Decoding those inscrutable fees on your phone bill

Take a close look at your phone bill and you’ll find a list of taxes, fees and surcharges going by obscure and slightly mysterious names. Some of these items are government-mandated. Others are devised simply to enrich your provider. Here are some of the fees you might see (although the exact wording of each item will vary by company):

Federal Universal Service Fee (also known as Universal Connectivity Fee). All telecommunications providers are required to pay into the federal Universal Service Fund, a program that subsidizes telephone services for rural and hard-to-reach areas. Providers are not required to pass this cost onto consumers, but they can if they choose.

Interstate subscriber line charge. The Federal Communications Commission allows local phone companies to charge this fee to pay to maintain and operate their wires and networks. The current maximum is $6.50 per month for a single residential line, but companies can choose to charge less or nothing at all.

Federal excise tax. In 1898, Congress placed this 3 percent tax on phone bills “temporarily” to help pay for the Spanish-American War. It was repealed or expired three times since then, but each time it was reinstated by Congress. After court challenges, it was eliminated in 2006 on long distance and cellphone service, yet remains on local land-line bills.

Regulatory Cost Recovery and carrier cost recovery fee. Despite their official-sounding descriptions, these are not taxes or required by the government. The money goes to your phone company. “These are additional charges which are essentially a way to hide rate increases,” said Christopher White of the National Association of State Utility Consumer Advocates.

Scott Wilson, Los Angeles Times

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