Consumer groups are angry over a decision by the Canadian Radio-television and Telecommunications Commission not to refund hundreds of millions of dollars to people overbilled by telephone companies.

The companies overcharged customers across the country about $50 each - and they did it because the CRTC allowed them to.

That money now adds up to $650 million.

But rather than giving refunds to customers the CRTC said the money will be used to expand services in rural and remote communities.

Bruce Cran, president of the Consumers' Association of Canada, said he's received more than 1,000 messages by phone and e-mail from angry customers. He said he's astounded by the commission's decision.

"It doesn't make good consumer sense at all," he added.

Michael Janigan, the executive director of the Public Interest Advocacy Centre in Ottawa, agreed.

"Certainly it may be in the public interest to have rural broadband subsidized in some fashion, but that really is a role for government to finance," he said.

In 2002, the CRTC ordered regulated telephone companies, such as Bell and Telus, to charge customers a rate that could have been lower. The commission wanted other companies such as Primus or Sprint, to come in and underprice them, encouraging competition and allowing consumers to get lower rates.

In the last few years, the regulated phone companies have been able to collect about $650 million as a result of overbilling.

Janet Yale, executive vice-president of corporate affairs with Telus, said the company is "very pleased" with the CRTC decision. "There is about $130 million in the Telus and Telus Quebec deferral account which can now be used to fund the expansion of broadband service into rural and remote areas," she said.

The Consumers' Association of Canada said it is considering appealing the CRTC decision.