The low per minute rate you signed up for may not necessarily translate into an affordable long distance bill. Here's what to look for on your long distance bill:
- Minimum Usage (or "Minimum Monthly") Charge
If your long distance bill contains this charge, it means that you will be charged a minimum, say $5, whether you spend any time on the phone or not. For example, if your minimum usage fee is $5 and your actual usage is only $1.25, you will be charged the full $5.00 (an additional $3.75) to cover the minimum usage charge.
- Flat Rate or Unlimited Long Distance Charge
Flat rate plans charge one flat rate per month and usually include a cap on total minutes per month. For example, you may be charged $29.95 for 500 long distance minutes.
Unlimited long distance plans charge one flat rate per month with no cap on total minutes. For example, you could be charged $29.95 for as many long distance minutes you can use during the month.
If you are billed for both local and long distance service on one bill, you may be charged a fee for this convenience. Consumers who do not want to pay this charge should contact their long distance company and ask for a separate bill.
- Universal Service Fund (USF) Surcharge
(a.k.a., Universal Connectivity Fee, Fed Universal Svc, Univ Serv Assessment)
The USF helps make phone service affordable and available to everyone, including schools, libraries, consumers with low incomes, rural health care providers, and those living in areas where the costs of providing telephone service is high. All telephone companies providing interstate service must contribute to this fund. Most phone companies pass these costs on to consumers in the form of a line item fee.
This is a three percent tax imposed by the federal government.
- Federal, State, City, County, and District Taxes
Various taxing jurisdictions may levy taxes on communications products and services. The methodology for assessing these taxes varies, but it is typically based on a percentage of the amount charged for your phone service, purchase or rental of equipment, and fees charged for reimbursement of federal program fees. Taxes are collected by your long distance provider and remitted to the appropriate taxing authority.
This fee is charged by local governments to help fund emergency services such as fire and rescue.
- Regulatory Programs Fee
(a.k.a., Regulatory Cost Recovery Fee, Regulatory Assessment Fee, Federal Programs Cost Recovery)
Some long distance companies consolidate charges associated with government programs into one fee called a "Regulatory Programs Fee." This is not a tax or government required charge. Since some long distance companies are not specific as to exactly what this fee covers, we advise you to call your company for clarification of this fee.
State and local taxes will vary depending upon where you live. If you have a question about a certain tax assessed, you can contact your state public utility commission or the taxing jurisdiction in question to find out more.
Some state and local fees (e.g., 911 Surcharges, City and Local Sales/Excise Taxes, Telecommunications Relay Services (TRS) Charge) are discussed in our Taxes, Surcharges, and "Other" Fees section, while other state and local fees (e.g., State Universal Service Fund) are similar to the federal fees described in Taxes, Surcharges, and "Other" Fees.
