Verizon Replaces Fed Fee With House Money

    August 22, 2006
    WebProNews Staff

Now that the Universal Service Fund has drawn to a close, Verizon Communications will impose a fee on new and existing digital subscriber line (DSL) customers.

The fees reported on the eerily mirror the ones coming off customer bills:

The surcharge will initially be $1.20 a month for customers with service up to 768 kilobits per second and $2.70 per month for customers with faster DSL service, according to the company.

The fee comes as a government fee on DSL customers for the Universal Service Fund is being phased out. For customers with service up to 768 kpbs, the fee was $1.25 a month, and for customers with service of up to 3 Mbps, the fee was $2.83 a month, according to Verizon.

A Verizon spokesperson denies that the new fee, which begins just as the USF fee ends in August, is a simple grab for cash that customers have been paying anyway:

(Bobby Henson, a Verizon spokeswoman) said the decision to impose the new surcharge now “is not related at all to USF.” She said she “would strongly disagree” with criticisms that Verizon was in effect diverting to its own coffers money that had previously supported the Universal Service Fund.

Instead, Verizon claims to be simply recouping the “new costs” they have incurred in developing their new DSL service.

The report also helpfully noted that Verizon lobbied for deregulation of DSL last year, which the Federal Communications Commission did in August 2005.

Techdirt’s assessment of the new fees cited the “shocking coincidence” they will nearly duplicate the old fees, and cast aspersion on Henson’s contention that Verizon now has new costs associated with DSL requiring this fee:

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.


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