Taxes, Fees, and Surcharges
FEDERAL SUBSCRIBER LINE CHARGE
The FCC instituted this charge as it developed its access charge regime after the break-up of AT&T in 1984. The FCC authorized line charge recovers some of the costs of the routing long distance calls to and from local customers. The surcharge required to be collected by the service supplier shall be added to and stated separately in its billings to the customer. All taxes and surcharges apply to this charge.
LOCAL NUMBER PORTABILITY SURCHARGE (LNP)
Local Number Portability (LNP) is a service that provides residential and business traditional (wired) telephone customers with the ability to retain, at the same location, their existing local telephone numbers when switching from one local telephone service provider to another. LNP was mandated by the Telecommunications Act of 1996. In July 1996, the FCC issued a ruling in CC Docket No. 95-116 that LNP must be in place nationwide by January 1, 1998.
PRESUBSCRIBED INTEREXCHANGE CARRIER CHARGE (PICC)
Presubscribed Interexchange Carrier Charge is a fee that long distance carriers must pay to the local telephone company for providing the local access.
911 has been designated as the “Universal Emergency Number” for all citizens throughout the United States to request emergency assistance. The purpose of the fee is to “pay for” the cost of such systems. There is no per-call charge for calling 911.
CARRIER COST RECOVERY FEE
The fee is a monthly surcharge telecommunication carriers are permitted to assess in order to defray a portion of the costs to terminated calls on other networks, fees paid to support government programs such as Telecommunications Relay Service and LNP, and additional indirect costs associated with administering and complying with government programs.
STATE AND LOCAL TAXES
Taxes paid by consumers and directly submitted to appropriate state, county or city authorities. City school district taxes are also collected under sales tax law provisions.
Surcharges recover company’ expenses associated with municipal revenue taxes, which apply to calls originating and terminating within the village or municipality. Municipal Surcharge applies to all local charges, LNP Surcharge, FCC Line Charge and Federal USF Surcharge.
GROSS REVENUE SURCHARGE/FRANCHISE TAX
This surcharge recovers company’ expenses associated with mandated New York State Transportation and Transmission Corporation Franchise Taxes (Section 184 Tax) and Excise Taxes on Telecommunications Services (Section 186E Tax).
UNIVERSAL SERVICE CHARGES
All telecommunications service providers must contribute to the federal Universal Service Fund, which allows those living in rural and high-cost areas, income-eligible consumers, rural health care facilities, and schools and libraries to access to telecommunications services at reasonable rates through programs and initiatives such as the Connect America Fund, Lifeline and E-rate.