BellSouth/AT&T Rape Consumers with USF

The Universal Service Fund (“USF”). Hmm, what’s that? Well, it’s been a fiesty little charge that’s on my cellular and telephone bill for a very long time. It amounts to a significant amount – an amount that’s always just annoyed me. First of all, the USF has been around since the early days of the telephone industry as a fund to provide for expansion into remote and rural areas of the country, including Alaska. Made sense then, today, I don’t think so.

Think about it, you can pretty much use a cellular phone anywhere, let alone get a landline. People have phones on their boats and planes and via satellite in the middle of freaking nowhere. So, how could this continue to be justified? Well, seems that they have gotten rid of it. I have to file this away in the ‘I can’t believe I didn’t hear about this’ file. So, what am I to find out tonight? That BellSouth and AT&T, and perhaps others, continue to collect the USF.

BellSouth Continues to Collect the USF after its abolishment

BellSouth, …couldn’t even be bothered to pretend that any new fee is unrelated to the end of the USF. They’ve announced that they’ll just keep on charging the exact same amount on everyone’s bill and will pocket it.

Bellsouth Continues to Charge USF

It won’t even be called a “supplier surcharge” either**. They’re not even trying to hide it. BellSouth is calling it a “regulatory cost recovery fee,” which is what they used to call it as well. Of course, there’s no more regulation, so there’s no more regulatory cost to recover. So, how does BellSouth explain that? Well, you see, it’s “to offset costs incurred in complying with regulatory obligations and other expenses. The fee also recovers costs associated with additional systems necessitated by federal regulation, as well as costs associated with monitoring, participating in and complying with regulatory proceedings, and other network and servicing requirements.”

How’s this possible? I mean, if they take it away, how can BellSouth continue to charge me the fee? Okay, curiosity’s got me. I have to find out if I’m being charged this crap. Time to log on.

Let’s Investigate

BellSouth BillOkay, they are still wacking me for it, as you can see from the image of my bill there. But it’s not just that, what are these “Network Access” fees, which just increased my line cost $6.50 each (let alone I have to pay 10¢ for each line for manholes? So, I scroll up, there are some answers, I click of What is the USF… It’s clear…

About Federal Universal Service Charge (from What is the Universal Service Charge?
Answer: The Universal Service Fund (USF) was created by the FCC to provide support to customers in high cost areas to keep local rates affordable. Factors causing higher costs include difficult terrain, low population density, and rapid growth rates. USF funds are distributed through several programs created by various FCC and stat Public Utility Commission (PUC) rules. All telephone companies providing interstate service are mandated by Congress to contribute to a percentage of their interstate and international revenues to the Universal Service Fund.

Clearly outdated! They are still telling customers that the fee is the FCC.

So, what will people do? I’ve already sent a couple emails – and hope to hear an answer soon. This is big folks, okay, I’m on their site, so why not just do some more research… First, I stumbled across their posting of a PDF of the New USF By the Numbers push in July, 2006.

BellSouth Eliminates Broadband Fee on DSL

Okay, then I found that they were eliminating the “broadband fee” on DSL Service. Hmm, I still have a fee on my DSL charges..

Here’s what it says,

ATLANTA, Aug. 25 /PRNewswire/ — Today, BellSouth announced that it is immediately eliminating a fee assessed on its DSL Internet services. As described on BellSouth’s website, the broadband fee was designed to recover a number of costs remaining from previous regulatory obligations and other network expenses that increase the cost of the Internet services we provide to consumers. Since the FCC eliminated the continuing applicability of many of these regulations, BellSouth has been able to provide a greater variety of Internet services to consumers, to which consumers have responded enthusiastically, and has signed over 300 contracts to provide independent Internet service providers with wholesale DSL services.

The vast majority of BellSouth’s DSL Internet service customers will see this change on their bills within a week, although it will take up to six weeks to implement this change for all of BellSouth’s DSL Internet service customers. Any payments attributable to this fee will be credited back to August 16, 2006.

