Figuring Out Your Phone Bill

By Author: Raymond Klesc
Total Articles: 6
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Your local phone bill may seem incomprehensible at first glance. It may also seem as though you need to be a certified public accountant to fully understand the gobbledygook that some vendors pass off as a billing statement. But believe me, there are accountants out there that can't decipher the telecommunication code these vendors use. I know, I've talked with them personally and they are as clueless as anyone else. I guess a CPA after your name doesn't give anyone the added power to unlock these mysterious beasts called phone bills.

So what does it all mean? Although we can't address the peculiarities and idiosyncrasies of each local biller within the constraints of this guide, we can try to unravel the more common pieces of their complex brainteasers they pass off as telephone bills. Review this list and examine your bill. You should be able to find answers to some of your questions below.

1. Basic Local Telephone Service:
This charge is for your local dial tone and access to your local vendor's telephone exchange. Generally this charge is based on the local calling plan that you have ...
... subscribed to through your local provider.

2. Optional Telephone Services:
These charges are determined by the number and variety of extra services that you requested with your particular calling plan. This might include such services as Caller ID, Call Waiting, 3-way calling, unlisted number(s), inside the premises wire line maintenance, and so forth.

3. 911 Surcharge:
This charge comes from your local government wherein your local governmental agencies provide enhanced 911 emergency services such as fire, police, and medical/rescue to name a few.

4. Federal Subscriber Line Charge:
This was instituted after the break-up of AT&T in 1984 to cover the costs of the local phone network. This charge may appear as End User Common Line Charge; Federal Line Cost Charge; Federal Access Charge; Customer Line Charge or Interstate Access Charge. Even though the name may contain the word Federal please realize that this is not a tax levied by the federal government. In a little slight of hand, the Federal Communications Commission (FCC) permits the local telephone providers to add this fee to cover the costs associated with local service. Under FCC guidelines, the local providers may charge up to $6.50 for a residential line and $9.20 for a business line. Make no mistake about it; your local telephone provider pockets the money.

5. Federal Universal Service Fund (USF):
This could also be referred to as the Universal Connectivity Fee. This is yet another slight of hand by the telephone carriers caused by an oversight by the FCC. The carriers are required to pay into a federal program to cover the subsidized cost of phone service in rural, low income, library and health and education telecommunications customers. Since the FCC did not specify in the law that the charge was not to be passed on to consumers, the carriers took advantage of this loophole and pass on the charge to their customers. Consequently, you are now charged a USF fee (generally between 6.8% and 9.9%) on interstate and International calls. Furthermore, the carrier can charge a percentage of the Federal Subscriber Line Charge, even though you may not have made any long distance or International phone calls. Every three months the FCC resets this percentage. (Note: Be advised that some individual States charge a USF fee as well.). In the past, AT&T and MCI use to charge a USF more than twice what the Government charged them. AT&T used to charge 11.5% and MCI used to charge 12.3% for something the FCC used to charge them 5%. Since these companies were making a ton of money, off of what the Public thought was a mandated fee, the FCC changed the rules so that all telephone companies are now required by law to charge the same amount and not to profit on this fee.

6. Local Number Portability Charge (LNP):
This is yet another charge that is allowed by the FCC but is not mandated by them. This charge provides residential and business telephone customers with the ability to retain, at the same location, their existing local telephone numbers when switching from one local telephone service provider to another. The charge can be imposed for up to 5-years from the initial install date of your service. This is not a tax and the proceeds are retained by the carrier.

7. Federal Excise Tax:
This is a mandatory 3% Federal tax on all services. It includes wireless communications, local dial tone and long distance calls. It's interesting to note that this excise tax was originally instituted way back in 1898 to raise money for the Spanish-American war. The war must have been terribly expensive because we are still paying for it after all these years.

8. Relay Service Charge:
This charge is imposed at the State level for the purpose of paying for relay centers utilized to transmit and translate telephone calls for people with speech and hearing impairments.

