Verizon Blames New Fees on 'Naked' Users

When a government-required fee for DSL users expired, Verizon Communications Inc. (NYSE: VZ) got creative. Instead of raising its prices all around to keep subscriber fees the same, the carrier added a new DSL surcharge and found a way not to save its customers almost $3 a month.

Here’s what happened: Last year, the government changed the rules so DSL subscribers would no longer have to pay into the Universal Service Fund (USF). (See FCC Zaps Broadband Carriage Regs.) That would have saved Verizon’s lower-speed DSL customers $1.25 a month and its high-speed customers about $2.83 a month.

But just as the decreases were to take affect, Verizon introduced new fees -- in almost identical amounts -- called “supplier surcharges.”

“It’s a supplier fee we have to pay to the Verizon LEC,” Verizon spokesperson Bobbi Henson told Light Reading Tuesday afternoon.

Yes, Verizon pays Verizon for the right to use Verizon's networks.

Henson explains Verizon DSL and the Verizon LEC are “totally different entities,” and must be kept “at arms length” from one another. This, Henson says, is to avoid the appearance that the Verizon ISP is being given preferred treatment over the many other ISPs that also pay the Verizon LEC for carriage.

Henson says the "cause" of the new fee stems from the company's "naked DSL" users, which buy broadband but not phone service from Verizon. Because Verizon is not getting voice revenue from those DSL-only customers, yet it still must pay increasing carriage fees to the Verizon LEC, Verizon the DSL provider is making up the difference with the new fee.

Verizon could have passed the costs along only to its naked DSL customers, but it is charging all DSL customers instead.

When asked how many of these naked DSL customers Verizon actually has, Henson replied that her company doesn’t report that stat.

“If we had done this a year ago it would have been added to the bottom of the bill,” Henson says. “Nobody likes a new fee -- we don’t -- but this is a way for us to recover some of this cost.”

The new surcharge kicks in this Saturday.

— Mark Sullivan, Naked Reporter, Light Reading

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MorningWd 12/5/2012 | 3:43:45 AM
re: Verizon Blames New Fees on 'Naked' Users They're charging everyone because they think that they can get away with it. What's a buck 25 a month to the average Joe, about a drive around the block? Spread that out over 6 million subs and it adds quite nicely to the bottom line.
burn0050 12/5/2012 | 3:43:45 AM
re: Verizon Blames New Fees on 'Naked' Users Is it just me, or do the "phone" companies continue to find ways to screw its customers? It seems to me that this should be illegal. And why are they charging EVERYONE instead of these "naked users"???
Paulysu 12/5/2012 | 3:43:44 AM
re: Verizon Blames New Fees on 'Naked' Users Lucky me.....we get free wireless internet and so screw Verizon there is comcast and other wireless internet provider out there. I'm not letting them get away with it.
Mark Sullivan 12/5/2012 | 3:43:44 AM
re: Verizon Blames New Fees on 'Naked' Users Wha? I don't get what you are saying.
jc_iii 12/5/2012 | 3:43:44 AM
re: Verizon Blames New Fees on 'Naked' Users I shall remember to pay myself.
"Ill" Duce 12/5/2012 | 3:43:42 AM
re: Verizon Blames New Fees on 'Naked' Users I'm a bit confused/suspicious. Wouldn't Verizon's ISP be buying from the wholesale unit of Verizon like other ISP's? And wouldn't that unit be charging everyone for the USF costs either directly or indirectly? Most likely they would cahrge directly so that they could blame it on the "Gubmnt."

Her statement concerning parity makes it sound like this is an affiliate relationship question, but it is contradictory in that the LEC couldn't charge Verizon's ISP more than the others. Therefore, all of the ISP's would be given relief from the additional charge.

I think Verizon has done this in order to inflate revenue on the regulated side. I believe the same thing is happening in the wireless world where the regulated side loves to hook the wireless side on small, leased circuits so they can inflate the bookings and make it look as if they have more business than they really do.

Something smells.
45rpm 12/5/2012 | 3:43:40 AM
re: Verizon Blames New Fees on 'Naked' Users Verizon Introduces New Charge-You-At-Whim Plan
August 21, 2006
NEW YORK Verizon Communications, Inc. announced a new service package for its wireless and residential customers that would charge them widely varying, but always high, fees every month depending how the communications giant feels at the time. "Our Charge-At-Whim packages offer the same mediocre quality and insufferable level of customer service youGÇÖve come to expect," a Verizon spokesman said Tuesday. "But it adds an unjustified, arbitrary and, if youGÇÖll allow us to boast, frankly unjustifiable method of determining just how much youGÇÖll pay for them." Packages start at "oh, $69.99 a month, letGÇÖs say?" and went into effect about three or four months ago. (via DSLR). Satire from The Onion.
Mark Sullivan 12/5/2012 | 3:43:40 AM
re: Verizon Blames New Fees on 'Naked' Users Maybe Verizon is being singled out here. I read today that BellSouth is charging a similar $2.97 "regulatory cost recovery fee."
Michael Harris 12/5/2012 | 3:43:39 AM
re: Verizon Blames New Fees on 'Naked' Users Too funny!

The spin doctoring from Verizon on the DSL charge is not even close to passing the sniff test.
Hanover_Fist 12/5/2012 | 3:43:39 AM
re: Verizon Blames New Fees on 'Naked' Users Ahhh...a rose by any other name would still smell just as sweet...

As soon as one of the giant's discover a loophole in the existing system of deregulation, competition, free-enterprise, or what ever you want to call this joke (aimed at squeezing each and every penny out of you whether ligit or not), you can bet that the others will follow the smell of money!

Like sharks to a feeding frenzy...oh, and speaking of which, what's the difference between sharks and lawyers in this regard? Not much.
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