Missouri Moves to Ban 'UnFees'Part of larger backlash against regulatory fees ( old news - 02:01PM Wednesday Apr 28 2004) tags: prices · business · Politics The Missouri state Public Service Commission is considering banning all extra provider charges and fees not mandated by state or federal regulators, reports the Kansas City Star. The move is a response to the recent increase in so called "regulatory recovery" and other fees that appear frequently on landline and wireless - and most recently - on DSL bills. The National Association of State Utility Consumer Advocates ( NASUCA), which represents some 43 state agencies, recently urged lawmakers to ban such "fees". "In the last few years, wireline and wireless carriers have concocted line item charges, fees, and surcharges, purporting to recover all manner of "regulatory," "administrative," or "government-mandated" costs, but which do nothing more than soak consumers for the carriers' ordinary operating costs," the group recently noted in a petition to the FCC (Word document). One recent op/ed piece in the Las Vegas Review Journal took such criticism to heart, arguing that providers are are going "to great expense to educate consumers" via the fees. The letter also wonders why watchdog groups aren't "delighted", since the fees clarify how customer money is being spent. "Then again," the author adds, "we're dealing with "consumer advocates" who in many cases are little more than big government shills."The response to criticism from the bells is similar, though obviously less venomous. "I'm surprised that anyone thinking of consumers first would want to eliminate information that explains to consumers what those fees are for," recently noted Jeffrey Nelson, a spokesman for Verizon Wireless - which charges their own 45 cent per month "regulatory charge". In Missouri, the new guidelines would force providers to include such fees in the regular advertised price for service.
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Lumberjack
Premium
join:2003-01-18
Newport News, VA
| Keeps them from hiding.... I could under stand Verizon's point, but if the fee is included in the advertised price it would really promote better competition. Yeah sure my plan is $59.95 but if they were to include the $5 or so for the stupid fees it would allow me to better compare my plans. At least taxes are equal (and thus should be listed separately) so they don't pose as big of an issue.
If they keep going in this direction then the service will be $5/month but the fees will be $87.95.
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BBr UT2004 Clan Administrator | |
|  | lesopp
join:2001-06-27
Land O Lakes, FL
| Re: Keeps them from hiding.... For how many year did MA Bell and her subsequent evil spawn operate in a regulated environment without "Regulatory Cost Recovery Fees" to the bills?
Isn't this cost of doing business factored into their approved rates?
Regulatory cost recovery is an already over used "excuse chit" probably applied to every requested tariff increase with every regulatory agency. The truth is they don't know how to compete or adapt and therefore need to invent a billable item to bump up the bottom line.
If the FCC doesn't step in we will someday be paying $87.95 in various invented fees. | |
| | 
KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
2 edits | Awesome! Let's slam the lid on this garbage before it becomes even further "Accepted Rip-Off Practice". | |
| Automate
join:2001-06-26
Atlanta, GA | I have a simple solution Allow the phone companies to include all the "fees" they want but require that any advertised price must include all fees. In other words they have to advertise the true final cost to the customer including all fees. | |
| | | | | mrljcsi
join:2002-10-19
Saint Charles, MO |  Re: I have a simple solution
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | So simple a solution, and it makes total sense.
That of course, means it has no chance of being adopted.... | |
| | 
CompNrdCR
@liquidaudio.com
| Here in CA at the gas pump it says "price shown includes all taxes and fees" so when it says $200 for a full tank of gas it is $200 dollars.
I agree that all fees should be listed in the price... 26.95 DSL service = 32.95
-Thats my 10 cents | |
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bistro777
Donuts-Is There Anything They Can't Do?
Premium
join:2002-02-07
Englewood, CO
| Dear Valued Customer:
At the request of a myriad of so-called public interest groups (meaning anyone not on ourside of the fence), henceforth your monthly bill will be broken-down to explain your base rate plus any additional, paltry, trifling, you-ll-never-feel-em surcharges.
From this billing forward, our automated billing system (just try calling us someday to talk to a real person) code-named CREEP - Customer Report Excepting Everything Pertinent – will detail your service plan and all associated price-gouging charges. Your current billing:
Base rate - - $19.95
Base rate 4-9s connection fee - - $2.00
Modem rental - - $5.00
Neighbor’s rental even though you own your own - - $2.00
Federal tax - - $2.00
Federal tax credit – who are we kidding, we don’t pay any - - ($2.00)
Federal tax just in case we goof and actually have to pay something someday - - $3.00
Federal universal service fund - - $2.00
Our PAC’s fund - - $4.00
Regulatory fee (current) - - $1.50
Regulatory fee (future) - - $2.00
CEO’s club dues (meals extra, your mileage may vary) - - $2.50
Attorney fees (for our shareholder lawsuits) - - $2.00
Broadband portability fund (in case you move someday and we lose your business) - - $15.00
TOTAL DUE upon receipt - - more than you ever thought…and definitely more than you’ve ever heard or read in our advertisements.
