On Friday, The Wall Street Journal reported that Federal Communications Commission Chairman Kevin Martin was "very upset" by the companies' decision to stick it to consumers. Regulators have yet to sign off on BellSouth's pending merger with AT&T
The agency was preparing a list of questions for Verizon and BellSouth, according to media reports.
On Friday, BellSouth backed down. The company said it would roll back the fee and credit any payments charged in the last week
The FCC fee in question, one that helped support rural phone lines, was paid by all the telephone companies into a common pool and was then rebated to the companies in proportion to the covered services (rural, schools, libraries, etc.) each company had provided. So, mostly, it just shifted money between the right hand pocket and the left hand one.
It was the telephone companies that were set to lose income; not the Feds.
BellSouth's decision to invent a new fee to subsidize themselves with didn't sit well with the FCC which is at least supposed to watch out for consumers and the word was out that the FCC thought this might amount to deceptive billing. Of course it would have--but where was the FCC when BellSouth (and other phone companies) were implying that the fee was a simple tax--like a sales tax--imposed on consumers instead of a self-collected subsidy?