Senator Robert "Bob" Deuell, M.D.
The Texas State Senate
District 2

For Immediate Release
December 5, 2003

***CAPITOL UPDATE***

Understanding Charges on Your Phone Bill

Recently, the Public Utilities Commission of Texas (PUC) published "Customer Connection," which outlines some of the charges on your phone and electric bill.  This article focuses on the portion that deals with telephone charges.  Next week, I will feature the portion on electric bill charges.

To receive a copy of the report, please visit the PUC's website at www.puc.state.tx.us, or feel free to contact my office for a copy.

TELEPHONE CHARGES

Your phone bills can be filled with charges that may be complicated or confusing. The following charges, taxes and surcharges are the most commonly seen on Texas phone bills.

Basic Local Service - a basic monthly charge for the dial tone that enables you tomake and receive calls, and allows you to be listed in the telephone book, and get acopy of the directory.

Extended Area Service - expands customers' local calling area by allowing themto call additional contiguous exchanges for a flat fee, rather than incur long-distancecharges assessed on a perminute basis. The size of the local calling area varies fromcompany to company. Availability is determined by affected local telephone companiesand communities, and approved by the PUC.

Optional Services - charges for "miscellaneous" services such as call waiting, caller ID, voice mail, or three-way calling may appear on the phone bill under your local company's services or on a separate page. Make sure you are being charged only for those services you have authorized.

Directory Assistance - know what each company charges for directory assistancebefore placing a call. If the directory assistance operator offers to complete the call for you, be aware that there may be an additional charge for the service.

Local Toll - local toll calls are made to places that are not close enough to be in your local calling area. (This service may be provided by your local phone company.)

Long Distance - like local toll, most consumers have a regular, or "presubscribed"long-distance carrier. When you dial "1" plus the area code and the phone number, the access code for the presubscribed carrier is automatically entered and the call is billed at the rates that company charges.Dial Around Service: You manually enter another company's access code (such as 10-10-XXX) then "1", the area code, and the phone number. That company will then billfor the call based on its own rates and fees.

Pay-per-call service - Pay-per-call service - Charges for pay-per-call services providedthrough 900 and 800 numbers are set by the service providers, not the telephonecompanies. They will appear on a separate page in your phone bill.

STATE AND FEDERAL CHARGES

Subscriber Line Charge - created and regulated by the FCC - allows local phone companies to recover a percentage of costs associated with interstate access to localphone networks. It may also appear as "FCC Charge for Network Access" or Federal Line Cost Charge."

Federal Excise Tax - a 3 percent tax mandated by the federal government leviedon all telecommunications services. It was instituted in 1898 as a "temporary" tax tooffset the cost of the Spanish American War. Applies to local charges, non-regulatedcharges and toll charges.

State and Local Sales Tax - state and local tax combined cannot exceed 8.25%.Applies to local charges, and non-regulated and toll charges.

Federal Universal Service Fund Surcharge - the USF is a fund that helps bring affordable basic phone service to all Americans, including schools, libraries andrural health care providers. Wireless, payphone and some long distance companiesadd this surcharge to cover their required support for the fund.

Texas Universal Service Fund Charge - is a fund that allows affordable service to high-cost rural customers, funds the Relay Texas and Specialized Telecommunications Assistance program for the hearing-disabled, and funds telecommunications services discounts to low income customers (Tel-Assistance and Lifeline).

Local Number Portability Charge - The FCC requires all local phone companies to make numbers portable from carrier to carrier so that customers can keep their phone numbers even if they switch local carriers. Companies are allowed the surcharge to recover investments in the necessary equipment upgrades.

911 - This charge funds free 911 calls from pay phones and helps pay for enhanced911, (which allows a street address to be determined for callers through their phoneline).

Municipal Franchise Fee - Compensates the municipalities for the use of public rights-of-way.

Source: United States Telecommunications Association, National Consumers League, TRA.

To contact Sen. Deuell about the legislative process, contact the Capitol Office at (512) 463-0556 or mail to Sen. Bob Deuell, Texas Senate, P.O. Box 12068, Austin, TX 78711.  The website for the Texas Senate is www.Senate.state.tx.us.  The e-mail address for Sen. Deuell is: bob.deuell@senate.state.tx.us.

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