What Are All Those Taxes and Fees On A Phone and Internet Bill?

One of the most common frustrations we hear from potential new clients has to do with the ¬†billing from their current Internet and phone provider. Many times, they’ll sign up with someone, maybe it’s because they saw a promotional price on an advertisement, or they were provided a proposal from someone at the company, and they’ll be anticipating paying a certain monthly price.

Crushing Phone Bill

Then, the first monthly bill shows up, and…. what is THAT? And that? What fee is THIS? Suddenly, that potential cost savings your company was anticipating is much smaller than you thought, if it’s even still there.

On telecom related services (meaning Internet service, phone service, etc.) there are state and federal taxes that often need to be charged. At this point, whether we like it or not, we’ve come to accept that nearly everything is taxed – Internet service and dialtone are no exception. So seeing those taxes on the bill, while not entirely welcomed, are somewhat expected.

You may also see a line itemed surcharge labelled USF – this is a fee that’s paid to the Universal Service Fund, a fee that was instituted after the Communications Act of 1934 to help provide phone service to rural areas. In 1996, the USF was amended to also cover Internet access to underserved areas as well.

Underneath your phone services, you’ll most likely see two additional fees – a 911 fee and an LNP fee. The 911 fee helps to pay for emergency 911 services to all phones, and the LNP fee (Local Number Portability) helps to cover the cost of moving phone numbers between phone companies. This fee was brought into place in the Telecommunications Act of 1996 to help consumers and businesses keep their phone number when they switched to a new provider, to help encourage competitive pricing and more choices for end users.

Now – these are the most typical fees that you’ll see on your bill; from there, however, some additional fees may be charged to customers that go above and beyond that scope, and may only be charged by specific companies. In fact, some carriers may have their own designations and names for the fees, so it’s difficult to try and explain them all. Some carriers even provide an additional page or two just to explain all those fees and surcharges!

Most often, companies may include some additional fees for things such as billing, network enhancements (or upgrades), interstate long distance, charges for NOT using that provider’s long distance services, minimum usage fees, overusage fees, burstable bandwidth fees, equipment rental fees… and many other individualized charges we could list here.

Once you add all of these fees up together, what you thought may have been a $100 phone and Internet bill has suddenly jumped up to $160. That can certainly make a difference when a small business is considering it’s budget and potential new vendors!

Our policy here at MegaNet has been to always be up front with customers on what taxes and fees they should expect to see on their bill. Internet customers are told if taxes are included, or if they’ll be additional; and if they’re additional, we’ll gladly let them know how much they’ll end up being. Customers who have our digital voice services are charged e911 and LNP fees, and we let them know right up front exactly how much they’ll be so they know what to expect every month.

We don’t charge customers additional “fees” to help maintain our network in underperforming or underserved areas, nor do we attach additional “network” fees to help upgrade our services and network capacity (or even just to cover normal maintenance). We charge the taxes and fees that we’re required to charge, and that’s it.

No one likes surprises… well, the unwelcomed ones anyways! That’s why we always do our best to keep customers informed and educated about our services, to make sure that whatever we’re providing is going to fit their needs and their budget. If you ever have any questions about your invoicing and billing, don’t hesitate to let us know, and we’ll be happy to help answer those questions for you.


Image courtesy of imagerymajestic/ FreeDigitalPhotos.net

Written by