TELECOM Digest OnLine - Sorted: Sprint Adding $1.50 to Everyone's Phone Bill

Sprint Adding $1.50 to Everyone's Phone Bill

David Lazarus (
Sun, 10 Jul 2005 22:00:04 -0500

by David Lazarus

Alamo resident Bryan McCaul received a postcard from Sprint the other
day warning that the long-distance provider is about reach deeper into
his pocket.

"Currently your Sprint long-distance charges are included in the
monthly bill you receive from your local phone company," the card
said. "Effective Aug. 1, 2005, there will be a $1.50 Single Bill Fee
for this service."

It explained that "this monthly fee is necessary to offset increased
billing costs that Sprint pays to the local phone company to include
your long-distance charges on your local bill."

McCaul can avoid the $1.50 charge if he opts to receive his bills
online. Sprint will also waive the fee for any month in which his
long-distance charges top $40.

"I don't mind this so much," McCaul told me. "It'll spur me to do
online billing. But I wonder about all the people who didn't bother to
read the postcard," he said. "I'll bet a lot of people are never going
to notice this extra $1.50 charge."

Telecom companies routinely come up with creative ways to rake in more
money from customers. I reported last week that MCI is introducing a
99-cent monthly fee just for receiving your bill in the mail.

In fact, Sprint has been charging a single-bill fee since early 2001,
as have AT&T and MCI (which each charge substantially more).

Caroline Semerdjian, a Sprint spokeswoman, told me that the company
only recently noticed that it had inadvertently neglected to impose
the fee on a number of customers nationwide, so that's why the
postcards are going out now.

She declined to say how many of Sprint's millions of long-distance
customers managed to duck the fee for so long. (For that matter, she
also declined to say exactly how many millions of long-distance
customers Sprint has.)

This is the cost that we have to pay SBC to provide this service,"
Semerdjian said.

Christine Mailloux, a telecom attorney at The Utility Reform Network
in San Francisco, found this a laughable claim.

"There is no way Sprint is paying SBC $1.50 a month per customer," she
said. "They're just passing off a profit-making charge as a cost of
doing business to make still more profit."

For its part, AT&T charges $2.49 a month to combine its long-distance
costs with your local bill. Gordon Diamond, an AT&T spokesman, said
the fee "covers our costs to process and provide the billing data to
the local exchange carrier."

MCI, meanwhile, dings long-distance customers with a whopping $3.99
monthly single-bill charge. Debbie Lewis, a company spokeswoman, said
this "covers the costs we incur to deliver this service."

It's important to remember that single-bill fees are completely
discretionary on the part of phone companies. There's no government
regulation that says they have to be charged.

Marc Bien, an SBC spokesman, said the Bay Area's dominant
local-service provider cuts individual single-billing deals with each
long-distance company.

He declined to say whether the fees charged by the various carriers
reflect SBC's cost -- as the long-distance firms would have us believe
-- or whether the carriers are significantly marking up the charge.

But Bien acknowledged that SBC is already purchasing paper, printing
bills and mailing them out as part of its own customer service. As
such, he said that including additional long-distance charges
represents "an incremental cost."

He also observed that the long-distance firms must each have billing
systems that are technologically compatible with SBC's so the data can
be automatically transferred.

"I don't know why each one charges a different rate" for single
billing, Bien said. "Perhaps they have different business models."

No, they all seem to have the same one.

"They just use this as a way to generate revenue," said TURN's


Call waiting: Speaking of Sprint, here's a little fun you can have.
Try calling its customer service department at (800) 877-4646.

I've tried it more than a dozen times over three days, and nearly
every time I get the same recording:

"Due to the overwhelming positive response to our products and
services, to speak with a Sprint representative, your wait will be
approximately 10 minutes."

In other words, you can't get through to a service rep because
would-be customers are beating down the door in response to Sprint's
products and services.

You believe that, don't you?

Copyright 2005 San Francisco Chronicle

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