August 30, 2006 12:34 PM PDT

Verizon drops DSL surcharge

After hearing complaints from customers, Verizon Communications has dropped plans to impose a supplier surcharge on its DSL service, the company said Wednesday.

Verizon began notifying customers earlier this month that it planned to tack on a surcharge starting Aug. 26 to cover costs associated with providing DSL (digital subscriber line) service to customers who do not also subscribe to the company's traditional phone service.

The surcharge was being added at the same time the company was no longer obligated by the Federal Communications Commission to pay into the Universal Service Fund, a federal program that helps subsidize rural telephone service and provide Internet access to schools and libraries. This fee was expected to be eliminated from phone bills.

Verizon's withdrawal of the surcharge is effective immediately. DSL subscribers who have already been billed for the surcharge will receive a credit, Verizon said.

"We have listened to our customers and are eliminating this charge in response to their concerns," Bob Ingalls, chief marketing officer of Verizon Telecom, said in a statement.

Last year, the Federal Communications Commission changed how it classifies DSL services, thus eliminating a fee that had been charged to all DSL subscribers to help pay into the Universal Service Fund.

Verizon DSL customers subscribing to the company's 768Kbps (kilobits per second) service paid about $1.25 into USF every month. Customers of its 3Mbps (megabits per second) service paid about $2.83 per month, the company said. Instead of simply dropping the fee, Verizon planned to add a new "supplier surcharge" of about $1.20 per month for the slower service and $2.70 for the faster service.

The FCC had planned to send a letter of inquiry to Verizon and BellSouth, which also proposed tacking on a new fee in lieu of the USF charge, according to Reuters News Service. BellSouth, which continued to call its surcharge a "regulatory cost recovery fee" despite the fact that the DSL service is no longer regulated, dropped its plans for a surcharge on Friday.

"I am pleased that both Verizon and BellSouth have eliminated fees recently imposed on their DSL customers," FCC Chairman Kevin Martin said in a statement. "Consumers should receive the benefits of the commission's action last summer to remove regulations imposed on DSL service. The continued deployment of broadband at affordable prices for consumers remains my top priority as chairman."

See more CNET content tagged:
surcharge, DSL service, Verizon Communications, DSL, BellSouth Corp.

16 comments

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don't worry - they'll add it back into your total bill
Your rates will go up in the future to recoup these costs!
Posted by baswwe (299 comments )
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don't worry - they'll add it back into your total bill
I would rather have it included in the base rate than as one of the many hidden fees that don't get quoted to you when shopping around.
Posted by T.Alderman (6 comments )
Link Flag
It makes one wonder . . . . .
It really makes one think, "How much were they padding that USF in the first place. If they were going to add a surcharge of $1.20 and the USF was $1.25? Sure would make me wonder. I kind of liken it to "Shipping and Handling" on mail order. When you get the product and you find out it actual cost $0.97 cents to ship and the company charged you $5.95 for "Shipping and Handling", Then you have know it is a "Profit" center for the company (kind of like extorting free money". I have often wondered why mail order companies could not charge for actual "Shipping and Handling" costs? Anybody have an answer?
Posted by techtype (25 comments )
Link Flag
Can they hear me now
I find it hard too believe that Verizion made this change due to customer complaints. I mean afterall there is no method of complaining other than writing to Verizion Wireless Attn/ Excecutive Relations P.O. Box553 Warrendale Pa. 15086.
Posted by torker88 (1 comment )
Reply Link Flag
Wireless
Verizon Wireless is a seperate division and a joint venture with another company, thats not where you are going to want to complain about DSL
Posted by Pericles21 (3 comments )
Link Flag
i guess they're not as stupid as i thought
still greedy as all hell, but not quite as stupid.
Posted by chris__anderson (23 comments )
Reply Link Flag
Would that it were that simple.
Yeah, I don't see customers complaining about a fee as a reason for it being rescinded.

When was the last time someone stopped charging something, or reduced the cost of something because people complained. (Ok, if you don't count the voter-initiated money-losing Proposition passed in Washington state where vehicle licenses only cost $30.)