NOTE: Most of our fees have nothing to do with regulation or government-mandated charges. If, in future billings, a single line-item entitled “additional profit” would suffice, please advice and your account will be credited with gold star.
Thank you for your understanding,
Your service provider (/laughing at you all the way to the bank)
"The problem with the world is that everyone is a few drinks behind." -- Humphrey Bogart | |
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Minister
join:2002-01-02
Fleeting | Re: I have a simple solution See, now you're going to make the bell people all mad with your assault on the poor, defenseless, honest, and penniless bells. I can hear them coming.... | |
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bistro777
Donuts-Is There Anything They Can't Do?
Premium
join:2002-02-07
Englewood, CO
1 edit | Re: I have a simple solution I will cheerfully add any telco (RBOC or other - it's not just the Bells), cable operator, cell provider, my gas and electric companies, and all those who obfuscate, hide and camouflage (additional) profit under the cloak of a nebulous, vague or misleading heading.
I mean, c'mon, it's like we need truth-in-lending or good-faith documentation from these guys every time the monthly bills arrive. Guess I just get tired of "How much is it?" v. "How much you got?" 
"There are no foreign lands. It is the traveler only who is foreign." - - Robert Louis Stevenson | |
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garagerock
Premium
join:2002-06-14
Louisville, KY | Re: I have a simple solution hey, when was the last time you bought a car? the hidden charges are obscene. no one ever gets the prices on TV... | |
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bistro777
Donuts-Is There Anything They Can't Do?
Premium
join:2002-02-07
Englewood, CO
| Re: I have a simple solution said by garagerock  :
hey, when was the last time you bought a car? the hidden charges are obscene.
Not too long ago... You can negate any nebulous dealer "add-ons" from the sales price with a little research - but you can't do that with your broadband provider. (Not singling-out anybody, 'cause they all do it.)
"Just add it up and tell me what it costs" v. sticking me after-the-fact with greater profit margin additional surcharges... (And I agree with you about all the "fine print" that flies by at ms speed in television advertising.)
Today is the last day of the middle of the end of the beginning. It is also the first. | |
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rchandra
Stargate S G-1 And Atlantis Fan
Premium
join:2000-11-09
14225-2105
clubs: | Re: Include it AND list it! Gasoline (and other motor fuel) retailers have been doing this for years (and also pretending I could pay less than a cent per gallon, BTW). hmmm.... | |
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Swingerhead
Premium
join:2004-04-06
Richmond, VA | Same as Mortgages Sounds like the same thing that you get when you apply for a mortgage. They have to tell you a good faith estimate on what you will pay per month. | |
| dick white
Premium
join:2000-03-24
Annandale, VA
 ·Verizon FIOS
| fees charged are usually not related to costs paid I've read that the amounts of money collected by the companies from consumers for these particular items bear little or no relationship to the actual costs incurred by the companies to perform whatever "regulatory" function they say must be done. The only difference between these guys and the used car salesman is these guys don't wear neckties made of upholstery fabric...
dw | |
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rchandra
Stargate S G-1 And Atlantis Fan
Premium
join:2000-11-09
14225-2105
clubs:
| Verizon Online ...begins this Sat., 01-May-2004. What really gets me is the section of the FAQ they've written:
Q: How does the Supplier FUSF Recovery Fee appear on my invoice?
A: The FUSF charge is identified on your invoice as “Supplier FUSF
Recovery” and appears as a line-item in the "Charges and Credits
Detail" section. This is an applicable fee, not a tax or government
required charge.
...so if it's not a government required charge, why are you charging it? If it's not a government required charge, it seems to me you have discretion whether or not to charge it!
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English is a difficult enough language to interpret correctly when its rules are followed, let alone when a writer chooses not to follow those rules. Blog is here | |
| | jgwilliams
Premium,VIP
join:2003-09-16
Chesterland, OH
clubs:
| Re: Verizon Online I don't know that anyone is looking at this in the right light, and perhaps because you don't know how things work on the other side.
