Sprint makes the right decision... about fees

Sprint makes the right decision… about fees

While Sprint Nextel's big announcement this week was the appointment of Embarq CEO Dan Hesse as the carrier's new chief executive, Sprint quietly made an important announcement last week that needs revisiting. It's too soon for me to judge whether Hesse was the right choice for CEO [1], but Sprint's new policy on so-called "hidden fees" should become an industry best practice.

Starting next year, Sprint subscribers will no longer see fees on their monthly bills like the Federal Programs Cost Recovery Fee, the Federal E911 surcharge or a Wireless Local Number Portability (WLNP) fee. Instead, Sprint will bill subscribers for a blanket Administration Charge and a blanket Regulatory Charge.

The change in wording on the subscriber bills may stem from a pending lawsuit brought against the carrier by Missouri's attorney general, who charged that the carrier aimed to trick their subscribers into thinking these fees were mandated by the government. Sure, the word "federal" when attached to fees has that connotation, but whatever the connotations, subscribers will continue to pay nearly the same amount in most cases.

Sprint sent their subscribers a notice that explains the new fees. The Administrative Charge will "help defray various costs imposed on us by other telecommunications carriers, including, but not limited to, charges imposed by local telephone companies for delivery of calls from our customers to their landline customers and for certain network facilities and services we must purchase from them." The Regulatory Charge will defray costs from local, state and federal regulatory programs. Fair enough. The notice also dispels any notion that the fees are taxes or required by any governing body.

While the fees appear to be "hidden fees" still, or an attempt to bury business costs below the line so the advertised price appears lower, in many cases these fees vary by region. Local fees differ, obviously--as do the fees some regional carriers charge Sprint. If a national carrier wants to have a nationally advertised rate plan, these much maligned "hidden fees" are a necessary evil. Sprint made the right move, however, to remove any whiff of these fees being federally mandated. -Brian [2]

Also: Take a look at Hesse's farewell email to Embarq. Document [3]