0) ______ Do you feel nauseous just looking
at this mess? (Warm up question)
ANSWER: This is a common problem and
nothing to worry about, except that you're being
overcharged.
1) ______ The charges above are the taxes and
surcharges for an entire average local phone bill.
FALSE: Believe it or not, these charges
are just the taxes and surcharges applied to the FCC Line
Charge, Portability Charge, and other cross-taxing. There
are other taxes applied to local phone service, phone
callings, and every other service, from non-listed
numbers to Inside Wiring.
2) ______ The FCC Line Charge goes to fund the
FCC and is a government tax.
FALSE: The FCC Line Charge, or the FCC
Subscriber Line Charge (it has many names across the US)
is unmarked revenue to the phone company and has nothing
to do with the FCC or a government tax. This charge was
increased over the last 4 years 86%, from $3.50 to a cap
of $6.50 without any cost support. Meanwhile studies done
in 1998 indicate that the actual cost of this charge
should have been greatly reduced, not increased.
3) ______ The Federal Excise Tax was first put on
to fund the Spanish American War in 1898.
TRUE: The Federal Excise Tax was originally
applied to wealthy phone customers as a luxury taxed
tacked on to fund the Spanish American War in 1898.
4) ______ The charges above are not correctly
added up and taxed based on June, 2004.
TRUE: This phone bill is from May 2003 and
the FCC Line Charge should be $6.50 (or there about), and
thus every tax should be adjusted. However, how would
anyone know this to be the case unless they studied the
phone bill? Also, in our survey we discovered that phone
bills are littered with mistakes and approximately 50% of
all phone bills have errors, from numbers simply not
adding up, the tax calculations are not accurate or the
exact same charge for the same month can be different on
different phone bills.
Pick One:
5) ______How many taxes and surcharges are
applied to the FCC Line Charge? a) 1,
b) 3, c) over 6 d) We don't know.
d) We don't know: That's right. Two
telecom and phone bill experts, New Networks Institute, a
market research firm, and LTC Consulting, a phone bill
auditing firm, are still not sure about some of the
charges on the phone bill, even after months of research
and analysis. For example, the word Surcharges" on the
Verizon web site lists 8 different charges that may or
may not be part of this phone bill.
6) ______The taxes and surcharges on the FCC Line
Charge in New York City, from the example above are?
a) 8%, b) 16%, c) 27%.d) 32%
c) 27% The FCC Line Charge is hit with
Federal,, state and local taxes as well as
Universal Service Fund Charge and "surcharges"
charge for a whopping total of 27% tax on something that
is in the Taxes and Surcharges section of this phone bill
and that many believe it is a tax.
7) ______ The taxes above as compared to the
"dialtone" monthly charge are a) 27%, b) 55%, c) 86%, d)
112%
d) 112% --- The "dialtone" charge, (which is
sometimes called 'basic service', monthly service, etc.)
in New York City cost $8.61, while the taxes and
surcharges section is $9.62 currently.
8) ______ Which statement about the
"Universal Service" Fund is False?:
- a) Has been called an "out of control" slush
fund.
- b) Has a "high-cost" fund that gives very
profitable rural companies more money?
- c) Has had a lack of oversight and
competitive bidding?
- d) The Bell phone companies were the largest
recipient of the Universal Service Fund's
"Schools and Libraries" Fund in 2001.
Trick Question -- They are all True. For
example, as we documented in our report, besides various
accusations of fraud, according to numerous sources the
Universal Service Fund has a serious lack of competitive
bidding, excessive payments to very wealthy rural
companies, and a lack of oversight and audits.
TRUE: d) In 2001, the Bell companies
received over $1/2 billion dollars from the Universal
Service Fund, making them the largest recipient of the
Schools and Libraries Fund.
TRUE: b) In 2001, the Rural phone
companies received some $2.6 billion in the "high-cost"
fund, even though many of these companies have EBITDA's
of 55%, (Earnings before Interest, Taxes and Depreciation
and Amortization), making them some of the most
profitable companies in the US.
9) _____ How many "Truth-in-Billing" violations are
there in this example? a) 3, b) 6, c) at
least 10.
c) at least 10, --- and counting. We've
uncovered over 20 violations in just this segment, but it
depends on how you count. For example, "Surcharges" with
no definitions, is clearly a violation but since it is
'plural' and there could be at least 8 unexplained
charges... The term "FCC Line Charge", is also a
violation, but so is not exposing and explaining the
multiple taxes that are being applied to this charge.
Each charge has multiple taxes and so the 'inter-taxing'
is totally undetailed and each a violation of supplying
the customer a detailed phone bill, with clear,
non-misleading descriptions.
10) _____Money: Surcharges and Taxes on a
Verizon package of local and long distance in New York
(advertised at $59.95) adds annually an additional
a) $25. b) $155, c)$260 d) $302.
c) $260 The Advertised price of a Verizon
Freedom Package in New York in 2003 was $59.95, while the
total taxes brought the total to $81.70.
11) ______ Which statement is False?:
- a) On an average bundled package of Local and
Long Distance, the taxes above are added to the
advertised price.
- b) Universal Service Fund continues to
increase from 3.9% in 1999 to 8.9% in 3rd Quarter
2004, a 128% increase
- c) Since 2000, the FCC Line Charge increased
86%, from $3.50 to a cap of $6.50.
- d) Many of the taxes and surcharges are direct
revenue or enrichment to the local phone
companies
FALSE: a) None of the taxes and
surcharges in our exhibit were included in the advertised
price, thus the major differential between the advertised
and taxes and surcharges.
TRUE: d) Many of the taxes are
revenue or enrichment. For example, besides the FCC Line
Charge, the Portability Charge, the 911 charge and even
some of the surcharges are all revenue to the company or
enrichment, since some of the Surcharges are actually
taxes that Verizon passes through to the customer.
12) ______ Which statement is False?:
- a) No regulator examines the phone bill
charges anymore.
- b) Phone bills are almost 100% accurate --
very few mistakes.
- c) Various regulators and politicians now want to
put ALL of these taxes and surcharges on new
services, such as Voice over the Internet (VOIP)
FALSE: b) Phone bills are almost 100%
accurate. As previously stated, phone bills are
littered with mistakes. In fact, Teletruth has helped to
initiate 3 Class Action suits against Verizon in New
Jersey based on the billing errors. In the first case,
which as been settled, Verizon neglected to give
approximately 40% of small businesses under 5 lines their
discounts.
TRUE: e) Regulators and
politicians around the United States are clamoring to put
all of these taxes and surcharges onto new services, such
as Voice Over the Internet. Teletruth is requesting an
investigation into every charge.
13)______ Bonus Question ----- How do I get
involved to fix this mess?
