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Verizon Drops New DSL Fees

Light Reading
News Analysis
Light Reading
8/30/2006

Verizon Communications Inc. (NYSE: VZ) announced Wednesday that it would eliminate its controversial new 'cost recovery' fees, which it recently applied to its DSL customers.

Verizon's decision comes after, on Friday, receiving a "letter of inquiry" from the Federal Communications Commission (FCC) asking for an explanation of the charges. (See FCC's Martin 'Furious' Over New DSL Fees.)

Verizon was given 20 days to respond, and said Monday it intended to answer the FCC's questions, but apparently decided soon after to dispense with the fees altogether. (See Verizon Blames New Fees on 'Naked' Users.)

"It’s in response to customer comments,” says Verizon spokeswoman Bobbi Henson of the reason for her company’s decision. Asked how many customers actually complained, Henson says “It’s not so much about the volume of the customer comments, but rather about what we feel is generally best for our customers.”

Henson declined to comment on whether Verizon’s decision is the direct result of pressure applied by the FCC.

"Consumers should receive the benefits of the Commission's action last summer to remove regulations imposed on DSL service,” FCC chairman Kevin Martin said in a statement today. “The continued deployment of broadband at affordable prices for consumers remains my top priority as chairman." Verizon's Henson says only a few Verizon customers actually paid the fee since it starting showing up on customers' bills Saturday. She says the ones who did will receive a credit.

Both Verizon and BellSouth Corp. (NYSE: BLS) in August were relieved of collecting Universal Services Fund (USF) fees from DSL customers, which would have meant a real reduction in what consumers pay for DSL service.

The carriers instead tacked on new fees almost identical in price to the old USF fees -- $1.25 a month for lower-speed DSL customers and $2.83 for high-speed customers. The move appeared to many as an attempt by the two to allow the carriers to collect more DSL revenues while their subscribers' bills stayed about the same.

BellSouth agreed to drop its fees last Friday after discussions with FCC staffers.

Verizon explained last week that the new fees stem from the company's "naked DSL" users, which buy broadband but not phone service from Verizon.

— Mark Sullivan, Naked Reporter, Light Reading

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rjmcmahon
rjmcmahon
12/5/2012 | 3:42:44 AM
re: Verizon Drops New DSL Fees
Will AT&T pull the same trick when it starts offering naked DSL, i.e. just change the rate on DSL instead of eliminating the fees for the (in my case, useless) phone line? Also, when are they going to start offering naked DSL? Is this a condition of the SBC/T merger?
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