Understanding Your Phone Bill
A common complaint of telephone customers is the multitude of charges and fees that appear on their bill without adequate (or any) explanation of what they are and who is responsible for placing the charges on the bill. Here is a guide to some of the typical charges:
An Anatomy Of A Phone Bill
Local Bill (from SWBT, GTE, Sprint Missouri or one of the small independent local phone companies)
- Local Service Charge
- This is your monthly flat rate charge for basic telephone service (no options) that allows local calling and allows you to reach long distance, 911, directory assistance, operator service. Price varies by provider and location. You do not have to purchase any option packages or select a particular toll carrier to obtain basic service.
- MCA Service
- (Metropolitan Calling Area Plan only in St. Louis, KC and Springfield metro) This is an optional flat rate toll plan that allows you to call to other areas of the metro area without toll charges and allows others to call you without toll charges. Prices increase the farther you live from the central zone.
- Other optional services
- Custom features, such as call forwarding, call waiting, CallerID, etc. that are optional features, available individually or in packages at an extra cost. Some services, such as Inside Wiring Maintenance, paging, voice mail and Internet Service are not regulated by the PSC even though charged on your phone bill. You are not required to buy any optional services to obtain local service or long distance service.
- Federal Subscriber Line Charge
- (Federal Access Charge, FCC Line Charge, Customer Line Charge, FCC Approved Customer Line Charge, Subscriber Line Charge or SLC) This is the charge (now $3.50 ) required by FCC as part of the price you pay to the local telephone company; it is not a tax and does not go to the government; it goes to the local company to pay for part of the cost of local lines, wires, poles, conduit, equipment and facilities that connect you to the interstate phone network.
- Local Number Portability Surcharge
- (Number Portability Service Charge or LNP) This fee goes to local company to recover its costs to upgrade its facilities to allow customers to keep their telephone number when switching to another local company or when they move; it started to appear in February 1999 when the companies were allowed, but not required to pass on these costs; it is not a tax, but part of the price paid to the local company; it can be charged for 5 years.
- 911 Service Fee
- (Enhanced 911 Surcharge) This fee is authorized by state law and county voters to pay for the 911 or E911 emergency dispatch systems that can locate the caller's address.
- Relay Missouri
- This fee is authorized by state law and the PSC to fund the special telephone system that allows the hearing impaired to make and receive phone calls and the Adaptive Telephone Equipment Program that provide equipment for the hearing impaired to access the phone network. Thirteen cents per month.
- Federal Tax
- Federal excise tax rate of 3%. (Started as a luxury tax in 1898 to fund the Spanish-American War; now goes to general revenue)
- State Tax
- State sales tax
- Local Tax
- City and county sales tax; rates vary by city/county
A local carrier may combine the Local Basic Service, MCA and other optional services into one line item and call it a "basic package" or "local service charges". You have the right to request an itemization of these charges.
Long Distance Bill
- Instate Calls
- Toll Calls in your state
- Interstate Calls
- Toll Calls to other states
- Calling Card Calls
- Calls billed to your calling card, including fees
- Directory Assistance Calls
- Charges for calls to directory assistance
- Monthly Fee
- Flat fee added to your bill by your long distance carrier, regardless of usage
- Monthly Minimum
- Difference between the total cost of calls made and the minimum required by your specific calling plan
- Universal Service Charge
- (Universal Service Fund Charge or USF or "Universal Connectivity Charge") This is part of your long distance carrier's rates designed to recover its contributions to the Universal Service Fund that is used to support affordable access to phone service for customers with low incomes and in high cost areas (such as rural areas) and to libraries, schools and rural health care providers for Internet access. The FCC requires each interstate carrier to pay a percentage of their revenues into the fund and allows the company to recharge you for this as it wants; it can be a percentage of your bill, a flat fee or the company can forego recovery of USF from you. This is not a tax; the company keeps any difference between the USF fees they collect from you and the charge they pay into the Universal Service Fund.
- Access Surcharge (PICC)
- (Presubscribed Interexchange Carrier Charge, National Access Fee, Presubscribed Line Charge, Regulatory Related Charge or Carrier Line Charge.) This fee started in January 1998; long distance companies pay a flat fee to the local phone company for each line resubscribed (1+) to the long distance company to pay for part of the local phone network. It is not a tax, but is part of the long distance carrier's rates where it seeks to recover an expense directly from the customer. Each carrier has its own method either by percentage, flat rate or no charge at all. (If you do not resubscribe to a long distance company, the local company will bill you directly for the PICC.)
- Payphone Access Fee
- Under the 1996 Telecom law, payphone owners must be compensated by the long distance company when the payphone is used for toll free numbers (e.g., when you use your calling card from a payphone) Most long distance companies pass this cost on to you on your long distance bill for calling card calls placed from a payphone or toll free calls received by you from a payphone. The rates vary by company.
- Federal Tax
- (Same rates as on local bill)
- State and Local Tax
- (Same rates as on local bill)