Verizon and BellSouth shamefully retract USF "replacement" fees

In case you haven't been following the exciting world of telecom regulation lately (and really, why would you?), the FCC recently mandated that DSL providers no longer have to pay into the Universal Service Fund that's meant to subsidize rural and low-income phone service (and that may induce all kinds of pork-barrel spending, but that's a whole other story right there). Anyway, the elimination of this surcharge was supposed to be passed along to consumers in the form of lower monthly bills -- and many companies, including AT&T and Qwest, did just that -- but the sneaky suits over at Verizon and BellSouth decided to keep charging customers almost the exact same fee, though for different reasons. Verizon claimed that it had "developed new operating costs" in the previous year, justifying this so-called "supplier surcharge," while BellSouth began calling theirs a "regulatory cost recovery fee" -- even though the USF contribution regulation no longer existed. Both companies offered up some confusing doublespeak as to why these new, identical fees came into play at the exact same time that the USF fee was withdrawn; ultimately, however, pressure from consumers, the media, and the FCC forced them to retract the charges from customers' bills and issue credits where applicable. So in conclusion, we're really starting to see an encouraging trend here: first Dell implements a massive battery recall following tons of negative publicity, then Foxconn stops picking on those "slanderous" journalists in the wake of a massive public outcry, and now the telcos have been forced to mend their greedy ways after everyone got wise to their shenanigans. Therefore, that old adage actually seems to be true: a lot of the time, it's the squeaky wheel that really does get the grease.

Read- Verizon's fee
Read- BellSouth's fee
Read- BellSouth caves
Read- Verizon caves

[totalundone @ Aug 31st 2006 3:50PM]

Hmm, Earthlink is still charging USF fees and they don't even own the lines...

[nightryder21 @ Aug 31st 2006 3:55PM]

Can anybody get on the horn about T-Mobile. The proudly advertise that they got rid of the cost but now are charging me 3 times over for a new "Compliance" fee. what the fuck. I have a family plan with two line attached. I gett charged 86 cents 3 times. Once for each line and ance for the plan itself. Im pissed. Any plans on the FCC starting to crack down on T-Mobile?

[tricky @ Aug 31st 2006 3:59PM]

Reminds me that Canadian cellular carriers are still charging a $6.95/mo per phone "System Access Fee" that started out life as a regulator-imposed fee in the early days of wireless and continued on after the regulations changed.

http://www.crtc.gc.ca/eng/INFO_SHT/t1021.htm

Or how about those "TouchTone" charges on your landline? Try telling them you don't want TouchTone.

[nightryder21 @ Aug 31st 2006 4:00PM]

Never mind the above post. The USF doesnt count for Wireless plans. Any chance that might happen?

[Adam @ Aug 31st 2006 4:24PM]

I was talking with a Tax Attorney the other day about this exact issue - he indicated that the real problem that Verizon and Bell South were facing was that in terms of their accounting the USF FEE counted as "revenue" - in terms of how it was charged and collected, unlike a Tax. So by eliminating this fee it made it look like their earnings had taken a hit and they were reluctant to do that so they just replaced it with another fee.
Like it or not, it is difficult for companies to raise rates as their costs increase - that is why you are seeing more of these regulatory fees.

[dave @ Aug 31st 2006 4:52PM]

I agree it's a good thing that public outcry caused these companies to make a problem right.

My biggest concern is that by default, these companies made the initial choice to essentially raise rates (by adding surcharges) through extremely questionable methods, and with suspect timing & amount. These companies chose their shareholders & executive bonuses over their customers. It is a disturbing choice in this day and age.

[Frankenstein Black @ Aug 31st 2006 5:02PM]

Verizon, the Phone Gimp Masters strike again! At this point why is anyone surprised? Oh yea, CDMA and ESNs SUXs too...

[Mark @ Aug 31st 2006 5:06PM]

I'm tired of all these fees. I have measured phone service on my landline (25 outbound/mo) just so I could get DSL. The monthly fee is $15.....but I pay the same in fees too. So I'm shelling out $30/mo for service..not including DSL. I LOVE SBC!!!

[Perrey Z. @ Aug 31st 2006 9:17PM]

In South Florida, the largest market of operation for BellSouth every single utility company charges the so-called "Recovery Fee" from the so-called "Extensive and expensive hurricane damages"., Whatever! All the utilities are constantly creating new innovative ways of ripping off the consumers with no one to help us at the Consumer Affairs office. That as always been our sorry story.

[The Management @ Sep 1st 2006 8:21AM]

Dave said:
"These companies chose their shareholders & executive bonuses over their customers. It is a disturbing choice in this day and age."

You must be new here. ;-/ Public companies will *always* chose their shareholders over their customers. The are *legally obligated* to do so.

[GTgadget @ Sep 2nd 2006 3:22PM]

Good to hear. I almost punched my monitor when I got through reading the email from Verizon. It was the biggest load of crap I'd ever read...I hadn't been that genuinely upset for a looooong time prior to that morning.