IRREGULATORS Complaint to the FTC: Remove All Cost Recovery Junk Fees on 350 Million AT&T, Verizon and T-Mobile Wireless Connections, $15 Billion Annually- To Start

COMPLAINT TO THE FEDERAL TRADE COMMISSION, FTC; ADDITIONAL COMPLAINT TO THE FCC.

• REMOVE THE COST RECOVERY CHARGE FROM AT&T WIRELESS, -VERIZON WIRELESS, AND T-MOBILE WIRELESS TO START.
• REMOVE ALL OTHER JUNK FEES FROM THESE WIRELESS COMPANIES.
• REMOVE THE COST RECOVERY CHARGE AND ALL OTHER JUNK FEES FROM ALL MVNO (RESELLERS) OF VERIZON, AT&T AND T-MOBILE WIRELESS
• INVESTIGATE THE MONIES COLLECTED VS COST OF DOING BUSINESS, DOUBLE-DIPPING AND BILLIONS IN FINANCIAL DISCREPENCIES.
• REMOVE ALL COST RECOVERY AND ALL OTHER JUNK FEES FROM ALL WIRELINE, CABLE TV, INTERNET, BROADBAND, VOIP, AND BASIC VOICE, DATA AND PHONE SERVICES.
• REMOVE ALL COST RECOVERY AND OTHER JUNK FEES THAT ARE APPLIED TO ALL COMMUNICATIONS DEVICES, FROM SMARTWATCHES, LAPTOPS, AUTOMOBILES AND OTHER TRANSPORTATION VEHICLES, CELL PHONES>
• ANY CHARGE THAT IS NOT SPECIFICALLY MANDATED BY A GOVERNMENT MUST BE REMOVED

SUMMARY: THE NEED FOR THESE ACTIONS

On almost every communications bill in America, customers are paying a collection of extra, made up, junk fees that are not government mandated, that are not part of the advertised price or discussed as part of service, and can add 10–30% to a customer’s bill.

Case by Case: We offer 1 charge, the Cost Recovery charge, (sometimes called “Telco Cost Recovery”, or “Regulatory” or “Admin” charges can also bee added to the name) being added to hundreds of millions of lines and services and devices.

Cost Recovery Charge Applied to Wireless Bills of AT&T, Verizon and T-Mobile, and their resellers, MVNOs. This complaint starts with a request to remove this charge from all AT&T, Verizon and T-Mobile wireless bills. Unknown to most, there are only 3 primary wireless companies in America and they resell their services (known as MVNOs), to hundreds of other companies.

3 companies have combined 356 million “connections”/lines, as of 3rd quarter, 2024. While the average charge is only $3.43, with additional taxes it is over $4.11 cents.

Do The Math: Over $15–18 billion dollars annually could be overcharged

MVNO Reselling these 3 companies wireless services. It is unclear whether the numbers provided include all of the MVNO lines being resold and rebranded; this includes the wireless services offered by cable companies Comcast, Spectrum Charter and Cox, among hundreds of other companies, including Mint Mobile, Boost, Cricket, and Tracfone.

And it is believed that the contractual arrangements of the wireless companies and the MVNOs may require them to add this Cost Recovery charge.

The IRREGULATORS are a consortium of senior telecom analysts, auditors, and lawyers that have been analyzing communications bills and charges for decades. The FTC’s proceeding on “junk fees” is a much needed step in protecting consumers.

We, as telecom experts, cannot ‘reverse-engineer’ or justify at least $10–15 billion on just these 3 carriers’ bills. Worse, even though it is only about $3.43-$4.11 counting taxes, it is being applied to over 350 million ‘connections’ — every phone, smartwatch and laptop, (with caveats).

NEW FINDINGS: 10–15 Separate Component Parts to this one Cost Recovery Charge: There are at lease 10 to 15 ‘component’ parts, separate items that are included for ‘recovery’, including:

• E911, which is also a separate line item on the bill,
• CPNI, the customer phone number and their use. This is bringing in billions of dollars by reselling customer information.
• Wireless Cell Tower Mandates — includes cell site maintenance, and this is out and our ludicrous; these are expenses that are part of offering wireless service;

These items do not require financial assistance from customers using a devious, hidden line item thrown on the bill and placed in the surcharges section.

