Forbes covers the telecom scandel
Front-page headlines in June 2000 hailed a historic deal that dramatically cut phone rates for the nation's consumers. The Federal Communications Commission, in persuading the Baby Bells to slash the access fees they charge long-distance carriers for routing calls to their local lines, said it would save customers $3.2 billion a year. The FCC's claim to have enacted "the largest rate cut in the history of federal telephone regulation" was the New York Times' lead story.
The true saving, it turns out, fell far short of that. While the Bells agreed to chop their access fees, they also won the right to offset that reduction by boosting flat monthly fees charged to local customers. These offsetting fee increases now approach $5 billion a year and, even in a world of telecom deflation, have sent local phone bills climbing. Today customers of Verizon (nyse: VZ - news - people ), the biggest of the four surviving Bell companies, see the $72 annual fee--up $30 a year per line so far--listed as the "FCC line charge" on their phone bills, though the Bell gets the cash.
Now some factions are pushing regulators to take a harder look inside this can of worms. In February a small watchdog group, TeleTruth, petitioned the Securities & Exchange Commission to launch an investigation. A coalition of 42 consumer groups, irked by a California state audit that accuses SBC of overcharging customers by $350 million, has filed a plea with the FCC. It demands:"When will the Commission systematically determine if violations of accounting requirements … have resulted in interstate overcharges, not only in California, but in all states in which SBC conducts its operations?" It calls the missing $5 billion in gear "the tip of the iceberg."
I have been very bad on following up my commitment to report on this story. Truth is I got my DSL and forgot the fact that we've all really been paying for T3 speeds for years now.