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  The TeleTruth about your phone bill

Telco Rationale

Cost to Consumer
The Harsh Reality
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Inside Wiring

A monthly fee for maintaining the wiring in the home or office.

The Bells don’t say how long the wire lasts. The only published stat stated that they typically break once every 16 years.

Costs range from $1.20 a month to $3.50 a month, double for businesses.

Cash cow: estimated to be over 70% profits.

Almost half of those who pay this fee never ordered t. Check your phone bill to see if you are paying, and if ou didn’t order it, demand a full refund, which can be hundreds of dollars.


Directory Assistance

Local Directory assistance is a service that allows the caller to find someone’s telephone number using either 411.

Directory assistance used to be included with local service, but the Bells have been arguing to raise fees based on costs. Today, there are 50 states and 50 different prices.

Directory assistance prices have climbed over 1800% since 1984 while the cost of offering has dropped.

What you don’t know will hurt you: About half the customers think that Directory calls comes with local service.

If you make more than a few calls, check your telephone directory to see what the costs are in your state.


FCC Subscriber Line Charge

According to the FCC, "The federal Subscriber Line Charge (SLC) defrays a portion of local exchange costs that have been allocated to interstate toll (long distance) services.

The Bells argue that local service is unprofitable, so they’re entitled to this money.

The annual charge come to $42 a year or $72 for business. Over $8 billion dollars is collected annually.

This charge increases as of July 2000

Money for nothing: The Subscriber Line charge is not anything physical, and so there is no service associated with this charge.

Until there is competition for your phone line via a second network, or the FCC rules differently, this charge will remain.


FCC Second Line, Subscriber Line Charge

A little known but expensive new charge was put on every second line (or 2 or more lines) in 1998.

The phone companies believe they need to get compensated for more Internet use as well as lowering the access fees.

According to the FCC, this second line charge is going up, from $5 a month to as much as $9 a month, while business jumped to $9 in 1998.

So much for no new Internet taxes.

Little can be done today to change the costs to customers.


Long Distance Access Fees

Believe it or not, in 1999, over 30% of the price of every long distance call you make goes directly back to the local phone company. Known as "Access Fees", these charges are ‘pass-throughs", since the long distance company pays the local phone company to handle your calls.

The local phone companies state that the revenue is needed because local service "isn’t profitable’.

With an average $30 long distance bill, every month the Bells get $10, which comes to $120 dollars annually. In 1997, MCI stated that Access Fees were "rip-offs"

The price of staying competitive: The Consumer Union recently stated that Americans are being overcharged on this fee $8 billion annually.

If the FCC and other regulators properly investigate Access charges, long distance rates should fall.


Competitive and Enhanced services

"Competitive" and "Enhanced" services include Touchtone, Call Waiting, and Call Forwarding.

The Bells state that these service profits are required because local service loses money.

They are called "Competitive", "Enhanced", or even Discretionary"

Call Waiting and Call Forwarding cost between $2-5 dollars per item for residential, almost double for business. Touchtone can cost between $1 and $3 dollars per month for residential and business customers.

Money for nothing, part II: It cost virtually nothing to offer these services.

According to Florida Public Service Commission, Call Waiting cost less than 1 cent, Touchtone is totally free

First check to see if you are paying for services you didn’t order. Then check to see if there is a newer package, especially if you have more than one feature.


Installation Fees

The charges to get phone service installed.

The phone company is the sole supplier of phone services, and, according to them, all fees should go to them.

Since 1984, installation fees have risen approximately 900%.

Getting paid to flip the switch: Many charges of installation has no physical costs, such as initiating service fees.

If you can handle wiring the place yourself, and don’t need a site visit, you can start to save money.


Local Service

Local Service is not the sum total of your local phone charges, but a single line item, usually called Basic Service.

The Bells state that they lose money on local Service, so they need this fee.

In testimony, Bernard Ebbers of Worldcom stated that the Bells made 40% profits as compared to other phone companies at 20%.

Bell Annual Reports indicated the total profit margins at 48%. for 1999.

Money for less than nothing: The Bells are protected by a regulatory shell game so that almost all of the other services mentioned are no longer part of the definition of local service.

Ask Congress, the States and the FCC to include all of the other charges in the definition. This would clearly should show the Bells enormous profits.


Taxes & Surcharges

Includes E911, Deaf Relay, School Wiring, Lifeline, and Universal Service Charges, portability charges,

Many of these charges are ordered in the Public Interest by the state legislatures, the FCC and or/Congress.

Some states used flat fees for E911 or deaf relay, while others states’ fees can be a percentage of total phone charges. This ranges from 12¢-50¢ a month, per line per fee.

Public interest profit: Many of these charges, while in the public interest, are also direct revenues to the local phone companies.

These fees are non-negotiable and they depend on state and federal laws.


Toll Calls

Toll Calls are the equivalent to statewide long distance.

In numerous state hearings, MCI and others stated that it really cost less than 1¢ a minute for access these calls.

Though Toll calls have been dropping in price over the last decade, these charges usually cost more than most current long distance plans.

Not a bad ROI: Over 50% profit margins.

Some states have toll call competition which can be less expensive.

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