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Sprint Modifies Their 'Unfees'
Feeling the heat from Missouri lawsuit?
by Karl Bode 12:26PM Tuesday Dec 11 2007 Tipped by kapil See Profile
"I will see your 3 un-fees and raise you 2 new un-fees," jokes site member kapil See Profile, who alerts us that Sprint is changing up their fee structure in time for the new year. As we'll explore below the break, the company is reacting to legal pressure for their long-standing (and industry-wide) practice of misleading consumers into thinking certain fees are government mandated.

Sprint is sending out notices to phone and data customers, letting them know that Sprint will be removing three fees from customer bills. In Kapil's case, those fees are the Federal Programs Cost Recovery (FPCR) fee of $1.55, the Federal E911 surchage of $0.40 and a Wireless Local Number Portability (WLNP) fee of $0.15.

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Luckily, Kapil gets a slightly lower bill starting in January. Unfortunately, Sprint will be replacing those three defunct fees with two new ones; an Administrative Charge of $0.75, and a Regulatory Charge of $0.20. Sprint explains the fees this way in the alert sent out to customers:
Sprint Nextel is charging the Administrative Charge to help defray various costs imposed on us by ther telecommunications carriers, including, but not limited to, charges imposed by local telephone companies for delivery of calls from our customers to their landline customers and for certain network facilities and services we must purchase from them. The Regulatory Charge is being assessed to help defray the costs of various federal, state, and local regulatory programs. These charges are not taxes and are not amounts we are required to collect from you.
Though industry execs, investors and employees swear on their mothers' graves that these fees are necessary and legitimate, "Regulatory Recovery" fees are a sleazy way of burying a business cost below the line so it can be excluded from the advertised price of a service. We've watched this practice drift from the landline industry to the wireless and VoIP industries while federal lawmakers napped.

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Sprint isn't suffering from a bout of spontaneous good will. The company was sued (pdf) by Missouri's Attorney General back in 2002 for misleading consumers into thinking these fees are government mandated. With the case still pending, Sprint is stripping the word "Federal" from all of their fees to protect their legal, err, assets.

In addition to record-low customer satisfaction levels due to their troubled merger with Nextel, Sprint isn't having much fun in the courts of late. They were recently sued by the Minnesota Attorney General for quietly extending customer contracts every time users made even minor changes to their service plan. They've also just been sued by a California consumer advocacy group for improperly applying fees to data card customer bills.

Back to the unfees; on the federal level, we recently saw some potential legislation aimed at curtailing the practice, but the Cell Phone Consumer Empowerment Act of 2007 hasn't seen progress since being introduced last September. Says bill sponsor Senator Amy Klobuchar of the practice of imposing "unfees":
"Anyone who’s looked at a cell phone bill knows it’s a hodge-podge of fees and surcharges that supposedly cover regulatory or administrative costs," said Rockefeller. "The reality is, often these are nothing more than operating costs that the companies are passing on to the consumer disguised as fees and taxes. It’s high time to protect cell phone users from these deceptive billing practices."
Unfortunately, the strength of telecom lobbyist operations has made getting any consumer friendly legislation passed almost impossible, so we'd expect this bill (which also takes aim at early termination fees) to have a steep uphill battle. By the way, we've started charging heavy BroadbandReports.com forum posters a "Winter transmission fee" (WTF); we hope nobody minds.

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Shill H8r
Huntington Beach, CA

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reply to FFH

Re: Unfees are marketing/lobbying efforts against regulation

Bullshit, it's an attempt by phone companies to lie about the costs of their service.

They'll advertise an artificially low price then charge these bullcrap fees.

ALL businesses have regulatory costs, ALL of them do. Telcos are just one of the few (another being airlines) who itemize it in attempt to bait and switch on customers.

Why not just have all costs of doing business itemized on our bills?

How about the water cooler recovery fee?
How about a parking lot restriping recovery fee?
How about an obscene retirement package for our CEO recovery fee?

Nope. This is telcos wanting to lie in advertising saying they're selling a service for $29.99 when it's really $40.