Untangling Verizon's Doublespeak Explaining How New Fees Replace Old Fees

from the let's-try-that-again dept

Verizon and the other telcos have a long history of misleading doublespeak when they try to explain their actions -- and we have yet another example today. Earlier, we mentioned how Verizon seemed to be taking its pricing cues from The Onion, with their decision to add in a new "supplier surcharge" that almost exactly matches the Universal Service Fund fees that they are no longer required to charge customers as of the end of this month. It's been shown by a few observers recently that the Universal Service Fund basically just goes right into the coffers of the telcos, and does plenty to hold back universal service than to encourage it -- so perhaps it's no surprise that the telcos would simply tack on a new meaningless fee to replace the old one. They have a long history of hiding price increases behind made up fees -- so in this case, they're simply replacing the USF fees with their own made up fee, that has even fewer restrictions (i.e., none, as opposed to very little) on how the fee money is used.

However, where the story gets really good is in Verizon's explanation for the new fees. While claiming it's just a shocking coincidence that the fees almost exactly match the amounts of the dearly departed USF fees, a spokesperson claims: "new costs that we've developed over the past year as we've been developing and delivering this standalone DSL service. That service doesn't have the benefit of the revenue that was coming in from voice." It's not at all clear what that means. She says the company "developed" new costs, which makes it sound like it purposely came up with these new costs. At the same time, she references the standalone DSL product, which Verizon has resisted rolling out for some time, even though there's been pretty strong demand. The idea that it should add additional costs to offer DSL without a phone line seems pretty silly -- especially since others have done it for years. What the quote is really saying is that Verizon is still upset that its traditional voice line business is in trouble, but Verizon can't admit it publicly as it would cause investors to beat down the stock. For any normal business, if your basic costs go up, you simply increase the prices you charge. You don't add in some random meaningless and totally unexplained "fee" to cover those costs. Unless, of course, you're trying to pretend you keep lowering prices so that you can claim to lawmakers that there really is competition in a market where there is very little. If that's the case, you need to keep adding in fake fees to raise revenue, while pretending that the "competition" is forcing you to lower prices. And, what better way to sneak in a fee than to replicate nearly the exact dollar amount of the fee the government no longer requires you to collect -- and then just sending it directly to your own coffers?


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Tek'a, Aug 22nd, 2006 @ 12:35am

    thinkspeak

    "We Have A Supplier Surcharge, We Have Always Had A Supplier Surcharge"

    "new costs that we've developed over the past year as we've been developing and delivering this standalone DSL service. That service doesn't have the benefit of the revenue that was coming in from voice."

    why wont any of their relations people just say it? "We want more money, without doing any more work or providing a greater level of service while keeping up our fictions of stressful competition"

     

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  2.  
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    louis, Aug 22nd, 2006 @ 2:24am

    verizon added charges

    THERE IS ONLY ONE WORD FOR WHAT THEY ARE DOING "GREED"

     

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  3.  
    identicon
    dorpus, Aug 22nd, 2006 @ 3:36am

    Clarification

    I'm using just high-speed internet through my cable modem. The cable company receives payment just for the internet. The apartment complex claims it has to charge me an additional $40 per month for the cable TV. The cable company says that is between me and the apartment complex. What laws can I quote to say that the apartment complex cannot charge me this fee?

     

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  4.  
    identicon
    Grab, Aug 22nd, 2006 @ 3:41am

    from my inbox

    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.
    For more information, see the Announcement in the Help section of Verizon Central, located at http://central.verizon.net

    We regret the need to add this Supplier Surcharge, but we thank you for choosing high speed Verizon Online DSL. We appreciate and value your business.

    Sincerely,


    Verizon Online
    Broadband Customer Care Team

     

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  5.  
    identicon
    voidmind, Aug 22nd, 2006 @ 5:51am

    It should be illegal

    A company should not have the right to advertise a service at a certain price and add a mandatory fee. This is just like taxation and only the government should be allowed to do that.

