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BellSouth had planned to continue collecting a $2.97 per month fee from its 3.2 million DSL customers, even though that fee had been originally collected for the federal government's Universal Service Fund.

When the Federal Communications Commission changed in August 2005 how it would treat DSL service, it eliminated the requirement for providers like BellSouth and Verizon to collect that fee.

But instead of simply removing the fee from customers' bills, both telecoms chose to continue collecting it themselves. BellSouth planned to keep charging the same $2.97 monthly fee to customers, while Verizon dropped a few pennies from what the USF fee had been in planning to keep it on customer bills.

An AP report has now noted that BellSouth decided to eliminate plans to persist in collecting that fee. Pressure from the FCC may have helped, as the agency inquired of both BellSouth and Verizon why their continued collection was not a violation of truth-in-billing laws.

BellSouth issued a statement where they chose to forgo the new charge:

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.
Verizon has resisted following BellSouth on this reversal, according to the report:

Verizon said the new fee is needed to recover costs related to offering the high-speed Internet service.

"We would have no comment on it other than to say obviously we will explain to them (the FCC) whatever it is they want to have explained," said Verizon spokesman Brian Blevins.
Since the FCC has confirmed to AP that it sent Verizon a letter of inquiry, it looks like they will have to explain it in Washington:

FCC spokeswoman Tamara Lipper said Friday that the agency prefers to let competitive forces govern the markets with minimum government regulation but is "willing and quick to act to protect consumers."

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David Utter is a staff writer for WebProNews covering technology and business.