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Your Phone Bill - Understanding the Charges

Since most telephone customers do not understand every charge on their monthly phone bills, the following is a quick reference to explain these charges:

• 911 – This is collected on behalf of state or local governments to cover the cost of providing 911 access to emergency services.

• Federal Excise Tax – This three percent tax imposed on all telecommunications services, including local, long distance and wireless bills.

• (Federal) Subscriber Line Charge – This is a fee that the Federal Communications Commission allows local phone companies to charge to recover a portion of the costs of completing long distance calls on their local networks

• Local Number Portability Charge (LNP) – Local telephone companies have created a system that allows consumers to keep the same phone number when they change local service providers. This fee, charged to all customers, covers the cost of this technology. The amount of this fee may vary based on where you live.
• 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.
• (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.
• Telecommunications Relay Services Charge – This fee covers the cost of providing a "translation" service for calls between TTYs users and people using traditional voice telephone. It also helps to subsidize the cost of specialized telecommunications equipment for people with specific disabilities.

Other Charges

• 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:

• Be clearly organized;

• Identify the service provider associated with each charge;
• Highlight any new providers and indicate the date the change was made;
• Contain full and non-misleading descriptions of charges;
• Identify those charges for which failure to pay will not result in the disconnection of a customer’s basic, local service;
• 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
• 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, check out www.fcc.gov/cgb/emailservice.html.

This information is provided by the Federal Communications Commission.

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