The IRREGULATORS POSITION: No state or federal government agency has examined these issues, and this is serious neglect, and this charge is now just another scam as the charge is a slush fund and revenue to the companies and the fee, as a hidden line item in the expense section of customer bills is not only deceptive but fraudulent, as each component part has a dapple-ganger or is claiming it needs to be reimbursed.

Every line, wireline, wireless, etc are now getting surcharged: Over the last decade, what was first a distraction is now all nonsense as the cost recovery and other bogus charges are now being put on every line, every device, and not only the wireless business but also cable TV, internet, broadband, VOIP and phone service are all being drenched in junk fees.

846 Million Total Potential Connections (including wireless, cable, and broadband) could be subject to cost recovery charges, highlighting the extensive reach of these fees across the telecommunications landscape .

Multiple charges for a family bill; On just the wireless service, since all of the lines and devices may have a junk fee, a family of 4 will have 4 cost recovery charges, adding about $15–20 dollars counting taxes, not to mention the other charges.

On the ACP bills: This fee was also on the low-income ACP subsidies as customers paid retail with all bogus charge — adding to the unaffordability of services.

With over 550 million wireless connections according to the CTIA wireless association, this number doubles or triples the overcharging amount.

The Starting Point: We believe that just the 3 primary wireless companies rake in over $15 billion annually from the Cost Recovery Charge and other junk fees. Our research shows that these charges are made up and do not represent actual costs. To the extent there are underlying costs, these are the ordinary and necessary costs of doing business and must be recovered in the basic rate for the service or plan, rather than added on as a separate line item.

EXTEND THE MARKET SIZE: But this problem is much, much larger as all of the services are now being charged various junk fees, including cable, phone, VOIP, Internet, and even the devices are not immune to being hit with a collection of junk fees that are going unchallenged, yet hiding in plain sight.

Chart: A Great Deal of Money Is at Stake.

Using basic data supplied by the companies, (and with caveats that need more explanation), we focus on the 3 primary wireless carriers, AT&T, Verizon and T-Mobile.

• We estimate that customers are being charged about $1.2 billion a month or about $14.7 billion annually.
• Adding the other taxes and fees applied, we believe the range is $13–20 billion annually and it will take audits to determine the extent of this overcharging.

Chart: The 3 Primary Carriers in the US are T-Mobile, Verizon and AT&T

Chart: The Average Monthly Charge

• The average price is $3.43, not counting additional taxes and fees applied, estimated at 15–25% added.

By simply taking the number of connections of the 3 primary carriers and their 356 million connections lines, with the average charge of $3.43-$4.11, this exposes an enormous amount of customer overcharging with no government analysis, oversight or accountability.

The charge has been continually going up and is added to every line in an account.

This is from a Verizon four line account. Notice that not only is the charge on all lines, 2 lines listed here there is an additional ‘admen charge’, and a Universal Service Fund charge added, both of which are not mandated and thus required to be charged to customers.

Moreover, as can be seen from these 2 lines, there are a host of other taxes and fees listed, some are also being applied to this Cost Recovery, though there is no information on how they are applied, etc.

A Court Case Against the Charge, Verizon Raises the Charge.

There was even a court case that paid out $100 million to customers, but Verizon never took the charge off the bill, but instead just raised it.

Phone Arena, Dec 3rd, 2024

“Companies are always coming up with ways to saddle their users with high fees and while some are begrudgingly stomached, others, such as Verizon’s Administrative and Telco Recovery Charge, result in a lawsuit. The company has learned nothing, as one furious Reddit user has discovered, and is going to increase the monthly charge again”

To add insult to injury, Verizon just raised this one charge $.20, to $3.50 on wireless per month. As we discussed, Verizon claimed that it did nothing wrong. So, in order to pay off any payouts, with 114,000,000 connections, Verizon will bring in $23 million dollars a month, thus not only paying off the entire amount in 4–6 months, but at the same time making about $275 million (with caveats) in one year.

