Who must pay?

Posted on February 8, 2014 by Jon Colgan

When you complain to your carrier about surcharge increases, you’ll receive a carefully crafted but intentionally vague response saying that you have no choice but to pay them. Your carrier will say that since surcharges are imposed by the government, they must be paid–you have no choice. Here’s an actual example written by Verizon’s Demetria James in response to a customer who objected to an increase in his federal universal service charge:

Did you notice the sleight of hand? Demetria is trying to pull several fast ones here. Let’s deconstruct them.

1) Sentence fragments allow carriers to be ambiguous.

Take this sentence, for example: “As far as the increase in federal service charge results are based on current tax/surcharge rates for a typical customer.” On one hand, the entire fragment could give readers the impression that another clause is coming. Readers might interpret this as an “insofar as x is true, y is true” sentence construction. But since the y part never comes, readers are left to wonder what point Demetria intended to make with this sentence.

2) Bundled presentations of surcharges and taxes conflate the two.

Surcharges and taxes are not the same. When carriers lead you to believe that they are, it’s harder for you to scrutinize your bill; because as upstanding citizens, we are taught and thus internalize that paying our fair-share of taxes is both our legal duty and the right thing to do. So by conflating surcharges with taxes, carriers instill the same sense of duty customers have toward taxes.

Here’s the offending snippet: “the increase in federal service charge results are based on current tax/surcharge rates[.]” Since surcharges and taxes are not the same, it’s not the case that a single charge–the federal universal service charge, in this case–can be based on the same rate. There are tax rates set by governments and surcharge rates set by whoever is charging them, which is not necessarily any government. So the question is: which rates are the federal universal service charge actually based upon? We’ll answer that shortly.

3) This so-called “typical customer” does not exist.

When carriers say that a charge is “based on current tax/surcharge rates for a typical customer[,]” you should wonder who this typical customer is and what he has to do with dollar bills in your wallet. The problem with words like “typical” is that it can’t be unequivocally applied to any actual person. Here’s what I mean.

Suppose we say that typical means average. Are we talking about the mean, median, or mode? Each version of average is likely to yield very different notions of what is typical. And what are we taking the average of? Maybe by “typical,” carriers mean the the average customer height. Even so, this could mean the sum of the height of all customers divided by the number of customers; or it could mean the middle height; or it could mean the height that occurs the most often. In any case, if you’re taller than 6 feet, I regret to inform you that your rates are based upon the other 94% of the world who does business with your carrier, because only 6% of the world is taller than 6 feet.

The takeaway is that the “typical customer” is such a slimy descriptor that it can’t be said to exist. Yet your carrier says that your rates are tied to this person.

4) Current rates are never current.

You should be baffled by this sentence: ”Actual taxes/surcharges on a customer’s bill could differ if rates have changed or if the customer’s situation is not typical.” In the previous sentence, Demetria gives a basis for charges (even if a slimy one). Then in this very next sentence, she says the opposite. The first sentence said, in essence, that this so-called “typical customer” is the basis for the charge: typical customer determines current rates, current rates determine your charge. Then she said it is not the basis if “rates have changed” or if “the customer’s situation is not typical.”

Let’s first look at this notion of a changing rate. At first, Demetria said that the “typical customer” was the independent variable and the “current rates” the dependent variable. Then she introduced the possibility of the rate changing on its own and for reasons having nothing to do with the “typical customer.” In the last part of the sentence, she simultaneously confirms this new understanding and contradicts her first statement when when she adds “or if the customer’s situation is not typical.” So we began with:

Well unfortunately, my friend, it as though current rates are not current and you do not qualify as typical. The salt in the wound though is that we’ve said all of this and still have no clear answer from Demetria on how your rates are derived.

5) Correlation is not causation.

Moving along, we find this vacuous sentence: “These charges are in accordance with the FUSF (Federal Universal Service Fund) program which promotes universally affordable telecommunications and information services to all Americans.” This is the first meaningful thing Demetria has said so far. Yet is does not defuse your complaint. Here’s why.

The FUSF program she refers to is, as she says, intended to extend telecom access to under-served areas. Congress created an agency to administer the fund, and the money is collected from telecom carriers by government mandate. This means that carriers are required to pay FUSF charges. It does not, however, mean that you are. Carriers choose, as a business decision, to pass on to customers the costs imposed on carriers by this mandate. Carriers certainly have this prerogative, but it does not mean that customers are bound to the same mandate that carriers are. Carriers must pay because Congress said so. You are only required to pay if you wish to do business with a given carrier who levies this charge, just like any other charge on your bill.

The important takeaway is that, also just like any other charge on your bill, there are limits to your contractual obligations when your carrier decides to increase the price it charges you. So suppose you notice an increase in your federal universal service charge, as this customer did, and you complain to your carrier. If your carrier chooses to maintain the increase and you consider it materially adverse to you, your contractual obligations are terminable, per the terms of your customer agreement.

So just because Demetria is correct that your federal universal charge can be traced back to the FUSF, it does not mean that you are under the same mandate that carriers are to pay it. Knowing this, Demetria’s clever omission of a prepositional object in her last sentence is quite interesting: “These charges are imposed upon by the federal government and can not be opted out of.” Imposed upon whom, Demetria? Typo or clever omission?

6) You are not your carrier.

Let’s restate Demetria’s last sentence: “These charges are imposed upon by the federal government and can not be opted out of.” Just because your carrier can’t opt out of these charges, doesn’t mean you can’t. That’s like the time you were grounded for a week as a kid and you told your friend that neither of you could go to the movies for a week. “Only you were grounded, pal. I can go to the movies whenever I like.”