Phone Fees Called Into Question
By Don Oldenburg
Washington Post Staff Writer
Tuesday, July 26, 2005; C10
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/25/AR2005072501515_pf.html
It doesn't raise the hackles of, say, high-speed Internet service crashing
for weeks, or rental-car companies charging damages for a wear-and-tear
nick on a bumper. Maybe because getting riled over nominal charges that
increasingly show up on bills is a trivial pursuit by comparison.
But the recent column on the corporate fee spree that's picking consumer
pockets ("Land of the Fee," June 28) stirred some readers -- especially
about fees on phone bills.
District resident Lori Gronich e-mailed about a 99-cent monthly
"paper-billing fee" that MCI recently began charging customers who want
their bills to arrive by mail. Those who pay via computer or use an
automatic checking account or credit card deduction avoid this little gem
of a fee, which MCI blames on the rising cost of snail-mailing paper bills.
"This used to be part of the cost of doing business and I think it should
remain so," says Gronich, who complained to MCI and got a one-month
reprieve, saving 99 cents. "MCI said everyone was doing it, so they added
this, too."
Adding fees, yes. But while some discount phone companies such as Total
Call International and Voice Revolution charge from 99 cents to $1.95 for
paperwork invoices, most phone companies haven't taken this step -- yet.
Verizon does charge $1.99 (and Nextel $2.50) for itemized paper billing
that many consumers think is essential for checking bills for the various
fees and charges dumped on phone bills.
Reston reader Stephen Brooks checks the fees on his phone bill every month.
He says his basic phone service advertises for $24.95, but a recent bill,
totaling only the basic charge plus excise taxes, line charges, Universal
Connectivity Charges, state right-of-way charges, a "911" tax and other
fees, came to $42.14.
"Which is [nearly] 70 percent more than the contract amount," says Brooks,
raising the specter of American colonists taking up arms over unwarranted
taxes. "Would you pay a 70 percent tax rate? We are forced to do just that."
While the government requires phone carriers to pay many of these taxes and
fees, the decision to pass some of those regulatory compliance costs and
property taxes on to customers as line items on their bills is
discretionary. It's authorized by law but not required. And some of the
fees, like the Carrier Cost Recovery Charge, are a standard cost of doing
business.
"It is upside-down and consumers are paying through the nose," says Sam
Simon, chairman of the board of the Telecommunications Research & Action
Center (TRAC), an advocacy group for residential telecommunications customers.
Simon says the federal excise tax charged on phone bills stems from an era
when telephone service was a luxury used by the wealthy. It originated
during the Spanish-American War. "So it was okay to tax that phone
service," he says, "but now [phone service] has become a necessity and the
tax is the biggest trough."
State and local communities also feed at that trough via county utility
user taxes, state relay fees, etc. The "911 tax," he says, "is a general
public good that should be paid out of our general revenues" -- not through
phone bills.
The latest zany add-on, says Simon, is a $3.50-a-month local tax to
wireless bills. "Alexandria has done it, Baltimore has done it. It is
cascading and it'll be everywhere," he says. "But why?"
Simon says phone companies are not totally to blame in what has become "a
morass" of phone bill fees. Phone carriers have lobbied against the federal
excise tax and argued that money should go toward the USF fees instead. But
the phone companies, he adds, are too willing to "rope" consumers with
these charges.
"I'm waiting for the day when I walk into the furniture store to buy a new
sofa and there is an OSHA [Occupational Safety and Health Administration]
fee on it," he says, encouraging consumers to complain to their congressmen
and state legislators about fees on phone bills. "If you've got to pay
these things, it should be included in their advertised rates."
Clear Signals
The Telecommunications Research and Action Center Web site at
http://www.trac.org offers a free weekly e-newsletter, TRACNotes, plus
telephone-rate and fee news and information on how to choose the best phone
service for your needs. For information on the campaign to stop taxes on
wireless phone service, visit http://www.Mywireless.org .
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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