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
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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
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The 3 percent federal excise tax is applied only to local service billed separately
from long distance service.
State and Local Taxes
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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
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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
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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
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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
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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
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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
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Minimum Monthly Charges are fees assessed by some long distance companies, even if you
don’t make long distance calls.
Directory Assistance Charges
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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
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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
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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.