Tuesday, April 13, 2004 - The Progress & Freedom Foundation Blog


Verizon has announced that it will join SBC and Bell South in imposing an additional monthly regulatory (read, USF) fee on DSL service. As these companies previously "absorbed" these costs in an effort to close the broadband gap with cable providers, the new fees are probably not the most politically savvy way to pass along a rate hike.

Viewing truth-in-billing across the telecom industry as a whole, there's plenty of shenanigans and blame to go around. Last month, NASUCA filed a petition for a declaratory ruling requesting that the FCC prohibit, in essence, carriers from including any line item charges above and beyond those imposed by regulators. Beginning in April 2003, the FCC has allowed carriers to recover administrative and other non-regulatorily prescribed costs through line item charges. NASUCA's brief describes how wireless and long-distance carriers have taken the bait and are assessing "regulatory assessment fees" or "carrier cost recovery charges" for anything ranging from property taxes to court proceeding costs. According to the brief, "carriers can hide their inefficiencies in line item charges while maintaining and advertising monthly and usage rates that are as low as, or even lower than, their competitors."

I agree, but line item charges should be limited to taxes such as USF for reasons that depart from those advanced by NASUCA. Explicit surcharges will not allow regulators to hide the ball as USF demand continues to grow, leaving open the possibility that public pressure will be brought to bear on reforming the system before it collapses on itself.

Ultimately, real truth-in-billing can occur only when there is truth-in-regulating. Seven dollars for caller ID service on top of a regulated basic phone line belies any claim that consumers can make informed choices once these billing issues are clarified (assuming, of course, that alert customers don't just jump ship for VoIP or full wireless substitution instead).

posted by @ 11:58 PM | General