AT&T’s new monthly stealth fee has some crying foul

May 23, 2013
7

AT&T has imposed a new "stealth fee" that, starting with this month, will tack an extra 61 cents on their monthly bills. While the amount is small, the principle behind it has many - both customers and non-customers alike - crying foul. The carrier says the new fee is a monthly administrative charge, and says that other carriers have done the same. Though it is a small amount, the company is slated to make millions from it.

The carrier sent out notifications to its customers about the fee 30 days before it went live, and says it includes details on each monthly bill regarding the extra 61 cents, per a statement by an AT&T spokeswoman. The new charge is applied for "certain expenses, such as interconnection and cell-site rents and maintenance." Verizon Wireless imposes a similar fee, and had briefly also instituted a $2 fee for customers who chose to pay over the phone and via an online account, something that was quickly squashed following consumer complaints.

Reportedly, AT&T is looking at making about $350 million from the additional fee this year, and more next year due to the additional months it would be charged, having missed out on four months' worth of the new revenue in 2013. For consumers, it will represent an additional $7 and some odd change shelled out yearly to the carrier, an amount so small some shrug it off.

Watchdog Public Knowledge has criticized the change, stating that the additional monthly 61 cents is merely a price increase, and that the carrier can get away with it because of lax regulations and insufficient competition in the market. A senior attorney with the advocacy group, John Bergmayer, said: "Imagine if McDonald's advertised hamburgers for 75 cents, but then required you pay a $3 bun fee."

Because the fee is so small, some call it a below-the-line charge because customers aren't likely to notice it. That aside, it is also provides a way for carriers to advertise a lower fee than customers are actually charged. Presently, AT&T already charges about 50 cents as regulatory cost recovery charge per phone line, something that has been part of the carrier's bills for about a decade.

SOURCE: Wall Street Journal


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