Long 
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August 27, 2014

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Understanding Common Monthly Charges
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Many telephone users are often surprised when their monthly phone bill arrives. What was supposed to be a plan that was free of service charges, has $5.00 in odd charges. That $4.95 a month plan actually ends up charging you $7.35 in additional fees that don't seem to make any sense. This site attempts to uncover those charges and report the true monthly cost of a long distance calling plan. The rates comparison tables report each plan's monthly charges. The way these charges are calculated and applied to your bill varies wildly by the calling plan service provider. This makes it impossible to give one simple explanation of these charges. This site cannot guarantee what a calling plan service provider will charge you in fees and recommend that you contact the service provider directly for an explanation of its fees. You can also get information about other types of fees that may show up on your phone bill by visiting our "How To Read Your Phone Bill" page. That said, what follows is a general explanation of the fees and charges that go into the calculation of a plan's monthly charges and how these charges can affect your phone bill.

Federal Access Charge (AKA: Federal Subscriber Line Charge):

    The charge may also show up as the Customer Line Charge, Interstate Access Charge, Interstate Single Line Charge, FCC Approved Customer Line Charge, Subscriber Line Charge or SLC. This federally ordered charge billed by your local telephone company pays part of the cost to the local telephone company of supplying a phone line into your home or business. It is designed to help local phone companies recover the cost of providing "local loops" which refers to outside telephone wires, underground conduit, telephone poles, and other equipment and facilities connecting you to the telephone network. This is NOT a tax. It is a charge that is part of the price you pay to your local telephone company. Neither the FCC nor any other government agency receives the Federal Subscriber Line Charge. The FCC places a maximum cap on this charge. Currently, as of July 1st, 2001, the FCC places a maximum on this charge of $6.50 for the first line and the lower of actual costs or $7.00 for non-primary lines in residences. For multi-line businesses the maximum allowed is the lower of actual costs or $9.20 per line.More information is available from the FCC.


Monthly Service Fee (AKA: Monthly Fee):

    Some calling plans charge you a per month fee simply for subscribing to or using its service. It is a set fee regardless of how many calls you make each month. In essence, you are paying the service provider a set fee for the right to use its plan. This fee is charged in addition to the actual cost of the phone calls you make. For example, if your calling plan had a Monthly Service Fee of $4.95 and you made $10.00 worth of phone calls, that amount you have to pay, excluding other taxes and fees discussed below, would be $14.95. A true Monthly Service Fee is not tied to the number, amount, or time of day of the telephone calls that you make.


Monthly Minimum Usage Charge:

    This fee is charged by some carriers if your specific rate plan has volume requirements, meaning that you must make a certain dollar amount of calls per month. For example, a plan may require that you make at least $10.00 a month worth of phone calls. If you do not make $10.00 worth of calls, the carrier will charge you the difference as a fee. If, for instance, your plan requires a $10.00 minimum per month and you only made $6.00 of calls, you would see the remaining $4.00 as a monthly charge. If however, you made $11.00 worth of phone calls you would not have to pay any Minimum Usage charge. This is the main distinction between a Monthly Service Fee and a Minimum Usage Charge.

    Monthly Usage charges are often confused with Monthly Service Fees. Many service providers will offer a plan that has either a promotional gimmick or twist related to a monthly charge. For example, a plan may have a $4.95 monthly fee that gives you 60 minutes of free long distance calls a month. What this really means is that you are paying for 60 minutes of phone use at 8.25 cents a minute whether you use that much time or not. After using your 60 "FREE" minutes, you pay the normal per minute rate for that calling plan.


PICC (Aka: National Access Fee, Presubscribed Inter-exchange Carrier Charge, Presubscribed Line Charge, Regulatory Related Charge, or Carrier Line Charge):

    Pronounced "pixie." This charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. Long distance companies pay a flat fee to the local telephone company when you pre-subscribe your telephone line to their long distance service. (Sometimes referred to "Dial 1" or "Plus 1" service) The charge is designed to compensate the local telephone companies for the costs associated with providing "local loop" service. If a consumer or business has not selected a long distance company for its telephone lines, the local telephone company may bill for the PICC. Although every long distance company is charged the same flat rate per line, long distance companies are allowed to recharge you for this in any way they see fit, and each company uses a different method to charge this carrier specific fee. It is normally not presented to you in such a way that you would think it is a competitive pricing issue. But it is! Some companies do not charge this fee at all, and some charge a carrier specific flat fee. We offer full details of the amazing differences in this rate on the Fees Comparison page. This is NOT a tax. Please note that on July 1, 2000 the FCC ruled that long distance companies no longer will have to pay this fee to local companies for residential lines, or single line businesses. The charge continues for multiple line businesses. Many long distance companies are still charging you for this, even though they aren't paying it anymore!


USF (Aka: Universal Service Fund Charge or Universal Service Charge):

    This charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. All companies that provide telephone service between states pay a set percentage of their previous year's billings. The charge is designed to ensure affordable access to telecommunications services for telephone customers with low incomes, telephone customers who live in areas where the cost of providing telephone service is extremely high, libraries, schools, and rural health care providers. Although all companies providing state-to-state telephone service are charged the same percentage of their billings, companies are allowed to recharge you for this in any way they see fit, and each company uses a different method to charge this carrier specific fee. It is normally not presented to you in such a way that you would think it is a competitive pricing issue. But it is! Some companies do not charge this fee at all, some charge a carrier specific flat fee, others charge a percentage of your state-to-state and international usage, while others charge a percentage of your entire bill. We offer full details of the amazing differences in this rate on the Fees Comparison page. Although the charge the companies pay is in essence a tax, the fee on your bill is carrier specific, and is NOT a set tax. The telephone company keeps any difference between the USF fees they collect and the charge they pay to the Universal Service Fund.




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