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FOLLOWING THE TELECOMMUNICATIONS INDUSTRY AND RELATED LEGAL TOPICS

Tuesday, August 22, 2006

BellSouth and Verizon Swap USF Charge for "Regulatory Cost Recovery Fee"

Last year when the FCC effectively removed all common carrier regulation from DSL services provided by the RBOCs the Commission also removed the obligation of DSL providers to pay Universal service surcharges on their DSL line revenues. Great news for end users, who will no longer have to pay those assessments, right?

But according to today's Wall Street Journal BellSouth and Verizon won't be passing the savings on to their customers. "Verizon recently emailed subscribers announcing that it dropped the universal-service fee as of Aug. 14 and will impose a new "supplier surcharge" beginning Aug. 26. The new fee -- $1.20 a month for slower-service customers and $2.70 a month for faster ones -- is almost exactly what consumers would have saved with the government's change. BellSouth yesterday said it also intends to continue charging Internet subscribers its $2.97 a month "regulatory cost recovery fee.'"

We are shocked! This is just like the "Missoula Plan" a/k/a Pimp Plan, which is supposed to "fix" the universal service problem without impacting incumbent revenues. Call us crazy, but we see a pattern emerging here.

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