FCC Slaps BellSouth and Verizon Posted Tue Sep 5, 2006, 9:42 AM ET

If you wonder what the telcos will be like years from now, when they're raking in the cash from video services, get a load of the way they behaved last month. As soon as the Federal Communications Commission removed some regulatory charges from consumer DSL bills, BellSouth and Verizon quickly tried to add them back and pocket the cash. The deleted charges had gone into the Universal Service Fund, which was originally designed to subsidize phone service in rural areas, and later extended to nurture Internet access in schools. BellSouth DSL customers had paid $2.97 per month into the USF, while Verizon DSL customers had paid $1.25-2.83 (depending on speed of service), until the FCC reclassified DSL and eliminated the fees to give consumers a break. Thereupon BellSouth swiftly imposed a "regulatory cost recovery fee" of $2.97, while Verizon added a "supplier surcharge" of $1.20-2.70. This breathtakingly opportunistic pickpocketing of consumers, greasily interlarded with corporate doublespeak, so enraged FCC chair Kevin Martin that he instantly threatened to send official letters demanding an explanation. He didn't have to send them—BellSouth quickly backed off and Verizon followed a few days later. They've got a lot on their regulatory wish lists, with BellSouth awaiting approval for its absorption into AT&T, and all the telcos eagerly awaiting the replacement of municipal franchise agreements for video service with more relaxed federal and state regulation. If this is what they act like when they're on their best behavior, just imagine what they'll be like at their worst.

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