Wireless Carriers Ban Together For Higher Fees
Since the beginning of this year, the four leading wireless carriers have quietly raised a monthly fee that each carrier charges in order to help recoup some of their business costs. Taken individually, the fee doesn’t sound like a lot—AT&T’s fee in California, for example, has increased by 40 cents per month. Sprint’s fee is only 24 cents higher. When multiplied over each carrier’s large number of subscribers, however, this additional revenue adds up to hundreds of millions of dollars.
T-Mobile customers in California were given a heads-up about the increase by means of an insert with their latest bill. This insert explained that the company’s "Regulatory Programs Fee" has risen from 86 cents a month to $1.21. The company also explained that this fee is not a tax but a fee that is used to help the company recover the costs associated with funding and complying with a variety of government mandates, programs, and obligations. In May, AT&T told its customers that it was nearly doubling its Regulatory Cost Recovery Charge to 83 cents per month from 43 cents.
Verizon Wireless told its customers in California earlier this month that it was raising its monthly Administrative Charge from 85 cents to 92 cents per month. In January, Sprint raised its own administrative charge to 99 cents from 75 cents per month.
Basically, these regulatory fees are the means by which the wireless companies pass the cost of following the government’s rules on to customers. Ironically, these rules are the same ones that were put in place in order to make wireless companies more friendly to customers. Whether the cost of complying with the government regulations have actually risen is hard to know. A spokesperson from the California Public Utilities Commission said she was unaware of a significant increase in the regulatory compliance costs of wireless companies operating in the state.
Although all of these increases are rather small to an individual customer, the benefit to the carriers is large. For example, AT&T could gain an additional $31 million every month or $374 million per year as a result of this fee increase. It’s impossible to know exactly how much AT&T is receiving, however, since the amount charged for the fee varies from one state to another. The same goes for other carriers.