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Understanding your Telephone Bill
FCC Charge for Network Access:
Also called Subscriber Line Charge, FCC Approved Customer Line Charge, Interstate Subscriber Line Charge, or Federal Line Fee.
What is it? It is a fee kept by local telephone companies to cover a portion of the
cost of providing telephone lines to residents and businesses. The fee helps local telephone companies operate and maintain the local telephone network.
Who placed it on the telephone bill? The Federal Communications Commission (FCC).
By what law or rule is it allowed? Title 47, Code of Federal Regulations, Section 69.152
How much is it? Residential and business pay $6.00 a month for single-line access, while fees for second lines are $6.07 a month for residential subscribers and $9.21 a month for business subscribers.
Who gets the money? Local telephone companies.
Pre-subscribed Interexchange Carrier Charge (PICC):
Also known as Carrier Access Charge (MCIWorldcom), Carrier Line Charge (AT&T), or Pre-subscribed Line Charge (Sprint).
What is it? It is a charge used by long-distance companies to compensate local telephone companies for originating and terminating long-distance calls. Long distance companies began paying the fee to local telephone companies in January 1998. The fee appeared on subscribers’ telephone bills shortly thereafter.
Who placed it on the telephone bill? Long-distance carriers. The FCC does not require long-distance companies to pass the charge on to consumers, but many have chosen to do so.
By what law or rule is it allowed? Title 47, Code of Federal Regulations, Sections 69.104, 69.153, & 69.154 require long-distance carriers to pay the access fee to local telephone companies.
How much is it? The fees will vary by long-distance company. Check with your long-distance company for the exact amount.
Who gets the money? Local telephone companies.
FCC Universal Service Charge:
Also known as the Federal Universal Service Fee (MCIWorldcom), Universal Connectivity Charge (AT&T), Universal Service Carrier Charge (Sprint).
What is it? The fees collected go towards a fund that pays for Internet access to schools and libraries and rural health care providers. The fund will also allow for the provision of local telephone service to the poor and for people living in rural areas where it’s generally more expensive to local telephone companies to run telephone lines. Wireless carriers and pay-telephone providers also contribute to the fund.
Who placed it on the telephone bill? Long-distance carriers. The FCC does not require this fee to be passed on to consumers, but many long-distance companies do so.
By what law or rule is it allowed? Title 47, Code of Federal Regulations, Sections 36, 54, and 69 require long-distance carriers to participate in the federal program.
How much is it? The amount will vary depending on the universal service requirements of the long-distance carrier.
Who gets the money? Schools and libraries and health care institutions. The funds are allocated by discounts and grants.
FCC Number Portability Line Charge:
What is it? If you’re thinking about changing telephone companies and wish to keep your same telephone number, number portability will make it possible. Technological upgrades telephone companies have made to their systems make it possible for consumers to never have to change telephone numbers should they decide to switch carriers. The charge appeared on consumers’ bills in February 1999.
Who placed it on the telephone bill? United States Congress via the FCC.
By what rule or law is it allowed? Title 47, Code of Federal Regulations, Section 52.33 and the Federal Telecommunications Act of 1996,Section 251 (e)(2).
How much is it? BellSouth is charging $0.35 for both residential and business subscribers per line each month. The charge will remain for a period of 5 years.
Who gets the money? Local telephone companies for the costs necessary for network upgrades and for the recovery of recurring costs of providing portability.
Federal Excise Tax:
What it is? This tax was created as a luxury tax to pay for the Spanish-American War. All proceeds are now used for general Federal revenue purposes.
Who placed it on the telephone bill? United States Congress in 1898.
By what law or rule? Title 26, United States Code, Sections 4251 & 4243.
How much is it? 3% of all billed local and long-distance services and teletypewriter exchange services.
Who gets the money? The U.S. Treasury Department.
Residential / Business Line Rate:
What it is? This covers basic local telephone service minus added features such as Caller ID, Call Waiting, etc.
Who placed it on the telephone bill? Local telephone companies. The charge is subject to approval by the Tennessee Regulatory Authority.
By what law or rule? Tennessee Code Annotated 65-5-208 (1).
How much is it? The amount will vary by a subscriber’s local exchange, area, and by the size of the local calling area. BellSouth is currently authorized to charge $12.15 for basic service in Memphis and Nashville.
Who gets the money? Local telephone companies.
Emergency 911 Service:
What it is? This fund provides free 911 calls from pay telephones and also helps pay for enhanced 911 service, which helps dispatchers locate areas requiring emergency assistance via computer.
Who placed it on the telephone bill? Fees are imposed by local governments.
By what law or rule? Tennessee Code Annotated 7-86-103 (11)(12); 7-86-106; 7-86-108 (a)(1).
How much is it? Local governments may not charge an amount in excess of $1.50 to residential subscribers, and $3.00 to business subscribers.
Who gets the money? Local governments.
State / Local Tax:
What it is? State and local taxes are collected on all basic telecommunications charges.
Who placed it on the telephone bill? State and Local governments.
By what law or rule? Tennessee Code Annotated 67-6-701 et. seq., allows municipalities to collect state and local taxes.
How much is it? The sales tax rate will vary by location.
Who gets the money? City and County governments, and the Tennessee Department of Revenue.
Changing long-distance carriers:
What it is? A flat fee will be charged to subscribers for changing long-distance service providers. The fee is charged by local telephones companies, and is used to recover the programming costs associated with making the change on a subscriber’s account.
Who placed it on the telephone bill? United States Congress via the FCC.
How much is it? $1.49 (some long-distance companies might be willing to eat the charge in exchange for your business. ASK!).
Who gets the money? Local telephone companies.
