Long-distance customers will see 99 cents tacked to their monthly bills.
By LOUIS HAU
Published July 2, 2003
Starting this month, AT&T long-distance customers will pay about $12 a year in added charges, and not a cent of it will go toward phone calls.
The company's new monthly 99-cent "regulatory assessment fee" isn't a tax or a government-mandated charge. It's the latest example of how long-distance carriers are getting customers to pay for a portion of their expenses, such as property taxes and interstate access charges.
AT&T says it's instituting the new fee to stay competitive in the cut-throat long-distance market.
Sprint was the first to introduce a separate, nationwide, nonmandatory fee in February 2001 with a 1.08 percent "carrier property tax fee," which was raised to 1.41 percent this year.
MCI has two fees, a "carrier cost recovery charge" and a "property tax surcharge," which total 2.8 percent of each month's billing. Verizon doesn't levy such a fee on its long-distance customers.
AT&T's new fee works out to a surcharge of more than 8 percent on an average monthly residential long-distance bill of about $12, according to Rich Sayers, editor of 10-10phonerates.com, which monitors long-distance rates.
"This fee will help AT&T recover the following costs: interstate access charges, regulatory compliance and proceedings costs and property taxes," reads a notice that the company is including in its July customer bills.
Competition to offer the lowest rates is "putting a lot of pricing pressure on all the carriers," AT&T spokesman Bob Nersesian said. "At the same time, certain kinds of things like taxes and regulatory proceedings aren't going away. . . . That's what the fee is for."
Like other long-distance carriers in Florida, AT&T already charges a monthly "in-state connection fee" to defray the cost of access charges the company pays to use local, in-state phone networks. In AT&T's case, the in-state fee is $1.88 a month. That means an AT&T customer who makes at least one long-distance call a month now will be charged an annual total of $34.44 in fees alone, excluding hefty state and federal taxes.
The competitive pressures that carriers say make the new fees necessary also help explain why they've opted to keep the charges separate from their all-important per-minute rates, which is what most customers look at when shopping for a long-distance carrier.
That makes the fees potentially misleading and confusing for consumers, said Florida Utility Watch president Mike Twomey. New phone legislation recently signed into law by Gov. Jeb Bush could lower in-state connection fees, but at the cost of increasing local rates, Twomey said.
The fees "have the appearance of being state mandated or federally mandated and they're not," he said. "This is all designed to confuse the customer on what the true minute-to-minute charges are."
Nersesian defended AT&T's decision to keep its new fee separate from its per-minute rates, again citing competitive factors.
"As long as (competitors) continue to do cost comparisons and keep the charges out of the comparisons, unfortunately we're forced to do the same," he said.
- Louis Hau can be reached at hau@sptimes.com or 813 226-3404.
