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FCC CONSUMER FACTS
Federal Communications Commission
Common Carrier Bureau
445 12th St. SW, Washington, DC 20554
(Voice) 1.888.225.5322 or (TTY) 1.888.835.5322
PRESUBSCRIBED INTEREXCHANGE
CARRIER CHARGEWhat is the Presubscribed Interexchange Carrier Charge?
- The Presubscribed Interexchange Carrier Charge is a fee that long distance companies pay to incumbent local telephone companies to recover part of the costs of providing the "local loop." Local loop is a term that refers to the outside telephone wires, underground conduit, telephone poles, and other facilities that link each telephone customer to the telephone network.
- The monthly service fee that consumers pay for local telephone service, the subscriber line charge (see Subscriber Line Charge Fact Sheet), may not be enough to recover all of the costs of the local loop. Historically, the incumbent local telephone companies have recovered the shortfall through per-minute charges to long distance companies. Starting in 1997, part of the shortfall is recovered through flat-rated charges to long distance companies, who use the local networks to complete their long distance calls. Because the costs of the local loop do not depend on usage, this flat-rated charge better reflects the costs of providing service by the local telephone company.
Has the Presubscribed Interexchange Carrier Charge been eliminated?
- For the majority of telephone customers, yes. Effective July 1, 2000, no Presubscribed Interexchange Carrier Charge can be assessed for a residential line or single-line business line. To the extent an incumbent local telephone company does not recover all of its local loop costs through the subscriber line charge, it may still assess a Presubscribed Interexchange Carrier Charge for each multi-line business telephone line presubscribed to the subscriber’s long distance company.
What was the maximum Presubscribed Interexchange Carrier Charge for residential telephone lines and single-line business lines?
- On July 1, 2000, the Presubscribed Interexchange Carrier Charge was eliminated for residential lines and single-line business lines. From July 1, 1999 through June 30, 2000, the maximum Presubscribed Interexchange Carrier Charge paid by the long distance companies for primary residential lines and single-line business lines was $1.04 per line per month. For non-primary residential lines, the maximum Presubscribed Interexchange Carrier Charge paid by the long distance companies was $2.53 per line per month from July 1, 1999 through June 30, 2000. (Local telephone companies treat a line as non-primary when it serves the same address as the primary line, even if the bill is in a different name at the same address.)
What is the maximum Presubscribed Interexchange Carrier Charge paid by long distance companies for multi-line business lines?
- From July 1, 1999 through June 30, 2005, the maximum Presubscribed Interexchange Carrier Charge paid by the long distance companies to local telephone companies is $4.31 per month for each multi-line business line.
- It is important to remember that these amounts represent maximum Presubscribed Interexchange Carrier Charge levels. The actual Presubscribed Interexchange Carrier Charge paid by the long distance companies may vary, based on the actual cost of providing local phone service in each area, and may be less than this maximum amount. As various phases of the FCC's access charge reform plan are implemented, the average Presubscribed Interexchange Carrier Charge for multi-line business lines should decrease.
Did the FCC require long distance companies to bill consumers for Presubscribed Interexchange Carrier Charges?
- No. The FCC does not require long distance companies to put the Presubscribed Interexchange Carrier Charge – or any other charges or surcharges -- on your telephone bill.
- Because there is competition for long distance service, the FCC does not regulate how long distance companies compute their charges or the amount of those charges. As a result of this flexibility, long distance companies are taking very different approaches to whether and how they are charging their customers to reflect the Presubscribed Interexchange Carrier Charges they pay.
- It is important to remember that the long distance companies' interstate access charge payments to local telephone companies did not increase. The per-minute charge long distance companies pay to incumbent local telephone companies for each call made by their customers was reduced by an even greater amount than the amount they pay for their Presubscribed Interexchange Carrier Charge payments and payments they make to ensure that all Americans have affordable access to telephone services.
If I don't have a long distance company, do I have to pay the fees?
- If a multi-line business has not selected a long distance company for its telephone lines, the local telephone company may bill directly the multi-line business for the Presubscribed Interexchange Carrier Charge. If service is terminated with one long distance company, the incumbent local telephone company may bill the multi-line business directly for the Presubscribed Interexchange Carrier Charge until a second long distance company is selected. (*see Tips for Lowering Your Long Distance Bill Fact Sheet)
| last reviewed/updated on 02/13/02 |
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