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AT&T continues its quest to make landline service a really bad deal with the introduction of a new bill-padding fee that wireless customers will not have to pay.
AT&T’s $1.99 “Tennessee Regulatory Inspection Fee” appeared on customer bills in March, much to the surprise of customers.
“My regular service is only 22 bucks,” Charles “Buck” Meyer told the Chattanooga Times Free Press. “If they add $2 to it, that’s almost a 10 percent increase. I’ve been on the fence about switching off my landline for some months, and this could be the thing that pushes me over the edge.”
AT&T says it is entitled to recoup the money it pays to the Tennessee Regulatory Authority. The $1.99 fee appearing on March bills is a “one-time” fee until AT&T figures out how much it plans to charge customers on an ongoing basis. Most companies subject to TRA fees build them into the monthly cost of the service. AT&T is the only phone company in the state to break the fee out on the bill and collect the money separately.
In 2009, when the company lobbied for widespread deregulation of phone bills in Tennessee, it claimed deregulation would not bring about increased rates.
Meyer does not see it that way. He considers AT&T’s new fee a stealth rate hike.
“Slip a little line item on there that’s just a couple bucks and is a one-time deal,” he told the newspaper. “Then pretty soon it’s on there every month.”
The new fee is permitted because of a 2009 change in Tennessee’s statutes that now allow companies to pass along regulatory fees on customer bills.
Companies like AT&T heavily lobbied for statewide deregulation of telephone bills that year, and spent $180,000 in campaign contributions to lawmakers, their political action committees or party organizations. AT&T hired at least 20 lobbyists to help push deregulation through the Tennessee legislature. Critics of the bill warned its passage would lead to rate increases, something AT&T denied at the time.
AT&T Tennessee president Geoff Morton told the Times Free Press back in 2009, “the company needs to compete with rivals and is not interested in raising rates.”
AT&T refused to say how much it will collect from the new fee, but Morton said the company is now lobbying for another law that would gut the fees AT&T pays to the TRA to oversee the quality of phone service in the state.
“In the previous administration, telecommunications inspection fees increased despite a dramatic decrease in telecommunications services regulated by the commission,” AT&T spokesman Bob Corney told the newspaper. “We are hopeful that legislation will pass this session to reduce the regulatory burden on landline telephone customers in Tennessee.”
[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WMC Memphis ATT Mystery Fee 3-21-13.mp4[/flv]
WMC’s “Ask Andy” segment has some non-answers from AT&T about their new $1.99 “regulatory authority inspection fee.” When the Memphis consumer reporter called AT&T, the company said, “no comment.”(1 minute)
Phillip writes: “AT&T continues its quest to make landline service a really bad deal with the introduction of a new bill-padding fee that wireless customers will not have to pay.” It is true that wireless customers don’t have to pay the fee, but rather than explain why, Phillip leaves it to readers to infer that maybe AT&T is doing something nefarious by not charging the same fee to its wireless customers. Here is a quote from the same article Phillip quotes, but for some reason didn’t bother to pass along: “AT&T’s inspection fee only applies to landline customers because the… Read more »
Nice try, but you forgot to mention the reason the TRA does not monitor AT&T’s wireless service — it is just one of several telecom technologies deregulated on the federal level and not subject to state oversight. Guess which phone company (among others) helped make that possible. 🙂 AT&T is under no obligation to charge this fee to anyone. They are the only phone company in the state doing so. Also missing from news reports is the fact this change in statute did not appear out of thin air. AT&T’s lobbyists were the primary driver for getting the ability to… Read more »
Phillip, I don’t doubt that AT&T lobbied heavily for the bill that allows them to pass along this fee to customers. But like Jay S said, such fees SHOULD be billed as separate line items, but that’s a policy argument that reasonable people can differ on. Why aren’t sales taxes “baked in” to the price you pay for groceries? OTOH, state & federal fuel taxes are part of the retail price for gas that you pay at the pump. So different products and retailers handle government taxes and fees differently — but the bottom line is (regardless of your feelings… Read more »
All fees and taxes that are assessed to ‘utility’ type services, by any government or regulatory agency, should always be required to be posted as ‘line items’, rather than ‘included’ in the total bill. This fee should have been passed along, to the individual customer, from the date that it was originally instituted upon AT&T. Utility bills should never have stealth fees and taxes;ratepayers need full disclosure. If these regulatory fees and taxes were charged to the customers, from the date of inception, then AT&T could not have suddenly pushed this rate increase on their customers. Unfortunately the government wants… Read more »
Why should consumers complain to the TRA? They’re AT&T’s customers, and AT&T is RAISING their phone bill with this one-time hike and soon to be monthly rate hike which they had never charged before. You may as well go scream at the IRS for taking a third of your paycheck while you’re at it. AT&T gets both a punitive penalty to hit people still clinging to their land lines with, and some extra money in it’s pocket at the some time while prodding them to switch over to its more lucrative and unregulated cellular services. AT&T could have broken out… Read more »
Scott I do complain to my Congressman about my income taxes and that is why some in Congress try to limit federal spending.
The problem is, those of us who actually PAY taxes, are far outnumbered by those who benefit from government handouts, so no amount of “lobbying” on my part will have much influence.
Who is John Galt?
“How does the TRA determine its “inspection” assessment on regulated companies? Are taxpayers getting value for their money? Is there any legislative oversight of the fee-setting process? Is the TRA collecting more in fees than is needed to cover its costs? (this gets to the “general fund transfer” issue we discussed earlier). Etc.
Only the TRA can answer those questions…”
Incorrect. Two minutes of googling suggests that you, yourself, can answer most of those questions. The assessment is set in the statute, a copy of which is on the TRA’s website. Do your research before making overbroad claims.
@shmatriot: if you found something then post it. Otherwise you’re blowing smoke.