In a regulated environment the utilities can not set their own price, the rates are approved by the PUC. Now the rates are derived from the Telephone companies cost of providing the service (the regulatory fees they pay are not a part of that cost - in this consideration). The PUC then allows them to have a certain markup, and in fact the phone company can not even charge less if they wanted to, let alone more.
The phone company then has fees, both regulatory fees from the government that they have to pay from their margin, and other non-elective costs such as 911.
The language relative to 'not a required charge' speaks to the regulatory ruling, and is a required statement. In short it is something like this:
Mr. Phone company it costs you 22.50 per month to provide dial tone, so you are going to charge consumers 25.90 and businesses 41.75.
In addition to that you need to provide 911 (this comes with a great deal of cost by the way), and you have these other fees you need to pay the government (these fees are not a part of the operating costs considered in regulating their retail price).
Then the phone company is given permission to recover a percentage of those costs, but not mandated to do so. If the phone company does decide to recover those costs then the PUC tells them a maximum amount (as a percentage usually - of the bill) that the are permitted to charge, and the phone company (being an elective recovery) can charge any amount, up to that percentage.
This is not a fee that the phone company pulls out of thin air, and for the most part they can not afford to eat the costs as their margins are pretty slim.
I am not here to defend the bell companies however in this case, most of the costs you realize on your bill are government related.
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JW
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rchandra
Stargate S G-1 And Atlantis Fan
Premium
join:2000-11-09
14225-2105
clubs:
| Re: Verizon Online J, I'm speaking more to the language of the FAQ. They need to write what they mean. By writing "not required," very plainly, that means "optional" to me. If as you write Verizon are required to write that, I guess it just changes the focus of disgust from VZ to their regulators.
The comparison seems flawed though. AFAIK, the DSL side of VZ aren't government regulated, as the telephony side of their biz (at least not yet).
What's even a little more puzzling on the regulatory front is that GSP fees are no longer itemized as they once were. The same concept as is echoed here in these news item comments applies...we usually prefer bottom-line pricing. Their advertised rates made only minor mention that a GSP fee was part of the monthly fee. But I guess it's tough to have it both ways.
"You're now going to pay $37.95 each month for your DSL"
"Why did you raise my rates?"
"We now have FUSF charges to pay"
"oh...."
Ignorance is bliss I guess.
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English is a difficult enough language to interpret correctly when its rules are followed, let alone when a writer chooses not to follow those rules. Blog is here | |
| | | dick white
Premium
join:2000-03-24
Annandale, VA
·Verizon FIOS
| No, think of it like this. Imagine a grocery store. The government mandates that all employers maintain workers compensation insurance to pay the medical costs of employees injured in the workplace. The government mandates that they put up all sorts of OSHA signs and safety devices. The government mandates that they do all sorts of health and sanitary things when handling food, including undergo all sorts of inspections, etc. These things are not taxes, but regulatory requirements for them to stay in business offering grocery services to the public. Now, what would you think if you went in to buy some toothpaste, advertised at $3.89, but when you got to the cash register, you had to pay the $3.89 plus the usual 4.5% sales tax (or whatever in your state) and, starting next week, a $0.50 "regulatory recovery fee" and a $0.40 "safety recovery fee" and a $0.10 "sanitary recovery fee" bringing your total cost for the toothpaste to $5.07? Would you regard it as more acceptable if, upon further inquiry, they said that the $3.89 price on the shelf was just their actual inventory cost and these fees were "not required, but necessary to pay for operating expenses that they might have now or in the future"?
dw | |
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footballdude
Premium
join:2002-08-13
Imperial, MO
| Re: Verizon Online said by dick white :
Now, what would you think if you went in to buy some toothpaste, advertised at $3.89, but when you got to the cash register, you had to pay the $3.89 plus the usual 4.5% sales tax (or whatever in your state) and, starting next week, a $0.50 "regulatory recovery fee" and a $0.40 "safety recovery fee" and a $0.10 "sanitary recovery fee" bringing your total cost for the toothpaste to $5.07?
The difference in that example is that the government isn't forcing them to charge $3.89 for the toothpaste. The price on your phone bill is mandated. | |
| | | | | dick white
Premium
join:2000-03-24
Annandale, VA
·Verizon FIOS
| Re: Verizon Online said by footballdude :
The price on your phone bill is mandated.