     

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  6.  
    identicon
    Emilio, Aug 22nd, 2006 @ 5:54am

    Timing

    I JUST switched to Verizon DSL at the beginning of August. As I read the above email, that means I won't start seeing this fee until next August.... We'll see.

    Basically, I'm guessing that when they innitially priced their DSL services, they were counting on piggybacking it for free on a physical infrastructure that was already paid for by POTS. As POTS customers have gone to VOIP and/or cell-only, they are still faced with the same maintenance costs for the lines and equipment. They're just shifting some of those costs to DSL users, who now represent a larger total proportion of the physical plant's use. It's just accounting, they were probably considering having to do it anyway. When the federal fee was eliminated, that would obviously be a propitious moment, when we would feel the least pain.

     

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  7.  
    identicon
    Anonymous Coward, Aug 22nd, 2006 @ 6:14am

    Yeah, everyone wants a 'piece of the action'.

    That's ok - I know NOT to go with Verizon at least.

     

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  8.  
    identicon
    Traveler, Aug 22nd, 2006 @ 6:15am

    Re: Timing

    Emilio - I think your explanation is exactly right. POTS usage is going down across all providers and the maintenance costs are not changing if not going up. They are trying to recover the revenue for use of the infrastructure....somehow....in order to maintain their margins. Of course, they can't just come out and say that so they hide behind "service provider fees."

     

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  9.  
    identicon
    Permanent4, Aug 22nd, 2006 @ 8:47am

    Ummmm... Verizon does offer standalone DSL.

    At least, they offered me standalone DSL in Durham, NC. They call it "Dry Loop DSL." I know, because I bought it from them, and it works just fine so far.

     

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  10.  
    identicon
    Anonymous Coward, Aug 22nd, 2006 @ 8:48am

    Re: Clarification

    I dont think you need to quote a law. I would simply write the BBB and the Attorney General as they appear to be fraudulantly charging you for a service that even the cable company says they don't need to charge.

     

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  11.  
    identicon
    alexander s, Aug 22nd, 2006 @ 9:48am

    Re: Timing

    Your comment would ring true if Verizon wasn't charging me for POTS access every month even though there's no phone attached to the line.
    I don't need, or want, their telephone service. I do need their DSL. To get the DSL I have to buy the POTS. If a $15/month telephone service can cover the cost of their infrastructure then surely a $40/month internet service could just as easily cover that cost.

     

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  12.  
    icon
    Mike (profile), Aug 22nd, 2006 @ 10:58am

    Re: Ummmm... Verizon does offer standalone DSL.

    At least, they offered me standalone DSL in Durham, NC. They call it "Dry Loop DSL." I know, because I bought it from them, and it works just fine so far.

    Yes, they're offering it in some places, but very few and only after many, many, many delays.

     

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  13.  
    identicon
    Rick, Aug 22nd, 2006 @ 10:58am

    Standalone DSL - BAH

    I attempted to order standalone DSL from SBC (AT&T). After 45 minutes of them transfering me from rep to rep, none knew what to do or that it was even an option, I finally got someone to give me a quote.

    $44.00/month for the 1.5mbps service

    This is the same company advertising $12.95/month 1.5mbps DSL service all over the net - but you have to 'bundle' it with their local service PLUS half a dozen unwanted 'features' - bundle price works out to $46/month with a 15 month contract.

    Unbundled DSL is $2 less than bundled DSL with phone service.

    I realize it's legal, but it still felt like borderline extortion.

    I happily went with the $30/month 5mbps CABLE internet and paid Skype $38/YEAR for a 'phone number' so people could call me over VOIP.

    The Telcos can die a long and well deserved death, I don't care to be ripped off anymore, lied to, extorted or otherwise and I AM NOT signing any more 2 year 'contracts.'

    If more people spent 15 minutes a day calling the phone company up and trying to get a better deal, without a contract - they'd change - eventually.

    Picture 100,000 phone calls a day to pressure them....

    Why don't you call and complain?

    If they don't make you happy, there are alternatives now. Use them.

