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 three minutes.

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 number.

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 United States.

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 another state.

Intrastate Calls: Calls that start and end within the same state.

LDU: Long Distance Usage is the amount of long distance a customer uses.

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 taxes.

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 call.

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 subscriber.

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 subscriber.

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 & 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.