AT&T adds new "administrative fee" to our phone bills, adds up to hundreds of millions in extra charges each year

New AT&T fee for postpaid customers will generate hundreds of millions in revenue each year

AT&T has quietly added a new administrative fee that is now appearing on the bills of postpaid customers. The fee is for $0.61 and shows up as a line item under the surcharges and other fees section. According to The Verge who spoke with AT&T, the new fee was enacted help cover expenses for items such as cell sites and maintenance.

If you're a postpaid customer, you'll see the new charge on your bill starting with bills that are cut after May 1st of this year. With AT&T's subscriber base of over 70 million users, AT&T will see an increase in revenue of almost half a billion a year.

AT&T tells us that the administrative fee will "help cover certain expenses, such as interconnection and cell site rents and maintenance." It also added that the charge is "consistent with similar fees charged by other carriers."

Carriers calculate fees differently with some bundling them into other categories. Compared to Verizon and Sprint, AT&T's fees are slightly lower. While $0.61 doesn't seem like a lot of money per customer, it ends up being a very healthy amount when collected from all subscribers. If you have AT&T, did you see the charge appear on your most recent bill? If you have another carrier, how much money do you currently pay in surcharges and fees?

Source: The Verge

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Allyson Kazmucha

Senior editor for iMore. I can take apart an iPhone in less than 6 minutes. I also like coffee and Harry Potter more than anyone really should.

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Reader comments

AT&T adds new "administrative fee" to our phone bills, adds up to hundreds of millions in extra charges each year

29 Comments

AT&T sure is creative when they need to pad the bill. I thought the maintenance of the towers etc. fees were built into the data charges, it sure as heck should be at the costs AT&T is charging.

Does anyone know which portion of the fine print in my contract says they can just add on fees any time they want? Just curious.

Looks AT&T really wants me to leave when my contract is up come next January.

Isn't it if the contract changes from the original agreement the contract was signed as then legally you can leave the contract with no penalties? If you wanted to leave you could say your going to your lawyer.

Only if the change is material. And its unlikely 14.66 over the life of the contract is material when you've already committed to paying 1600 or more over the contract term. It's a less than 1% change for most.

according to section 1.3 in customer agreement, you can now terminate contract without paying ETF. I did it today, spent a long time with customer retention, you just have to keep at it and say "it's a breach of contract and you have a right to terminate without paying ETF"

I'm thinking the opposite of a pre-paid customer? But I've never heard of postpaid

Did you miss a comma or period in there and mean... "Postpaid = contract. Prepaid = no contract"?

I'm on contract but I would, possibly mistakenly, consider myself prepaid because I'm PRE-paying for the next month's service on the bill. For instance, my last bill says Bill Cycle Date: 4/4-5/3 but the Monthly Charges are for 5/4-6/3. I'm paying for the service ahead of time. My cable bill is the same way. Where it all gets horribly confusing is when you go over some limit. Then the bill is a combination of new monthly charges and old, overage charges. I always assumed they did it this way because it ensures they get your money.

In all honesty, you should pull out the agreement and read thru it. While it's dry and boring, it is 'interesting' to once and awhile actually read thru all of the stuff that WE are ALL agreeing to but never reading. I'm as guilty as everyone else.

I got all pissed off once about some change in fees (text messaging back in 1998/9, I think). I was all prepared to read them the riot act until I glanced thru the agreement and found the paragraph that basically told me to F myself.

[shrug] I hate it as much as everyone but we're agreeing to a lot of terms that we're not aware of.

That's what I was thinking. That changes the terms of my agreement with them since it adds new fees not already outlined in our agreement.

AT&T will get around it by saying they're merely breaking out a line item for a fee that was previously bundled with another line item... even if the total bill changes... or not. :)

PR Spinning it doesn't mean it's not in violation of the terms of the agreement. If they're changing any aspect of the billing or fees, that's in violation, esp when not government mandated.

If you read your contract you would discover that Administrative fees are not included in the protected pricing - only if they change the fees charged for services. You can't get out of your agreement.