9. Presubscribed Interexchange Carrier Charge (PICC):
This is a per-line charge imposed on businesses that have more than one business telephone line in their premises. PICC charges should never be charged on residential service. If you see this on your residential telephone bill then you should contact your carrier immediately and ask for a refund.

10. Gross Receipts Tax; State and Local Municipal Tax:
These are legitimate State, county, and/or municipal charge on all products and services you have authorized and used during the month.

These are some of the more common monthly charges that may show up on your telephone bill; both landline and wireless. Unfortunately, the greatest issues facing consumers, especially if you are using wireless products and services, are the extent and nature of the fees allowed, but not mandated, by the FCC or the Federal Government.

The words Federal or Regulatory does not necessary legitimize a charge. These terms do not always mean that the government or any of its agencies are collecting these taxes. There are many wireless carriers that are literally pocketing millions of dollars every month from fees that they couch or legitimize with such terms.

As always, and most specifically with wireless carriers, you must ask the carriers about ALL of the various charges and fees they impose on your telephone bill. You may not be able to do anything about the charges (you can't fight city hall as they say) at least you will be able to better quantify these costs for budgeting and comparison purposes. As a general rule of thumb, I have found that it is wise to assume a mark-up of between 15-20% of your normal monthly service rate to cover the cost of these additional fees and charges.

To ensure that telephone bills give consumers the essential information they need to protect themselves from fraud and to make informed choices, the FCC has issued the following rules and guidelines that phone companies must follow when creating their phone bills. The bills must:

1. Be clearly organized;
2. Identify the service provider associated with each charge;
3. Highlight any new providers and indicate the date the change was made;
4. Contain full and non-misleading descriptions of charges;
5. Identify those charges for which failure to pay will not result in the disconnection of a customer's basic, local service;
6. Provide a toll-free number for customers to call for customer service in order to lodge a complaint or to obtain information. If the customer does not receive a paper telephone bill, but receives a bill by e-mail or over the Internet, the telephone company may provide the customer with an e-mail address or Web site to inquire about charges; and
7. Use standardized labels when referring to certain line item charges relating to federal regulatory action, such as "local number portability" and subscriber line charges.


Do you know the long distance terminology on your phone bill?

1. Dialaround Number (Casual Access):
This is a number you use to purposely bypass your local or long distance telephone carrier. This is also sometimes referred to as a 10-10 number reflecting the number dialed to access the carrier's network. If you use a dialaround number, you do not need to switch your current service. It can also be used even if you do not have a primary long distance carrier selected. Generally speaking, it is possible for you to get the best local, long distance and International calling rates using a dialaround provider. For more information about selecting a dialaround calling plan click here.

2. Interstate Calls:
These are calls that originate in one state and terminate in another state. It can also be referred to as state-to-state calling.

3. Intrastate Calls:
Contrary to the interstate calls, mentioned above, these types of calls originate and terminate within the same state.

4. Slamming:
This is the unauthorized conversion of a customer's long distance phone service from their current carrier to a new long distance carrier. This practice is specifically forbidden under Federal Law and can carry criminal penalties. To ensure that you are never slammed, you may request a PIC Freeze. This is a specific request by the customer to not allow a change in their long distance service. For more information about slamming, check this article at the FCC web site.

5. Toll Call:
This is any telephone call subject to an additional charge when terminating outside the local service area covered by your local carrier's telephone calling plan. This is also referred to as a long distance call. Most local service providers offer a variety of plans that cover ever expanding local or intrastate service areas. By examining your calling pattern, and adjusting your plan to accommodate your specific pattern and needs, can dramatically affect your telephone bill and perhaps save you considerable sums of money every month - month after month.

Much of this material was gathered from the Federal Communications Commission web site and this article on the FCC web site.

About the author:

Global Value Connect - providing quality telecommunication products and services from leaders in the industry since 1995.
http://globalvalueconnect.com

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