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Phone Bills Bring a Holiday Surprise: 62 Percent in Fees

Home > Debt Help Advice > Phone Bills Bring a Holiday Surprise: 62 Percent in Fees

Do you know anything about the California Relay and Community Surcharge or the Texas Poison Control Fee?

How about the Federal Excise Tax? Or the Universal Service Fee?

Those are a few of the monthly penalties you pay for the privilege of using a phone.

Your telecommunications provider won’t agree with that description, but when you have to pay 25-75 percent more for service than what you thought you agreed to pay, I call that a penalty.

The government, bless their hearts, insists that the phone companies list these penalties on your monthly phone bill. The phone companies, unbless their hearts, list them, but don’t explain them.

In fact, they try to disguise their intentions by putting some frilly adjective in front of words like surcharges, taxes, fees and line charges and hope we’ll just pay the accompanying charges without complaint.

But I’m going to complain.

A Step Above Outrage

For the first time in more than a decade, I took a look at my family’s monthly phone bills, one for the landline (mine) and one for cellphones (the other four members of my family). When I got to the bottom line, I was wheezing like I’d just finished a 100-yard dash.

The cost for the $17.95 monthly landline was actually $29.08. There was a federal subscriber penalty ($6.62) on there, a universal service fee penalty ($1.03), a federal excise tax penalty ($0.74), and four more lines of financial mayhem that aren’t worth detailing. The seven penalties added up to $11.13 more than I expected to pay for a $17.95-a-month plan.

That is a 62 percent markup that I guess I’m supposed to grin and swallow every month. I am not grinning. I am whatever level of emotion exists a step above outrage.

Why are phone companies allowed to surcharge, tax, fee and line charge us to death every month for the rest of our lives?

What if all the other monthly bills I paid had a 62 percent markup attached to them? My $1,000 mortgage payment would actually be $1,620. My $200 utility bill would be $324. My $350 car payment would be $567.

And I would be out looking for a second job to keep pace with the 62 percent markup in my life.

You Can Thank Uncle Sam

I called one of the phone companies to ask who gave them permission to steal so much from my wallet every month, and the answer, not surprisingly, is the government. In some cases, it’s the feds, sometimes it’s the state and, of course, there’s the city.

Depending on where you live, you will contribute to all sorts of specialty situations so the city, state and federal government can improve someone else’s life at your expense.

For example, people in California pay the Relay and Community Surcharge so that Californians with hearing and/or speech disabilities can use text telephones to communicate with people using standard voice telephones.

If you live in Texas, you will pay the Texas Poison Control Surcharge that funds six centers around the state that provide information on poison remedies 24 hours a day.

All of us have the monthly privilege of paying the Federal Excise Tax. You will be proud to know this was initiated in 1898 as a 1 percent luxury tax to pay for the Spanish-American War. It was phased out twice in the next 25 years, but as more people used phones, the government realized it was an easy way to get into people’s pockets and brought it back. The tax went as high as 25 percent in 1944, before starting a slide that eventually brought it down where it is now — about 4 percent.

Share the Wealth

The granddaddy of all the phone bill penalties is the Universal Service Fee. That one is used by the federal and state governments to punish those of us living in populated areas by having us contribute to a pot of gold that goes right back to the phone companies so they will wire up remote areas of the country.

In other words, we’re paying so the people in places like Mentone, Texas, and Brewster, Neb., and the thousands of other completely isolated towns in America, can have the privilege of using a phone.

I don’t know any of the 19 people who live in Mentone, but I do know it’s the largest town in Loving County, Texas, a 677-square mile section of west Texas that has space – and phone service – for another 67 people, thanks to the USF fee.

Same goes for Brewster, which is the county seat for Blaine County, Neb. Brewster lost  nearly half its population over the last 10 years, but the 17 people who are left have phone service that you and I help pay for.

I’m actually all right with that. It’s nice to know that people in Mentone and Brewster can sign up for phone service.

I’d just love to see their face when they get the bill for that $17.95 monthly service.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].