Verizon adds a surcharge as it eliminates a tax
DSL customers will save up to 13 cents a month
It's not enough to use a pay phone, but it's something: Verizon Corp. sent out notices to high-speed Internet customers telling them their bill will fall either a nickel or -- hold onto your seats -- 13 cents a month.
What's going on? Verizon said it stopped collecting a federal tax called the Universal Service Fund on DSL customer bills on Aug. 14, and will replace it Saturday with its own fee that comes out to be just slightly less. The new fee, called a supplier surcharge, will go to Verizon, said a company spokesman, John Bonomo .
``This surcharge is not a government-imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service," the company said in e-mails sent to customers over the weekend.
Some of Verizon's 6 million DSL customers reacted with dismay to the new supplier surcharge, which is equal to 8 to 9 percent of their monthly bill.
``I think it's a sad joke," said David Bookbinder of Peabody. ``Apparently Verizon saw the elimination of the federal Universal Service Fund charge as an opportunity to sneak in another price increase. They figured the customer wouldn't complain too vehemently since the price to them is about the same."
The tax-for-surcharge swap is basically a wash for most DSL customers. Customers with 768-kilobit service, which costs $14.95 a month purchased online, will see the $1.25-a-month Universal Service Fund charge disappear from their bills and be replaced with a $1.20-a-month surcharge for a net savings of 5 cents a month.
All other Verizon DSL customers will see the $2.83-a-month Universal Service Fund tax replaced with a $2.70-a-month surcharge, for a net savings of 13 cents. For a 3-megabit-service customer paying $29.99 a month, the surcharge is 9 percent of their bill.
Customers on annual plans will not have to pay the surcharge until their current plan expires.
Bonomo, the Verizon spokesman, said the surcharge was added to offset costs that another business unit within Verizon had previously been absorbing.
``This was a business decision that we made to recover part of the cost for that line that goes to your home," he said.
The Universal Service Fund was established in 1996 to promote the availability of telecommunications services in rural and high-cost areas of the country and to support advanced telecommunications services in schools and libraries. The fund has been financed by assessments on telecommunication companies, which in turn passed most or all of the assessments along to their customers .
In August 2005, the Federal Communications Commission ruled that DSL providers no longer needed to contribute to the fund, but ordered them to continue making contributions until Aug. 13 of this year.
Cable companies, which provide voice, Internet, and video services to their customers, have never been required to contribute to the Universal Service Fund.
Bruce Mohl can be reached at mohl@globe.com. 