Okay, why would it take more than 1 minute to eliminate the charge?

Then, I find this

BellSouth to make $13MM monthly Bonus on Landline USF Charges

At the end of the second quarter, BellSouth served nearly 3.3 million broadband DSL customers. The Company added 128,000 new customers during the second quarter and continued to improve the economic mix of customers. Today, more than 25 percent of BellSouth’s broadband customers subscribe to the Company’s premium service offerings — FastAccess® DSL Xtreme and FastAccess® DSL Xtreme 6.0.

BellSouth ended the second quarter with nearly 7.5 million long distance customers and at quarter-end served more than 60 percent of its mass-market customer base with long distance. The Company added 120,000 long distance customers during the second quarter. Approximately 63,000 customers added DIRECTV® service to their BellSouth bundle, resulting in a total of 691,000 customers who have included DIRECTV® service in their communications packages.

As of June 30, 2006, total access lines were 19.3 million, down 460,000 compared to March 31, 2006. Residential access line loss in the second quarter reflects seasonal loss patterns, wireless substitution and competition from cable telephony providers. Retail residential access lines were down 251,000. Retail small business access line gains were nearly 25,000, offset by a 48,000 decline in retail large business access lines that was predominantly driven by the loss of a single customer. Wholesale lines resold by BellSouth competitors declined 181,000 compared to March 31, 2006.

Cingular… served a total of 57.3 million subscribers at the end of June.

Based on these numbers, 19.3 million lines, continuing to collect this fee will provide Bellsouth with an incremental, 100% profit revenue of $13,413,500 a month. Yep, a month. Feeling good about that? Not me either.

Wait, it gets better, let’s add in the 57.3 million wireless subscribers – that gives them a monthly BONUS of $53.237,000!

This is Crazy!

Demand that they stop the charge!

**Verizon is introducing a ‘supplier surcharge’ basically equal to the amount of the USF contribution.

Source: Techdirt: BellSouth Adds New Fee To Pay For The Non-Fee They No Longer Need To Collect

  • Lonny Paul


    WEDNESDAY, APRIL 27, 2005

    * Mr. GARY G. MILLER of California. Mr. Speaker, in 1898, the United States engaged in a brief military conflict with Spain. To pay for the three month skirmish, lawmakers enacted a luxury tax that would only tap money from the super wealthy. Today, that same luxury tax lives on, but instead of taxing only the rich, it hits the pocket books of almost all Americans, both rich and poor. The tax is the federal phone tax. A pesky three percent surcharge on all phone calls made in the United States. Today I am introducing a bill to ensure its days, like those of the Spanish empire before the 1898 war, are numbered.

    * H.R. 1898, the “Telephone Excise Tax Repeal Act of 2005,” will repeal the antiquated tax on telecommunication services.

    * While a “luxury” tax on telecommunication services might have made sense in 1898, there is no question that telecommunications services today are necessities, not luxuries.

    * Today, Americans depend daily on land line telephones, cell phones and dial-up internet services to communicate. However, we continue to take money from Americans by classifying these services as a “luxury.” Today, more than 100 million American households are paying for a tax on their telecommunications services.

    * The tax is not only applied to local services, but on specialty features including call waiting, caller ID, local toll charges, long-distance calls, wireless services and directory assistance. This tax burdens our communication abilities and is destructive to technological innovation. It must be repealed immediately.

    * Telephone tax revenues once used to pay for the Spanish-American War are deposited in the General Fund. Unlike the gas tax, which directs revenues to the Highway Trust Fund, no specific account exists to redirect money collected from the telephone “luxury” tax. Other items subject to a “luxury” tax include airplane tickets, beer and liquor, firearms and cigarettes. Obviously, a telephone is a necessity, and thus does not fit with this list of “luxury” items.

    * It is time to hang up on the telephone tax. I urge my colleagues to join me in supporting this important legislation to permanently repeal the federal telephone excise tax.

    Source: Search Results – THOMAS (Library of Congress)