Verizon Hears You Now, Drops DSL Charge

Verizon Communications  has heard the outcry loud and clear.

The New York-based telco and broadband provider said today that it will no longer charge customers a controversial new fee to cover costs associated with providing DSL service to customers who do not also subscribe to Verizon’s traditional phone service.

The surcharge was initially set at $1.20 per month for broadband service up to 768 kilobits per second and $2.70 per month for customers using higher DSL speeds.

Customers billed for the surcharge will receive a credit, Verizon said in a statement.

The move is a quick about-face for Verizon Online, a subsidiary of Verizon Communications, which began notifying its retail customers earlier this month of its plans to pass on the DSL fee, imposed by its affiliated operating telephone companies.

The new fee was announced only days after an FCC ruling relieving Verizon (and other telephone companies) from the obligation of collecting Universal Service Fund (USF) surcharges on broadband bills took effect.

The amount of the new fee was suspiciously close to the amount of the USF surcharge, raising hackles among both consumers and the FCC.

“There were a lot issues raised about that, so we’ve decided to not do it,” Eric Rabe, senior vice president of media relations at Verizon, told internetnews.com.

BellSouth reconsidered its own plans to add a similar surcharge to their customers’ bills.

Verizon still contends that the fee was for something altogether different than the USF.

According to Rabe, Verizon was simply passing along access fees that its online subsidiary, Verizon Online, has to pay telcos for access to homes without wireline telephone service.

“The cost doesn’t go away,” Rabe told internetnews.com. “We’re just going to eat it for now.”

FCC Chairman Kevin Martin, who had criticized Verizon earlier in the week, congratulated the company for its change of heart.

“I am pleased that both Verizon and BellSouth have eliminated fees recently imposed on their DSL customers,” Martin said in a statement.

“Consumers should receive the benefits of the Commission’s action last summer to remove regulations imposed on DSL service.”

Brian Washburn, principal analyst for business network services at Current Analysis, agreed that Verizon took the high road.

“They saw the right thing to do and they went ahead and did it,” he told internetnews.com.