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Some Fees Cover Phone Company's Costs, Illinois Consumer Counselor Says

Posted on: Monday, 16 February 2004, 06:00 CST

Feb. 16--Not all the money you pay in extra charges on your phone bill goes to government agencies.

Money collected for such items as "number portability" and "interstate line charge" goes to the phone companies themselves to offset some of their costs. Your money helps maintain telephone lines and even pays property taxes on the phone company's buildings.

Line item charges like number portability do not appear on your phone bill because they were imposed by federal or state governments, said Jim Agnew, consumer counselor with the Illinois Commerce Commission. They are there because the Federal Communications Commission allows phone companies to recover some of their expenses.

One such charge is the "federal access charge," also called a "federal line cost charge,""FCC charge for network access" or "interstate line charge."

Consumers have been paying this fee since 1984. Although "FCC" or "federal" can appear on the bill, the federal government does not receive the money. The phone companies collect it to pay for building and maintaining equipment like telephone lines and poles. The fee varies per phone company and by service plan. SBC charges $4.50 per month, while AT&T charges $5.38 per month.

This charge differs from the similar-sounding "line charge," which is usually included within the cost of your monthly service plan.

The line charge "is a charge for your dial tone, for basic local service," said Mark Polisky, SBC spokesman.

Two relatively new fees initiated by phone companies are "bill statement fees" and "regulatory assessment fees."

AT&T last summer started charging some of its customers a $1.50 "bill statement fee." People subject to this charge were those who had AT&T as their long distance provider and a different local carrier. The fee is an incentive for customers to receive local and long distance service from AT&T, said AT&T spokesman Mike Pruyn.

AT&T implemented the "regulatory assessment fee" of 99 cents in July 2003. It covers AT&T's costs to other phone companies for using their phone lines and for paying property taxes on some of their buildings. The fee is only assessed for long distance customers.

"Every time a customer makes a long distance call, we have to pay an access fee to the local phone company," Pruyn said.

When you place a call from Champaign to New York City, your long distance provider will pay the local company a fee for taking the call to the long distance switching center, then the long distance carrier has to pay the local phone company in New York City to accept the long distance call and switch it over to the recipient, Pruyn said.

AT&T customers who have local and long distance service with AT&T are exempt.

The regulatory assessment fee, like the bill statement fee, acts as an incentive for customers to use AT&T as their local and long distance providers, he added.

Another recent addition to the list of phone charges is number portability, a fee that varies per carrier. SBC and AT&T charge their local customers 28 cents per month for this service.

Portability allows customers to change carriers, but keep the same phone numbers. It has been available to land- line phone customers since 1996 when Congress passed the Telecommunications Act and ordered the phone companies to make it available to customers, said Audrey Waters, MCI spokeswoman.

As of last November, wireless customers in the country's large metropolitan areas could start switching carriers and keeping their numbers. Customers in other regions in the country will be able to switch in May.

The fee covers the costs of providing the portability service to customers. The phone companies need to update computer systems and add employees to handle portability requests, Pruyn said.

Phone companies are not allowed to collect the fee from customers for more than five years, according to FCC rules.

In another example of an additional charge, AT&T charges some of its customers a minimum monthly usage charge of $5 per month. Even if you made $1.50 worth of calls, the company will charge you $5.

Because carriers call surcharges by different names and fees can vary according to the type of service you have, the only way to know for sure what you are being charged is to examine your bill and consult your carrier if you have any questions. The Illinois Commerce Commission can also help explain fees if you are unable to receive an answer from the phone company.

"Charges and taxes can be different depending on where you live, what plan you have and what optional services you have," Polisky said.

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(c) 2004, The News-Gazette, Champaign-Urbana, Ill. Distributed by Knight Ridder/Tribune Business News.

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