Understanding Your Telephone Bill

Terminology used to describe charges on your telephone bill will be defined below. Telephone companies expect full payment of the bill. However, when a customer makes partial payment most companies require that the customer pay basic local service charges in order to avoid disconnection of service. The telephone bill must specify which charges (including the basic local service charge) the customer must pay to avoid disconnection of service.

Access Charges

Access charges are fees charged to subscribers or other telephone companies by a local telephone company for use of its local network. The FCC allows local telephone companies to bill customers for a portion of the cost of providing access. These costs are described on the phone bill as Federal Access Charge, Customer or Subscriber Line Charge, Interstate Access Charge, etc. The maximum monthly charge is $6.50 for single line business and single line residence. The maximum monthly charge for multiline business is $9.20. The maximum monthly charge for non-primary residential service is $7.00.

Federal Excise Tax

The 3 percent federal excise tax is applied only to local service billed separately from long distance service.

State and Local Taxes

State and local taxes are imposed by state, local, and municipal governments on goods and services. They may also appear as “state utility tax or gross receipts” taxes on the bill. The services include intrastate and interstate charges on the bill. The tax rate is 6%. If equipment is rented (i.e. telephone) a rental tax of 3% is applied. Some municipal governments mandate a franchise fee assessment on telephone bills.

Universal Service Charges

The Universal Service Fund (USF) provides support to promote access to telecom services at reasonable rates for those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries. All telecom providers must contribute to the federal USF based on a percentage of their interstate and international telecom revenues. Some consumers may notice a “Universal Service” line item on their bill. This line item appears when a company chooses to recover its USF contributions directly from its customers by billing them for this charge. The charge is adjusted quarterly of each year and currently ranges from 12% to 15.5%. These charges can be applied to phone bill items such as: Federal Access Charge; Customer or Subscriber Line Charge; Interstate Access Charge; and Interstate or International Long Distance Toll.

911 Charges

The 911 charge is a single, monthly statewide level fee imposed by the statewide 911 Board to help pay for access to emergency services in the state of Alabama.

Carrier Cost Recovery Fee

Carrier Cost Recovery fees may be charged by carriers for the reasonable costs associated with timely and accurate billing information of customer telephone service accounts provided to other carriers.

Local Number Portability (LNP) Charges

Local Number Portability (LNP) Charges are fees imposed by some telephone companies to recover costs for LPN. LPN allows customers to retain, at the same location, their existing local telephone numbers when switching from one company to another.

Telecommunications Relay Service (TRS) Charges

Telecommunications Relay Service (TRS) Charges are fees used to help pay for the relay center that transmits and translates calls for people with hearing or speech disabilities. The current monthly fee is $0.15 per access line.

Minimum Monthly Charges

Minimum Monthly Charges are fees assessed by some long distance companies, even if you don’t make long distance calls.

Directory Assistance Charges

A Directory Assistance Charge will appear on the telephone bill if the customer requests directory assistance by placing a call using 411 or 555-1212.

Feature Charges

Telephone companies offer features such as: call forwarding, three-way calling, call waiting, voice mail, and caller ID. The charges for these services will be shown as Feature Charges.

Third Party Providers/Charges

Third-Party charges are charges on your bill that appear to be unrelated to your local telephone service. These charges may be legitimate charges for products that have been ordered. However, if charged for products or services that have not been ordered appear on the bill, contact the telephone company or the PSC at 1 800 882 3919 and tell them that there are unauthorized charges on your bill.