A comment on this story follows the excerpt ...
Net telephone fees have users fuming
Published: January 26, 2005, 10:06 AM PST
By Ben Charny
Staff Writer, CNET News.com
John Rolff's latest broadband phone bill contained three words he
vowed never to see again: "regulatory recovery fee."
The same charge was the reason he dumped his old phone provider, SBC
Communications, in favor of Primus Telecommunications' Lingo, which
lets his broadband line double as his phone line. From all
appearances, Lingo hadn't been "adding these little nickel and dime
charges," he said.
But now, the 38-year-old software engineer -- along with 755,000
others -- is learning that this had never really been the case. Lingo,
Vonage, Time Warner Cable and every[*] other commercial provider of
voice over Internet Protocol (VoIP) services have been collecting
government fees for years. It's only in recent months that most have
been coming clean on their statements -- to fend off critics, as the
spotlight on Net phone services grows.
Some, notably state governments, have called for broadband telephone
services to pay the same regulatory fees that the traditional local
phone providers -- known as the "Baby Bells" -- do. The Federal
Communications Commission has so far kept regulators' hands off VoIP.
Hoping to counter calls for direct taxation and regulation, many of
the Net phone operators now identify a "regulatory recovery fee" line
item of 50 cents to $3 as part of their regular monthly service
charges. They say they're highlighting the portion of local phone fees
the Bells have always charged them for completing calls on local
"A lot of people were raising this concern that we weren't funding
telephone projects like the Bells were," said Jeffrey Citron, CEO of
VoIP provider Vonage Holdings. "That's a red herring -- I say 'malarkey'
to it. We already fund part of it, and we wanted to show our customers
and everybody else."
Net phone companies insist that the fees are legitimate, merely
offsetting the costs of taxes and regulatory fees passed on to them by
the local phone companies for completing Net calls, they say.
Nevertheless, some critics say the label is at best misleading --
and at worst a misrepresentation with potential for abuse.
The line item attempt to soothe angry state regulators seems instead
to have riled VoIP customers, many of whom admire the outsider stance
of broadband phone services as well as the cheaper rates. Rolff said
he no longer views his operator as a lovable underdog with a hot
technology trying to topple the Bell Goliaths.
Full story at:
[*Jack Decker COMMENT: Can you spot the false statement in this story?
It is, "every other commercial provider of voice over Internet
Protocol (VoIP) services have been collecting government fees for
years." First of all, many of the providers of VoIP service haven't
been in business for "years", second, even today there are providers
(such as VoicePulse) that do not collect a regulatory recovery fee. I
have been opposed to the addition of these fees from the outset
because they are almost never mentioned adjacent to the advertised
price, thus making it difficult for customers who want to compare
monthly rates, and putting those who don't resort to such trickery at
a disadvantage (by making their competitors' prices look lower than
they really are). All the customer cares about is the bottom line,
and that's the price he wants to see when making price comparisons.]
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