Cagey Consumer

Your 1998 Phone Bill

The information on this page was provided by the State of Alabama to explain various charges that may appear on your local or long distance phone bill. Of the fees described below, only the SLC is mandated to be charged directly to the customer.

The PICC charge was imposed on the long distance carrier, in conjunction with a reduction in the per-minute access charges paid by long distance carriers to local phone companies; long distance carriers have chosen to pass this cost through to their customers, although they impose this fee inconsistently, and may impose it even on those customers who are not presubscribed to them, for whom they pay no PICC charges.

Similarly, the USF charge is paid by carriers. Carriers make their own decision as to how to recover this cost.

Effective January 1, 1998, decisions by the Federal Communications Commission have brought changes in the telecommunications industry that will affect your phone bill. These developments resulted from the Telecommunications Act of 1996, a federal law designed to foster competition in the phone industry. Because of the FCC actions, you may see some new charges on your local and/or long distance phone bill. Here's what has gone into effect for 1998:

Federal Subscriber Line Charge (SLC)

The federal Subscriber Line Charge has been around for a number of years. It is a means for your local telephone company to recoup some of the costs of providing the telephone line to your home or business. For primary residential and single-line business customers, there is no change in the SLC. The maximum SLC for primary residential lines and single-line business custome rs is $3.50 per month. However, with the FCC reforms, consumers who have more than one residential access line will pay a higher SLC for the additional lines. The maximum charge for these "non-primary" residential lines will be $5 per line per month in 1998.

Business customers with more than one phone line will also pay a higher SLC. The maximum SLC for multi-line business customers will be the lower of either the average cost of providing a line in Alabama or $9 per line per month.

Presubscribed Interexchange Carrier Charge (PICC)

The Presubscribed Interexchange Carrier Charge (PICC) is a flat-rate per-line fee that long distance companies pay local telephone companies for accessing the local companies’ networks. If a consumer or business hasn't chosen a long distance carrier, the local telephone company may bill the consumer or business for the PICC.

Here's a breakdown of the maximum PICC charges long distance companies are paying in Alabama for 1998:

It's important to remember that the FCC did not require long distance companies to pass along PICC costs to consumers. Each long distance company was left to take its own approach in handling the PICC charges.

Universal Service Fund (USF)

The Universal Service Fund was set up by the FCC to fund the initiatives of its Universal Service Report and Order. The goals of this order are to provide telecommunications support for high-cost, rural and insular areas, low-income consumers, schools and libraries plus health care providers in rural areas.

All interstate telecommunications carriers must contribute to the USF starting in January 1998. Each of these companies can individually determine how it will recover its expenses from paying into the USF, including charging customers. Some companies are instituting a "Universal Connectivity Charge" for their business and/or residential customers

Advice For Consumers

As a consumer, it is your right to shop around for the telephone company that offers you the best service for your needs at the best price. Since different companies are handling the impact of the FCC decisions differently, compare companies and choose the one that's right for you.
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March 20, 1999