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Under Pressure, Verizon Scraps Plans For DSL Surcharge

Verizon Communications is scrapping plans to tack on an Internet surcharge for some of its broadband subscribers after pressure from consumer groups and regulators. The decision follows a similar one made by Bell South Corp.--highlighting the sensitivity of major U.S. telecoms to such pressure, as well as an increasingly competitive broadband market. It also raises questions about whether major telecoms would back down from their plan to roll out a two-tiered Internet service to Web publishers. While not directly a public-surcharge, so-called "Net Neutrality" proponents argue that charging Web publishers for greater bandwidth usage would ultimately trickle down to the consumer, raising prices of products and services on the Web. Verizon and other major U.S. phone companies quietly announced plans to impose the aforementioned "supplier surcharge" on so-called "naked" DSL customers earlier this month, after the government stopped collecting its "Universal Service Fund" charge. That means the companies were going to tack on another surcharge the same day the government lifted theirs. They hoped consumers wouldn't notice. The charge would have applied to residential DSL subscribers who do not subscribe to phone service. Consumer groups urged the Federal Communications Commission to take action against Verizon and other DSL service providers for imposing the surcharge, which has already appeared on some subscribers' bills. Those customers will now be reimbursed for the charges. After both Verizon and Bell South rescinded their charges, FCC Chairman Kevin Martin said: "Consumers should receive the benefits of the commission's action last summer to remove regulations imposed on DSL service. The continued deployment of broadband at affordable prices for consumers remains my top priority as chairman.

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