long distance services


USF and PICC Fees

Some telephone companies may be overcharging

As of July 1, 2000, the FCC eliminated the Presubscribed Interexchange Carrier Charge (PICC) for residential and single-line business customers. This charge was a component of access charges that long-distance companies previously had to pay to local companies each month for each customer. Most long-distance companies included a surcharge on customer bills to recover that cost -- usually at a monthly rate of $1.04, $1.50 or $1.51. (Your company may have referred to that fee as National Access Fee, LD Line Charge, Presubscribed Line Charge, Regulatory Fee Related Charge, FCC Primary Carrier 1st Line, or Carrier Line Charge). Although the underlying charge was eliminated in July 2000, some companies have continued to collect these moneys anyway. The National Association of State Utility Consumer Advocates (NASUCA) is trying to identify all companies who continued that surcharge after July 1, 2000. The surcharge in question is on the long-distance portion of your bill and is not related to the "carrier line charge" of $4.35 or $3.50 on the local portion of your bill. In addition, this fee is not related to the continuing universal service fee which is usually computed as a percentage of your interstate long-distance bill and which varies each month. These fees are the nationwide carrier specific fees.These fees are in addition to normal monthly plan fees, taxes, and actual long distance usage. You should check the full details of the plans prior to changing your service.

Our advice: If a LEC sends a PIC charge to a customer, the new IEC will typically credit the customer's account. Always ask if your new long distance carrier (IEC) will credit switching fees.

From our Telecommunications Glossary:

PICC - Presubscribed Interexchange Carrier Charge

National Access Fee, Presubscribed Interexchange Carrier Charge, Presubscribed Line Charge, Regulatory Related Charge, or Carrier Line Charge. Pronounced "pixie." This charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. Long distance companies pay a flat fee to the local telephone company when you pre-subscribe your telephone line to their long distance service. (Sometimes referred to "Dial 1" or "Plus 1" service) The charge is designed to compensate the local telephone companies for the costs associated with providing "local loop" service. If a consumer or business has not selected a long distance company for its telephone lines, the local telephone company may bill for the PICC. Although every long distance company is charged the same flat rate per line, long distance companies are allowed to recharge you for this in any way they see fit, and each company uses a different method to charge this carrier specific fee. It is normally not presented to you in such a way that you would think it is a competitive pricing issue. But it is! Some companies do not charge this fee at all, and some charge a carrier specific flat fee. This is NOT a tax. Again, please note that on July 1, 2000 the FCC ruled that long distance companies no longer will have to pay this fee to local companies for residential lines, or single line businesses. The charge continues for multiple line businesses. Many long distance companies are still charging you for this, even though they aren't paying it anymore!

USF - Universal Service Fund Charge or Universal Service Charge

This charge started on January 1, 1998 as part of the FCC overhaul of telephone fees. All companies that provide telephone service between states pay a set percentage of their previous year's billings. The charge is designed to ensure affordable access to telecommunications services for telephone customers with low incomes, telephone customers who live in areas where the cost of providing telephone service is extremely high, libraries, schools, and rural health care providers. Although all companies providing interstate telephone service are charged the same percentage of their billings, companies are allowed to recharge you for this in any way they see fit, and each company uses a different method to charge this carrier specific fee. It is normally not presented to you in such a way that you would think it is a competitive pricing issue. But it is! Some companies do not charge this fee at all, some charge a carrier specific flat fee, others charge a percentage of your interstate and international usage, while others charge a percentage of your entire bill. Although the charge the companies pay is in essence a tax, the fee on your bill is carrier specific, and is NOT a set tax. The telephone company keeps any difference between the USF fees they collect and the charge they pay to the Universal Service Fund.

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