Explanation of Telephone Charges
Federal Subscriber Line Charge (SLC)
The Federal Communications Commission (FCC) requires that local telephone companies recover a portion of our costs for facilities used to connect your home or business through a monthly assessment on all residential and business customers. Commonly known as the federal “subscriber line charge” or SLC, this assessment is part of the FCC’s effort to promote a competitive framework for the U.S. telecom industry. The federal SLC is a flat monthly charge assessed directly on your bill.
The FCC established the federal SLC as a way to reduce the “access charges” paid by long distance companies but still compensate local companies for the use of our networks by those carriers to gain “access” to their long distance customers. Prior to the establishment of the SLC, long distance carriers were assessed a per-minute “access” charge to use our facilities, but the FCC changed the way we charge for that cost. For purposes of competition, the FCC decided to target end user customers more directly for these costs. As a result, the SLCs result in no additional revenue for local telephone companies.
Basic Local Service Charge
This prints as “RES (BUS) TELEPHONE SERVICE” on your TMS bill. A member must pay this fee to receive a dial tone. All basic local landline service charges by the Indiana Utility Regulatory Commission (IURC) were removed from regulation as of July 1, 2009.
State Line Charge
The Indiana Utility Regulatory Commission (IURC) requires that local telephone companies recover a portion of the costs of the facilities we use to connect your home or business for services through a monthly assessment on all residential and business customers. Commonly known as the “subscriber line charge”, this assessment is part of the IURC’s effort to promote a competitive framework for the Indiana telecom industry. The state line charge is a flat monthly charge assessed directly on your bill.
Local Number Portability (LNP) Charge
The Telecommunication Act of 1996 requires that telecom providers allow customers to keep their existing telephone numbers when they switch from one service provider to another. The Local Number Portability (LNP) charge is a fixed, monthly charge established by the FCC to allow local companies to recover some of our costs to provide telephone number “portability” to customers.
Telecommunications Relay Surcharge
Local telephone companies offer access to Telecommunications Relay Services (TRS) to help hearing or speech impaired individuals communicate via the telephone. The TRS is required by Title IV of the Americans with Disabilities Act and to the extent possible, must be “functionally equivalent” to standard telephone services. Communications assistants (CAs) relay the content of calls between users of special text telephones (TTYs) and users of traditional telephones. The requirements for collection and remittance of the fees are established by state law, public utility commission rule and tariff filings.
E911 Indiana State Surcharge
Federal Excise Tax
Your bill includes the 3% federal excise tax levied by the federal government that applies to all telecom services, not just local service. This tax dates back to 1898 when it was enacted to finance the Spanish-American War.
Indiana State Tax
State sales tax is imposed on telecom services.
Federal Universal Service Charge (FUSC)
This prints as “Federal USF Surcharge” on your TMS bill. The “Federal Universal Service Charge” (FUSC), also authorized by the FCC, is not part of your local service rate; the charge helps to keep rates affordable for all Americans, regardless of where they live. The amount of the FUSC on your monthly bill is based on quarterly Federal Universal Service Fund contributions projections made by the FCC.
The federal Universal Service Fund assists with the costs of providing “affordable” telecommunications service to low-income individuals and to residents in rural, high-cost areas. In addition, Congress has expanded the program to help schools, libraries and rural health care providers obtain leading-edge services, such as high-speed Internet access. All providers of telecom services contribute to the support of these universal service programs.
Indiana Universal Service Charge
This prints as “IN USF Surcharge” on your TMS bill. In addition to the federal programs, some states collect fees to support their own universal service programs. Like other telecom providers in Indiana, we collect fees for the Indiana Universal Service Fund that is administered by the Indiana Utility Regulatory Commission (IURC).
The IURC requires telecom providers to recover their universal service contributions through a customer charge. The IURC uses these contributions to ensure that community based companies in high-cost areas have sufficient financial support to keep basic local rates affordable for all Indiana citizens. As with the federal support program, the Indiana Universal Service Fund is distributed to individual companies based on the costs we incur in serving our particular areas of the state.
Access Recovery Charge
This charge was recently adopted as part of reforms to the intercarrier compensation regimes. This transitional recovery charge is intended to mitigate the effect of reduced intercarrier revenues and facilitate continued investment in broadband. The FCC caps the maximum price that a company may charge for this between Indiana State Tax and Federal Universal Service Charge (FUSC).