Today I looked at my most recent bill from Level3.
They are now assessing a 2.5% surcharge, which is listed as "Taxes" on the bandwidth bill I have. In the state of PA, telecoms services are explicitly not taxable.
When you call Level3 billing, they admit in their recorded message it is not a tax at all, but a surcharge, and if you want to dispute it you are supposed to quote back their own contract terms to them via email (i.e. you cannot reach a human).
I would expect this kind of scamminess from Verizon's cell-phone billing, but a contract is a contract and I can see no provision for arbitrarily tacking on fees, illegally labeling them as "taxes" and then putting the onus on you to prove that they can't charge you.
Anyone else seeing this same behavior from Level3?
(It seems that the larger a telecom company gets, the more they want to act like a scum-sucking ILEC.)
I saw the same kinds of behavior from WorldCom years before their collapse.
I was the technical manager at a small ISP in Houston and was presented with
the WorldCom invoices and was shocked to find 20% per month in phony
charges.
2.5% is a far cry from 20% but that 20% had to start somewhere.
Today I looked at my most recent bill from Level3.
They are now assessing a 2.5% surcharge, which is listed as "Taxes" on the bandwidth bill I have. In the state of PA, telecoms services are explicitly not taxable.
When you call Level3 billing, they admit in their recorded message it is not a tax at all, but a surcharge, and if you want to dispute it you are supposed to quote back their own contract terms to them via email (i.e. you cannot reach a human).
I would expect this kind of scamminess from Verizon's cell-phone billing, but a contract is a contract and I can see no provision for arbitrarily tacking on fees, illegally labeling them as "taxes" and then putting the onus on you to prove that they can't charge you.
Anyone else seeing this same behavior from Level3?
(It seems that the larger a telecom company gets, the more they want to act like a scum-sucking ILEC.)
I wouldn't automatically assume malice here, although it is tempting. Further, escalating past low-level support or machines in corporate america is difficult and infuriating, but we know that.
In Israel we have a name for such methods: shitat matzliach.
Loosely translated it means "the succeeding method". You try something, see if it works. Then try something a little bit less, see if it works, and so on.
How many folks do you think:
1. Notice this irregularity.
2. Call.
3. Endure the process of complaining, staying on the phoen for hours and emailing in the contract?
And these are just the steps you went through so far.
"How much pain can we inflict on our customers before they break
(whether or not it increases revenue or decreases costs)?"
I see it in a different way.
At one point, a corporation's accountants decide that growth through
acquisition of new customers will slow and the only way to continue to
grow revenus is to start nickel and diming existing customers to death,
cutting customer support (aka: outsource to a different country where
the folks there are given a simple 2 page script and no other training)
and implementeing strange new billing schemes.
And in the past, such schemes have worked with minimal customer
complaints (of course, the customer service side in in cahoots and
aren't about to report to the board that the decisions made have been
highly unpopular) and those measures become permanent.
The big problem is that upper management are more focused on pleasing
the Wall Street Casino analysts than they are running their company and
pleasing their customers.
You try something, see if it works. Then try something a little bit less, see if it works, and so on.
If what you are saying translates to
"How much pain can we inflict on our customers before they break (whether or not it increases revenue or decreases costs)?"
More like "let's give it a shot, see if they are on to us. Best case we suceeded, worst case we give a little way and try again. In all likelihood we will end up better off, and at the worst at a regular starting position for the deal/negotiation/kick in the nuts.
Then yes, it is inherently malicious, but of a natural predatory sort.
Isn't malicious, just not very ethical. Having been on the recieving end a few times.. you don't always know it is happening.
But now that we all released some steam, I don't think billing practices is really our expertise here.. although many of us techies negotiate the bandwidth and peering for some very odd reason.
I'm not sure that's a useful distinction. I strongly doubt any vendor has actual malice towards me (modulo some people I've pissed off at times in panics). Ethics are what I hope for from partners, try to demonstrate, and it is proven over time.
