Verizon Reverses Position, Cuts DSL Surcharge

Just two days after saying it would not rescind its USF-replacement fee, Verizon Communications Inc. said on Wednesday it is dropping its supplier surcharge, which totaled $1.20 per month for Verizon Online DSL with service up to 768kbps, and $2.70 per month for service at higher speeds.

The company was getting backlash from customers, most visibly in the form of a new Web site called It also was being pressured by the FCC; media reports quoted sources saying FCC Chairman Kevin J. Martin was incensed that Verizon and BellSouth Corp. both of whom recently were relieved from having to pay into the USF from their DSL proceeds had imposed the fees when consumers bills were supposed to go down.

BellSouth on Aug. 25 dropped its fee because it wants to stay on the FCCs good side as it aims to merge with AT&T. We obviously have a pending merger and we did not want this to become too much of a distraction, Joe Chandler, director of media relations for BellSouth, said on Monday.

That same day, Verizon spokesman Brian Blevins said the carrier had no plans to drop its USF-replacement fee. The carrier argued the surcharge helped meet the costs of providing service, particularly the cost of offering standalone DSL.

On Aug. 30, several days after receiving a letter of inquiry from the FCC and fielding customer complaints, Verizon reversed its position. “We have listened to our customers, and are eliminating this charge in response to their concerns, said Bob Ingalls, chief marketing officer of Verizon Telecom, in a statement.

The customers who already have been billed for the surcharge will receive a credit, Verizon said.

In a news release issued on Wednesday, the FCC’s Martin said he was pleased BellSouth and Verizon both eliminated the fees. “Consumers should receive the benefits of the commission’s action last summer to remove regulations imposed on DSL service. The continued deployment of broadband at affordable prices for consumers remains my top priority as chairman,” he said.

BellSouth Corp. 
Verizon Communications Inc.

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