Taxes

State and Local Taxes: These taxes are regulated by the state, local and municipal governments.  They apply to most line items appearing on a local and/or long distance bill. This tax may also be referred to as a "gross receipts" tax in some states.

Federal Excise Tax: A 3% tax mandated by the federal government. It is imposed on local standalone exchange service. As of August 1, 2006, this tax no longer applies to long distance or bundled services.

Fees and Other Charges

FCC Charge for Network Access:  A per line charge regulated, but not mandated, by the FCC that allows local phone companies to recover a portion of the costs associated with connecting to a telecommunications service provider's interstate network.  The charge varies depending on the type of telephone line. (This surcharge may also be referred to as a Subscriber Line Charge or the Interstate Network Charge.)

Federal Universal Service Fund (USF):  The USF helps to make basic phone service affordable and available to all Americans, including consumers with low incomes and those living in remote areas.  The USF is also used to assist organizations such as schools, libraries and rural health care providers with their telecommunications expenses.  Long distance companies are required to contribute to the fund based on projected universal service demands. Contribution levels are adjusted by the FCC on a quarterly basis; current and prior contribution factors can be found on the FCC's website. Although this charge is not government mandated, some long distance companies recover their support requirements by adding a USF charge onto their bills.

Emergency 911 (E-911):  911 surcharges are levied by local governments and are used to help pay for emergency services such as fire, rescue and 911 operation centers.  Some local authorities base it on a percentage, while others establish specific fees.

Presubscribed Interexchange Carrier Charge (PICC): PICC is a monthly charge assessed to each multi-line business telephone number.  It does not apply to residences or single-line businesses.  The purpose of PICC is to help offset costs of completing calls between the local and long distance telephone companies' equipment.  The fee is applied regardless of whether a subscriber uses long distance or not.  The FCC establishes pricing levels for the local exchange carrier.

Local Number Portabiltiy (LNP):  The FCC authorizes telephone companies to recover certain costs for providing "telephone number portability" to its customers.  This allows subscribers to maintain their same telephone number, with limitations, when changing local service providers.

Telecommunications Relay Service (TRS): This state regulated surcharge is used to help pay for the relay center that transmits and translates calls for hearing and/or speech impaired individuals.