Verizon has spent much of this year reworking its unlimited-data offerings. Its September introduction of a plan that throws in Apple’s Apple One bundle of services brought it to six such plans. But it quietly rolled out a more meaningful change to its rates in July.
That’s when it increased the “Administrative and Telco Recovery Charge” applied across its plans from $1.95 to $3.30, just over a 69% increase. The review from many Verizon customers since then, as seen in such forums as Reddit’s r/verizon: not nice.
As one reader noted in a message, that extra $1.35 on people’s bills will add up at scale – Verizon reported in July that it has 91.5 million subscribers. He also objected to how this surcharge was only itemized on a PDF of his bill, sharing a screenshot of one recent statement that showed a total of $7.85 in taxes and surcharges.
“They hope that consumers don’t realize it, because consumers look at the headline price,” said Roger Entner, founder and lead analyst at Recon Analytics. “They hope that it’s an itch point, not a pain point for customers.”
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A Verizon publicist declined to speak on the record about this, but the not-for-attribution response she offered matched almost exactly with the language of a customer-support posting in a thread on Verizon’s own forum: “Verizon reviews the Administrative and Telco Recovery Charge from time to time and makes adjustments to recover some of the administrative and telco expenses and costs of complying with regulatory requirements we incur to provide service.”
Not every Verizon representative, however, seems to have gotten the same memo about explaining what can look like telecom’s sneaky answer to the “shrinkflation” inflation response of some grocery vendors. That Verizon forum thread includes a post from a user complaining that two different Verizon support reps “told me that this is a state tax and that Verizon has no control over it.”
Verizon is not the only wireless carrier to fine-print its way to fatter subscription revenue. AT&T has long charged a $1.99 “Administrative Fee” on top of its “Cost Recovery Fees” – although that surcharge drew a class action lawsuit alleging it violated California law that the carrier recently proposed to settle with payments of $15 to $30 for class members. T-Mobile, in turn, levies a “Regulatory Programs & Telco Recovery Fee” that it bumped in February from $3.18 to $3.49.
But T-Mobile’s Magenta and Magenta Max unlimited-data plans, the ones it markets most heavily, include all taxes and fees in their advertised rates. The same all-inclusive pricing applies at Visible, the Verizon-owned service that resells its network at a much lower pricesubject to a strict 5 Mbps speed limit on mobile hotspot use.
Noting that Verizon has reported subscriber losses for two quarters in a row, Entner questioned the wisdom of trying to launder a rate hike through an add-on fee with a dubious rationale: “It is driving some customers to leave.”
Rob Pegoraro is a tech writer based out of Washington, DC To submit a tech question, email Rob at [email protected]. Follow him on Twitter at twitter.com/robpegoraro.
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