dslreports logo
site
spacer

spacer
 
   
spc
The Rise of 'Unfees'
VoIP providers embrace sleazy tactic
by Karl Bode 01:16PM Friday Jan 07 2005
The addition of surcharges with names like "regulatory recovery fee" first sprang up on landlines, and quickly migrated to DSL and wireless services. The fees (which aren't FCC mandated) are now making their way to VoIP providers, and continue to be slammed by consumer advocates who say it's an underhanded way to hike prices. Users in our VoIP forum note that Lingo is the latest (Vonage and others already have), adding a $1.50 "regulatory recovery fee" to monthly bills in February. Lingo users are also facing a new 3% "Federal Telecommunications Excise Tax".

view:
topics flat nest 
asonnyb

join:2004-12-31
Lutz, FL

No wonder

my bills for cable and cellular keep creeping up. Telcos must be one of the most reviled industries ever.
--
If you're gonna be stupid, you gotta be tough...

HiVolt
Premium
join:2000-12-28
Toronto, ON
kudos:21
Reviews:
·TekSavvy DSL
·TekSavvy Cable

Re: No wonder

How can they call it regulatory fee when VoIP isnt even regulated? WHat a crock of sh*t.
--
}·.¸¸.·´¯`·.¸¸.·´¯`·.¸¸.·´¯`·.¸¸.·´¯`·.¸¸.·´¯`·.¸¸.·´¯`·.¸¸.·´

Karl Bode
News Guy
join:2000-03-02
kudos:42

1 edit

Re: No wonder

They use the same lame reason the bells do. It's in "anticipation" of future regulation.

quote:
This fee is charged to our Lingo customers to recover the costs of certain regulatory and compliance requirements imposed, or expected to be imposed
Can we as end users "anticipate" ass-ish service and deduct $1.50 a month?

Ironically in the bells case, they've been seeing significant de-regulation, so maybe they'll start paying us.

en102
Canadian, eh?

join:2001-01-26
Valencia, CA

Re: No wonder

It's more of 'Here's what we have to pay our lawyers and lobbiests, and a slush fund' fee right now, and eventually, it will be 'Here's what we have to pay our lawyers and uncle Sam, and the rest is for the slush fund'

dare99me

@optonline.net
Fees should not be imposed until fcc finalizes any taxes on Voip, rite now there are none!!
Not that I am an expert in law, but just because a voip telco is unregulated doesn't mean it is exempt from certain laws - just that it doesn't have to be regulated by all the service interconnect fees etc or whatever those fees that telcos pay each other are called.

The 1996 telco act states that all providers of telecommunications services should contribute to Federal universal service in some equitable and nondiscriminatory manner - this has nothing to do with the excise tax. this is over and above it.

This, from broadvoice:

The Regulatory Recovery Fee is $1.50 per line. This is a fee that BroadVoice charges its customers to recover costs related to the Federal Universal Service Fund (USF), other similar funds, as well as domestic and international fees and surcharges. Your monthly bill will reflect a Regulatory Recovery Fee a $1.50 for each line on your account. You will not be charged a Regulatory Recovery Fee for Alternate Phone Numbers.

I would guess that the regulatory fee most people are seeing is related to the FUSF. However, I would NOT be surprised if the voip provoders were slipping in something extra there.... (heck, broadvoice admits as much!)

To me it makes good sense - if voip wants to avoid getting regulated from congress it is paying money so mr & mrs middle-of-nowhere can connect to Al Gore's internet and thus placate provincial legislators. Am I happy? no. would i rather pay $1.50 and keep the gvnmt out of my voip than pay AT&T level fees & taxes? You betcha

Karl Bode
News Guy
join:2000-03-02
kudos:42

1 recommendation

Re: No wonder

quote:
Am I happy? no. would i rather pay $1.50 and keep the gvnmt out of my voip than pay AT&T level fees & taxes?
You're doing exactly what they want you to do. Namely blame what is purely a price-hike on Uncle Sam, not the provider.

It allows them to raise prices, advertise the old price, and make more money while you blame someone else for it.

