The FCC, which had announced a planned phase-out of the Universal Service Fund (USF) fee scheduled to take effect Aug. 14, sent a letter of inquiry to Verizon earlier this week asking the company to explain its proposal to charge consumers between $1.20 and $2.70 per month.
The original USF was a fee levied by phone and Internet providers on behalf of the federal government to subsidize communications services to lower income households, schools and rural areas.
News of the agency’s interest in the fees that would take effect after the USF phase-out prompted BellSouth to quickly discontinue its plans. Verizon made its decision to drop the new fee after it received the FCC’s letter of inquiry.
According to a Verizon company statement, the decision was a result of customer feedback.
"We have listened to our customers, and are eliminating the charge," a company spokesman said.
Gene Kimmelman of the Consumers Union said that government pressure likely had more to do with Verizon’s decision than consumer input.
“They got caught red-handed in a blatant consumer rip-off,” Kimmelman said. “Only under the pressure of regulators cracking down on them did they back off from this unwarranted charge."
FCC Chairman Kevin Martin said that he was pleased that both BellSouth and Verizon had seen fit to drop the fees, adding that deployment of affordable broadband remains his top priority.
