Donate to your local phone company

I was looking at my Cingular bill tonight, at the various fees. For our most recent bill, we paid $4.75 in "other fees and charges". The details are:

Regulatory Cost Recovery Fee = $2.50
Federal Universal Services Charge = $1.88
State B and O Surcharge = $0.37

Oh, the government is hitting me with fees and charges.

Well, not really. If you do a little digging, you find out something that is surprising.

Regulatory Cost Recovery Fee. To quote Cingular's website, "The purpose of the fee is to defray Cingular's costs associated with payment of fees and compliance with various initiatives imposed by the government."

In other words, there are government regulations that apply to Cingular, but they don't want to pay them, so they're passing them straight to customers and making it look like it comes from the government.

Federal Universal Services Charge. Same deal. The government set up a program that the telcos were supposed to pay into, and they don't want to, so they make it look like the fee comes from the government.

State B and O surcharge. For this you need to know that Washington has this weird business tax called "Business and Occupancy", which charges you for running a business, even if you don't make any profit. Nope, we don't want to pay that either, so we'll pass it on to consumers.

Now, obviously, businesses have expenses, and all these expenses are ultimately passed on to consumers. So what's the problem in this case?

Well, there are really two problems. The first is that the companies are engaging in a "Bait and Switch" tactic, which is illegal. I signed up for service that only costs $60 a month, but they really charge $65 per month. The second is that they attempt to hide their extra charges with names that sound like taxes. I would argue that that is also fradulent.

This obviously makes it hard to compare carriers, when a plan really doesn't cost what it says it costs.

Argh.

Comments

• Anonymous
  October 18, 2004
  Why not switch to VoIP? I signed up with Vonage a while back and love it.

• Anonymous
  October 18, 2004
  The comment has been removed

• Anonymous
  October 18, 2004
  John - it's not mobile. Eric is ranting about cell providers, VoIP, at least for now, is pretty much just fixed lines.

• Anonymous
  October 18, 2004
  My bad.

• Anonymous
  October 18, 2004
  The comment has been removed

• Anonymous
  October 18, 2004
  All this started when the politicians found that the public wouldn’t support further tax increases to support their latest pork project. So they decided to tax business instead. Business, which has no money but from what it can get from the consumer began to pass these charges on to the consumer. This raised the ire of the consumer and in effort to strive off the consumer storming its gates; the business began to itemize these expenses on its bill. This might be the wimpy way out but it did redirect the consumer’s ire back to the politicians who then tried to make it illegal for the businesses to itemize these expenses, but that is another story.
  
  Basically, it doesn’t matter whom the politicians tax to pay for their pork it is we the people who pay for it. Businesses don’t have any money except what it gets from us so any tax it pays it must also get from us. Don’t like all these fees? Well you are in luck! It is that time again when we Americans can express our opinion and elect politicians that will cut pork instead of creating more pork; leave the bacon at home instead of bringing home the bacon. After all, politicians don’t have any money except what they get from us anyway. They are bribing us with our own money. Now finding such a politician could prove to be difficult and is another story.
  

• Anonymous
  October 18, 2004
  In Australia, all prices quoted must include any taxes. There is no "plus tax"; tax isnt optional or separate - its part of the price.

• Anonymous
  October 19, 2004
  The comment has been removed

• Anonymous
  October 19, 2004
  Yeah, my wife is a Senior Manager at KPMG and has had to audit a few of these large telecomm companies.
  
  The sheer amount of obscure and obsurd fees are amazing, and how the telecomms have conveniently spun them into their customers' bills. Wonderful magic.
  
  You should see things on the accounting side, as well. Apparently even more of a bird's nest.
  
  It definitely makes VOIP a breath of fresh air, IMHO. We'll see how long (and if) that lasts.

• Anonymous
  October 19, 2004
  If the companies didn't charge the consumers for the government imposed business costs ( regulation ), how are the companies going to get the money?
  
  When you hear people talk about cost of government it includes both direct taxes and regulations.

• Anonymous
  October 19, 2004
  Vonage, Vonage, Vonage.
  
  I was ecstatic when I could call my telco (they will remain nameless, but their initials are SBC) and cancel my account.
  
  I was paying about $80 a month for service all told, when I can get more features and cheaper long distance for only 25 bucks a month from Vonage.
  
  I've had it for about three months now and it's flawless. The only thing I worry about is power outages...but that's why I have a UPS on my router and firewall boxen.

• Anonymous
  October 19, 2004
  The comment has been removed

• Anonymous
  October 20, 2004
  The comment has been removed

• Anonymous
  October 20, 2004
  The comment has been removed

• Anonymous
  October 20, 2004
  The comment has been removed

• Anonymous
  October 20, 2004
  The comment has been removed

• Anonymous
  October 20, 2004
  The comment has been removed

• Anonymous
  October 21, 2004
  Actually this is common problem all over world.
  For example two biggest cellular (mobile) telecoms in Ukraine provided different pricings in advertisements and all papers - one company provided pricings excluding both VAT (20%) and pension fund (6%), but another excluded only pension tax, but included VAT.

• Anonymous
  November 01, 2004
  I think you make a very legitimate case filing to Better Business Beauro (www.bbb.org) or even DoJ. Both have a page to file complaints against companies online and takes 10-15 mins to do so.

• Anonymous
  December 18, 2004
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