TELECOM Digest OnLine - Sorted: Verizon Pockets New DSL Fee Instead of Government

Verizon Pockets New DSL Fee Instead of Government

Reuters News Wire (reuters@telecom-digest.org)
Tue, 22 Aug 2006 13:28:34 -0500

Verizon Communications has decided to pocket most of the savings from
the cancellation of a government surcharge on digital subscriber
lines, despite calls from consumer groups to pass on the savings on to
users.

Verizon, one of the biggest U.S. telecoms companies, used to charge
DSL customers a monthly fee of $1.25 or $2.83, depending on connection
speeds, for a government fund to help bring service to lower-income
and rural areas.

The government stopped charging that fee on August 14, but Verizon
will instead impose a new monthly surcharge of $1.20 or $2.70, beginning
August 26, which it said was to help subsidize connection costs.

"There's a lot of cost associated with the service and this is a way
we've elected to recover a portion of that cost," said Verizon
spokeswoman Bobbi Henson on Tuesday.

By introducing the new surcharge as the previous fee ended, Verizon
hoped to minimize the impact on customers, she said.

But consumer groups like the Consumer Federation of America said DSL
customers should not have to pay a new fee.

"They charge so much for that already. The simple fact is they have
market power," said Mark Cooper, an official at the Consumer
Federation of America.

Verizon's latest earnings report in August showed it had a total 6.1
million broadband customers, although 375,000 were connected to its
more advanced fiber-optic network called FiOS.

Copyright 2006 Reuters Limited.

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