News That Matters

This is a breakout from the January 27th, News That Matters.

It’s war!

I got my phone bill from Verizon the other day as many of you did as well. I’d like you all to open to the part where it has the Breakdown of Charges and specifically, “Taxes, Fees and Other Verizon Charges”. Let’s take a look:

Yo Wait! Before we do, remember that New York gave Verizon permission to raise their rates recently because they had lost business to their competition. So, rather than improve service and attract more customers in that good old American Capitalist way, they went begging to the State and the State said, “yeah, sure.” And keep in mind that an increase in the basic rate (which was $2 a month per line) also represents an increase in sales tax receipts for the state.

Back to our regularly scheduled rant…

Federal Tax	.20
NY State/Local Sales Tax	2.81
911 Surcharge	.35
Federal USF Surcharge	.97
USF – Long Distance	.99
Surcharge(s)	1.14
FCC Line Charge	6.41
Total Taxes, Fees & Other Verizon Charges	$12.87

This is based on a bill totaling $59.99 bringing the total amount to $72.86. That’s a lot of money for a  telephone. That bill includes $8.79 as a Basic charge… but we’ll see just how much bullshit that really is…

The USF Surcharge should be combined with the USF- Long Distance surcharge as they are one and the same. In effect, they are both charges that Verizon makes you pay for their participation in the Universal Service Fund which is geared towards providing schools, libraries, rural America and the poor with telephone service though, being poor myself I somehow don’t seem to qualify. Contributions to the fund are set to estimated quarterly earnings so you should see it shift and change each quarter. Your mandatory contribution (remember, it’s not a tax) raised $7.1 billion in 2008.

The Fed requires that interstate communications providers pay into this account but there is nothing in the code that requires them to pass the cost on to you, at least not as a “fee”.

In essence, however, though Verizon collects this from you and sends it to the Fed, the Fed uses it to subsidize programs which means the money goes directly BACK to Verizon. In one hand and into the other… directly. And for the record, the High Cost component of the USAC has seen some $4 billion returned directly to phone companies as subsidies.

Surcharge(s). Who the hell knows?

FCC Line Charge. This charge also is known as the Federal Subscriber Line Charge, the Federally-Ordered Subscriber Line Charge, Federal Line Cost Charge, and the FCC Subscriber Line Charge. In reality it’s the missing portion of your basic line charge mentioned above. That $8.79 fee should be, if Verizon were open and honest about their charges, $15.20. But they get to “cheat” to give you the impression your actual costs are lower and that the Fed is responsible for $6.41 of it. They’re misleading you and getting away with it.

Verizon tells me this charge is mandated by the FCC and must be collected in order to satisfy the Fed but I honestly cannot find independent confirmation of that. Instead, what I’ve found is that the “FCC” part is a cheat to encourage you to believe that money is somehow going to Washington DC as a fee or tax or corporate bribe or something. But the truth is that it’s none of those things. It is, in fact, a charge to you by Verizon to provide a line to your home. The only FCC part of it is that the FCC has mandated it’s maximum which was $6.44 in 2007.

This charge does not go to fund the FCC. It’s not a tax nor a surcharge. It is simply another revenue stream for Verizon. But Verizon tells me that it is Federally mandated and so I looked it up and sure enough, in USC Title 47 §201 it reads:

(b) All charges, practices, classifications, and regulations for and in connection with such communication service, shall be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or unreasonable is declared to be unlawful…

So, it doesn’t say diddly about the charge and only that Verizon can charge. The FCC however, has set the maximum (as stated above) and that’s the only thing the FCC has to do with the FCC Line Charge.

Someone at another time might have said that Verizon has fabricated their bill to reflect something that it is not. That was at another time. For this time I’ll say this: Verizon has fabricated their bill to make you think the FCC wants your money when in reality they’re nothing more than a money sucking corporation that needs your tax dollars to pay their stockholders because they can’t seem to turn a profit by providing good service at an affordable price.

Sue me.

But even if we assume that the total $12.87 are taxes alone, on a $60 bill that’s still a lot of often hidden taxes and each and every one of us is paying it and we’re doing so quite happily. It really is time to break a few dishes around here and I’m open to suggestions. How many more tax breaks, kickbacks and forced subsidies do taxpayers need to give to Corporate America? When is it enough?

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