Verizon Wireless Backtracks on $2 Fee Deal; Shares Rise

Shares of Verizon Communications, majority owner of Verizon Wireless, rose after the company squelched a day-old plan to charge customers a $2 convenience fee to pay their bills.

Verizon shares closed 2011 at $40.12, up 7 cents, or 12 percent for the year, after consumers complained and the U.S. Federal Communications Commission said it would investigate.

The Basking Ridge, N.J.-based Verizon Wireless, the No. 1 U.S. mobile carrier, announced the cancellation shortly before the New York Stock Exchange closed.

The best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time, said a statement from CEO Dan Mead.

The mobile carrier had said it needed the surcharge from customers whose accounts aren't automatically tapped by the company because single payments are expensive to process. The charge would have applied even to those who made their payments over a Verizon Wireless phone.

Verizon Wireless, which is co-owned with Britain's Vodafone, is the profit center of Verizon Communications, the New York-based parent. The parent company has still not concluded negotiations with the Communications Workers of America and the Brotherhood of Electrical Engineers whose members mounted a two-week strike against it earlier in 2011.

Consumer pressure previously forced Bank of America, the second-largest U.S. bank, to cancel a proposed surcharge on bank debit card payments.