As we've been covering, the FCC recently sent a letter to Verizon asking them to explain why they just doubled their ETF fee for smartphones from $175 to $350, and to explain why exactly they've been socking consumers with a mystery $1.99 data fee for no apparent reason. As we noted yesterday, the inquiry deadline was yesterday, but the FCC gave Verizon an extension until Monday. Given that less people pay attention to press releases on Fridays, Verizon this afternoon filed their response to the inquiry with the FCC.

Of course Verizon doubled their smartphone ETF to make more money. They also did it so they'd lose less money by limiting people from getting subsidized phones from Verizon -- then turning around and selling them to interested customers on eBay. Verizon of course doesn't say this, instead telling the FCC the sudden ETF hike is part of a new "two tier" structure for ETFs that's aimed at recouping the costs of running a smartphone network. And here you were thinking that's why you paid significant monthly service costs.

Verizon continues by trying to argue that more people are using smartphones, therefore the higher ETFs are needed because overall costs of supporting smartphones have "increased substantially." Like AT&T -- Verizon's wireless revenues are exploding as well, but you're apparently supposed to ignore that. In short, Verizon doubled their smartphone ETF because they can.

More interesting is the phantom $1.99 fee Verizon's been hitting consumers with for doing absolutely nothing. The fee was first exposed by the Cleveland Plain Dealer last summer. It only gained the FCC's attention after David Pogue at the NY Times posted a column featuring a Verizon insider -- who claimed Verizon was aware of the glitch -- but was too in love with the millions in additional revenue it generated to do anything about it. Says big red:Not according to Verizon's own users. Not only have users been complaining since last summer about being charged the fee when landing on the Verizon start page, they've complained about being charged the fee when data is blocked, the phone's battery is dead, the phone is off, or the phone doesn't even have the necessary software to go online. Verizon even gave many of these users in Ohio refunds after the practice was exposed by a local paper. But Verizon denies to the FCC that this even happens:In short, you've got Verizon denying a billing glitch that they've already acknowledged existed and have doled out refunds for. Worse, Verizon's claim runs in stark contrast to what one of their own employees said to the New York Times recently:Perhaps the erroneous fee isn't what's supposed to happen, but it is -- unless the users who've been complaining to newspapers around the country since last summer are engaged in a mass hallucination. Verizon and Verizon Wireless both have a long extensive history with extensive billing problems and nickel and diming customers with bogus fees. Eventually you have to ask whether such errors are truly accidental.

In this instance, we've got a Verizon employee quoted in a major paper saying Verizon's not fixing the problem in order to generate millions in extra revenue each month. You've got Verizon failing to acknowledge they've been doling out refunds for this problem since last summer. Whether Verizon's dodging the truth here or not, you can probably be sure they'll be shoring up this billing "glitch" now that the FCC is snooping around. If you're still seeing it on your Verizon Wireless bill please drop us a line.