     

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  14.  
    identicon
    bernie, Aug 22nd, 2006 @ 11:42am

    seems to me this is another example of a regulated company repeatedly attempting to return to the basic economic controls of the marketplace: "What the Market Will Bear." They'll keep it up until smacked, then send out a tentacle in another direction to maintain its income, until that becomes troublesome, and so on. Market force control is fine, as long as the customer has the option of using a competitor. How many competitors are doing similar things? How many alternatives do you really have?

     

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  15.  
    identicon
    Razmear, Aug 22nd, 2006 @ 4:04pm

    Double The Profit?

    If I'm understanding this correctly, and maybe I'm not, the VOIP companies have to pay 7% into the USF, which goes to the Telco's, then the Telco's that are no longer required to charge USF are also adding new fees that bring in the same amount of cash, so they are staying even on their own books, plus getting a 7% bonus take from the VOIPs?

    If I'm understanding this correctly, then it sounds like a tax on VOIPs that is given directly to the Telco's.

    Please let me know if I'm mistaken.

    eb

     

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  16.  
    identicon
    hometoast, Aug 24th, 2006 @ 5:11am

    Re: Standalone DSL - BAH

    This is the problem: I have no cable drop any where near my neighborhood. VZ is the phone or DSL provider available to me as well. I could call the call center and bitch out a minimum wage call center employee but I fail to see how that would really help. I'm stuck and screwed.

     

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  17.  
    identicon
    Andrew Gearhart, Aug 24th, 2006 @ 5:16am

    Re: Re: Ummmm... Verizon does offer standalone DSL

    The key to getting "dry loop DSL" from Verizon is to talk to their Business DSL department. If you talk to them, they will set you up in virtually every market.

    Given what they're doing though... be wary of their pricing schemes. They're less than our cable company on the price... and the quality of the connection is better... but I have to say that I had to ask the question on taxes and surcharges more than once when I signed up. The business DSL sales folks were great though.

     

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  18.  
    identicon
    John, Aug 24th, 2006 @ 1:50pm

    Call and complain

    Hey, you're not going to get them to waive the stupid surcharge, but you can cost them $1.20 every month by calling and complaining to a live person for a few minutes.

    Next time you're in line at the movies, or waiting for your laundry to dry, or whatever, call Verizon and demand to know why they won't just include the surcharge in the base rate. Demand to be told how much you were billed in surcharge last month. Demand to be told how much you will be billed for your surcharge next month. You won't get any satisfactory answers.

    They just keep asking, "Is there anything else I can help you with on your account sir?" Just say, "Yes."

    Then ask another inane, slowly delivered, unanswerable question. What's your record?

     

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  19.  
    identicon
    Mark in Tampa, Aug 27th, 2006 @ 5:44pm

    Canceled Verizon

    This little Fee tid-bit was a drop in the bucket compared to what we just went through with verizon. Canceled everything! Phone and DSL and went with Brighthouse for TV, phone, and internet. For those with no cable close by there is now satelite internet; wildblue or something like that! I voted with my dollar bill and verizon will not get another!

     

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  20.  
    identicon
    Former Verizon Customer, Sep 1st, 2006 @ 9:24am

    As soon as I got the double-speak memo from Verizon I called and cancelled my service and told them this was the reason. They offered me a free month of service but I declined so they offered me two months.

    I told them it's not at all about the money and they are welcome to charge as much as they want for their service. Frankly I'd be willing to pay more for the service if they just honestly raised the price. It was the deception I objected to. I refuse to do business with people or companies that don't meet minimum standards of honesty.

     

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  21.  
    identicon
    Daiku, Sep 2nd, 2006 @ 2:43pm

    Verizon: The "Microsoft" of telco's

    I dropped Verizon cell service a year ago because of their brain dead disabling of bluetooth functions so they could route basic functions for a fee over their network. Seems to me they are just as slimy with this carrier fee. I dont' call it greed, I call it theft!

