Sprint customers got a little surprise in their holiday stocking this week. The
company announced it was removing three of the extra fees it bills to customers
from their monthly charges, including fees assessed for 911 service, number
portability, and costs of compliance with federal programs.
However, the company also sent along a lump of coal by offering two new fees
an "administrative charge" of 75 cents monthly, and a "regulatory charge" of 25
According to Sprint, the administrative charge will "help defray various costs
imposed on us by other telecommunications carriers" while the regulatory charge
is "being assessed to help defray costs of various federal, state and local
These charges are not taxes and are not amounts we are required to collect from
you," the carrier said.
While customers may receive a minuscule savings from the new fees, what are they
and why, if the company isnt required to charge them, does it do so?
The mysterious fees, or "unfees" as disgruntled customers call them, are
basically thinly disguised price increases or, to put it a little more
generously, ways to pass on increased business costs to consumers. Its a
common, if unpopular, practice and is not limited to the wireless industry,
though wireless carriers are certainly fond of it.
When Verizon won temporary relief from paying into the Universal Service Fund
(USF), rather than pass on the savings to customers, it promptly replaced the
USF fee with a new fee that almost exactly mirrored the USF fee.
BellSouth tried to do the same but both telecoms backed down after Federal
Communications Commission (FCC) chair Kevin Martin threatened an investigation
for violating the agencys "Truth In Billing" requirements for customer service
Congress attempted to gain some relief for consumers when Senators Jay
Rockefeller (DWV) and Amy Klobuchar (DMN) introduced the "Cell Phone Consumer
Protection Act of 2007," which would ban the charging of any extra fees beyond
what government regulations mandate, and require wireless carriers to spell out
fees in clear, comprehensible language.
But the bill has languished since its introduction, with no sign of forward
motion before Congress adjourns for the holidays.
Sprint, meanwhile, bowed to consumer pressure and competition from its larger
rivals AT&T and Verizon Wireless when it recently announced that it would
prorate its contract cancellation fees and not charge customers who want to
change plans by locking them into new contracts.
But the "unfees" continue to frustrate those who want to pay a flat, fair price
for the services they get. As one commenter at Broadband Reports put it, "If I
go to a grocery store to buy something, I see the price that is charged, and I
pay a sales tax ... If I wanted, I could look at other stores carrying similar
items, and comparison shop based on price, knowing that another store isnt
showing an artificially low price that includes an unfee. "
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