The incumbent LEC additional charges

Q. Do I understand correctly that the Federal Communications Commission (FCC) is causing my telephone bill to go up?

A. No. The FCC has approved an industry plan that will adjust some charges and eliminate others. Your total bill -- what you get when you add together your local and long-distance bills -- should go down. Most likely, you will see a shift of charges from interstate long distance to local service with no worse than a neutral net effect on your total bill. Most residential customers will see a decrease.


Q. I thought the state Public Service Commission controlled local rates.

A. The FCC is not causing your local bill to increase. The FCC has regulatory authority over interstate long distance service, and a nationwide program to make local service affordable for all Americans, called the Universal Service Fund. Since local tele phone lines are involved in carrying interstate long distance calls, the FCC also can influence some aspects of local telephone charges.


Q. What if I don't make many long distance calls? Will my bill go up?

A. (RESIDENTIAL, SINGLE LINE BUSINESS and BASIC RATE ISDN) You should ask your interstate long-distance carrier to be sure. However, if you don't make many LD calls, your overall billing from the Incumbent LEC and your long-distance carrier may decline. Many res idential, single line business and BRI ISDN customers who use little or no long-distance will see monthly minimum charges from some interstate long-distance companies disappear. Another charge, the Presubscribed Interexchange Carrier Charge (PICC), may al so disappear from these type customer bills.


A. (MULTI-LINE BUSINESS) You should ask your interstate long-distance carrier to be sure. However, if you do not make many LD calls, your overall billing from the Incumbent LEC and your interstate long-distance carrier may decline.


Q. I keep hearing that access charges are being reduced. What are access charges? Where are they listed on my bill?

A. Access charges are fees that local telephone companies, such as the Incumbent LEC, charge long distance companies for completing their calls over our lines. The long distance companies, in turn, add the access fees as part of their charges for individual long distance calls. While access charges aren't itemized on LD bills, comparison of LD charges before and after the adjustments take place and over the coming months should indicate the affect of access charge reductions, if the reductions are passed on to customers by the interstate LD carriers as the FCC intended.


Q. What is the purpose of access charges? If the long distance company carries long distance calls, why should the local telephone company be able to bill access charges?

A. Long-distance calls are completed -- for the most part -- using a combination of circuits owned by local and interstate long-distance companies. Access charges are paid by interstate long distance companies for using the local telephone company's network to reach end user customers.
Traditionally, interstate long distance service was used to subsidize local telephone service and to help keep it affordable, as well as almost universally available, for all Americans. However, things changed with the breakup of the Bell System in 1984, and more recently with passage of the Telecom Act of 1996, there are more phone companies and more competition and that subsidy system is no longer possible. Access charges were introduced to offset this loss of support for local telephone service from long distance revenues.


Q. Why are access charges being reduced?

A. Congress said it wanted the subsidies for universal service -- subsidies now included in the cost of interstate long-distance calls -- to be billed as separate charges. This is being accomplished by reducing the the Incumbent LECs charges to the interstate long distance carriers for accessing the local network. These subsidie s will now be collected through the Subscriber Line Charge (Shown on your bill as "FCC Charge for Network Access") and a new Federal Universal Service Charge that appears on local phone bills.


Q. Is this a one-time occurrence?

A. No. The adjustments called for in the industry plan that the FCC approved will take place over a five-year period.


Q. Are all local telephone companies and interstate long distance companies affected the same way by the FCC order?

A. The order applies to all major local telephone companies. The access charge reductions will flow to all interstate long distance companies.


Q. So, The Incumbent LEC is required to increase certain charges on my telephone bill?

A. No. The FCC required the Incumbent LEC to lower the access charges that it bills interstate long distance companies. In order to recover the revenue lost by lowering these access charges, the FCC authorized the Incumbent LEC to increase Subscriber Line Charges (Shown on your bill as "FCC Charge for Network Access") for certain customers and to stop collecting Presubscribed Interexchange Carrier Charges from residential, single-line business and ISDN BRI customers. This combination of events should lower the total amount you pay for telecommunications services.


Q. If I refuse to pay these new or increased charges, will The Incumbent LEC interrupt my telephone service?

A. The Incumbent LEC will take appropriate actions to collect these local service charges, as it would for any other authorized charge. These actions could include interrupting your service for failure to pay correctly billed charges.


Q. How can I identify increased charges for Subscriber Line Charges?

A. On your the Incumbent LEC bill after the charges become effective, an entry will appear on the bill's Other Charges and Credit page stating: Charge Due to Increase in Rates for Network Access, Reflecting Changes in the Rules of the FCC (MM/DD/YY - MM/DD/YY) On subsequent bills, the full monthly charge will be itemized on your bill's Local Service page.


Q. How can I identify the new Federal Universal Service Charge on my bill?

A. On your the Incumbent LEC bill after the charges become effective, an entry will appear on the bill's Other Charges and Credit page stating: Charge for Increase in Rates for Federal Universal Service Charge, Due to Changes in the Rules of the FCC (MM/DD/YY - MM/DD/YY) ($ZZ.99/mo) On subsequent bills, the full monthly charge will be itemized on your bill's Local Service page.


Q. How will customers be notified of these bill increases?

A. Residential and small business customers will be notified of the changes by "FYI" messages or bill inserts in their bills. Larger business customers may also be notified through personal contact by their Incumbent LEC account teams.
Effective July 1, 2000, for more information on these changes customers can visit on the Internet: http://www.phonebillcentral.org


Q. Since customers couldn't budget for increased telephone bills, will the Incumbent LEC provide an option for delaying payment?