I would agree with you for regulated landline POTS charges, but in the area of regulated charges, they do have the opportunity to periodically request a rate increase to adequately cover their costs of providing the regulated service. These fees are just added on top of the regulated charge and often don't bear any relationship to the costs (including reasonable return on investment) of the alleged mandated activity.
And I would disagree with you for the unregulated cell phone and DSL lines of business. No government regulator tells them how much to charge per month for these service - it is the competitive marketplace. What they have discovered is that they can advertise the $3.89 price for the toothpaste with full page newspaper ads and broadcast media spots to sucker the customers in, and then once the customer is locked into a two-year contract for a fresh tube of toothpaste every week automatically charged to their credit card, and then start adding the $1 extra hidden "fee" simply because they can.
dw | |
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alanhdsl
Premium
join:1999-10-09
Phoenix, AZ
 ·Qwest.net
| That's exactly it! And what's worse, they don't have to disclose what their actual costs are. So the regulations may cost them $0.25, but they can collect $1.00.
As for the "educating consumers on what regulation costs" angle, like any cost of doing business, businesses can be more or less effecient at managing these costs. Idealy, those that do it most efficiently would be rewarded. So a grocery store with a strict safety program may have lower workman's comp costs. But with fee itemiziation, they can't advertise a lower price than a grocery with a higher "workman's comp recovery fee".
In the telecom sector, consider two wireless phone companies. One has a $0.45 fee for wireless portability, and another has $1.40. Which helps the consumer more: ads reading $40.40 vs. $41.45, or ads reading $39.95 vs. $39.95? | |
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Dour Reaper
@208.156.x.x
| This analogy is faulty. The sales pricing in this example is a result of total cost of sales plus a profit margin (competitive price/market price), and is driven by product demand and supply.
In the case of utility pricing, consumers get charged a set fee per connection, regardless of volume of use. Meaning just having the account open but not ever using it, the consumer will be charged the fees. So, without ever having utilized the product, you get "charged" for the service fees.
One of the reasons the PUCs like to hide these charges is because the consumer won't be reminded of the fees the PUC is "collecting" for local government coffers each time the consumer reads the bill.
There's an old saying about sales taxes that applies here:
"Sir, I don't charge the sales tax, I just collect it for the state." | |
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tomsprat
Draw Me A "Cold One"
Premium,ExMod 2002-04
join:2000-11-03
Fort Lauderdale, FL
clubs:
| quote:
This is not a fee that the phone company pulls out of thin air, and for the most part they can not afford to eat the costs as their margins are pretty slim.
Sorry, but I disagree on both counts. These costs should be treated as normal operating expenses and included in the price of the service. If it were the true intent of the providers to educate the public, they could do so in an explanation for their costs, but not camouflage them as additional fees that appear to be imposed by the government(s).
If you think that their profit margins are slim, think again. Check forbes. com, or any other reliable source to determine how profitable the ILECs have been, regardless of our country's economic situation. They have all been at the top of the list for profitability, even through recessionary periods, when others have gone "belly-up".
Yes, we depend on them for reliable communications and, yes, their service has been good. Unfortunately, they have reached the point of dictating to the consumer what their profits will be, simply due to a lack of competition and government representatives who are truly concerned with our county's populous, as opposed to the silk linings in their pockets...
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Anything that ever was, was once a dream... | |
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maciej
@comcast.net
| Phone prices like gas prices I like very much decision of the Missouri PSC, and I hope that other states follow suit. I propose that prices of telephone lines are advertised the same way as gasoline prices (i.e. all fees, charges and taxes included). When I drive around looking for gas I have no problem comparing prices at different gas stations. With the phone line, various hidden fees and charges constitute often more than 50% of the advertised price. Recently I was paying SBC $32 per month. Is an offer of $25 better? Probably not, as SBC's line charge is only $21, and rest are taxes, fees and surcharges. These are likely to be added by a competitor too. Very often customer can only learn about these hidden fees after he or she has signed up for service. Cancelling at that point and switching to other company is not practical, as setup fees usually go around $40-50. In essence, current practice is an example of dishonesty and cheating, so I am really glad that somebody proceeds with a plan to ban it. | |
| 
jtudor
Xm 60's On 6 Freak
Premium,MVM
join:2002-12-07
Morganton, NC
|  Too many fees
AT&T thus lost my business, After the latest round of added fees, I changed my LD carrier.