If prices went down when we complained, we wouldn't be paying $3 a gallon for gas.
Posted by TV James (680 comments )
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Verizon yeah.. whatever...
Total Spin.

They probably recinded the surcharge when they found out that they would probably lose customers as well as face potential legal issues.

As a long time UUNET then MCI and now Verizon customer, I can verify that the quality of service has declined to a new low. Heck! They can't even run their USENET servers and feeds properly.

Try talking to tech support. Its a black hole.
Posted by dargon19888 (412 comments )
Reply Link Flag
Drop the charge??? And lose the profit??? Never!
Verizon and other companies like this would like to appear as benevolent but underneath it all, they are like sneaky wolves just waiting to jump on the unsuspecting public with a big rate increase to cover their profit making bottom line. Drop the charge? And lose the profit??? In my opinion, they would never do that... What will the fat cats on the top retire to live off on? Face the fact... They are as sneaky as the Ferengis... LOL ;-) Acquisition Rule #1... Always raise the price when the customers aren't watching. But first, make sure they are "asleep".
Posted by Hawk Shango (5 comments )
Reply Link Flag
Oh they did not lose too much time on that !!
I am a Verizon customer...yes they dropped that charge...But..the famous But...they added This...
So they will not lose but about 10 cents...

Hal

**********************************************

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.
Posted by zebra148 (38 comments )
Link Flag
BULL! They just hid it elsewhere
Oh yea, sure. But here's what they AREN'T saying. I've been watching Verizon's DSL for the past several months as I'm moving to an area where that is a viable option over cable for me.
Well, for the past year, they have been offering a $14.95/month sign up for the basic service, and continue that price for at least 2 years.
NOW, all of the sudden, the "deal" is $17.95/month. How about that? extra $3.
Amazing.
Screw America Again.
Posted by EmporerEJ (23 comments )
Reply Link Flag
price varies depending on the ad
The 14.95 seems to be on their web site
<a class="jive-link-external" href="http://www22.verizon.com/ForHomeDSL/channels/dsl/packages/default.asp" target="_newWindow">http://www22.verizon.com/ForHomeDSL/channels/dsl/packages/default.asp</a>

but $17.95 is also on their ads and in the weekly flyers from stores like Best Buy.
--Who knows. I believe they are making $10 profit on it each month anyway IF NOT MORE.
And try to get the advertised 768mbit download: it ain't happening: best I see is 721mbit download.
Posted by eeee (672 comments )
Link Flag
They'll add a new charge in a month...
Verizon will add a new "Surcharge Removal Adjustment Service Fee".
More than likely, someone at FCC got some call(s) from a few congressman that got emails from a few of their voters, outraged at how Verizon thinks it can just keep sticking it up the users anus. Well, they sure showed us.
Ironic that Verizon's color scheme in their logo is ..hey, the same colors as that 1939 German reich?
Posted by Below Meigh (249 comments )
Reply Link Flag
Lets get real. They retreated for one reason only...
A telco is still considered a public utility and they can't just create "surcharges" on the fly.

Clearly these surcharges were a way to hide the true cost and Verizon would most likely get nailed by the FTC for deceptive advertising.

So why open a hornet's nest?

And yes, telco prices vary by location. So that $14.95 deal you see in one area isn't the price in a different area.
Posted by dargon19888 (412 comments )
Reply Link Flag
Re: Lets get real. They retreated for one reason only...
I'm sorry, but I think the FCC should have still investigated their
motives.

More recently, I've been looking at Verizon to produce some
competition against Comcast. I'm disappointed as heck that
they'de pull something like this. It wreaks of sleeziness.

There was a time that if they (Verizon) provided a comparitvely
priced service with all the fibre they just dropped in my
neighborhood, I'd (probably) have dropped Comcast in a
heartbeat because they're managed to tick me off so bad.

At this point, I consider Verizon no better than Comcast and I'll
think twice before JUST leaving Comcast.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
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