[IP] FCC Line Charge could increase to $10 or more on local bills,
Begin forwarded message:
From: Bruce Kushnick <bruce@xxxxxxxxxxxxxxx>
Date: August 17, 2004 9:03:35 AM EDT
To: dave@xxxxxxxxxx
Subject: FCC Line Charge could increase to $10 or more on local bills,
increase USF, Broadband taxes.
TELETRUTH NEWS ALERT (contact info below.)
Get ready to be nickeled, dimed and quartered again!
New Proposed Taxes, Surcharges on Phone Bills and Broadband.
If the FCC's Intercarrier Compensation Forum (ICF) has its way, every
residential and business local phone bill will show an increase of
the FCC
Subscriber Line Charge ("SLC" and other names) from a current cap of
$6.50
to over $10.00 a month, not counting hefty taxes. To make matters worse,
this industry group also wants to raise customers' Universal Service
charges on everything from local service to even cable and DSL services
--
new broadband taxes.
To read an Executive Summary of the ICF plan released August 16th, see:
http://www.teletruth.org/docs/ICFExecutiveSummary.DOC
To see the planned increases in a chart.
http://www.teletruth.org/docs/SLCincreaseICF(1).pdf
"Teletruth believes that before any increases to these charges are
initiated, the FCC should stop listening to closed-door-phone-industry
groups who represent their own corporate needs and start representing
the
customers' interests. As we have filed, based on our recent 2-year
investigation into phone bill charges, the FCC should immediately do a
cost-justification of every fee, tax and surcharge on the bill because
every
charge has been inflated or lacks adequate cost-support, or just
shouldn't
be on the bill in the first place" states Bruce Kushnick, Chairman,
Teletruth.
Teletruth Research: To read details of our recent 2-year investigation
into
phone bills, see:
http://www.teletruth.org/phonebillindependencereport.html
If the FCC doesn't listen, everyone from Seniors to Small Businesses
will be
hit with unjustified increases with these proposed new changes.
The FCC Line Charge Scam, Part One and Part Two.
In 1999, the FCC backed another industry cabal known as "Calls"
claiming
that it would help customers by lowering "access" fees, which are the
fees
long distance companies build-into our long distance rates that are
paid to
the local phone companies. In exchange, the FCC would raise the "FCC
Line
Charge" from $3.50 to $6.50 in 2003. This increase was done with
virtually
no cost support. In fact, there was ample data presented that clearly
showed that the $3.50 charge was inflated.
And now, in a new scam, Part Two, this new industry group, once again in
closed-door meetings that closed-out anyone representing customers,
wants to
continue to lower access fees and once again raise the FCC Line Charge
and
increase Universal Service funding --- meaning charges to customers.
Why is it a scam? The FCC Line Charge is a very large slush fund for the
phone companies. Besides the lack of cost support:
* Most customers believe this charge goes to fund the FCC. However,
it is
unmarked revenue to the phone companies. The FCC Line charge is a
"non-service". You can't order it and you can't take it off your bill.
* The FCC Line Charge is NOT included in the advertised price of a
local-long distance package. This charge with various associated taxes
adds
25-35% more to the actual costs of the total package. Also, it is never
included in the advertised costs of 'local phone service' even though,
in
many states, it is part of local monthly charges.
* The FCC Line Charge is quintuple taxed in New York City 27%, and,
as in
most other states, Universal Service is also being charged to this
fee. Any
new increases also increase the taxes -- adding additional dollars a
month.
In NYC, this will be adding an additional $2.70 more in taxes --- for a
total of $12.70 a month. This will be 131% more than the cost of
dialtone
for a 'non-service'!
Teletruth has filed a "Data Quality Act" challenge and a
"Truth-in-Billing"
complaint requesting the FCC investigate this charge. To read more see:
http://www.teletruth.org/RemoveFCCLineCharge.html
Are Packages Customer Friendly?
The ICF also claims that "customers prefer bundles" and that
"Customers do
not receive the service packages they want.".
While packages are good for heavy users, the majority of households do
not
save money on a package, mainly because of the excessive hidden charges
and
fees that are not part of the advertised price. In fact, our recent
survey
of phone bills found that 15-25% of the population on packages are
paying
more than if they simply ordered ala carte.
Another secret -- Prices should have been in serious decline because the
costs of offering local phone service have continued to drop, with
massive
cuts in staff and new construction. However, a package that includes
long
distance or DSL allows the phone company to cross-subsidize these other
businesses, meaning that the phone companies can shift the expense of
these
other services to local phone customers. This means everything from
advertising to even staff and construction are inflated for local phone
customers.
If prices are supposed to be going down from competition, how is it
that
states across the US, from New York and New Jersey to Florida, have seen
recent increases in various local services, from local base rates to
directory assistance..
Increasing Universal Service Funding? You got to be kidding.
As many know, the Universal Service E-Rate has been under investigation
for
fraud. More to the point, the largest recipient of these programs are
the
major vendors -- the phone companies. The schools and libraries get
discounts, while these companies are reimbursed full business rates.
But the real secret is the fact the USF "High-Cost" fund, is another
slush
fund. This fund allows companies who are very profitable to claim they
need
more subsides, even though many of these companies are under "price
caps",
and regulators no longer examine their profits. We're talking about
companies with earnings (EBITDA) of 55%, making them some of the most
profitable companies in the US. And this fund has yet to have any
substantial audits performed -- Who's minding the fund?
"Our survey of phone bills also revealed that the USF charges simply
don't
add up. Many customers are being overcharged for fees in a myriad of
ways,"
states Tom Allibone, Teletruth Director of Audits.
"Teletruth believes USF charges should be slashed, and that the entire
fund
should be 'needs-based', not 'greed-based," adds Kushnick.
New Broadband Taxes? -- As America talks about speeding up broadband
deployment, another troubling point in this proposal is that there are
increases to Universal Service and Broadband will be seriously
taxed. For
example "Non-switched, dedicated network connections with capacity of at
least 1.5mbps but less than 45mbps are assessed 5 units" ---- five
times
the charge for a residential line. (The documents do not explain how
much a
"unit" is.). Thus, a phone line will not only have a major increase for
DSL,
but the faster you go, the more you get taxed.
"Teletruth believes in Universal Service principles and the need to fix
the
broken access regime, too complicated to discuss here. However,
'Investigate
the FCC Line Charge and USF monies, and not increase these funds',
should be
the outcry by the public" adds Allibone.
Finally, for those of you who haven't been following this tale of
telecom
woe, the ICF only represents a small group of the telecom companies.
Many
were denied access or have dropped out, and it certainly doesn't
represent
any customers. --- This is not a "consensus" document. This is a
"senseless"
document.
Tom Allibone and Bruce Kushnick, Teletruth
Bruce Kushnick, bruce@xxxxxxxxxxxxx
718-238-7191
Tom Allibone, tom@xxxxxxxxxxxxx
609-397-2257
For more about Teletruth: http://www.teletruth.org
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