FUSF is gone, Verizon takes opportunity to gouge customers.

Update: Lots more at Mercury News and Technorati

I received this email today.  I’m including it in it’s entirety, highligts are mine.

Dear Valued Verizon Online Customer,
Effective August 14, 2006, Verizon Online will stop charging the FUSF (Federal Universal Service Fund) recovery fee. We will stop being assessed the fee by our DSL network suppliers. Therefore, we will no longer be recovering this fee from our customers. The impact of the FUSF fee is as follows: for customers of Verizon Online with service up to 768Kbps, the fee eliminated is $1.25 a month; for customers of Verizon Online with service up to 1.5 Mbps or 3Mbps, the fee eliminated is $2.83 a month (based on current FUSF surcharge amounts). On your bill that includes charges for August 14, 2006 you will see either a partial FUSF Recovery Fee or no FUSF line item at all, depending on your bill cycle.
Starting August 26, 2006, Verizon Online will begin charging a Supplier Surcharge for all new DSL customers, existing customers with a DSL monthly or bundle package, and existing DSL annual plan customers at the time their current annual plan expires. This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service. The Supplier Surcharge will initially be set at $1.20 a month for Verizon Online DSL customers with service up to 768Kbps and $2.70 per month for customers with DSL service at higher speeds.
On balance your total bill will remain about the same as it has been or slightly lower.
For more information, see the Announcement in the Help section of Verizon Central, located at http://central.verizon.net
We regret the need to add this Supplier Surcharge, but we thank you for choosing high speed Verizon Online DSL. We appreciate and value your business.
Sincerely,
Verizon Online
Broadband Customer Care Team

So, if I’m reading this correctly, Verizon’s costs are going down, but instead of passing that along to consumers, they are taking the opportunity to raise their fees by an amount that is almost equal to the FUSF.  I guess Verizon figure that consumers won’t really notice, and they get to pad their profits.

I’d love to see some regulation on how service providers advertise pricing.  Taxes and such should not be allowed to be “passed through”, they should just be part of the providers costs of providing the service.  I don’t know many other industries that are allowed to pass through costs this way.  I just want the bottom line.  If your costs go up (new taxes) then you raise your prices, and consumers can see the truth about what they are paying for your services.

The irony?  If Verizon didn’t practice this tax pass through, then they could’ve kept the difference from the elimination of the FUSF and I wouldn’t be complaining.

Update:  After Getting Called Out, Verizon Rescinds Non-USF-Replacement-Fee Fee  — Basically it looks like Verizon tried to pull a fast one, and when they realized the world was watching, they took their hand out of the cookie jar.