03-12-2010, 12:43 PM
...and it may surprise you to learn that it was Verizon that championed elimination of the Federal Excise tax on phone service (I worked there while this effort was underway).
The touch tone fee harks back to the monopoly Bell System days, when the philosophy was to overcharge for each and every "frill" (like calling features, long distance calling, touch tone,etc.) in order to keep rates for basic local service low. It is purely an income source for telcos. Untangling the web of cross subsidies between local and long distance and between the companies that start and end calls has been underway for 25 years and it's still a mess. I could tell you stories that would curl your hair about the way telcos (big and small) try to game the system to their advantage - but I retired from the industry so that I wouldn't have to think about these issues anymore
The touch tone fee harks back to the monopoly Bell System days, when the philosophy was to overcharge for each and every "frill" (like calling features, long distance calling, touch tone,etc.) in order to keep rates for basic local service low. It is purely an income source for telcos. Untangling the web of cross subsidies between local and long distance and between the companies that start and end calls has been underway for 25 years and it's still a mess. I could tell you stories that would curl your hair about the way telcos (big and small) try to game the system to their advantage - but I retired from the industry so that I wouldn't have to think about these issues anymore