Southern York County Life

Figuring out phone bills

So what are all of those charges on your phone bill for? Here’s what I’ve found out so far.

Interstate/Intrastate Access Charge

According to GTE, the FCC has mandated an access charge (known as the Federal Subscriber Line Charge) to partially reimburse telephone service providers for the cost of routing long distance calls made by local customers. This charge is applied to all customers who have telephone lines in their home or business, whether they make long distance calls or not.

My research has found that GTE charges the maximum amount permitted by the FCC, which caps but does not mandate a specific fee. GTE’s average interstate cost for providing the line must not be less than the fee they charge.

For residential customers the cost is $3.50 for your primary line (the first line to a given address) and $6.07 for each non-primary line (all other lines to that address).

Federal Excise Tax

This is a 3% federal tax levied on all long distance calls and some services and features. The “some services” seems to include basic service fees.

State Sales Tax

A 6% State tax levied on all long distance calls and some services and features. Though this is a higher percentage than the Federal excise tax, it is not applied to the basic call plan or interstate access charge so the dollar amount might be less.

State Surcharge

I haven’t nailed this one down yet, but I think it is what is often referred to as a “State Utility Gross Receipts Tax” that is levied against GTE based on total revenue. Another possibility is that it is a Transaction Privilege Tax--basically a sales tax by another name.

Telecommunications Relay Surcharge

Fee for providing special needs equipment, facilities and services to the hearing impaired in order for the hearing impaired to use the telecommunications network. This is state regulated.

Emergency Service Fee for 911

At $1.25/line (I think), this covers the costs of providing 911 emergency response services to local residents.

Service Number Portability

Federal law requires all local phone companies to provide “service provider number portability”. Service provider number portability allows customers to retain their phone number when switching companies to provide their local phone service. Federal law allows for (but does not require) the recovery of costs associated with the development, implementation and operability of service provider number portability. GTE places their cost at $500 million. The FCC and State Public Utility Commissions have approved the amounts that the local phone companies can charge, on a fee per access line basis, to recover these costs. PBX and ISDN PRI customers are charged nine and five times the basic per line fee, respectively. This charge may continue for 5 years from the time GTE first begins collecting the charge.

Note that service number portability does not allow you to take your phone number with you when you move. It allows you to change local telephone company without changing phone numbers. I’ve heard of one company that plans to compete with GTE, but I haven’t confirmed it yet.

Presubscribed Interexchange Carrier Charge (PICC)

Long distance companies pay local phone companies for access to their local phone network to begin and end a long distance call. The FCC regulates the price, but it is not a tax, and the Commission does not require that long distance companies pass these charges on to consumers. Of course, where else would they come from?

The maximum PICC local phone companies may charge long distance companies is $1.04 per line per month for primary residential lines, and $2.53 per line per month for non-primary residential lines. The actual amount can be lower, but not higher. How the long distance companies charge consumers can vary since they are not directly regulated by the FCC. Some incorporate the charge into their rate structure, but most add a “National Access Fee” or similar charge, which is often the same regardless of classification as a primary or non-primary line. Mine is fixed at $1.50/month (Qwest).

Universal Service Fund (USF)

The FCC requires long distance companies to pay this tax (they prefer not to call it that, but that’s what it is) to cover subsidies to consumers with low incomes, consumers living in areas where the cost of providing telephone service is high, schools and libraries, and rural health care providers. Again, it is up to the long distance carriers to decide how they pass this on. Some add it as a fixed fee, some charge customers a percentage of their long distance charges, and some--though not many--incorporate it into their base rate.

Calling Areas

This can be a bit confusing as well. Here’s the scoop.

Local - calls within your local calling area, but also includes those made just beyond your local calling area for which there may be a fee.

Extended - pay per call, generally extends a bit further out from your local calling area. I know...sounds like some overlap between Local and extended.

Regional Long Distance (also IntraLATA or Local Long Distance) - Calls outside your local and extended calling area but within regional boundaries drawn by the federal government.

Long Distance - InterLATA (within the state--intrastate--but outside of regional boundaries drawn by the federal government) and State-to-State--interstate--calls. Often the intrastate calls will have one rate and the interstate calls will have a different rate. It depends on your long distance carrier.

That’s all I’ve got for now. Is there anything I’ve missed, or do you have additional information that might be of interest?

Posted by Dan Baldwin on 09/09/2000 at 09:05 PM in News

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