TELECOM Digest OnLine - Sorted: Bell South Agrees to Drop Bogus DSL 'Fee' After FCC Threat

Bell South Agrees to Drop Bogus DSL 'Fee' After FCC Threat

Reuters News Wire (
Sat, 26 Aug 2006 14:20:34 -0500

BellSouth Corp., the No. 3 U.S. local telephone company, on Friday
said it will immediately drop a $2.97 monthly fee for high-speed
Internet service after U.S. communications regulators threatened to
investigate the charge, and punish them for imposing it.

The U.S. Federal Communications Commission had been poised to send a
letter of inquiry to BellSouth asking the carrier to explain the new
fee, which replaces a surcharge for a government subsidy program, FCC
officials said.

Most customers would see the change on their bills within a week, but
it could take up to six weeks, BellSouth said. It added that customers
charged the fee dating back to August 16 would receive a credit.

However, the FCC's enforcement bureau on Friday did send a letter to
Verizon Communications, the No. 2 U.S. telephone company, for
information on its own new charge instituted to replace the fee for
the government program.

"The bureau is investigating whether Verizon's practices are
consistent with the obligations set forth in the commission's
Truth-in-Billing rules," said the letter, which requires a response
within 20 days.

The FCC could seek enforcement action, including fines, against the
company if any regulations have been violated.

As of August 14, providers of high-speed Internet service, known as
broadband, are no longer required to contribute part of that revenue
to the Universal Service Fund (USF), which subsidizes communications
services to schools, lower-income households and rural areas.

The carriers had passed that USF cost onto their customers, but an FCC
decision last year phased out the USF fee for the telephone companies'
high-speed Internet service.

Still, BellSouth continued charging its nearly 3.3 million high-speed
Internet customers $2.97, and Verizon said it would impose a new
monthly surcharge of $1.20 or $2.70, beginning August 26, which it
claimed was to 'help subsidize connection costs'.

Verizon had charged broadband customers a monthly fee of $1.25 or
$2.83 to cover its USF contribution, depending on connection speeds.

"When the FCC phases out a fee and a major broadband provider rushes
in to replace it with a new company surcharge, consumers get burned,"
said FCC Commissioner Michael Copps, a Democrat. "Pulling a fast one
like this won't fool consumers and I don't think it will fool the
commission either."

Verizon spokesman Eric Rabe said the company received the FCC letter
and would respond. He also said that Verizon informed customers about
the fee, the reasons for it and posted a notice on its Web site.

A spokeswoman for the FCC declined to comment.

AT&T has agreed to buy BellSouth and needs the FCC to approve the
transaction. AT&T Inc., the largest U.S. telephone company, did not
impose a replacement fee and the FCC did not send the company an
inquiry letter.

Copyright 2006 Reuters Limited.

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