     

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  22.  
    identicon
    sue, Feb 20th, 2007 @ 2:54pm

    replacing old phone

    recently my phone was tossed in the hot tub, called verizon and they are charging me 50.00$ to replace it? what the hell is up with that can`t even get a different phone, any thoughts?


    sue

     

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  23.  
    identicon
    Devlin, Mar 2nd, 2007 @ 4:45am

    Re: replacing old phone

    Is it really Verizon's fault someone was careless and trashed the phone?

    Was it a Verizon employee who threw it in the hot tub or instructed someone to do it?

    That's like hitting something with your car then crying to the car dealer where you bought your car because they won't replace the damaged part(s) of your car for free.

    Devlin

     

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  24.  
    identicon
    Big Dave, Mar 24th, 2007 @ 6:57am

    Re: Timing

    Basically, I'm guessing that when they innitially priced their DSL services, they were counting on piggybacking it for free on a physical infrastructure that was already paid for by POTS.

    Basically, you're buying in to this bs. It's users like you, who allow things like this without complaint, who get the rest of us screwed. If enough people don't tolerate a company's bogus policy, it will be changed, or the company can go out of business. Or people like you can say 'Oh, they really need the money' or some other asinine rationalization, and we have an unfair market.

    I stopped using Verizon because of practices like this, which the company is famous for. I hope, for your sake, they keep tacking on more illegitimate fees, and you finally wake up.

     

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  25.  
    identicon
    Roxanne Brennan, Dec 30th, 2007 @ 4:35pm

    Surcharges

    Do we "have" to pay these? how is it that this company can tack on charges and say Wal Mart or any other company can't? Why should we pay this?

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Roxanne Brennan, Dec 30th, 2007 @ 4:40pm

    Re: from my inbox

    If you are no longer charging this fee, then why are we still seeing it on our wireless bill...We don't have DSL. We are locked into a 2 year contract with this damn phone and I resent being raped every time I pay that bill. Some savings, you boast 39.00 per month when it's really 47.00 and change....good job.

     

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  27.  
    identicon
    Ted, Nov 29th, 2008 @ 5:35am

    Re: replacing old phone

    The thing is that unless you have "insurance" you have to buy a new phone (in your case from them for $50) and then have it activated AT AN EXTRA FEE!!
    But if you buy a used phone,say, on eBay, you'll likely pay a lot less and activation over the internet is FREE.
    Way to go.

     

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  28.  
    identicon
    Lee, Nov 28th, 2009 @ 3:23pm

    MY VERIZON FEES AND SURCHARGES ARE MORE THAN MY CALLS

    I just got my current Verizon landline bill. I pay per call and I don't have regular long distance. MY actual telelphone calls came to $0.90, while my fees, surcharges and taxes came to $43.95. Usually my bill with fees and surcharges comes to $35.00, now it is has doubled. What a dam rip off.

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    B Samstag, Feb 6th, 2010 @ 3:32pm

    Explanation of Supplier Surcharge Recovery (SSR) Fee

    I asked DSLExtreme several times what the Supplier Surcharge Recovery (SSR) Fee is, and got the runaround. The tech persons who responded replied, but did not explain anything. I looked at the response, and said: Huh???

    Thank you for explaining it. DSLEXtreme has once again raised my renewal fee by another TWO DOLLARS for my DSL, even though the "better service" I am paying for sometimes sucks. But, the Supplier Surcharge Recovery (SSR) Fee remains at $2.88 @ month. I need to find someone who does more than respond by "opening a ticket" and does not continue to raise prices annually at no increase in quality of service!

     

    reply to this | link to this | view in thread ]

  30.  
    icon
    PCMatters (profile), Sep 23rd, 2010 @ 10:33am

    Verizon is still collecting USF's Universal Subscriber Fee's

    I still see these Universal Subscriber Fees USF on my bill. They are still collecting these fees. 100 million customers X about a buck a month equals 2 billion dollars a year. 2,000,000,000.00 they're stealing each year. How come no one is freaking out about this?

     

    reply to this | link to this | view in thread ]


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