What is a Connection? A single wireless line of service with all devices, Smartwatches, Smartphones, tablets, and laptops, and all plans — voice, data, video, internet, broadband, wireless.

Only 3 companies control Wireless in America, AT&T, T-Mobile and Verizon, but they each have hundreds of resellers, known as MVNO’s.:

The connections listed for T-Mobile at 127 million lines appear to include the lines being used by an estimated 200 resellers, known as MVNOs, which include Mint Mobile, as well as their own brand. It is estimated that 20% of the subscribers are using a reseller, Verizon’s resellers include Comcast, Charter-Spectrum and Cox cable. Note: The number MVNO’s is in question as different AI sources produced different totals.

However, as we discuss, it also appears that T-Mobile and AT&T require the addition of cost recovery charges, though it is not clear who gets the funds.

Total Cost Recovery Revenues Unknown.

We do not know the total extent of the Cost Recovery Slush funds that these companies have employed and all lines and services, nor do we know how much of the cost recovery is mandated by the carriers, or how much goes to the reseller vs the underlying carrier.

• The Cost Recovery Fee is not a mandated by the government.
• It is a separate line item on an overstuffed wireless bill.
• There are other related charges, including “Regulatory Fees” or “Admin Fees”.
• These fees are revenues to the companies and therefore are also taxed, including having other made up fees be applied.
• These fees are not part of the advertised price, even though most of the items that make up this charge appear to be just the cost of doing business and they should not be singled out and put into a separate line item.
• There are many other taxes, fees, surcharges and they can vary by city, state or even the usage of the customer, the phone bill above has 2 of 4 different wireless users on the same bill in different locations and as is show, thy have different collections of charges and almost every service has a different name or cost.
• On a standard four line wireless account, every line can have the fee. The bill excerpt for December 2024 of a four line account has all 4 lines at $3;30 each and another Admin fee of $.16 cents. However, it is impossible to calculate the taxes fees and other surcharges being applied to this one charge.
• The fees are also being placed on connections based on their device, so that the smart wristwatch, to the laptop or smartphone have a charge.

The Breakout of what is in the Cost Recovery Charge;

The opening exhibit is a compendium to all of the different component parts of the Cost Recovery charge, by AT&T, T-Mobile and Verizon. The next page supplies a cross-referencing of the different component parts, including rhea wording and decryption of the cost recovery charge for Verizon, AT&T and T-Mobile, 2024. Sources include the websites and ‘terms and conditions’, definitions about the changes on the bills.

• On the opening chart, the column on the left we list the specific component as told by the companies, though every listing is not exact or matches the other companies as there are vague but not seriously deigned labels. In fact, there are different names for different carriers and by different years — and they can use words telco, regulatory, admin and cost recovery in combinations. Worse, as we uncovered the names on the bills or the web sites cannot match, adding to the confusion

Chart: The 3 Primary US Wireless Carriers and Their Info about the Cost Recovery and Related Expenses.

Fraudulent Mathematics.

• T-Mobile charges $3.49 and has 127 million connections and shows 7 component categories,
• AT&T charges $3.49 and shows 115 million connections with 13 components (and most are overlapping T-Mobile).

Because of the vagaries of how the fee is applied to the different offerings, we can’t make a final judgment but there is no mathematics that would make these 2 companies charging the same fee, with one having at least 5 other component parts even be close to have this $3.49 be an actual assessment of actual expenses.

It is impossible, then, that the exact amount, $3.49 matches these carriers’ actual expenses. Even if the number of components were the same, the expenses for T-Mobile and AT&T, from staffing to the costs for E911, cannot generate the same expenses.

Thus, we believe this is a fraud case because we believe that the companies made up what was in the charge, just like it is a made-up fee, and decided at the expense would be whatever they could get away with.

Double-Dipping or Unjust Charge or Fraudulent or Deceptive Practice?

This one charge is a slush fund because it lists items like E911, or “number portability”, which also have other revenue sources to the company and there is no ‘cost justification’ as to why there are compliance costs that aren’t already covered or worse, where there are revenues and profit that no regulator is examining. We call this double-dipping.

