New billing surcharges

Fusion Voice service, features and help.
4 posts Page 1 of 1
by edperry » Tue Jun 26, 2012 3:34 pm
My July bill included two new surcharges, with prorations to add the charges for the month of June:

Property Tax Allotment
Voice Regulatory Recovery

The first sounds like Sonic found a way to pass property taxes off to customers. The second is another cost of voice service. Interestingly, my AT&T bill at another property does not have either of these two new surcharges.

Why are they added, and why as of June 2012?
by dane » Tue Jun 26, 2012 6:35 pm
These two new charges were mentioned in our recent newsletter, you can read a copy here: http://eepurl.com/l8oND

The property tax amount is $0.36 per Fusion line. You can read more about the fee here:
http://sonic.net/solutions/home/interne ... esfees#pta

As noted in the above, this is property tax charged by counties for equipment - and as you note, we now pass this tax on to customers.

The regulatory recovery fee is $0.10 per Fusion line. You can read more here:
http://sonic.net/solutions/home/interne ... y-recovery
Dane Jasper
Sonic
by edperry » Tue Jun 26, 2012 10:07 pm
The key part of your response was "...we now pass this tax on to customers." In other words, you don't have to. You didn't before. This is not a service tax the government, FCC, CA PUC, or other agency requires Sonic to administer. This is merely a cost of doing business, which Sonic has now decided to divide by the number of line subscribers and tack on to our monthly bills as a surcharge.

You do this so you can avoid the other approach of dealing with your billing expenses, e.g. merely increasing the monthly rate. I presume your marketing could not handle changing your advertised $39.95/month residential service rate. Horrors! So you found another way to increase subscriber bills by over 1% without calling it what it is: you are voluntarily deciding to "surcharge" your customers more for your previously established cost of doing business.

Simply put, our rate increased over 1%. Why the subterfuge? And most importantly, why retroactively to June 1? Are you desperately in need of new revenues?
by dane » Tue Jun 26, 2012 10:26 pm
Ed,

Property tax is a tax on equipment deployed in your local CO, which we are required to pay to the counties where our customers are located. Communities use these funds for their general operation, public safety, schools, etc.

As with ALL the other regulatory taxes and fees, we are NOT required to pass the costs on to customers, but could simply put them into the base price of the product. To give an example, the FUSF fee legislation simpy says that carriers "may, but are not required to" pass on the fee to consumers. (One carrier who does this is MetroPCS, with their $40 "all inclusive" price point offering.)

The regulatory recovery fee is less clear-cut: it is our cost of compliance with all of the various state, federal and local regulatory and tax programs. Again, as with all other tax and fee items, we could simply put it into the price of the product, but we have decided to separate it as a line item, as most other carriers also do.

I would welcome an elimination or reduction of most of the taxes and fees and regulatory compliance that we are subject to. The growth in FUSF is particularly irksome. See my recent article on tis topic here: http://corp.sonic.net/ceo/2012/06/13/death-and-taxes/

The line item enumeration that carriers choose to do (with MetroPCS being the notable example otherwise) of all taxes and fees in general is a form of price shrouding, which does not completely conceal but does obfuscate the total delivered cost of service. In our defense, I will say that of all the wireline carriers, I believe we are the only one who provides per-city real-time estimated tax and fee totals on our website. Try getting the amount from our competitors; you won't find the total on the website, nor are their staff allowed to quote you an estimated total.

Oh, and one last comment: take another look at the newsletter (which was sent in May): http://eepurl.com/l8oND

I hope that you can find enough free new feature value there to offset the tax and fee changes which were announced alongside. That's our goal, to deliver a compelling overall value, to keep improving the Fusion product through technology, feature and policy improvements.
Dane Jasper
Sonic
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