I was looking at my Cingular bill tonight, at the various fees. For our most recent bill, we paid $4.75 in “other fees and charges”. The details are:
Regulatory Cost Recovery Fee = $2.50
Federal Universal Services Charge = $1.88
State B and O Surcharge = $0.37
Oh, the government is hitting me with fees and charges.
Well, not really. If you do a little digging, you find out something that is surprising.
Regulatory Cost Recovery Fee. To quote Cingular’s website, “The purpose of the fee is to defray Cingular’s costs associated with payment of fees and compliance with various initiatives imposed by the government.”
In other words, there are government regulations that apply to Cingular, but they don’t want to pay them, so they’re passing them straight to customers and making it look like it comes from the government.
Federal Universal Services Charge. Same deal. The government set up a program that the telcos were supposed to pay into, and they don’t want to, so they make it look like the fee comes from the government.
State B and O surcharge. For this you need to know that Washington has this weird business tax called “Business and Occupancy”, which charges you for running a business, even if you don’t make any profit. Nope, we don’t want to pay that either, so we’ll pass it on to consumers.
Now, obviously, businesses have expenses, and all these expenses are ultimately passed on to consumers. So what’s the problem in this case?
Well, there are really two problems. The first is that the companies are engaging in a “Bait and Switch” tactic, which is illegal. I signed up for service that only costs $60 a month, but they really charge $65 per month. The second is that they attempt to hide their extra charges with names that sound like taxes. I would argue that that is also fradulent.
This obviously makes it hard to compare carriers, when a plan really doesn’t cost what it says it costs.