Other charges are ‘the cost of doing business’, that should never been allowed to be put in this charge because it is nothing more than normal business expenses, such as “Tower Mandates, or charges for connecting the companies’ networks to other networks, known as interconnection.

E911 as an Example of “Double Dipping”

On every bill there are separate E911 charges that the companies act as a bank to collect the money and then send it to the government agency. And the companies get paid for:

a) Putting the charge on their bill and is paid to do so.

b) Collecting the money and acting as the bank

c) An admin fee is usually allowed for overseeing of this process

d) In the case of AT&T and Verizon, the State-911 calls have traditionally been handled by the state telecommunications utilities, which includes companies including Verizon in New Jersey.

e) Verizon NJ received $14 million out of $18 million that was paid in just New Jersey for E911, though the state had collected $127 million in just 2023 according to the FCC, and this wireless company is a subsidiary of Verizon, the holding company, which includes Verizon Wireless.

f) Every state is collecting these funds and each state treats E911 historically as a job for the incumbent, which includes the entire ‘footprints’ of AT&T and Verizon. Also, as the Verizon Wireless bill shows, the amount being collected can vary wildly, from $.20 cents in one state to $5 in one city in a different state.

g) There are no records of all of the funding going to the companies.

Thus, what is the total amount Verizon receives from every state for E911, or the payments for putting the charge on 114 million ‘connections’ nationwide for wireless, has never been audited or investigated that we know of.

However, the lunacy that Verizon et al can also put in some ‘compliance’ recovery fee — shows pure hubris.

We call this double dipping where the company already is getting lots of money to compensate for the work they are doing.

We need to make a few things clear however, Verizon is a holding company that controls the state telecom public utilities on the East Coast, from Massachusetts to Virginia. Verizon can argue that wireless is a separate company but as we discuss, the wireless business has been heavily subsidized by the utilities, but more importantly through multiple financial shell game, where the construction budgets of the utility as well as the customers of the Verizon were directly charged for this Capex. So, examining the entire ‘revenues and expenses where the state utility is supplying the E911 service is more than fair game to question the compliance money.

Florida makes it clear that the companies get paid for their work —

“The E911 Board receives funds for the operating costs and expenses of managing, administrating, overseeing receipts and E911 Trust Fund disbursements, and for other activities as defined in section 365.172(6), Florida Statutes. Based on sworn invoices, E911 funds reimburse wireless service providers for their actual costs of providing E911 service. Reimbursement includes the costs of complying with FCC orders and costs and expenses to design, purchase, lease, program, install, test, upgrade, operate, and maintain all necessary data, hardware, and software required to provide E911 service.

But, there are some specific states that detail that the wireless providers get compensated from the government. FCC FIFTEENTH ANNUAL REPORT TO CONGRESS

ON STATE COLLECTION AND DISTRIBUTION OF 911 AND ENHANCED 911 FEES AND CHARGES FOR THE PERIOD JANUARY 1, 2022 TO DECEMBER 31, 2022

• New Jersey: In addition, they have designed the support and maintenance program and coordinated the Verizon database load solution.
• Maryland: continues to benefit from an effective 9–1–1 system. Recent Board statewide efforts include working with Verizon and NG911 service providers, Maryland PSAP personnel,
• Nevada: consolidated Municipality of Carson City NV- AT&T 911 System monthly charges, …
• Arkansas: In July 2021, the Arkansas 911 Board contracted with AT&T to imp NGCS.
• Illinois: The State of Illinois is currently implementing the AT&T Seined. During 2022, 14 9–1–1
• Indiana: As of August 4, 2021, AT&T migrated their buildout of the second Seined for Indiana.
• Kansas: An additional 3 Pass will join in 2023. All of these Pass are (or will
• be) connected via IP to the AT&T Nationwide Seined in an i3 routing configuration.
• North Carolina: An additional 3 PSAPs will join in 2023. All of these PSAPs are (or will
• be) connected via IP to the AT&T Nationwide ESInet in an i3 routing configuration.
• Tennessee: AT&T was ultimately selected as the successful respondent. and will have two redundant connections to the wireless backup connection through AT&T’s FirstNet wireless network.
• Texas: Dallas executed an NG9–1–1 agreement with AT&T

The Cost of Doing Wireless Business.

