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DSL Surcharge Plan Abandoned by Major Carriers

thedletterman writes to mention a USAToday article about the proposed surcharges on DSL lines. The FCC stepped in just as major carriers Verizon and BellSouth made moves to add a $1-$3 surcharge to their DSL services; they were coincidentally to add this charge just as the Universal Service Fund fee was being removed from all DSL services. From the article: "Verizon, in a statement, said it was dropping the new fee as a result of feedback from consumers: 'We have listened to our customers, and are eliminating the charge.' Gene Kimmelman of Consumers Union had another explanation: 'They got caught red-handed in a blatant consumer rip-off. Only under the pressure of regulators cracking down on them did they back off from this unwarranted charge.' The FCC last week sent Verizon a 'letter of inquiry,' the first step in a formal investigation."

26 of 204 comments (clear)

  1. Say what? by tomstdenis · · Score: 4, Insightful

    They wanted to add a charge under the guise of some FCC fee after the fee was eliminated?

    Sounds about right. Who's the terrorist now?

    Tom

    --
    Someday, I'll have a real sig.
    1. Re:Say what? by Anonymous Coward · · Score: 5, Insightful

      They wanted to add a charge under the guise of some FCC fee after the fee was eliminated?
       
      It wasn't going to be "under the guise of some FCC fee" at all. That would be one step above their backhanded methods to an outright fraud that would have probably gotten someone some jailtime.
       
        Who's the terrorist now?
       
      In what fashion? Please, if you're one of the people who thinks that the term is thrown around way too much now don't start being a hypocrite and thinking it's cute. It's simply not.
       
      I hate to defend Verizon in light of this news article and I think there is a lot of crap that goes on in the name of better telecommunications that is simply hype. Despite all of this, in the face of the cable industry and their "phoney" ad campaign, Verizon is a fairly honorable company compared to their competition. In a system where we have little choices to be made in the case of broadband internet providers Verizon is probably one of the best companies that I know of. Certainly a sight better than Comcast and their incompetence or their outright lies.

    2. Re:Say what? by jank1887 · · Score: 4, Informative
      It wasn't going to be "under the guise of some FCC fee" at all

      Correct. Here's the cut and paste from my notice:

      Effective August 14, 2006, Verizon Online will stop charging the FUSF (Federal Universal Ser vice Fund) recovery fee. We will stop being assessed the fee by our DSL network suppliers. Therefore, we will no longer be recovering this fee from our customers. The impact of the FUSF fee is as follows: for customers of Verizon Online with service up to 768Kbps, the fee eliminated is $1.25 a month; for customers of Verizon Online with service up to 1.5 Mbps or 3Mbps, the fee eliminated is $2.83 a month (based on current FUSF surcharge amounts). On your bill that includes charges for August 14, 2006 you will see either a partial FUSF Recovery Fee or no FUSF line item at all, depending on your bill cycle.

      Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds.

      On balance your total bill will remain about the same as it has been or slightly lower.

      It was their hope that the last line was all that anyone would really notice when the bill finally came. "Hey, my bill went down a nickel! Cool!". It was some Verizon exec's way of saying, "hmmmmm... people are willing to pay our prices, and here's a slick little way to add that dropped FUSF fee right into the Profit Margin. No one will be the wiser! We'll call it a 'cost offset'. AND, we'll let them know the 'initial price'. I bet later we can tweak it up a bit at a time, and still keep our advertised rates the same. W00t!"

      Glad the pressure got to them.

    3. Re:Say what? by RevDobbs · · Score: 5, Interesting
      Verizon is a fairly honorable company compared to their competition. . . . Certainly a sight better than Comcast and their incompetence or their outright lies.

      I'm not a Comcast customer, so I can't speak on them.

      I was, however, a Cablevision internet ("Optimum Online") and Verizon DSL customer at the same time for about a month, back when Verizon was still running the "Cable is shared and teh slowz!" advertisements (that the FTC later made them stop running). I learned first hand (and demonstrated to anyone I could get over to my apartment) how much faster cable was than DSL -- with out the hassel of putting filters on all the other phone lines, or of PPPoE.

      When I finally called to cancle the service, they tried to keep me on by offering everything from faster service (I didn't even realize that faster DSL was an option) to one year of reduced fees. When I finally said "Look, I have cable, and it is faster with large data and has a lot less lag", the VZ rep put the cancelation through with any further protest. Even Verizon's own employees know that they can't compete with cable internet on a serice basis.

