Verizon Drops DSL Fee After FCC Query

By John Dunbar
Associated Press
Thursday, August 31, 2006

Verizon Communications Inc. said yesterday that it was dropping a "supplier surcharge" on its high-speed Internet service for retail customers, less than a week after the Federal Communications Commission wrote the company, asking it to explain the reasoning for the charge.

The FCC had sent a similar letter to BellSouth Corp., which said Friday that it will stop charging a $2.97-per-month fee on a similar service.

"We have listened to our customers and are eliminating this charge in response to their concerns," Bob Ingalls, chief marketing officer for Verizon Telecom, said in a statement.

The dispute followed a decision by the government to stop assessing a Universal Service Fund charge on companies that offer digital subscriber line Internet service.

The companies had passed the charge, which subsidizes services in rural and low-income areas, on to their customers.

Consumer groups had accused the companies of simply replacing the dropped fee with a new charge rather than passing on savings to their customers.

Verizon dropped the fee Aug. 14 but informed customers that it would begin charging the new "supplier surcharge" Aug. 26. The company told customers in an e-mail that the monthly fee would be $1.20 or $2.70, depending on connection speed. The fee affected about half of Verizon's 5.7 million DSL subscribers, according to the company.

Customers who have already paid the charge will receive credit, the company said.

Before Aug. 14, Verizon was collecting $1.25 or $2.83 from DSL customers, depending on the connection speed.

Verizon said yesterday that the fee was "imposed by its affiliated operating telephone companies to cover costs associated with providing DSL service to customers who do not also subscribe to Verizon's traditional phone service."

On Friday, BellSouth said that it was immediately eliminating the fee and that the fee was "designed to recover a number of costs remaining from previous regulatory obligations and other network expenses."

FCC Chairman Kevin J. Martin released a statement supporting the companies' actions.

"I am pleased that both Verizon and BellSouth have eliminated fees recently imposed on their DSL customers," he said. "Consumers should receive the benefits of the commission's action last summer to remove regulations imposed on DSL service."

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