This excerpt is a detail from previous exhibit that gives more detail about each line item.

The wireless companies are making an exorbitant amount of revenues and profits from this cost recovery — and these items should never be part of this list.

Cell site maintenance and/or the interconnection with other carriers are ALL parts of the business operations. There is nothing special or outstanding or worse — something that should be applied for some recovery fee, hidden in an obscure line item when these should be part of the advertised price, not itemized

Scandal and Investigations

The items marked in the opening chart has a group of areas that need full investigations as they not only don’t need some reimbursement for compliance based on the revenues and profits, but worse, these items should be brought under scrutiny and investigated

Before we go into the details of the different component parts,

None of the component parts of this charge have been audited or even investigated, even though there was the $100 million dollar settlement in 2024, which was about disclosure of the charge vs the actual charges or amounts being charged.

For example, why should the public be paying Verizon’s property taxes, or give other ‘compliance’ money for reporting to the state commissions and reporting outages?

The idea that in 2024 the companies have created what appears to be a fraudulent scaffold of charges in all areas of the bills based on manipulated accounting — and there is zero presentation of facts that would show some heart-ship and yet it is dropped into this junk fee, now requires how they are getting away with this shell game.

Hijacking of CPNI is one thing; throwing a claim that it needs to get compliance payments requires full investigation.

Nowhere does it say we are going to sell your information and that the agents have nothing to do with Verizon.

The inclusion of “CPNI” for additional compliance fees needs an open full hearing. For CPNI, Customer Proprietary Number Identification was not supposed to be a play-toy of the phone companies. But now we find that every wireless and wireline connection, the companies are being able to use these numbers as a revenue stream — a very profitable revenue stream.

Most customers do not know that when they do not “opt out”, which requires an action, the company can sell their information and because it is on their wireless phone, it can include everything from the monitoring of apps to the customer location information, and even who they call.

This results is billions of dollars in revenue to the companies and yet here these companies claim that they need additional fees for ‘compliance.

And there has been a total abuse of the use of this information.

LernerSenter law firm wrote:

“The FCC has fined AT&T, Sprint, T-Mobile, and Verizon a combined nearly $200 million for failing to protect their voice customers’ data by selling access to customer location data to “aggregators” without obtaining customer consent. T-Mobile and Sprint, which merged since the FCC started its investigation into the violations, were fined more than $80 million and $12 million respectively. AT&T was fined over $57 million, and Verizon was fined close to $47 million.

“Under federal law and the FCC’s rules, carriers are required to protect the confidentiality of certain customer information, such as location information, which is considered customer proprietary network information (CPNI)”.

Ars Technica covered the story and added links to the FCC’s decision.

“The FCC summarized its findings as follows:

“The FCC Enforcement Bureau investigations of the four carriers found that each carrier sold access to its customers’ location information to “aggregators,” who then resold access to such information to third-party location-based service providers. In doing so, each carrier AT&T attempted to offload its obligations to obtain customer consent onto downstream recipients of location information, which in many instances meant that no valid customer consent was obtained. This initial failure was compounded when, after becoming aware that their safeguards were ineffective, the carriers continued to sell access to location information without taking reasonable measures to protect it from unauthorized access.”

What is the Total number of lines that are being smothered by these cost recovery and other fees?

It is impossible to do this exercise without a serious collection of wireline, cable TV, streaming, internet bills, etc.

Chart: The Retail ‘Voice’ Telephone, 2023

This FCC exhibit gives the number of ‘voice lines’ in America using both the old ‘TDM” (also called “Switched Access”) and the VOIP lines,

It shows over 22.5 million basic phone lines “Switched vs 66 million “ VOIP” lines — which would include the Charter “Digital Voice” services, or the U-verse phone lines that is the same original copper wire that has been reclassified as an information “VOIP” service once it uses the “IP” protocols.

This takes the lines out of the accounting, and thus instead of a substitution to VOIP, it shows up as a loss of a line.

But this one chart shows almost 90 million wired voice lines still in use in America.