    4. Re:Say what? by grapeape · · Score: 4, Informative

      I recently switched back from DSL to cable after initially falling for the "cable is slow because it shared" campaign. After the AT&T merger my DSL bill went from $29 to over $100 month for "pro" DSL with 1 static IP. When I called to see what was up they acted quite rude and firmly stated the "deal" I had was no longer avaialable and had the nerve to say I should be grateful that my rates stayed unchanged so long after the merger, so I hung up, called the cable company and ordered the all-in-once service. Digital Cable, Internet and Digital Phone and its about half what my bills were separately. When I called to cancel my phone service suddenly AT&T wanted to talk...evidently this is happening alot since I was bounced from a "customer retention specialist". They offered deal after deal and just didnt seem to want to accept "shut it off" as an answer.

    5. Re:Say what? by wtansill · · Score: 4, Informative
      verizon communications is the single largest builder and owner of fiber in the entire country. however, they are forced by the government to operate at a loss. since they are considered "communications",
      Do tell? Well, for operating at a loss, their execs sure are well paid. For instance, in 2005, salary ans other compensation (rounded) for the top five VZ execs were:

      Ivan Seidenberg, Chairman, CEO: ~ $19,400,000
      Lawrence Babbio, Jr. Vice Chairman/President: ~ $8,600,000
      Dennis Strigl EVP, Pres/CEO VZ Wireless: ~ $10,100,000
      Willam Barr EVP/General Counsel: ~ $15,200,000
      Doreen Tobin EVP/CFO: ~ $6,700,000

      Source: SEC Def/14-A filing
      http://www.sec.gov/Archives/edgar/data/732712/0001 19312506058648/ddef14a.htm

      Hard to justify those salaries for a company operating at a loss, don't you think?
      --
      The contest for ages has been to rescue liberty from the grasp of executive power. -- Daniel Webster
  2. Let me be the first to say.. by Rob+T+Firefly · · Score: 5, Funny

    Veriz0wn3d!

  3. Darn by jayhawk88 · · Score: 4, Insightful

    Now they're going to have to wait 6 whole months and spend 10 whole minutes coming up with another lame-ass random fee to tack onto your bill!

    1. Re:Darn by avdp · · Score: 5, Informative

      Or... just raise the base price of the service by $2.70.

      Frankly these fees are ridiculous. Everytime I call a utility company for a quote on phone or broadband services, I specifically request they add all their random little fees and made-up taxes in any price they quote me. It usually takes a little bit of scrambling from the salesperson to get me that number, but they've always been able to tell me. I make my decision accordingly.

      The best so far: Verizon Fios (fiber, if you're lucky enough to have it available in your area). It was $35/month, no fees, no taxes (not even sales taxes!) charged to my credit card monthly. But I moves to the other side of town about 8 months ago and there no Fios available on my street. I do understand that they started charging taxes and/or fees now. I guess it was good while it lasted.

  4. Finally by yellekc · · Score: 5, Funny

    The FCC stepping up to actually protect consumers? Guess the Telcos need to buy off some more commissioners...

  5. Text of the original Verizon explanation by rickkas7 · · Score: 5, Informative
    Here's the specious explanation that Verizon originally gave for the "Supplier Surcharge":

    Dear Valued Verizon Online Customer,

    Effective August 14, 2006, Verizon Online will stop charging the FUSF (Federal Universal Service Fund) recovery fee. We will stop being assessed the fee by our DSL network suppliers. Therefore, we will no longer be recovering this fee from our customers. The impact of the FUSF fee is as follows: for customers of Verizon Online with service up to 768Kbps, the fee eliminated is $1.25 a month; for customers of Verizon Online with service up to 1.5 Mbps or 3Mbps, the fee eliminated is $2.83 a month (based on current FUSF surcharge amounts). On your bill that includes charges for August 14, 2006 you will see either a partial FUSF Recovery Fee or no FUSF line item at all, depending on your bill cycle.

    Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds.

    On balance your total bill will remain about the same as it has been or slightly lower.

  6. Moo by Chacham · · Score: 5, Interesting

    Traditionally, i'm against government stepping in. I'm a firm believer that the market should (and will) regulate itself, only requiring laws breaking monopolies on limited necessities. But with consumer's getting more stupidly passive, and companies more ingeniously aggressive, i'm left without a force to join, and the companies, who as a result of frequent changeover and short-termed decisions, never think of the customers as more than a quick way to make money, we need a government body stepping in.

    We are no longer practising Capitalism. This is more of a MoneyGrabism.

    1. Re:Moo by gfxguy · · Score: 4, Insightful

      I agree - the free market is great when it's actually free. When there's collusion (price fixing), then I can support government intervention.

      --
      Stupid sexy Flanders.
    2. Re:Moo by Intron · · Score: 4, Interesting

      Let's try an experiment in letting market forces rule. I set up a PBX and connect up the 6 houses in my neighborhood. I get a bill from the phone company and apportion it based on fixed cost + per minute to the folks using the phone. I will also provide backup VOIP for when the phone goes out or all lines are busy, and a UPS for power outages. My guess is that I have just cut our phone bills in half.