The Regulatory Recovery Fee is not an official fee, and is not going to the USF, it's going right into their pockets.

roamer1
sticking it out at you

join:2001-03-24
Atlanta, GA
said by FreeMarketsNow:

The 1996 telco act states that all providers of telecommunications services should contribute to Federal universal service in some equitable and nondiscriminatory manner - this has nothing to do with the excise tax. this is over and above it.
One thing a lot of people miss is that VoIP providers are *already* contributing to the USF -- although quite indirectly and not necessarily fairly, via what they pay to ILECs, CLECs, and IXCs (entities that clearly must contribute to the USF) for PSTN interconnection services (PRIs, DIDs, wholesale LD, etc.) and last-mile and intercity facilities (T1's and so on.) It does seem that VoIP is eroding USF revenues, though, mostly because of lower contributions from those sort of services vs. traditional phone service.

-SC
--
"it seems like all you ever buy is Abercrombie and cell phones" --a friend

Logan 5
Enjoying the Cataclysm
Premium,MVM
join:2001-05-25
Austin, TX
kudos:7

Why should this be surprising?

VoIP providers look to the successes of the DSL & Cable ISP's so if they have been charging additional fees just because they can, why should the VoIP providers think that they shouldn't as well?

Don't forget that this is a monetary driven commodity, so the more that they make the better that they think they are doing.

Until this practice is declared illegal across all the broadband & internet service providers, it won't go away and will likely continue unabated with no restrictions placed on it's existance....

It's up to us to decide if this practice is allowed to continue, not them.
jakenshaken

join:2005-01-07
Sioux City, IA

Re: Why should this be surprising?

Yes, you can thank that liberal lawyer turned Judge {Green] who helped us out be deregulating the Bells and thereby causing our bills to double and all kinds of special charges be put on our bills for telephone services. The taxes and fees cost as much as the line. So much for his idea that deregulation would lower fees. Just the opposite. Write your congredsperson and demand utility regulation. All this deregulation is good for stuff is just a rip off. That's how it was with the electricity industry and well proven. But we still have this wonderful competitive system in our utilities that is only competitive on how much each one can tack on the consumer bill. That was one reason we had Enron too. They were trading the mythical electricity from the mythical savings of deregulating the utilities. Same old same old. Every time they cut my taxes my pay is less. Same thing with the HMO that was going to provide better service at less cost to us users [or so it was presented by the company when they first began coming out].

Logan 5
Enjoying the Cataclysm
Premium,MVM
join:2001-05-25
Austin, TX
kudos:7

1 recommendation

Hey there jakenshaken See Profile WELCOME to BBR!!, this being your 1st post and all....
DonLibes
Premium,ExMod 2001
join:2003-01-19

1 recommendation

SunRocket has a good model

That's what I like about SunRocket. Rather than quoting the cost *before* taxes and fees, they only quote the cost *after* taxes and fees. You can't hide bogus taxes, tariffs, surcharges, penalties, or whatever subterfuge you choose when your policy is always to show the bottom line in the advertising and bills.

bottomdollar

@optonline.net

Re: SunRocket has a good model

Yes! That's right, demand the final price AFTER taxes before you begin service so you know exactly what your in for and paying, also read the fine print of any voip contract to see what the 'unlimtied' minutes REALLY stands for (is it 3,000 5,000, or skys the limit to the theoretical max? 60minutes times 24 hours, times 30 days?)
Which, if you do, you really need a life...
but the sunrocket model sounds the best, even at some piont if you have the price so low, it still beats many providers 2:1 on price
ossito16

join:2004-07-31
Whiting, IN

this one is easy

Cancel your Voip services. Voip is way to new, and nobody is dependent on its technology yet. People can easily do without it. A small drop in revenue will kill a lot of startups.

Logan 5
Enjoying the Cataclysm
Premium,MVM
join:2001-05-25
Austin, TX
kudos:7

Re: this one is easy

said by ossito16:

Cancel your Voip services. Voip is way to new, and nobody is dependent on its technology yet. People can easily do without it. A small drop in revenue will kill a lot of startups.
Why kill technology with promise just because you don't agree with their current billing practices??

That attitude reminds me of going deer hunting with a RPG Launcher.....Effective? Sure it is......Overkill....you betcha!!

There's better ways to address this issue (like stopping the fees at the source by making their collection illegal) then condemning a whole technology to "Cyber Genocide".
ossito16

join:2004-07-31
Whiting, IN

Re: this one is easy

Should not really kill technology. Just make them realize customers are not going to put up with that crap.
lesopp

join:2001-06-27
Land O Lakes, FL

1 recommendation

I can hear it now:

Q. What did you use on that deer?

A. Colateral damage from a near miss.

rollinraver

join:2002-04-27
Buffalo, NY

unfees...