A. The combination of charges on local and interstate long-distance bills should be lower. The Incumbent LEC will not provide a delayed payment option for these Subscriber Line Charge (FCC Charge for Network Access" and Federal Universal Service Charge changes that appear on local bills.


Q. What is changing with the Presubscribed Interexchange Carrier Charge (PICC) in this order?

A. The PICC, which generally appeared on interstate long-distance bills is eliminated for residential, single line business and BRI ISDN customers. Multi-line business PICC rates will continue to be billed at the current rate of $4.31 per month*. Additionally, the FCC continues its unique multiline business PICC rate treatment for Centrex lines and PRI ISDN. On 07/01/00*, Centrex PICC rates per line will be 1/9th the $4.31* rate or $0.47* per line. PRI ISDN customers will be billed at five times the multiline business PICC rate, or $21.55. (The new Federal Universal Service Ch arge will also be handled this way, Centrex lines will be billed 1/9th of $0.32 or $0.03 per line and PRI ISDN will be billed five times $0.32 or, or $1.60.)


Q. How does "Universal Service" enter into the FCC's CALLS order?

A. Universal service is a term applied to a basic principle of U. S. telecommunications regulation that asserts that basic telephone prices should be kept affordable to ensure availability of telephone service to all Americans. As a result, local rates have been kept below cost while other services, such as interstate long distance, have been priced substantially above cost. This support from other services has been used to subsidize local service. Because of competition and recent (1996) changes in telecom law, this type of support is no longer possible to sustain.


To promote universal service, the FCC created an interstate Universal Service Fund to provide support for local telephone companies faced with the task of offering affordable telephone service for all Americans. The Universal Service Fund was created and is maintained by contributions from local and interstate long-distance telecommunications companies.
In the past, the Incumbent LEC was authorized to recover its federal Universal Service Fund contributions through access charges billed to the interstate long distance carriers. The interstate long distance carriers also billed their end user customers separately for their costs associated with Universal Service. In this Order, the FCC authorized the Incumbent LEC to recover its Universal Service contributions directly from end user customers. This more efficient means of recovery should lead to lower bills when you add together what you pay to your local and your interstate long-distance companies. This charge will be $0.32* per line, 1/9th of that amount for Centrex (ESSX) customers, and five times that amount for PRI ISDN customers.


Q. Will the SLC increases disadvantage the Incumbent LEC in the today's competitive environment?

A. These increases are part of the regulated charges on the Incumbent LEC customers' monthly bills. Accordingly, resellers of the Incumbent LEC services will be billed these same charges without a resale discount. Of course, the reseller may or may not pass the charges on to their end users.
CLECs (Competitive Local Exchange Carriers) purchasing Unbundled Network Elements (UNEs) will not be billed subscriber line charges (Shown on your bill as "FCC Charge for Network Access") and Federal Universal Service charges by The Incumbent LEC. Likewise, the charges do not apply to ALECs (Alternate Local Exchange Carriers), who provide local service over their own non-The Incumbent LEC facilities.
Without these additional charges for local telephone service, the competitors described above could appear to have a price advantage over the Incumbent LEC. However, the FCC does require CLECs to contribute to the interstate Universal Service Fund.


Q. Why did the FCC rule that Primary Rate ISDN (PRI) lines be billed five (5) Subscriber Line Charges/Federal Universal Service Charges?

A. The FCC determined that Subscriber Line Charges (Shown on your bill as "FCC Charge for Network Access") be based on the cost of providing the service. Since the cost to provide PRI ISDN is much higher than the cost of providing regular telephone servi ce, the FCC ordered that five (5) Subscriber Line Charges (Shown on your bill as "FCC Charge for Network Access") should apply to PRI ISDN lines. The new Federal Universal Service Charge was authorized to be billed in a similar manner by the FCC.


Q. Will termination charges be enforced if a customer disconnects ESSX service/MultiServ/The Incumbent LEC Centrex service because of these increases?

A. Yes. The Incumbent LEC will enforce the termination liability in its contracts. The tariff explains the situations for which termination liability is waived. For example, when the customer chooses to switch to a "Higher Order of Service" the termination liability may be waived.


Q. For which services has the Incumbent LEC filed new rates?

A. The charges being revised as the result of the FCC order apply to Interstate Access services and are listed in the FCC tariffs. These services are used by long distance companies. The Incumbent LEC is also increasing Subscriber Line Charges (Shown on your bill as "FCC Charge for Network Access") for residential, single-line business and BRI ISDN customers and is introducing a new Federal Universal Serv ice Charge.


Q. When will customers see decreases to their long distance rates as a result of the lower access charges?

A. Customers should ask their interstate long distance company about its plans for passing on the lower access rates to them in the form of reduced long distance charges.


Q. Is this the last time the SLC will go up?

A. No. The adjustments approved by the FCC are to be phased in over five years. Further adjustments may be made, but increases in one area should be offset by decreases elsewhere on bills.


Q. If lines are toll restricted and cannot make long distance calls, why should they be billed SLCs?

A. The FCC has prescribed the SLC as a method of recovering the cost of interstate access for incoming and outgoing calls. Since toll restricted lines can still receive interstate long distance calls, SLCs apply.


Q. Why do I need to pay these charges on lines used only for inbound calls?

A. These charges are designed to allow telephone companies to recover the cost of their wires, poles, switches and other network components. Additionally, in the case of the Federal Universal Service Charge, the Incumbent LEC is authorized to recover its required contribution to the Federal Universal Service Fund.


Q. What is the new Federal Universal Service Charge appearing on my bill?

A. It is a charge to recover the amount the Incumbent LEC must contribute to the Federal Universal Service Fund, which offers support to keep local phone rates affordable for all people no matter their income or geographic location.

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