1.3 Can AT&T Change My Terms And Rates?

We may change any terms, conditions, rates, fees, expenses, or charges regarding your Services at any time. We will provide you with notice of material changes (other than changes to governmental fees, proportional charges for governmental mandates, roaming rates or administrative charges) either in your monthly bill or separately. You understand and agree that State and Federal Universal Service Fees and other governmentally imposed fees, whether or not assessed directly upon you, may be increased based upon the government’s or our calculations.

IF WE INCREASE THE PRICE OF ANY OF THE SERVICES TO WHICH YOU SUBSCRIBE, BEYOND THE LIMITS SET FORTH IN YOUR CUSTOMER SERVICE SUMMARY, OR IF WE MATERIALLY DECREASE THE GEOGRAPHICAL AREA IN WHICH YOUR AIRTIME RATE APPLIES (OTHER THAN A TEMPORARY DECREASE FOR REPAIRS OR MAINTENANCE), WE’LL DISCLOSE THE CHANGE AT LEAST ONE BILLING CYCLE IN ADVANCE (EITHER THROUGH A NOTICE WITH YOUR BILL, A TEXT MESSAGE TO YOUR DEVICE, OR OTHERWISE), AND YOU MAY TERMINATE THIS AGREEMENT WITHOUT PAYING AN EARLY TERMINATION FEE OR RETURNING OR PAYING FOR ANY PROMOTIONAL ITEMS, PROVIDED YOUR NOTICE OF TERMINATION IS DELIVERED TO US WITHIN THIRTY (30) DAYS AFTER THE FIRST BILL REFLECTING THE CHANGE.

Wait...

$0.62 times 70 million customers is nowhere near $500 million. It's $42 million, which, while still an annoying pinprick to its customers, is barely a rounding error when compared to AT&T's $7.3 billion profit...

EDIT: Per month per customer. Got it.

Worse than that - per month per line. I assume the 70 million customers counts each line separately, but it is per line...

Must be nice to be able to charge people more money on contracts whenever you want and pocket millions. And then tell them how they can use the limited data they are paying for, no hangouts for you.

I agreed, this fee should be included in the data charge each month. All carriers are sneaky with fees. I did an experiment for two months with Verizon, who said they could save me money over AT&T. I turned off the two phones I had with them. Never used them, and both months my fee was $135.00. Claiming data charges. Bull crap, I did not have a data plan at all. The reason two months, my contract would be up, and I shut it down. With a data plan, and use the iPhone a lot on 4g, my bill is always $95.00 with AT&T. Not happy with the fee but sure better than Verizon.

Verizon has the same thing. I was actually pricing AT&T today, when my contract with big red is up, I think I might just dump them in response to the last few years of customer hostile changes. Now that AT&T and Verizon are exactly the same price for mobile share, and my VZW discount is 20% and AT&T is 23%, I was going to save about $2/month and get faster speeds.

Now it is only about $1.38...

Oh, wait. Verizon's is 90¢ per line. Is this per line, too?

** Just do what I did today. I called AT&T, asked for the retention department, complained about the $.61 "administrative fee"; listened to their customer relations explanation; still said I was unsatisfied with it and got the $20 unlimited text messaging plan cut to $10. That's $10 less per month on my bill.

I would continue to check your AT&T statements on that discount. We have heard many stories in store and online in the forums with several customers claiming that AT&T has made a new "feature sku" discount on their bill... And then it turns out to be just credit for one month or two and then dissapears...

I have never seen a texting plan for unlimited texting for $10... No such plan can be created on customer service side (coming for years of experience in working with the system)

My guess is that they're just gonna credit your account $10 a month to balance it out...

Either way continue to look at your statements to see that the discount continues to be applied, that way you're not screwed out of what the customer relations dept said to you.

Actually if you said you were ready to cancel they would have probably given you the anymobile and text free for six months and then lower it to 10$ that's what happened to me. I ended up dropping them anyway b/c prepaid is till cheaper but that's just me.

Verizon charges $0.91 per line

Sprint is about $1.99

T-Mobile is $1.61

AT&Ts fee is still cheaper than all the other carriers....

But the question rises "why now?"