That said, inventing random fees, hiding them as "taxes" or "federally mandated something or other", and seeing what sticks to the wall in order to get that tiny percent profit boost is not going to make any friends in a network community. It works much better with cell customers or unaware bean counters, but netops folks are going to see it. L3 have given me reason to not like them in the past, and this is just more of the same. The problem is that the big boys seem to be racing to the bottom, so there isn't anyone better to which to defect.
Calling something a "tax" or "federally mandated" when it is not sounds both like a class action suit waiting to happen, and illegal enough to have the company at least fined.
Why doesn't Cuomo go after problems like this instead of the BS he likes to chase. It's got to have an appeal to at least as many people who vote.
I'm just looking for a company that looks past the next quarterly investor call. Because then at least some ethics come into play. Doing things like this will have longer term effects, and they won't be positive.
Date: Thu, 31 Jul 2008 15:34:04 -0400
From: Patrick W. Gilmore
Calling something a "tax" or "federally mandated" when it is not
sounds both like a class action suit waiting to happen, and illegal
enough to have the company at least fined.
I agree.
I'm probably not the only one who has read large communication company
shareholder reports and SEC filings. Class-action suits are listed as a
calculated risk, a cost of doing business, and factored in as part of
doing business. Yay for customers prepaying their opponent's legal
fund!
If we were to ask for a show of hands who's never been jerked around by
a telecom company, I don't think we'd see many folks on this list
uncrossing their arms. I'm even having some fun with one (re a small
personal/non-business account) that claims service cannot be terminated
in writing -- despite lack of any Contract terms, statute, or precedent
to substantiate their position. And then we have [what appear to me to
be] FCRA violations.
To answer Joel's "[a]t what point is regulation okay" question: At the
point where the regulators are less evil than those they are regulating.
There are two three reasons for reading statutes and precedent (or for
paying someone on your behalf):
1. To comply;
2. To find loopholes;
3. To find the best way to nail whomever has angered you.
When #2 or #3 becomes "excessive", someone cries for an overhaul. Of
course, a poorly-executed "overhaul" can exacerbate #2 and #3, but let's
not follow the recursion too far.
We all have plenty of billing nightmares. Level 3 has tried this sort of thing before. Their "property tax surcharge" or something. We got it removed years ago since our MSA didn't support it -- their new ones do, whether legal or not.
We were particularly frustrated with a traditional T3 international circuit where you expect (and request) full protection, blah, blah only to find the foreign leg was not protected. We had ordered it from Broadwing before the acquisition and then had to cancel it when we found out how L3 was going to engineer it.
Passing on these fees (even if challenged by many) would still end up with 40-60% not challenging it. This is a vastly impressive move on their side until the class action lawsuit and it'll grow as a percentage too.
Reliance Telecom (formerly Yipes and others) has started passing on "regulatory fees" without further description. Boo.
This is a market that is about go through another round of BKs and consolidation, and to draw a parallel to the rest of the market -- no one is too big to fail. All of the sins of the last companies to go under are about to come to light again. I think the datacenter builders are doing the same sort of thing with the overbuilding and telling Wall Street how behind they are on capacity, but time will prove that right/wrong too.
To make this operational. The reason techs negotiate bandwidth and peering deals is because they are the only ones whose eyes don't glaze over when the terminology is thrown around.
Most bean counters are used to mature industries where billion dollar companies don't perpetrate this sort of fraud by whimsy (traditional companies buy permission with lobbyists first). So they never challenge taxes or "fees" because they have good reason to believe that if Verizon is charging it, they have the legal authority to do so. Its these also-ran companies like L3, Reliance and others that have the "infrastructure" to deliver hicap services but they don't have the patience or maturity of old school tyrants.
Another way to say this. You should keep complaining about it until one of them clues in and asks the PSC in your area to make it legal.
There's a big difference between the airlines hiking fares for future
flights, which you can see when searching, and choose the competition;
and companies adding "surcharges" to pre-existing contracts, some with
terms and penalties for termination; all of which have a relatively high
switching cost.
This is a way for them to raise prices above what they contracted for,
while preventing termination of contracts for cause.
Usually there is something about having to pay whatever taxes & legally mandated fees there are no matter what. Which is probably why they called it a "tax", even though it isn't. (No comments on what that says about L3.)
