Consumer Questions

How do I help keep rural areas connected?
The fees you pay in your telephone service bill help pay for phone service in rural areas. Namely, Universal Service Fund fees and access fees are meant to help keep rural areas connected, as both of those fee systems provide subsidies for rural telephone providers in order to make it affordable for them to provide service in rural areas.

Why is my phone bill so confusing?
Because of numerous government requirements, phone bills often contain costs or charges for more than just the cost of basic phone service or the additional features you choose. There are additional taxes charged by federal, state and local governments and there are other fees like Universal Service Fund charges and access charges. Not all of these are always itemized on a customer’s phone bill, however. In some states, not all of the fees are made explicit on a consumer’s bill and as a result, the consumer ends up paying for more than the cost of their basic phone service without their knowledge.

What are all those charges on my phone bill?
There are several different kinds of additional charges to a phone bill. They can be taxes (federal, state and local); the additional cost of products like caller ID, voicemail and other add-on services; or they can be additional regulatory charges that are passed on to the customer. Additional regulatory charges can include fees like Universal Service Fund fees or access fees. In addition, hidden fees can increase basic rates.

Why does it cost more to call my mom who lives in the same state as me than it does to call my cousin who lives out of state?
An outdated system of access fees could inadvertently create this situation. Access fees are charges imposed in some states on non-rural telecommunications companies to help subsidize the cost for rural telecommunications companies of providing rural phone service. This system was set up at a time when we did not have the advancements in communications that we have now – broadband, wireless phones and VoIP. Many consumers are choosing these services in place of traditional telephone service, but the access charges on traditional telephone service remains. As a result, people are paying more on their phone bill for in-state calls to rural areas. Access charges do not always apply in other states or when making a long-distance phone call from one city to another city; therefore, an out-of-state phone call could be cheaper.

If these access fees help keep rural areas connected, what’s wrong with them?
The goal behind access fees – to make sure rural areas receive telephone service at an affordable rate – is important public policy. Unfortunately, the current system was created for a different time when we did not have all the advancements in communications that we have today such as other alternatives to traditional phone service like wireless phones and VoIP. Now with all the alternatives, there are many ways to keep rural areas connected and a subsidy to provide regular phone service is no longer needed. But with access fees in place, it provides an incentive for rural telephone companies to keep outdated technology in place rather than providing new technologies because those companies will receive revenue from access fees if they continue to provide just traditional telephone service. Consumers, especially those who live in rural areas, are the ones hurt in this situation as they pay access fees in their telephone bill and could be stuck with old technology.