- The Washington Times - Monday, November 15, 2004

NEW YORK (AP) — The nation’s second- and third-largest cell-phone carriers are lowering surcharges on customer bills that have brought the companies more than $250 million this year.

Verizon Wireless and Sprint Corp. say they are reducing the fees, starting this month, because costs of a federal order to allow “phone number portability” — when people switch carriers but keep the same cell numbers — have fallen sharply since it took effect a year ago.

Their assertion that costs are down raises questions about whether other wireless companies continue to charge monthly fees not to offset expenses, but to collect additional revenue.

Verizon Wireless, the biggest winner of customers since number portability was first permitted a year ago, announced yesterday that it was eliminating all but a nickel of the 45-cent monthly fee it charges for regulatory expenses.

Sprint is lowering its regulatory recovery fee to 25 cents, the second reduction since June. The fee, which was more than doubled to $1.10 in July 2003, was reduced to 40 cents in June.

Both Verizon and Sprint explained that the cost of phone number portability fell after the early barrage of requests eased, and the process turned routine after a few months rife with glitches.

Cellular companies have charged hundreds of millions of dollars in fees in the past few years to defray expenses resulting from mandates by the Federal Communications Commission intended to further such public goods as subsidizing rural phone lines.

Critics have complained that the fees exceed actual expenses by a wide margin, and that they are presented on the bill in language falsely suggesting the charge is a tax by the government.

Verizon denied the fee cut was timed to lure customers away from the industry’s largest company, created by the just-completed merger of Cingular Wireless and AT&T; Wireless Services Inc.

Cingular, a joint venture between SBC Communications Inc. and BellSouth Corp., charges from 52 cents to $1.25 a month for regulatory recovery, while AT&T; Wireless charges $1.75. A new fee for the combined company has not been set.

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