What’s In Your Phone Bill?

Teledata Select is an expert in reviewing business telecom expenses with an eye for finding inefficiencies, errors and opportunities for cost savings. We have reviewed countless bills over the years and thought it was time to shed some light on all of taxes and fees that typically add 20 – 40% to your contracted services.

There is no standard bill format among the Service Providers. But they all contain federal, state and local regulatory taxes and fees that are  passed along to the consumer.  Additionally there are Telco imposed fees and surcharges that may or may not be passed on to the customer. The latter depends on how your contract is written.

• A Federal Excise Tax, currently at 3 percent, is charged on your telephone local service charges.
• Depending on where you live, taxes may be imposed by state, local, and municipal governments on your phone service.
• Emergency 911 Access is a fee imposed to help pay for the technology needed to help local governments pay for emergency services such as fire and rescue.
• Local telephone companies are allowed to bill customers for a portion of what it costs to provide access to their local networks. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less, or even nothing at all.
• Access charges for additional lines at the same residence may be higher than charges for the primary line. These charges may be described on your bill as “Federal Access Charge,” “Customer or Subscriber Line Charge,” “Interstate Access Charge,” or the like. State public service commissions regulate access charges for intrastate (within a state) calls. However, the fee is regulated and capped by the FCC. It is not a tax or a fee charged by the government. The money received from the subscriber line charge goes directly to local telephone companies.
• All telecommunications service providers must contribute to the “Federal Universal Service Fund”, which helps people in rural and high-cost areas, and income-eligible consumers, get access to telecommunications services at reasonable rates. The FCC does not require this charge to be passed on to you, but service providers are allowed to do so.  These charges usually appear as a percentage of your phone bill.
• A “Federal Universal Service Fee” line item may appear on your telephone bill when your service provider chooses to recover their USF contributions from the customer. Companies cannot collect an amount that exceeds the percentage of their own contributions to the USF.
• Local Number Portability– For keeping your current local telephone numbers when switching from one service provider to another at the same location. Fees may vary by company; some may not charge any fees. These fees are not taxes.
• Telecommunications Relay Service– To help pay for relay services that transmit and translate calls for people with hearing or speech disabilities.

These are the most common line items you’ll find on your bill. We would love to know if you are seeing additional fees on your bill.

Teledata Select offers a whole range of services that will help you meet your business goals. Starting with a complimentary review of your current telecommunication bills to identify errors and find opportunities for savings, better service and more functionality. We also offer project management for new service implementation and infrastructure installs, including fiber and low voltage cabling. Call me at 404-257-1502 to discuss the SLA’s you have with your service provider. Or send us a note via  Contact us to start a no obligation discussion of your specific business technology needs.

John Hagan is President of TeleData Select, a Telecommunications Consultant located in Atlanta, Ga serving customers throughout the US and overseas.  His company provides business solutions for voice, data, mobile and cloud solutions for both large and small businesses.  Contact John or their team for a complimentary telecom audit to make sure you’re getting the best value for communication services.  The savings you receive could offset the cost of purchasing a new Hosted or Premise VoIP phone system.