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Pressure mounts on Verizon over USF fees

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Verizon is coming under increased pressure to stop charging its DSL customers a new fee that is roughly equivalent to the Universal Service Fund fee it no longer has to collect on its high-speed Internet access lines.

That pressure is coming from the Federal Communications Commission, which eliminated the USF charge for DSL lines, and from customers such as Ailis Wolf, who launched her own Web site, StoptheDSLripoff.com, to urge other Verizon customers to protest Verizon’s decision not to lower its DSL rates to reflect the USF change.

Fellow telecom service provider BellSouth bowed to such pressure last week, announcing last Friday that it will refund the $2.97 fee it once collected for USF. Both BellSouth and Verizon had initially said they would keep all or part of that money. AT&T had immediately said it would pass the savings on to its customers.

“That issue had received a fair amount of attention, some of it negative,” a BellSouth spokesman said. “Based on the collective feedback, we decided that the best thing to do was eliminate it.”

BellSouth is now updating its systems to stop collecting the extra fee and to send credits to customers who have already paid the fee, going back to Aug. 16.

According to published reports, the FCC had contacted both service providers to object to their plans to essentially rename the USF fee and keep the money, rather than pass the savings on to their DSL customers. Those reports out of Washington say that Verizon has received a letter from the FCC on the matter and has 20 days to respond. BellSouth avoided the same fate by agreeing to eliminate the charges.

Wolf said her Web site allows Verizon customers to send protest emails directly to the FCC.

"I'm really unhappy that they decided to tack on this sham fee," she said in a telephone interview. "They have said they needed it to cover their costs. But if that's the case, they should have included it in the cost of the service. It shouldn't be tacked on at the end."

Wolf said she investigated other service options but determined Verizon's service to be the least expensive in her area. Her preference would have been to drop the telephone company entirely and rely on her cellphone and an alternate data provider, but the alternates "cost a lot more."

"If all of the other companies are [passing on the savings to their customers] it doesn't make any sense that Verizon can't do that also," she said.

Verizon and other telephone companies have dropped the cost of DSL service to attract new customers, and the strategy has enabled them to gain ground on their cable rivals in high-speed Internet access. Industry analysts have long questioned, however, whether the deeply discounted services, as low as $12.99 for some promotional offers, will be profitable in the long run if customers don't move to higher speed offerings with higher price tags or buy additional services.

For now, Verizon is sticking to its story that it needs the addtional fee to recover its costs of providing service, a spokeswoman said.

"It is a unique charge," she said.

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