Verizon, Sprint to Cut Cell Fees
The nation’s second- and third-largest cellphone carriers are lowering controversial surcharges on customer bills that have brought the companies more than $250 million this year.
Verizon Wireless and Sprint Corp. say they’re reducing the fees, starting this month, because costs of a federal order to allow “phone number portability” -- when people switch carriers but keep the same cell numbers -- have fallen sharply since the order took effect a year ago.
Their assertion that costs are down raises questions about whether other wireless companies continue to charge monthly fees not to offset expenses but to collect additional revenue.
Verizon Wireless, the biggest winner of customers since number portability was first permitted a year ago, planned to announce today that it was eliminating all but a nickel of the 45-cent monthly fee it charges for regulatory expenses.
Sprint is lowering its regulatory recovery fee to 25 cents, the second reduction since June. The fee, which was more than doubled to $1.10 in July 2003, was reduced to 40 cents in June.
Both Verizon and Sprint explained that the cost of phone number portability had fallen after the early barrage of requests eased, and the process turned routine after a few months rife with glitches.
Cellular companies have charged hundreds of millions of dollars in fees in the last few years to defray expenses resulting from mandates by the Federal Communications Commission to further such public goals as subsidizing rural phone lines.
Critics have complained that the fees collected exceed actual expenses by a wide margin, and that they are presented on the bill in language falsely suggesting that the charge is a tax by the government.
Verizon denied that the fee cut was timed to lure customers away from the industry’s largest company, created through the just-completed purchase of AT&T; Wireless Services Inc. by Cingular Wireless.
Cingular, a joint venture between SBC Communications Inc. and BellSouth Corp., charges 52 cents to $1.25 a month for regulatory recovery, and AT&T; Wireless charges $1.75. A new fee for the combined company has not been set.