Understanding Your Telecom Bill
For most business owners, just looking at your phone bill can
cause panic or dread. Instead of checking line by line for
accuracy in the invoice, you probably look at the total, sigh,
and write a check. With all the new services available, you need
to understand your invoice so you don't get overcharged or
billed for something you're not getting.
The FCC requires telephone companies to provide you with clear,
plain language in their invoices when they describe their
services. However, even then, you may not understand what you are
being charged for.
Here is a list of terminology associated with your business
telephone bill, your wireless bills, or both.
Access Charge: fees charged by a local phone company for the use
of its local network.
Airtime Charges: These are per-minute charges for the time you
spend talking on your wireless telephone. Some wireless providers
will round fractions of minutes to the next highest one, two, or
Billing Increments: A call duration measurement unit expressed in
seconds or minutes. Depending on your service provider, some
services are measured and billed in sixty-second increments and
some may be in durations of six or even ten seconds. For example,
if you have one minute billing increments, any call less than 1
minute will be billed as 1 minute.
BTN (Billing Telephone Number): Your main billing telephone
Cramming: When a charge is placed on your phone bill that you
didn't order or authorize.
Detailed Billing: This service provides detailed information such
as date, time, duration, type of call (incoming or outgoing),
number called, or calling party, for each call.
Direct Dialing: When a customer is pre-subscribed with a long
distance company and makes a call using 1+ the area code (or
country code) and the telephone number, without operator
assistance or using a dial-around number.
Directory Assistance: Charges for dialing 411 or (area code)
555-1212 for directory assistance calls.
Domestic Call: Any call that originates and terminates within the
Downloading Fees: Fees charged for downloading options offered by
your wireless service provider, such as ring tones. If your plan
includes Internet access, these are fees for downloading data
from the Internet.
E911 Charges: These are Enhanced 911 or E911 service. This lets
your wireless telephone automatically transmit your geographic
position to emergency responders when you dial 911. Your provider
is charged for this and may choose to pass their costs on to you.
Features Charges: Both wireline and wireless telephone companies
offer features such as call forwarding, call waiting, voice mail,
three-way calling, and caller identification. These services may
show up as separate charges on your bill.
FCC (Federal Communications Commission): The United States
government agency that regulates interstate and international
communications by radio, television, wire, satellite and cable.
Established by the Communications Act of 1934, the FCC's
jurisdiction includes all 50 states, the District of Columbia,
and U.S. territories.
Federal Excise Tax: A three percent tax applied only to local
service that is billed separately from long distance service. In
2006, the IRS stopped enforcing the toll portion of the tax. The
tax still applies to customers who only subscribe to local phone
service. Earlier this year H.R 3011 was introduced (Telephone
Excise Tax Repeal Act of 2009) to repeal the federal excise tax
on communications services.
Interstate Calls: Calls that start in one state and end in
Intrastate Calls: Calls that start and end within the same state.
LDU: Long Distance Usage is the amount of long distance a
Local Exchange Carrier (LEC) Billing: When a customer receives
their invoice directly from their Local Exchange Carrier (your
local phone company).
Local Number Portability (LNP): This allows customers to retain
their existing local telephone numbers when switching from one
telephone service provider to another. Companies may pass on to
customers the fees they are charged. These are fees and not
Minimum Minute Charge: Some calling plans will have a minimum
number of minutes that they bill for a call length. A 10-minute
minimum charge would mean that even if you talk less than 10
minutes on a call, you would still be billed for a 10-minute
Minimum Monthly Charge: Some long distance calling plans have a
minimum monthly charge. This means that if your plan has a $50
monthly minimum, your monthly bill will always be at least $50
even if you have a month where you have only made $25 in calls.
Minimum Usage Charge: A calling plan where you would pay a small
fee if your monthly long distance usage is under a certain
amount. This is different from a minimum monthly fee.
Monthly Calling Plan Charge: Charges applicable to any monthly
calling plan. For example, unlimited long distance calling on
your wireline bill or unlimited minutes on your wireless bill.
Operator Assisted Calls: These are charges for any calls that are
connected by an operator. Usually, it is more expensive to have
an operator help you with a call.
Roaming Charges: Roaming charges require you to pay for using
your wireless telephone outside of the "home" service area as
defined by your service provider in your service plan or
contract. Usually the charges are higher when roaming. In
addition to roaming charges, there might be a daily access fee.
SIM card (Subscriber Identity Module): Also known as a "smart
card," this is the physical card in a mobile telephone that
contains all necessary information for uniquely identifying a
Single Bill Fee: This is a fee that the carrier can charge for
combining your local and long distance charges onto one bill.
This fee is not an FCC charge and some companies waive it.
SLA (Service Level Agreement): Documentation or a contract that
details service quality commitments between a carrier and the
Slamming: The unauthorized conversion of a customer's long
distance phone service from their current carrier to a new long
distance carrier. Slamming is illegal.
State and Local Taxes: Taxes that are imposed by state, local,
and municipal governments.
Toll Call: Any call, subject to charge, to a destination outside
of the local service area of the calling station.
Telecommunications Relay Service (TRS): This is a charge that
pays for the relay center to transmit and translate calls for
people with hearing or speech disabilities.
Text Messaging: This service allows sending of short messages,
usually less than one hundred characters in length. This will
either be a flat monthly fee or a per-message fee.
Universal Service Fund (USF): This is a charge on some long
distance services to offset a carrier's mandatory payment into
the Federal Universal Service Fund, which subsidizes rural, low
income, and health and education telecommunications customers.
The FCC sets the USF rate every three months. It applies only to
state-to-state and international phone calls. The FCC doesn't
require this charge to be passed on to customers, and each
carrier decides if and how to recover its Universal Service
costs. If this line item appears on your bill, it means the
carrier has chosen to pass their charges onto you.
You should check your phone bill every month and make an effort
to understand the meaning of each item to make sure that you're
paying the proper rates for your contract. If you make any
changes to your lines, make sure they apply the right charges to
the change. If you see something that you don't understand, ask
your provider to explain the charge. If you have a Telecom
Expense Management company working for you, they can explain the
charges as well as make sure you're not billed for something
you're not using.
Nermine Shaker is a Partner at THE SYGNAL GROUP, a telecom
consulting firm that offers telecom expense management,
telecom auditing and VoIP management to businesses of
all sizes. Find out how to lower your telecom expenses
at www.SygnalGroup.com/ or visit our blog at