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Sprint Removes Three Fees, Adds Two New Ones

Company claims new charges will "defray costs"

By Martin H. Bosworth
ConsumerAffairs.com

December 17, 2007 

However, the company also sent along a lump of coal by offering two new fees -- an "administrative charge" of 75 cents monthly, and a "regulatory charge" of 25 cents.

According to Sprint, the administrative charge will "help defray various costs imposed on us by other telecommunications carriers" while the regulatory charge is "being assessed to help defray costs of various federal, state and local regulatory programs."

These charges are not taxes and are not amounts we are required to collect from you," the carrier said.

While customers may receive a minuscule savings from the new fees, what are they and why, if the company isn't required to charge them, does it do so?

The mysterious fees, or "unfees" as disgruntled customers call them, are basically thinly disguised price increases or, to put it a little more generously, ways to pass on increased business costs to consumers. It's a common, if unpopular, practice and is not limited to the wireless industry, though wireless carriers are certainly fond of it.

When Verizon won temporary relief from paying into the Universal Service Fund (USF), rather than pass on the savings to customers, it promptly replaced the USF fee with a new fee that almost exactly mirrored the USF fee.

BellSouth tried to do the same but both telecoms backed down after Federal Communications Commission (FCC) chair Kevin Martin threatened an investigation for violating the agency's "Truth In Billing" requirements for customer service charges.

Congress attempted to gain some relief for consumers when Senators Jay Rockefeller (D-WV) and Amy Klobuchar (D-MN) introduced the "Cell Phone Consumer Protection Act of 2007," which would ban the charging of any extra fees beyond what government regulations mandate, and require wireless carriers to spell out fees in clear, comprehensible language.

But the bill has languished since its introduction, with no sign of forward motion before Congress adjourns for the holidays.

Sprint, meanwhile, bowed to consumer pressure and competition from its larger rivals AT&T and Verizon Wireless when it recently announced that it would prorate its contract cancellation fees and not charge customers who want to change plans by locking them into new contracts.

But the "unfees" continue to frustrate those who want to pay a flat, fair price for the services they get. As one commenter at Broadband Reports put it, "If I go to a grocery store to buy something, I see the price that is charged, and I pay a sales tax ... If I wanted, I could look at other stores carrying similar items, and comparison shop based on price, knowing that another store isn't showing an artificially low price that includes an 'unfee.' "

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