Verizon, one of the largest wireless carriers in the US, is set to increase its Administrative and Telco Recovery Charge by 20 cents per line, effective December 18. The move, which was confirmed by a Verizon spokesperson, will see the fee rise from $3.30 to $3.50 for each voice line on a plan and from $1.40 to $1.60 per data line.

The Administrative and Telco Recovery Charge is a surcharge that Verizon, along with other wireless carriers like AT&T and T-Mobile, tacks onto monthly bills. According to Verizon, the fee "helps defray and recover certain direct and indirect costs we or our agents incur," including network operating and maintenance costs. However, critics argue that this fee is a way for wireless companies to raise rates without explicitly stating so.

This is not the first time Verizon has increased this particular surcharge. Just a couple of years ago, the company significantly hiked the fee, sparking concerns over the "fee creep" strategy employed by wireless carriers. The term "fee creep" refers to the practice of incrementally increasing various fees and charges to boost revenue, often without providing corresponding improvements in service.

The impact of this fee increase may seem minimal, with customers only facing an additional 20 cents per line. However, when multiplied across millions of users, the revenue generated from this fee hike can be substantial. This is particularly significant for Verizon, which reported a net income of $3.4 billion in the third quarter of this year, down from $4.9 billion in the same quarter last year.

The "fee creep" strategy has been the subject of controversy in the past. In 2022, AT&T faced a class-action lawsuit over its similar fee, which the company eventually agreed to settle. The lawsuit alleged that AT&T was using the fee to mislead customers about the true cost of their plans.

The latest fee increase by Verizon serves as a reminder of the various levers that wireless carriers can pull to pad their bottom line. As the telecom industry continues to evolve, it remains to be seen how customers will respond to these incremental fee hikes and whether regulators will take action to address the "fee creep" phenomenon.

In the meantime, Verizon customers can expect to see the increased Administrative and Telco Recovery Charge on their next bill. While the impact may be small for individual customers, the cumulative effect of these fee hikes can have significant implications for the industry as a whole.