      The experiment is to see how many days it takes for the government and phone company to come out and cut the wires and arrest me.

      --
      Intron: the portion of DNA which expresses nothing useful.
    3. Re:Moo by TheCarp · · Score: 5, Insightful

      I don't know about stupidly passive. I think its easy to say that but... I think Scott Adams of Dilbert Fame had it right in one of his books (I believe it was "The Dilbert Princible")... the world is far too complex to be smart all the time.

      I mean ok... the DSL provider just switched around a couple of fees. One no longer being recovered, one new one to line their own pockets.

      The difference is minor... probably about what I spend on my morning coffee. However thats one bill, from one service provider. Take my situation... I pay electric, gas, cell phone, cable, a mortgage, collect rent, collect 4/5 of the bill money from my roomates, water bill, house insurance.

      Theres alot of room in there for a change to just go unnoticed, because I also work 40 hours, study martial arts, and try to have a social life, including seeing my friends and dating. Never mind spending some time here and there with the family.

      Um... believe it or not, I don't have that much time to spend pouring over each and every line item on each and every bill. In fact, if it wasn't for gnucash, I might not have a clue as to what my finances really looked like overall.

      So yah, I could easily get extra fees tacked on and not notice. Does that make me stupidly passive? I don't think its that so much as overly active. My time is spread pretty thin sometimes. I think that is true of alot of people.

      -Steve

      --
      "I opened my eyes, and everything went dark again"
    4. Re:Moo by tinkerghost · · Score: 4, Insightful

      Actually, chances are pretty good he would be arrested. Phone service is extremely regulated - more to keep new people out than to actually control the people already in.
      Office parks and MSB are all corperations controlling the buildings that are being wired. As such they are in effect wiring their own property. Also most MSB's actually don't own the PBX, the TelCo just installs one there for convienence. If he were to wire his own house with an Asterisk server - no problems, but reselling that service outside his house is likely to get him in trouble.

  7. Happy Happy Verison Land by mobiux · · Score: 4, Funny

    "we have listened to our customers, and are eliminating the charge."

    I want to live in Verison world, where unless people tell you otherwise, they want to be ripped off.

    I just can't comprehend how fucked up corporations are.

  8. blame the government, not us by spyrochaete · · Score: 5, Informative

    These "service charges" should be illegal as they stand today. Many Canadian cellular carriers use this very same practise. There was some sort of meeting between the heads of the carrier families where they all agreed to introduce a "government licensing fee" or "federal satellite licensing fee" of $6.95 per month. This went on for years. The government finally perked up and said "Hey, we don't charge that licensing fee" and demanded the charge to be dropped (though not refunded, naturally). The carriers eagerly complied by renaming it a "system access fee", and it is still in place today.

    These fees are nothing but a vehicle for false advertising and a covert way to increase prices unannounced. Carriers can legally advertise a plan to be $20 per month when in fact it is $26.95. Thus, no carrier can afford to be honest or they will appear to be the most expensive service.

    Hello, legislation?

  9. Listening to the customers and dropping the charge by Danga · · Score: 4, Insightful

    Riiigggght... more like they got busted attempting a money grab and are taking the charge away to save face. I mean what do they think there really are customers who like paying 10,000 extra little fees on top of the advertised "$29.99" or whatever per month. If they really wanted to listen to the customers then they would get rid of all of the additional fees that customers have gotten used to as well.

    How many people here hate getting a phone bill and while you signed up for some great deal such as $29.99/month the real charge with all of the extra hidden fees is more like $39.99? That pisses me off to no end and I wish they would eliminate doing that completely but I know the chances of that ever happening are nil.

    --
    Hey, there is only one Return and it's not of the King, it's of the Jedi.
  10. More on this by dcgirl20006 · · Score: 4, Interesting

    This is the website from Kimmelman's team, has a bunch of info on the press release and the fees.

  11. This logic is sadly familiar by The+Monster · · Score: 5, Insightful
    It seems like every time there's an election, there's a referendum on one tax or another. There is a particularly nasty trick that the tax advocates play:
    Year X: This tax is temporary, only for Y years.
    Year X+Y: This isn't really a tax increase, because it replaces the tax passed in Year X. Your tax bill isn't going to go up if this passes.

    Of course, it's usually a different group saying these two things, so that the lie isn't as blatant.

    The regulated monopolies are so in bed with the government that they start to think the same way.

    --

    [100% ISO 646 Compliant]
    SVM, ERGO MONSTRO.

