Originally created 03/31/04

Group fights phone charge

NEW YORK - Phone companies should be banned from imposing an array of surcharges that are labeled so as to suggest the government gets the fees or requires their collection, state watchdog agencies complained to federal regulators on Tuesday.

The "regulatory assessment fees" and other similarly named surcharges, which reap billions of dollars annually across the industry, are legally permitted as a way for companies to recoup costs for complying with federal mandates.

Such programs include ensuring phone service for rural and low-income customers, or the new rule that lets cell phone users keep their numbers when switching carriers.

In a petition filed Tuesday, the National Association of State Utility Consumer Advocates, which represents 43 state agencies, argues that such expenses reflect a regular cost of doing business just like network maintenance or mailing out monthly bills.

As such, the fees charged to cover those costs should already be reflected in the per-minute calling rate or overall monthly fee a company advertises - rather than being tacked on as a fee purportedly beyond the carrier's control, the association said in requesting a rule change by the Federal Communications Commission.

"In the last few years, wireline and wireless carriers have concocted line item charges, fees and surcharges, purporting to recover all manner of 'regulatory,' 'administrative' or 'government-mandated' costs, but which do nothing more than soak consumers for the carriers' ordinary operating costs," the petition says.

The FCC declined to offer immediate reaction.

"I'm surprised that anyone thinking of consumers first would want to eliminate information that explains to consumers what those fees are for," said Jeffrey Nelson, a spokesman for Verizon Wireless. "We think it's good practice, although not required, for consumers to know what state, local and federal governments are charging them, whether it's directly or the result of increased costs for wireless service."

Telephone companies have frequently defended their billing practices, asserting that customers should know that it is government burdens that are increasing prices.


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