Understanding Your Telephone Bill and Charges
Consumers are sometimes confused by the various charges and items on their monthly telephone bills. The Truth-in-Billing rules of the Federal Communications Commission (FCC) require telephone companies to provide clear, non-misleading, plain language in describing services for which you are being billed. The company sending you the bill must identify the service provider associated with each charge. If a bill contains charges in addition to basic local service, it must distinguish between charges for which non-payment will result in disconnection of basic local service, and charges for which non-payment will not result in disconnection. Telephone companies must also display, on each bill, one or more toll-free numbers that you can call to ask about or dispute any charge on the bill.
Here is a detailed description of some of the charges or line items that may appear on your traditional wireline telephone bill.
- Access charges are fees charged subscribers or other telephone companies by a local telephone company for the use of its local network.
- The FCC allows local telephone companies to bill customers for a portion of the costs of providing access. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less or nothing at all. Access charges for second or additional lines at the same residence are higher than the charges for the primary line. These charges can be described on your telephone bill as “Federal Access Charge,” “Customer or Subscriber Line Charge,” “Interstate Access Charge,” etc.
Access Recovery Charge: This charge was recently adopted as part of reforms to the intercarrier compensation regimes. This transitional recovery charge is intended to mitigate the effect of reduced intercarrier revenues and facilitate continued investment in broadband. The FCC caps the maximum price that a company may charge for this. It is not a tax. The FCC does NOT receive this money.
Beginning July 1, 2012, the FCC will allow Incumbent Local Exchange Carriers (LECs) to assess a new Access Recovery Charge (ARC). The FCC will allow Incumbent LECs to bill the ARC separately, or to combine the ARC with the SLC for purposes of billing the two charges. The FCC will allow Incumbent LECs to assess a monthly charge of up to $0.50 per line on residential end users, single-line business customers, and non-primary residential lines. The $0.50 ARC may increase an additional $0.50 annually through 2016 or 2017, depending on the type of carrier (price cap or rate-of-return). The FCC also will allow Incumbent LECs to assess a monthly charge of up to $1.00 per line on multiline business lines. The $1.00 ARC on multiline business lines may increase an additional $1.00 annually through 2016 or 2017, depending on the type of carrier (price cap or rate-of-return). The multiline business SLC combined with the multiline business ARC may not exceed $12.20 per month. Non-Primary Lines are any additional telephone lines, after the first telephone line, that connect consumers’ residential telephone service to the telephone network (i.e. any additional line billed to the same address is considered a non-primary line). Local telephone companies use a service location (address) definition, meaning that any additional line billed to the same address is considered a non-primary line, subject to a higher subscriber line charge cap, even if the bill is in a different name at the same address.
Charge for Network Access (Subscriber Line Charge): This charge covers the costs of the local phone network. This charge may appear as “FCC Charge for Network Access,” “Federal Line Cost Charge,” “Interstate Access Charge,” “Federal Access Charge,” “Interstate Single Line Charge,” “Customer Line Charge” or “FCC-Approved Customer Line Charge.” The FCC sets the maximum allowable Federal Subscriber Line Charge. This is not a government charge or tax, and it does not end up in the U.S. treasury.
- State public service commissions regulate access charges for intrastate (within a state) calls. In some states, a state subscriber line charge may appear on customer bills.
Federal Excise Tax
- This three percent tax is now applied only to local service billed separately from long distance service.
State & Local Taxes
- These taxes are imposed by state, local, and municipal governments on goods and services. They may also appear as “gross receipts” taxes on your bill.
Universal Service Charges
- The Universal Service Fund (USF) provides support to promote access to telecommunications services at reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries.
- All telecommunications service providers and certain other providers of telecommunications must contribute to the federal USF based on a percentage of their interstate and international end-user telecommunications revenues. These companies include wireline phone companies, wireless phone companies, paging service companies, and certain Voice over Internet Protocol (VoIP) providers.
- Some consumers may notice a “Universal Service” line item on their telephone bills. This line item appears when a company chooses to recover its USF contributions directly from its customers by billing them this charge. The FCC does not require this charge to be passed on to customers. Each company makes a business decision about whether and how to assess charges to recover its Universal Service costs. These charges usually appear as a percentage of the consumer’s phone bill. Companies that choose to collect Universal Service fees from their customers cannot collect an amount that exceeds their contribution to the USF. They also cannot collect any fees from a Lifeline program participant.
911, LNP, and TRS Charges
- 911 – Charge imposed by local governments to help pay for emergency services such as fire and rescue.
- Local Number Portability (LNP) – Telephone number portability allows residential and business customers to retain, at the same location, their existing local telephone numbers when switching from one telephone service provider to another. Companies may assess fees to recover the costs that they incur in providing number portability. Fees may vary by company, and some companies may not charge any fees. These fees are not taxes.
- Telecommunications Relay Service – Charge to help pay for the relay center that transmits and translates calls for people with hearing or speech disabilities.
- Directory Assistance – Any charges for placing 411 or (area code) 555-1212 directory assistance calls.
- Monthly Calling Plan Charge – Charge applicable to any monthly calling plan such as unlimited long distance calling on your wireline bill or unlimited minutes on your wireless bill.
- Operator Assisted Calls – Charges for any calls connected by an operator. Rates for these calls generally are higher than rates for unassisted calls.
- Features Charges – Both wireline and wireless telephone companies offer features such as call forwarding (transferring incoming calls to another telephone number); three-way calling (holding an incoming call, placing a call to a second number, and allowing three parties to participate); call waiting (providing a signal during an ongoing call to notify that another party is calling the subscriber); voice mail (message service much like an answering machine); and Caller Identification (Caller ID) (allowing the subscriber to view the telephone number of an incoming call on a display screen). With Caller ID, non-listed or non-published numbers may be displayed unless the non-listed or non-published subscriber requests that they not be.
- Minimum Monthly Charge – A minimum monthly charge assessed by some long distance companies even if you don’t make long distance calls.
- “Single Bill” Fee – Charge for combining local and long distance charges onto one bill. This fee is not mandated by the FCC and is not an FCC charge. Some companies waive the fee for customers who pay bills online or by credit card. Customers can avoid the charge by arranging for separate billing from their long distance telephone company.