Like Janus, the Roman god of the new year
who gave January its name, Verizon Online DSL has two faces. Unlike the pagan deity, however, the broadband provider to vast tracts of the United States doesn't use its spare visage to gaze into the past as its other one looks into the future. The Verizon god shows its two faces to the people who pay it tribute: its customers.
In the space of just two weeks, Verizon made a heartwarming goodwill gesture to some of its snowbound customers, then turned around and sicced a new supplemental charge on them. As a long-serving consumer journalist, I seldom feel sympathy for corporations, especially ones with captive markets, but Verizon's mealy-mouthed message of January 20th left a particularly bad taste in my mouth.
But before we launch into screed, it's only fair to give the devil his due. So to begin with, we’ll start with the good news, which begins with a 10-hour service outage.
On Wednesday, January 12, Delaware and parts of eastern Pennsylvania suffered a DSL outage that began at around 6 a.m. and continued through the entire workday. Both Verizon’s home and business DSL customers were affected by this outage, and surprisingly, the blame did not lie with the usual wintertime culprits, ice and snowfall. The company was installing an upgrade and got it wrong. The twin terrors of bad timing and serious technical problems cost Verizon customers a whole day of Net access.
Verizon's mealy-mouthed message of January 20 left a particularly bad taste in my mouth.
How does this qualify as good news, you ask? Well, by 5 p.m., service was restored, so a good portion of Verizon DSL workaday customers missed the outage completely. Yet within two days, each affected customer had received a recorded voicemail message and/or an e-mail message that was an unvarnished mea culpa
, taking full responsibility for the outage. And of course, Verizon announced that it would issue a credit in the next billing cycle for the outage.
This is a textbook example of how to show good faith to customers after landing them with a bout of poor service. Well done, Verizon.
What a shame, then, that Verizon went and ruined it all six days later. Less than a week after the Verizon DSL outage, many of the Northeastern customers who lost their service the previous week got an announcement that they would soon be seeing a supplemental charge on their DSL bills. Dubbed a "tax recovery fee," the unnamed sum would be charged to Verizon Online customers as a "partial recovery of the tax that Verizon Online must pay when they purchase the DSL circuit from the telephone company." The e-mail goes on to explain that the surcharge will go away with the passage of the Internet Tax Nondiscrimination Act "in November 2005 until November 2007."
The subtext of the message appears to be this: Verizon is paying some of a federal tax that will soon be repealed, but that for the next few months, its customers will have to pay some of that bill, too.
This is quite an exercise in spin. Verizon is in one message claiming to subsidize its customers’ bills and at the same time is increasing them.
Whose tax bill?
Several Verizon customers contacted me, asking what this e-mail meant. The short answer: Verizon doesn’t want to pay its full whack of taxes, so it’s making its customers pay up for them. The tax in question is the corporate contribution to the Federal Universal Service Fund (USF), a telecommunications fund mandated to long-distance telecom companies in 1996 to subsidize Internet and telecommunications access. The USF funds high-speed communications for schools, libraries, low-income customers, and high-cost areas such as sparsely populated rural communities. It also helps provide rural hospitals with facilities for sharing medical information and images with specialists in other areas.
Verizon is in one message claiming to subsidize its customers’ bills and at the same time is increasing them.
Almost as soon as the FCC mandated the USF, long-distance carriers began passing the costs on to their customers. Using buzzwords such as federal
in the line item, most people assumed that the USF contribution was a consumer tax. It isn’t, it’s a corporate tax that the telcos are legally allowed (but not required) to recover by surcharging their customers.
In the world of long-distance calling, USF surcharges aren’t consistent at all: Some carriers charge 8.9 percent of the total bill, some charge 10 or more percent, and a few charge nothing--the rate they quote includes all the taxes, like the price tags in European stores. And the surcharges aren’t consistent among Verizon Online customers either. In Washington, DC, DSL customers have been paying almost $3 a month for the past six months to subsidize Verizon’s tax bill. In Pennsylvania, they will begin paying $1.62 in February. In California and Delaware, customers aren’t being surcharged at all.
I’m sure that there are good reasons for a corporation charging its customers for part of a corporate tax bill. I’m equally sure that none of these reasons has anything to do with customers--unless they happen also to be shareholders.
If Verizon is really going to suffer from having to pay its share of the USF, then it should charge its customers more for the service. But the company should be honest about it: Increase the rates so that comparison shoppers can make a fair comparison. Include all of the fees and taxes in one single rate. Trust me...customers appreciate a fair comparison.
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