The telecommunications excise tax is NOT new. Quite the opposite really, it's over 100 years old. 1898 it was enacted and Mr. Clinton failed to sign the legislation that would have removed it.
hrobins
Premium
join:2000-10-15
White Rock, BC

Re: unfees...

The excise tax was put in place to pay for the Mexican/American war. Most telcos don't want to get rid of it because its money in their pocket.
rbb

join:2000-09-17
Fairfax Station, VA

Re: unfees...

said by hrobins:

The excise tax was put in place to pay for the Mexican/American war. Most telcos don't want to get rid of it because its money in their pocket.
Actually, the Spanish American War:o...
The Chef

join:2003-12-09
said by hrobins:

The excise tax was put in place to pay for the Mexican/American war. Most telcos don't want to get rid of it because its money in their pocket.
The telcos don't get money from that tax. Uncle SAM does. So telcos would be glad to see it go away.

Karl Bode
News Guy
join:2000-03-02
kudos:42
Well, new to Lingo users...

wwdubbia

join:2002-06-03
Clinton, NY
said by rollinraver:

The telecommunications excise tax is NOT new. Quite the opposite really, it's over 100 years old. 1898 it was enacted and Mr. Clinton failed to sign the legislation that would have removed it.
Don't blame Clinton, Bush #1, Reagan, Carter, Ford, Nixon, Kennedy, and others didn't do anything either. And it's highly likely that GWB won't either if he even knows about it.
moonpuppy

join:2000-08-21
Glen Burnie, MD

2 recommendations

Any they cry about being taxed......

You can't have it both ways.

Either stop charging the fee or be taxed AND regulated like a telco.

I was considering switching but not now. Just as bad as the normal telcos.
rbeadles
Premium
join:2003-12-19
Durham, NC

1 recommendation

The Rise of 'Unfees'

One good approach here is to refer it to the FCC, to perhaps scare them into backing down. Michael Powell, head of the FCC, has been making big noises about keeping VOIP in the largely-unregulated domain. Also, make noise to your congressmen and senators.
I received today from Lingo my notice that they will begin adding among other fees a 3% Federal Excise Tax. Now, if they collect a "fee" which they claim is a Federal tax, they will be legally obligated to pay that amount to the federal government.
I pay my Lingo bill through my AMEX credit card. I intend to contest the 3% claimed Federal Excise Tax through AMEX as an illegal charge to my credit card b/c there is no law AT THIS TIME that makes this a requirement for Lingo service. Join me in the effort.
IanR

join:2001-03-22
Fort Mill, SC

Re: The Rise of 'Unfees'

Nothing will bring the FCC down on VoIP providers quicker than spurious "tax" and other charges which the FCC is keeping away from the industry. It could well make the FCC do either an immediate "strong warning" or a quick reversal on REGULATE the heck out of VoIP.

Darn stupid Lingo.

Side note. Even P8 increased some of their international rates like the UK from 2 Cetns to 3 Cents. Since Lingo throw the UK and some other countries into their "all you can use" plan anyone wanna guess they are using these "fees" as a way of not putting up their charges? "You can fool some of the people, some of the time. But you can't fool all the people all the time". Especially dn't Fool with the FCC when they are your best friend.
xrobertcmx
Premium
join:2001-06-18
Sterling, VA

here we go.

Hello www.fcc.gov
runlevelfour

join:2002-06-12
USA

Fees

Hey, we cant complain too loudly about the tack on fees for telecommunications. We have to pay the companies extra so they can afford lobbyists and campaign donations so legislation goes in their favor, right?
tparker1

join:2004-09-29
Winston Salem, NC

Re: Fees

This is the reason i never subscribed seems everyone always lets a number Subscribed and then they hit you in the back Pocket.I wasn't impressed with the VOIP quality anyway and it doesn't seem right to tap into Cable and use Bandwidth that doesn't belong to them to make money.I will keep my Cellular Phone it fits my needs with free Nights and Weekends.Nothing in life is free.

