Have you ever looked at your cell phone bill and wondered why your $50 a month plan really costs $60 a month?
According to the Tax Foundation, nearly 18% of the average U.S. wireless customer’s bill now goes to federal, state and local fees — the highest level ever.
We’re going to explain where that money goes using a Sprint bill as an example. The monthly cost of the phone, unlimited talk/text and data is $51.50, but the bill is $59.50 — $8 higher.
Here’s a breakdown of those charges and what they mean:
State telecommunications service tax
We called Sprint for clarification on exactly what this $1.39 charge is, but the customer service representative fed us a line from their website, saying the charge is to “defray the cost of government programs and network connections.”
Universal Service Fund fee
All telephone companies that provide interstate service must contribute to the Universal Service Fund, according to the Federal Communications Commission. Many carriers choose to pass their contribution costs on to their customers. It’s often called the “Federal Universal Service Fee” or “Universal Connectivity Fee.”
This charge is imposed by local governments to help pay for emergency services such as fire and rescue, the FCC says.
According to Sprint’s website, this monthly charge is applied per line and helps offset costs incurred by Sprint, including charges imposed on Sprint from other carriers. Wireless providers are not required to collect this money from you by law. The amount can vary from time to time.
Similar to the administrative charge, the monthly regulatory charge is billed per line. It’s used to defray costs of various federal, state and local regulatory programs, according to Sprint. Again, this fee is not government-mandated.
Government taxes & fees
In this example, Sprint collects $0.17 a month in government taxes and fees in the form of a sales tax. This fee is imposed directly on the customer, which the carrier collects on the government’s behalf, according to Sprint.
The bill included a $2.99 monthly charge for a premium voicemail service, which started out as free but ended up on the bill months later. If you see any services that you didn’t sign up for, contact your carrier immediately.
The government has been cracking down on ‘cramming,’ which is the act of placing unauthorized charges on your bill.
What can you do?
Your wireless carrier probably won’t be willing to waive surcharges. Since they’re usually based on a percentage of your total bill, you can either search for a cheaper cell phone plan or switch to a provider that includes fees in the monthly rate.
Filing a complaint
If you’ve already contacted your carrier about a suspicious charge and you’re running into a roadblock, you can file a complaint with the Federal Communications Commission.
You can file on the FCC’s website, by mail or by calling 1-888-CALL-FCC.