Verizon has spent much of this year reworking its unlimited data offerings. Its presentation in September of a plan that includes the Apple One service package from Apple led him to six of those plans. But it quietly implemented a more significant change to its rates in July.
That’s when it increased the “Telecom Administrative and Recovery Fee” applied across all its plans from $1.95 to $3.30, an increase of just over 69%. The review of many Verizon customers since then, as seen on forums like Reddit’s r/verizon: Not well.
As one reader pointed out in a post, that extra $1.35 on people’s bills will add up to scale: Verizon reported in July which has 91.5 million subscribers. He also objected to this surcharge only being itemized on a PDF of his bill, sharing a screenshot of a recent statement showing a total of $7.85 in taxes and surcharges.
“They hope consumers don’t notice, because consumers look at the core price,” said Roger Entner, founder and principal analyst at Recon Analytics. “They expect it to be an itch, not a sore spot for customers.”
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A Verizon publicist declined to speak officially about this, but the non-attribution response he offered matched the language almost exactly. a customer support post in a thread on Verizon’s own forum: “Verizon reviews the Telecommunications and Administrative Recovery Fee from time to time and makes adjustments to recover some of the telecommunications and administrative expenses and costs of complying with regulatory requirements that we incur in providing service.”
Not all Verizon representatives, however, appear to have received the same memo explaining what may appear to be telecommunications’ canny response to some grocery vendors’ “reduced inflation” inflationary response. That Verizon forum thread includes a post from a user complaining that two different Verizon support reps “told me this is a state tax and Verizon has no control over it.”
Verizon isn’t the only wireless carrier to print its path to higher subscription revenue in fine print. AT&T has long charged a $1.99 “Administrative Fee” in addition to their “Cost Recovery Fees”, although that surcharge attracted a class action lawsuit claiming that it violated California law that the carrier recently proposed to settle with payments from $15 to $30 for class members. T-Mobile, in turn, charges a “Telco Recovery Fee and Regulatory Programs” that collided with february from $3.18 to $3.49.
But T-Mobile’s Magenta and Magenta Max unlimited data plans, the ones it sells the most, include all taxes and fees in their advertised rates. The same all-in price applies to Visible, the Verizon-owned service that resells its network at a much lower price, subject to a strict 5Mbps speed cap on mobile hotspot usage.
Noting that Verizon has reported subscriber losses for two quarters in a row, Entner questioned the wisdom of trying to launder a rate increase through an additional fee with a dubious reason: “It’s driving some customers to leave.”