I am in the 17th month of a 24 month contract with a company (ISP A) to provide internet services. They got bought out by (ISP B) this month.

I have not paid any money to this new company as of yet. (Invoice is due on the 1st of each month).

The new company added an extra "Universal Service Fund" fee that I never had to pay for before. The fee is ridiculous and I did not agree to it in any form.

First of all, am I obligated to finish out my contract? And secondly, do I have to pay this extra fee? how can I control this? they could charge me $1000/month in some "extra random fee"?

thanks for your time!

and PS: There is no provision in the contract talking about the company being acquired.

1 Answer 1


A contract need not say anything about the fact that the company could be sold. What matters is that the terms of the contract are not changed. Since there is no opt-out on transfer clause, you have to finish the term of the contract (or pay whatever fee is assessed if there is an early termination clause). So the question is how certain you are that you did not agree to the possibility of adding a "Universal Service Fund" charge. There may be subtle language which allows the company to add charges for specified purposes, and the new owners are availing themselves of that possibility.

It may be difficult to determine just how this fee is legal (if it is), because customer service might just say "we are now charging this fee", or "we have to charge this fee", but you could try asking them where in the contract this new fee is allowed. You can hire an attorney to read over the contract to see where this possibility is mentioned; perhaps it is not, and then an exchange of letters between attorneys might be necessary.

There is such a thing as the Universal Service Fund, which is a government operation to improve rural telecommunications. Telecomm companies have to pay a percent of their interstate revenues to this fund. If your bill has not increased since the acquisition, that suggests that you simply did not know that you had been paying into the fund, since the original company didn't give you a detailed invoice. If it has increased by this amount, that suggests that the earlier owner hadn't exercised an option to pass the cost on to the customer.

It is likely that there is some clause in the contract that addresses charges required by law. That does not mean that you could not prevail in a suit against the company, but it would make the job harder (more expensive) for you. One company sort of explains how they are legally allowed to pass the cost on to the customer. Because it is allowed by federal regulation, it need not be mentioned in the contract.

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