SpitefulCrow
Insert Witty Tag Here
Premium
join:2003-06-04
Berkeley, CA

Re: Fees

said by tparker1:

I wasn't impressed with the VOIP quality anyway and it doesn't seem right to tap into Cable and use Bandwidth that doesn't belong to them to make money.
That doesn't even make sense. It's the USER'S bandwidth that he's paying the ISP for. What's wrong with the user deciding to use some of his bandwidth to subscribe to a VoIP service?
It's not run by the cable company? So what? This is why VoIP is able to compete with the telcos. Vonage doesn't have to build its own last-mile network because all it needs is an IP address. This is the way things work now. You pay for bandwidth and an IP and then you can run whatever services you like over it (as long as they don't violate your provider's ToS).
--
Powered by Optimum Online
Please do not feed the trolls.
Computer specs:Athlon XP 2600+/1GB DDR333/120GB 7200RPM SATA/GeForce FX5500 256MB AGP8x + IBM T86a LCD 1280x1024x24@60/Marvell Yukon GigE/Onboard VT880 6.1-channel sound

aBoVe1

@12.5.x.x

Sue them

Give them a class action law suit for adding fee's.. It's the american way.
rbb

join:2000-09-17
Fairfax Station, VA

1 recommendation

Oh, the irony

I'm surprised that no one has commented on the irony that the story preceding this one on the main page is about the states trying to tax voip. If it's not the businesses trying to take your money, it's the government (or both...).

Vvian Kalyss

join:2003-10-14
Stage 5.0

Re: Oh, the irony

Hehe, you noticed too
Cyber2lz

join:2001-11-15
Odessa, FL

Packet 8

Account Balance $19.95

Federal Excise Tax (3% FET) $0.60

Total Bill $20.55

--
If you're not livin' on the edge, you're takin' up too much space !

oliphant
I Have 8 Boobies
Premium
join:2004-11-26
Corona, CA

1 edit

Gotta love itemizing overhead...

What's next, the parking lot striping recovery fee? How about the air conditioning recovery fee? Watercooler recovery fee?

These fees are nothing more than profit generating scams, just like the NPF which is was reported that some cell companies and telcos are making 10's of millions in profit on.

Taxes of any kind incurred by business is OVERHEAD, no different that electricy or labor. And claiming that these are some how mandated direct to consumer taxes ( or in this case, making it look like they are) like a sales tax is plain ass sleezy.

I can see it advertised now.

Vonage NOW ONLY $1 /mo*

*Plus any applicable fees.

Then you get your bill

Vonage Service $1

Electricity recovery fee $3
Labor recovery fee $5
Wednesday golf recovery fee $5
Parking lot repaving recovery fee $2
Advertising recovery fee $3
Federal and state tax recovery fee $4
Phone number lease recovery fee $2
Interior office painting recovery fee $3

Total Now Due $28

Vonage and others should quit with the deceptive practices.
--
Don't get it, demand it! The Anime Network www.theanimenetwork.com

sdgthy

@optonline.net

Expect this to showup more and more

As competition heats up, or just to make an extra buck, more and more companies will look for ways that they can advertize a low price and still make a profit. Auto companies add a "destination" charge, others add some "fee", many retailers state a price that is actually after a rebate, it's all the same thing. Charges, fees, promised rebates, whatever. It's all so a low price can be advertized when the true cost is really much more.

Fzzy

@ar2-4.xx.125.xx.evrt

Verizon's new one

Just got this tonite:

Dear Valued Verizon Online DSL Member,

Thank you for choosing Verizon Online DSL as your Internet service provider.

Please note, starting February 20, 2005, you will begin seeing a monthly Tax Recovery Fee on your DSL service bill. This is not a tax charged directly to Verizon Online's customers, but the partial recovery of tax that Verizon Online must pay when they purchase the DSL circuit from the telephone company.

This fee will be eliminated after the recently passed expansion of the Internet Tax Nondiscrimination Act becomes effective in November 2005 until November 2007. Since this is not a direct tax but is the recovery of a tax paid by Verizon Online, there are no applicable exemptions.

So, we only temporarily have to PAY THEIR TAXES FOR THEM.

Assholes.

endoftheline

@hcjbeng.org

Re: Verizon's new one

I'm also on Verizon DSL, received the same message several months ago and have been paying the extra each month. However, I have always wondered who the "telephone company" is that Verizon pays. The charges are on the same bill as my Verizon telephone service, so I have to believe they are paying themselves, since they own the lines.
yjchung
Premium
join:2004-08-20
Aurora, CO

This is old story on Vonage

When I first started Vonage a couple years ago their monthly rate was a lot higher than it is now. Then suddenly I got an email from them that they would start charging $3.00 for regulartory tax or whatever. But they lowered the monthly rate by $3.00 so there was no difference in my final bill. So it looks like the tax was a hidden cost but now it's just out in the plain sight. It's been like that ever since and I'm still enjoying a great phone service that costs about 50% of what I used to pay my local telco.