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explanation of charges on bill
In addition to the charge for basic local service, telephone bills are made up of a number of fees. Below is an explanation of these charges. Contact your telephone company if there is a charge on your bill that you don't understand. If you are not satisfied with the company's explanation, contact the Michigan Public Service Commission.
Interstate Access Charges
Access charges are fees charged subscribers or other telephone companies by a local telephone company for the use of its local network.
The FCC allows local telephone companies to bill customers for a portion of the costs of providing access. These charges are not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge less or not at all. Access charges for second or additional lines at the same residence are higher than the charges for the primary line. These charges can be described on your telephone bill as "Federal Access Charge," "Customer or Subscriber Line Charge," "Interstate Access Charge," etc.
Intrastate Subscriber Line Charge (No Longer Allowed)
The Governor has signed the Michigan Telecommunications Act (MTA) rewrite legislation (HB 5237) into law and is now PA 235 of 2005.
Section 310a of the new MTA states:
Sec. 310a. (1) After June 1, 2007, all providers of telecommunication services in this state shall not charge, assess, or impose on end-users an intrastate subscriber line charge or end-user line charge.
(2) If a provider is charging, assessing, or imposing an intrastate subscriber line charge or end-user line charge on July 1, 2005, the provider may no later than June 1, 2007 file with the commission under section 304(2)(d) notice of an increase in the primary basic local exchange rate in an amount not to exceed the provider's intrastate subscriber line charge or end-user line charge in effect on July 1, 2005.
Universal Service Fund (USF) Charge
Because telephones provide a vital link to emergency services, to government services and to surrounding communities, it has been our nation's policy to promote telephone service to all households since this service began in the 1930s. The USF helps to make phone service affordable and available to all Americans, including consumers with low incomes, those living in areas where the costs of providing telephone service is high, schools and libraries and rural health care providers. Congress has mandated that all telephone companies (local, long distance and wireless) providing interstate service must contribute to the USF. Although not required to do so by the government, many carriers choose to pass their contribution costs on to their customers in the form of a line item, often called the "Federal Universal Service Fee" or "Universal Connectivity Fee".
Local Number Portability Charge
Under the terms of the 1996 Federal Telecommunications Act and according to the Federal Communications Commission planning schedule, local number portability was required to be available in the country's top 100 metropolitan areas by the end of 1998. Local number portability (LNP) enables customers to keep their phone numbers when they change local service providers. When a customer moves, however, they may not be able to take their telephone number with them. The LNP surcharge was authorized under the law as a means for the costs to be recouped over a period of five (5) years.
Effective November 24, 2003, the Federal Communications Commission mandate requiring wireless number portability went into effect. Wireless number portability allows end users to keep their existing number when changing either wireless or wireline service providers.
This charge is imposed by local governments to help pay for emergency services such as fire and rescue. If you have two 911 or emergency services charges on your bill, one of the charges goes to your county and one of the charges goes to the telephone company for handling the 911 billing.
State taxes in Michigan are 6%. Contact the Michigan Department of Treasury for an explanation of what charges on your bill are subject to the 6% tax.
Federal tax is 3%. Contact the Federal Internal Revenue Service (IRS) for an explanation of what charges on your bill are subject to the 3% tax.
State Access Charge or Access Restructuring Mechanism Charge
The Michigan Intrastate Switched Toll Access Restructuring Mechanism, shortened to Access Restructuring Mechanism (ARM) came about as the result of an amendment to the MTA (signed into law in late Dec. 2009) which requires companies to lower their intrastate switched toll access rates (rates they charge to other providers for transporting and terminating intrastate toll calls on their networks). The ARM is a fund that has been in existence since September of 2011. All providers of intrastate retail telecommunications services and mobile wireless voice providers contribute to the fund monthly, (VoIP does not contribute). Eligible providers (the small rural ILECs and Allband) receive disbursements from the fund to partially offset the lost revenues they experience from their lowered intrastate access rates.
Providers contribute to the ARM based on the current contribution percentage which is multiplied by their intrastate retail telecommunications services revenues. The current contribution percentage is 0.620% (.00620).
This law does not prohibit companies from passing on the cost of this to their customers and there is no language in the law relating to how this charge might be listed on a customer’s bill—though it should be a fairly small charge because the contribution percentage is very low. We know that many of the wireless carriers do charge their customers for this, but haven’t heard that any wireline providers are (though, they can if they choose to).
Other Surcharges and Regulatory Fees
Oftentimes local telephone companies place numerous other fees and surcharges on customer bills that are not regulated by the Michigan Public Service Commission. For example, some companies charge for providing customer with a paper telephone bill (instead of a copy on the computer), miscellaneous "regulatory fees", "carrier line charges", etc. These are fees the telephone company chooses to place on your bill. Contact the Michigan Public Service Commission if you have questions about the legitimacy of any of the fees or surcharges on your bill.
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