And it leaves out all data lines, such as DSL or alarm circuits or hot spots, and by doing this, it dramatically creates revenue drops, as the services are being taken out of service.

This vs what should have happened in the midst of the Pandemic, the FCC should have asked ‘where is the fiber we paid for?

Chart : Total Potential Cost Recovery on Cable TV and Streaming, Satellite

To close this, there are 846 million potential connections that had a cost recovery and other made-up charges.

According to Statista,

• There were 114.7 million broadband subscribers in the United States, As of the end of 2023,
• The estimated Number of Cable TV Subscriptions in the United States is 68.7 million. Aug 22, 2024.
• DirecTV had around 11.3 million subscribers in the United States, while Dish Network had 5.89 million traditional pay TV subscribers in the third quarter of 2024: As of the fourth quarter of 2023,

While there is overlap in those who have cable TV or phone wire in their homes, these numbers for the Cost Recovery are additive because they all can have these made up fees — i.e. a person with cable TV, wireless phone, and broadband-internet can have charges for each of these services, even if they are delivered over the same wire. However, they can have instead Dish and a cell phone or other combinations

Punchline: Junks Fee are one of the Reasons America has some of the most expensive wireline, wireless and broadband service. in the World.

The reason to remove these egregious fees is because they have made US prices for communications services some of the most expensive in the world.

Overseas Prices are a Fraction of America.

Anyone who doesn’t want to compare America’s out of control prices with overseas prices for communications services has either listened to the hype of the US providers and those who present biased data, or failed to incorporate basic facts or worse, works for the companies.

Using multiple sources to examine the price of communications services overseas and in America, including actual bills, the company advertisements and basic analysis skills that appear to be missing in this discussion, we need to make some points very clear.

One of the primary reasons America has a Digital Divide is because prices were not affordable and this was caused by the addition of many ‘fake, junk fees and other processes that make America’s prices unjust and unreasonable. Using multiple sources including the European Union’s Broadband research:

• The “triple play”, which has cable TV, internet, broadband and voice calling, overseas averaged about $35–45 dollars, but the US average was $220.00 in 2020 according to Consumer Reports.
• Using Rewheel Research’s decade of detailed tracking of prices, On Wireless, 5G, the average cost per gig was 3–5 cents, with unlimited Gig — averaging $10–20 dollars.
• Spectrum’s wireless ‘deal’ was $14. per gig and if the customer goes over, they are charged an additional $14, which does not include the various taxes and separate cost recovery fees.

Junk Fees and Other Shenanigans

This chart from the being of 2024 shows the difference between the competitive the French Free Telecom triple play offering — based on actual bills and the Charter-spectrum cable Triple play in Brooklyn, NY.

They both are in the general average range for their country for prices and offerings but notice that on the left the French service has no additional fees “no gimmicks” as one American senior couple living in France wrote us. They have a 5Gbps fiber connection, with a triple play, and they even have the national scorer programming for 29.99 Euros, which goes up to 39.99 -with an exchange rate that makes this about $44 bucks and the updated price is part of the original contract — and there no other fees. In fact, the VAT tax is included.

The US Charter-Spectrum bill is an insult to the American consumer — and something that has harmed America — and it is time to fix it.

From the deregulation that allowed the set top box and modem to be separately charged to the original sin of greed by throwing on every possible garbage pail fee, if Amerce claims it wants affordable prices, the FTC must join us in fixing this mess.

Some of our recent documentation, done as stories for easier access.

• “No Gimmicks” Vs America Is Getting Screwed. The Free French Telecom Fiber Optic Triple Play vs Spectrum-NYC Prices.
• Collusion of the Providers and the Negligence of FCC Equals Exorbitant Prices for All U.S. Communications Services.
• ACP is Going Away: Time to Remove the Mask and Go After the Unjust & Unreasonable Rates.

We have a great deal more detailed analysis and data to bring to any proceeding or investigation.

IRREGULATORS

Bruce Kushnick, Managing Director

Sascha Meinrath, Palmer Chair, Penn State

Tom Allibone, President, LTC Consulting

Chuck Sherwood, Former Public Sector Consultant

Kenneth Levy, Esq.