AT&T Quietly Imposes New “Administrative Fees”

by Matt Klassen on June 7, 2013

While airlines and hotels are famous for sneaking in those extra taxes and fees, over the past few years wireless carriers have quietly gone about finding their own ways of increasing their income off customers, often by adding “below-the-line” fees, so-named because they often appear at the bottom of the phone bill after the regular contracted service charges.

To that end, AT&T made headlines early last month when it imposed a new monthly “mobility administration fee” of $0.61 on every monthly bill, a number that certainly won’t break the bank for any customer but one that will generate massive revenues for Ma Bell, the change estimated to increase the telecom giant’s annual revenue by more than a half-billion dollars.

Again, while the paltry monthly increase will likely have little effect on consumers, it’s the fact that wireless providers are masking their price hikes in this manner that should really have people up in arms, as consumers have entered into term contracts with their providers on good faith that the agreed monthly service fees won’t change for the life of the contract, and while customers can’t change anything about their contract without hefty penalties, providers are routinely making changes with no consequences at all.

There was a great moment in The Simpsons episode ‘Bart to the Future,’ where in a vision of the future where Lisa has become President she institutes a punitive tax increase, but avoiding calling it a tax increase she labels it a “temporary refund adjustment,” assuaging the fears of the masses as she bilks them for all they’re worth.

As of May 1, 2013 AT&T customers will now find their own ‘temporary refund adjustment’ tacked on to their monthly bill, one instituted by the company itself but nestled right down there next to the mandatory taxes and fees the government requires you to pay on top of your cell phone bill. Now this new “administrative fee,” as its called, is clearly not considered part of the contracted service fee customers pay each month, but neither is this below-the-line charge a new government tax, and its something that often flies under the consumer radar.

Wireless providers—and lets be clear here, all of them do this—justify these additional fees as simply covering additional operational costs, such as expenses incurred while running their business, but are adamant that such fees are not rate increases. Of course one’s service contract is supposed to include all such operational costs, device costs, and service fees, but that simply isn’t the case.

While companies in other industries may simply absorb these types of operational costs or charge higher rates to generate the difference, wireless providers have “stealithy disguised” these rate increases by calling them something else, leaving many people frustrated when they discover that the price they were quoted when signing their contract is not the price they pay on a monthly basis.

Further, while AT&T’s latest increase was only a paltry $0.61, who’s to say that that fee won’t increase, as there’s clearly nothing governing any of these below-the-line costs. While AT&T’s tag line has long been Rethink Possible, the company justified this increase with the antithetical response; well everyone else is doing it.

Stating that the new monthly fee has been instituted to “help cover certain expenses, such as interconnection and cell site rents and maintenance,” Ma Bell went on to say that, “For some time some of our competitors have been assessing this type of charge… Until now, AT&T has not charged such a fee, but it will help defray a small portion of certain expenses and we are using a name for the fee that has become common in the industry.”

Call it sneaky rate hikes, call it double-dipping, heck, call it a temporary refund adjustment, it doesn’t really matter, what the top four national carriers are doing is finding ways of circumventing a contractual service fee to bilk you out of more money, and while its only $0.61, its enough to raise my ire and I’m not even a customer.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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