.2 million would be enough to hire 30 new teachers at a starting salary of $39,500.

"AT&T also undermined the effectiveness of the E-Rate Program by depleting limited public funds that could have supplied other schools and libraries with access to crucial learning technologies and services,” the OCPS lawsuit reads.

"AT&T charged us $80-plus a line for service when they were providing it to others for $17," Rodriguez said. 

The overcharges were found during an audit and later investigated by the Federal Communications Commission. In response, the FCC announced it would fine AT&T $106,000 for overcharging two Florida school districts, Orange and Dixie counties, for basic phone service.

AT&T responded by saying "…the bureau's arguments, however, that we applied the LCP rule incorrectly are factually wrong."

AT&T further argues that OCPS was not entitled to the lowest rate because the district declined to enter into a service contract, and was instead obtaining phone service on a month-to-month basis.

"In this case, the school districts at issue never asked for annual contracts, never signed annual contracts, and did not behave as though they had annual contracts," AT&T said, adding that the district did not purchase service through a state consortium, which negotiated for lower service prices.

"Their argument is essentially (that) what the school board didn't know should hurt them, and that's inappropriate," Rodriguez said.

The case is pending in federal court in Orlando. Rodriguez said the district has obtained an outside law firm to assist on the case on a contingency basis, meaning the firm will only be paid if they win or settle the lawsuit. At this point, Rodriguez said AT&T has made no effort to try to settle the case.