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Verizon Joins BellSouth in Retreat From Unexplained New DSL Fee

Telcos' Response to Regulatory Relief? A "Regulatory Cost Recovery Fee"

By Truman Lewis
ConsumerAffairs.com

August 30, 2006

Net Neutrality • FCC Votes To Create Net Neutrality Rules • FCC Chairman Proposes New Net Neutrality Rules • FCC Launches Probe Of Wireless Industry • FCC Chair Vows To Enforce Net Neutrality • House Introduces "Internet Freedom Preservation Act" • Obama Promises Support for Cybersecurity, Net Neutrality • Net Neutrality Advocate Tapped As FCC Head • Internet Providers Ponder Bandwidth Limits For Heavy Users • Comcast, Cox Caught Blocking BitTorrent • Will Antitrust Law Save Net Neutrality? • Few Are Neutral in Net Neutrality Battles • Net Neutrality Supporters Testify • Comcast Blocks Public From FCC Hearing • Congress Gets Net Neutrality Legislation • Time Warner To Test Metered Pricing For Broadband • House Committee To Probe FCC • FCC To Investigate Comcast For Blocking Net Traffic • Verizon Wireless Opens Network to All Devices, Software • Comcast Sued Over Internet Blocking • Verizon Overrides Internet Searches With Its Own Results • Comcast Blocks Subscribers From Some Services • Verizon's Abortion Block Raises Net Neutrality Concerns • FTC Nixes Net Neutrality • Wireless Spectrum May Hold Key To Net Neutrality • Telcos Lift Block On FreeConference.Com • FCC Takes Another Look at Net Neutrality • AT&T Blocks Calls To Competing Conference Call Service • Study: Ending Net Neutrality Would Hurt Consumers • FCC, FTC Challenged To Protect Net Neutrality • Net Neutrality Back on Congress' Agenda • Net Neutrality Opponents Step Up PR Blitz • AT&T Trumpets New TV Service • Verizon Joins BellSouth in Retreat From Unexplained New DSL Fee • FCC Nudges BellSouth Into Giving Up New DSL Fees • FTC Head Urges "Caution" On Net Neutrality • Net Neutrality May Derail Telecom Bill • Google: No Net Neutrality Means Antitrust Fight • Senate Prepares for Net Neutrality Showdown • Congress Moves Quickly To Satisfy Telecoms' Net Neutrality, Cable Entry Demands • Net Neutrality Gets Its Day In Congress • Net Neutrality Wins Committee Vote In Congress • Net Neutrality Attracts Surprising Allies • Congress Wrestles with Net Neutrality

Like BellSouth, Verizon has retreated from its plan to impose a surcharge for DSL service after the normally compliant Federal Communications Commission (FCC) sharply questioned the fee.

"We have listened to our customers," said Verizon executive Bob Ingalls, perhaps momentarily overlooking the eight-page letter the FCC sent to Verizon and BellSouth.

Ingalls said a small number of customers who have already been billed for the surcharge will receive a credit.

Last year, the federal government changed a rule that had required DSL subscribers to pay into a federal fund that subsidizes phone service in rural and low-income areas, intending to shave a dollar or two off subscribers' broadband bills.

Instead, just as the federal fee expired, Verizon and BellSouth tacked on a new "supplier surcharge" fee -- Verizon's euphemism -- ranging from $1.20 to $2.70 per month, almost exactly the same as the eliminated fee. BellSouth called its extra take-home pay a "regulatory cost recovery fee."

Embarrassed and angered by the blatant consumer gouging as the fall election nears, the FCC sent an eight-page "letter of inquiry" to both BellSouth and Verizon asking whether the new fees complied with the FCC's "Truth-In-Billing" requirements for clearly explained and understandable customer charges.

After chewing on the question for a few days, Verizon and BellSouth apparently couldn't come up with a credible answer.

"The old-line telco tubbies talk a lot about listening to their customers but they are so accustomed to having their way with Congress and the FCC that they clumsily, stupidly and ineptly embarass their patrons by imposing an outrageous and indefensible fee as the party in power wrings its hands over voter anger at the current Congress' war on consumers," said one longtime D.C. public affairs practitioner.

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