--
Best of luck
"Do, or Do not, there is no try!" Yoda | |
| | 
n2jtx
join:2001-01-13
Glen Head, NY
 ·Optimum Online
| Re: Too many fees said by jtudor :
Kinda reminds me of my LD bill last month. I had one LD call in the AT&T portion of my bill. 1 minute at $0.17. By the time AT&T was through with me I paid them $8.53 for that one call.
AT&T thus lost my business, After the latest round of added fees, I changed my LD carrier.
I dumped AT&T as well for the very same reason. I make very very few LD calls (in fact, since I dropped them in March, I haven't made any). AT&T instituted a $5/month minimum charge in March. Then came the taxes and other surcharges (in-state connection fee, cost recovery fee, etc.) and I was seeing an $8 charge without making any calls. Let them soak someone else... Buh-Bye AT&T... | |
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yock
TFTC
Premium
join:2000-11-21
Fairfield, OH |  Sure...
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pcscdma
Chocobo Chocobo Random Battle
Premium
join:2004-01-14
Winterset, IA
clubs:
| Re: Sure... The USF is not required to be added on as an additional charge. It supposed to be included in the tariff. The fee does change, but it can be evened out in their profit.
»www.fcc.gov/cgb/consumerfacts/charges.html
Here is what my Sprint PCS bill says -
Surcharges and Fees - The surcharges in this section generally recover the costs incurred by Sprint in complying with various federal and state mandates. Charges that appear in this section of your invoice, including charges associated with Federal Wireless Number Pooling and Portability, Federal and State Universal Service Funds (USF) and Federal E911*, are neither taxes nor government-imposed assessments. The Federal USF charge is calculated using the FCC-prescribed contribution factor, which may change on a monthly basis. Neither federal nor state law requires carriers to impose these charges but carriers are permitted to recover their costs of complying with these federal and state mandates.
Call 1-866-770-6690 for more information, including the current Federal USF invoice surcharge.
*E911 is limited... blah blah blah ...
Throwing federal, state and FCC in there is solely to confuse the consumer.
quote:
Neither federal nor state law requires carriers to impose these charges but carriers are permitted to recover their costs of complying with these federal and state mandates.
That does not say that the carrier has to use a line item charge. It just says that they can charge you for it. Putting it in with the advertised price would sure comply with that, wouldn't it?
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The secret to sucessful marketing is to promote the positive qualities of your product. You can point out the weaknesses of your competitors, but if that is all you do the consumer may have the impression that your product is unfit for the market. Kerry04 | |
| Skippy25
join:2000-09-13
Hazelwood, MO
| Say what you mean! It simply boils down to them charging what they advertise. These fees have always been there and they are just now "breaking them out". Which is a stretch because they are adding them to the bill, they are not breaking anything out. And really 99.9% of us could careless if it was a fee of $50, just dont tell us DSL cost $29.95 and then slip the fee in on top of it.
Also someone was so kind to point out the way they come up with their pricing. However, this person did not disclose the questionable way they do it. They have hundreds of millions of dollars in equipment that they can't account for, but they use it to expense as a cost of goods (or however they account for it). This of course raises their expenses, cost of operating, and reduces their profits in the books. They use this information to access the cost they can charge. As a result of that they are over charging everyone anyway because if you start with an inflated number, you get an inflated result.
I believe what I speak of was articled here once a few months back. It could have been on another site. I however can attest to thousands of dollars of their equipment I have sitting in my lan room because they won't pick it up after we cancelled service quite a while ago. | |
| solstice
join:2003-03-05
Berkeley, CA
| Remember the energy surcharge at hotels? During (and much after) the "energy crisis" of 2000/2001, many hotels tried to charge an energy surcharge. Same deal. I expect that they will try for a labor surcharge after their next labor contract negotiations and a regulatory recovery recovery fee (for them to get back what they pay to their broadband provider)... | |
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J D McDorce
Premium
join:2001-12-29
Westland, MI | Re: Remember the energy surcharge at hotels? And some airlines have gate charges, departure fees, fuel surcharges, etc. that go beyond the advertised cost of an airline ticket - all of which could be factored into the advertised price if they wanted to. | |
| 
wozster
Premium
join:2000-10-21
Lenexa, KS
| Twice now.... Hmmm.. This is the second time in recent years that I've been proud to be a Missourian (publicly).
we still have the worst highways in the nation.
The other was here: Link
or here for more context: Link
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Protect online free speech | |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | Re: Twice now.... Hmmm.. I'm beginning to think Missouri rocks.... | |
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Varangian
join:2002-12-08
Collinsville, IL |  Why not just require..
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