Major Rate Increases on Small Business Wired Services — Up 133% in New Jersey. FCC USF Tax Up Over 300% Since 2005.

First, regardless of the hype, there’s plenty of small businesses that still rely on basic wired services. And due to the manipulation of the accounting, whatever you heard, quadruple it. We will address this in an upcoming story.

As we wrote previously,FCC Chairman, Brendan Carr has stated that prices have been going down over the last few years. And yet, as we showed, AT&T, Verizon wireless, and AT&T CA residential bills have continuous increases. W e now present here — small business service rate increases

Tom Allibone of LTC Consulting, a telecommunications auditing firm and the director of Audits for the IRREGULATORS, makes it clear that prices are going up based on actual bills with all of the charges a customer pays — and the FCC got it wrong.

“Hogwash. The FCC and other authorities are claiming that the rates have gone down and to illustrate that this is just a made up fiction of bad analysis, here is an example -

“Custopak” — This chart was based on actual bills from Verizon New Jersey customers that had a service called Custopak, which is a basic phone service with added features. As we tracked for the last 2 decades, prices of Custopak went from $26 dollars to $61.60 dollars a month, and there has been a continuous series of increases over the years. There are caveats, but these are actual charges from actual bills. (And we left out some of the taxes, fees and surcharges.)

Allibone continues: “The customers of these services are small businesses that have depended on the networks. And this is a nationwide problem of major rate increases. About 80% of America’s businesses are also working within a range of 1–5 lines of service, including the cell phones, from the plumber to the Pizza place.”

Universal Service Fund Taxes have had continuous increases. — now 36.%

The basic phone service bills also show another disturbing fact: Universal Service Fund tax is now 36.3% — this is more than the mob charges on the ‘vic’ in the movies… and it is applied on interstate classified charges, and it was only 8.7% in 2005.

And all interstate service, including wireless calling, has a USF tax being applied.

NOTE: These findings are from actual bills, and they do NOT include all of the taxes, fees and charges. The USF info was derived from bills as well as examining the OMB’s quarterly info. We note that these info sources do not line up with what is on the bills, another story to be told)

There are a whole collection of issues that we will come back to. But let us be very clear -

Simply put, these 2 examples clearly show that prices are going up, not down.

And the USF Fund is critical but — Does having a 36% tax on consumers and small businesses sound just and reasonable? And including low income or rural families paying an additional tax on an ever increasing bill that the tax is applied to?

The “driving force’ of America’s economy — small businesses, have been plagued by the burden of continuous rate increases.

While we focus on Verizon New Jersey in this story, this is happening nationwide.

• Prices should have been in dropping. The prices for copper based services should have been in steep decline because the expenses were all reduced. In 2025, there is no serious maintenance, it has been almost completely written off and it still gets utility perks.
• There is no effective competition, regardless of what the FCC or pundits declare — even the Chicago School can’t argue that prices are being driven down through competitive choices.
• 100% fiber to the home by 2010 in New Jersey, But in NJ, by the year 2010, there should no longer have been a copper wired based service as Verizon NJ was supposed to have completed 100% coverage of their state footprint with the original fiber optic plan called “Opportunity New Jersey”

But we leave these items and return to a series of facts — the cost of this small business service has more than doubled while one of the taxes on the basic phone service has a tax that has gone up over 300%

Tom Allibone, IRREGULATOR, sums it up

“Dear FCC: Do the charges taken from bills we just laid out look like prices went down?

It is time for the FCC to examine some of the continuous rate increases that are on actual small business bills.

“Moreover, the FCC’s definition of small business never examined the real small businesses working out the house, like the local florist to the diner down the block.-

NOTE: The prices we just laid out are based on the filed rate tariffs; the taxes, fees and surcharges, and junk fees are not being quoted and are in addition and always taken from the actual phone bills.

“The FCC is relying on…? We don’t know what the FCC is actually relying on because the CPI-BLS does not use surveys of phone bills but rather uses retail sales and then added use of weighted analytics — which can distort reality. And with the actual expenses to offer these services, the CPI is not adjusted for a steep decline in actual expenses

“In sum, the FCC needs to address the facts of our analysis as the FCC has presented a distorted reality that is a serious burden to America’s economic growth and a burden to all small businesses.”

And to cut the FCC off before they speak. — — This is not rate regulation we are discussing. This is purely about the FCC’s claims that prices are going down. We will come back to rate regulation soon enough.