Verizon Wireless has the lowest fees of any wireless carrier

[jones]

Wireless Firm Faces Challenge From FCC
Source: Daily Breeze
Publication date: 2004-08-21
Arrival time: 2004-08-23


NEW YORK -- T-Mobile USA Inc.'s first quarter financial results looked great this year, but it wasn't because customers were spending more time chatting on their cell phones.
The wireless company's revenues were up $1 per customer compared with the previous quarter. That was because T-Mobile, for the first time, counted as revenues two fees it tacks onto customer bills. Without those surcharges, the average revenue per customer would have dropped.

The surcharges certainly make T-Mobile more attractive to investors -- they added $58 million in revenue during the quarter.

The fees aren't taxes, although they may look that way on your bill. Wireless, long-distance and local phone service companies use fees like these chiefly to recoup normal business expenses, including property taxes and the cost of posting their rates on the Web.

And that's led to a challenge before the Federal Communications Commission by consumer advocates including officials from nine states and the District of Columbia.

The fees have raised consumers' ire. Ken Juler of Angwin, Calif., says he pays "under objection" the 99 cent monthly fee that AT&T Corp. adds to his bill.

"These were costs the company was supposed to pay themselves out of operations," Juler said. "They want to make the bottom line look better, so they stick the customer with it. It's dishonest."

Very little from the fees goes to the federal government, said Patrick Pearlman, a West Virginia state consumer advocate.

"Regulatory costs are not the reason for the fees, they're the cover for the fees," he said. "Any industry has a cost of complying with government regulation. You don't get nailed with a National Environmental Policy Act surcharge by General Motors when you buy a car."

One problem for consumers: Companies' advertised rates don't include extra fees.

"The explosion of line items has made it all but impossible for consumers to compare rates and shop around," FCC Commissioner Michael J. Copps said in March. "You need a lawyer and an accountant -- preferably both -- to root out what you're being charged for and why."

Regulators and consumer advocates are petitioning the Federal Communications Commission to ban the line-item fees phone companies add to bills.

A petition before the FCC, filed by the National Association of State Utility Consumer Advocates and supported by the National Association of Regulatory Utility Commissioners, maintains that surcharges should be built into companies' rates. The FCC is accepting individual comments on the petition through its electronic filing system, under docket number 04-208.

There is no statutory deadline for the FCC to rule on the petition, said David Bergmann, assistant consumers' counsel in Ohio.

"The FCC has a lot on its plate," Bergmann said. "We hope this would take a place on the plate."

The fees are big money. At 45 cents a month per user, Verizon Wireless has the lowest fees of any wireless carrier. But since it has the most customers, the fee brings in about $173 million a year.

[rich6880]

Yes, but probably the highest rates.

[bobolito]

Makes sense...with the higher rates, they make up for the lowest fees.

[crood]

I'd rather have higher rates that were advertised as such than getting hit with them on a bill. If they advertise 39.99 a month, shouldn't that be what I pay. I don't mind them adding legitimate taxes, like sales tax, but when you advertise one price and then tack of "fees" to recoup the cost of doing business, that's false advertising. Every other business includes their costs into the price of the product.

Another thing about these fees is that they can, and do, change them whenever they want. That amounts to a rate increase without having to change the advertised price.

[AnthroMatt]

Originally Posted by crood Another thing about these fees is that they can, and do, change them whenever they want. That amounts to a rate increase without having to change the advertised price.

But if they raise the fees they choose to impose themselves you can cancel your contract without penalty. So it is not in their best interest to raise them too high or too often or lots of people might just take advantage of the ability to leave without penalty.

[budney]

Originally Posted by AnthroMatt But if they raise the fees they choose to impose themselves you can cancel your contract without penalty. So it is not in their best interest to raise them too high or too often or lots of people might just take advantage of the ability to leave without penalty.

That is very true. I did that early in the year with my stand alone data plan with T-Mobile when T-Mobile added a number porting fee.