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Background
Many consumers do not understand the various charges and items on their
monthly phone bills. Here’s a quick reference that describes some of
these charges:
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911 – This charge is imposed by local governments to help pay
for emergency services such as fire and rescue.
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Federal Excise Tax – This is a three percent tax mandated by
the federal government (not the Federal Communications Commission
(FCC)). It is imposed on all telecommunications services, including
local, long distance and wireless bills.
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(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 "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 caps the maximum
price that a company may charge for this. This is not a government
charge or tax, and it does not end up in the government’s
treasury.
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Local Number Portability Charge (LNP) – The FCC allows local
telephone companies to recover certain costs for providing
"telephone number portability" to its customers. 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.
This is a fixed, monthly charge. Local telephone companies may continue
to assess this charge on their customers’ telephone bills for five
years from the date the local telephone company first began itemizing
the charge on the bill. This is not a tax.
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State & Local Municipal Tax –
This charge is imposed by state, local and municipal governments on goods and services. It may
also appear as a "gross receipts" tax in some states.
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(State) Subscriber Line Charge – This charge is mandated by
some states’ public service or utility commissions to compensate the
local phone company for part of the cost of providing local telephone
lines associated with state services, i.e., intrastate long distance and
local exchange services.
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Telecommunications Relay Services Charge –
This state charge helps to pay for the relay center which transmits and translates calls for
hearing-impaired and speech-impaired people.
Other Charges
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Universal Service Fund (USF) (Also
called the Universal Connectivity Fee) - Because
telephones provide a vital link to emergency services, to government
services and to surrounding communities, it has been our nation’s
policy to promote telephone service to all households since this service began in the
1930s. The USF helps to make phone service affordable and available to all
Americans, including consumers with low incomes, those living in areas
where the costs of providing telephone service is high, schools and
libraries and rural health care providers. Congress has mandated that all
telephone companies providing interstate service must contribute to the
USF. Although not required to do so by the government, many carriers
choose to pass their contribution costs on to their customers in the form
of a line item, often called the "Federal Universal Service Fee"
or "Universal Connectivity Fee."
FCC's Efforts to Help Consumers
Understand Bills
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:
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Be clearly organized;
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Identify the service provider associated with each charge;
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Highlight any new providers and indicate the date the change was made;
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Contain full and non-misleading descriptions of charges;
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Identify those charges for which failure to pay will not
result in the disconnection of a customer’s basic, local service;
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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
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Use standardized labels when referring to certain line item charges
relating to federal regulatory action, such as "local number
portability" and subscriber line charges.
To receive information on this and other FCC consumer
topics through the
Commission’s electronic subscriber service, click on www.fcc.gov/cgb/emailservice.html.
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