  12. Simple Economics by Hoi+Polloi · · Score: 4, Funny

    Didn't you study economics? Costs such as this used to be called "The cost of doing business". In today's modern economy however it is now known as "Sticking it to you as hard as we can and you can't do shit about it".

    I look forward to seeing on my bill:
          $5 Gas for installation truck fee
          $10 Catered lunch for marketing dept fee
          $20 Lack of alternatives in the market fee
          $3 Sending you this abusive letter fee

    --
    It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
  13. Verizon enables criminals by Quiet_Desperation · · Score: 4, Interesting

    I'm dropping Verizon land line service in favor of VOIP in a week or so. I got an expensive collect call charged to my bill last month, a call I never accepted, and the date/time stamp showed it supposed ocurred when I was at work (and I live alone). Verizon's response was "Oh, we just poass those charges from the original collect call company." Contacting the other company produced nothing, and a quick online investigation shows that they are the source of many phone line scams.

    Fuck you, Verizon. By passing on the charges and doing NOTHING for your customers, you are an enabler, and just as guilty as the other company. Fuck you, fuck the cocksucking MBAs who made you what you are, and kiss my lilly white ass.

  14. Re:comcast ha by Phreakiture · · Score: 4, Interesting

    This is one of the things I like about Road Runner.

    I was quoted $44.95/month.

    My bill is $44.95/month.

    See the connection? No fees, no taxes, no charges besides the $44.95/month. The service is pretty good, too.

    Now, before someone suggests that I look at my cable bill for the hidden fees, or asks about what I pay for my cable service, I think I should point out that I do not subscribe to cable (I get my TV fix through Dish Network). It is not well known, but you can unbundle Road Runner from TW Cable TV, and I have done so. When you do so, you will pay exactly $44.95/month for the middle-tier Road Runner residential service, and not a cent more.

    --
    www.wavefront-av.com
  15. Modern life = too complicated for that by dal20402 · · Score: 4, Insightful

    educate the people to start participating in the free market

    Hmmm, let's see. To run my daily life I deal with...

    • three major credit card companies
    • three major national banks
    • two giant telecommunications companies
    • two insurance companies
    • one power monopoly
    • one large property-management company
    • one federal government (student loan) bureaucracy
    • one auto company
    • 2 city, 1 county, and 1 state government
    • and the usual mix of consumer retailers and manufacturers.

    So what I need to do is drop my life's plans and ambitions (to say nothing of my job) in order to spend years learning about every little detail of each of these businesses or regulatory entities. Even if I do that, I will still have less knowledge about any one of them than any of the thousands of professional staff who have spent their careers learning the details.

    Face it. There is no way even the smartest, most willing-to-learn consumer can prevent himself/herself from being at an information disadvantage in modern society. If the consumer actually wants to live a life instead of constantly learning about uninteresting subjects, the information disadvantage will be worse. If we want to take advantage of the possibilities modern technology and finance offer us, we need to protect the consumer -- not because he/she is "lazy" but because it's *impossible* for him/her to learn all the details.

    There are now only two alternatives to regulation, as imperfect a tool as it is:
    1. large companies and government bureaucracies that are able to screw consumers at will thanks to superior knowledge, or
    2. reverting to a world simple enough for everyone to know all the details... uh, no thanks, I like having cars, computers, electricity, and plentiful food.

  16. This is nothing new... by Pollux · · Score: 4, Informative

    Phone companies will quite frequently attempt to pass off certain charges to the consumer through "fees." For example, the Universal Service Fee is a payment from you that goes directly to the FCC for the Universal Service Fund, the fund that pays for eRate, the government subsidization program that helps fund schools' telecommunication access (POTS, internet, long-distance, equipment to keep it all in order). The same thing is done with 911 access. The government bills the providers, and the providers just pass the bill onto consumers.

    When our school switched over from AT&T to a regional long-distance provider, the rep at the regional company gave me a little insight to AT&T's various "fees." Ever take a look at the "FCC Line Charge"? According to AT&T (requires flash, and you'll need to zoom in to read the thing), it is an "FCC-approved flat-rate monthly charge paid by consumers to their Local Telephone Company so that the Local Telephone Company can recover the costs, not recovered in local rates, that are associated with connecting customers to the long distance network." Now don't you love how that works? They can advertise that their phone line only costs $18 a month, then hit you up for another $11 to cover costs that are "not recovered in local rates." And how about the "Carrier Cost Recovery Fee?" AT&T just doesn't want to have to pay their own property taxes, so they pass the cost onto consumers. I was told by the rep that AT&T has been known to pass whatever fees it can to the consumer, whatever can be FCC and state approved. Even approved "expansion fees" can be funneled into paying for new office buildings that "house infrastructure."