Frequently Asked Questions
About
The Federal Access Charge
(also known as the Subscriber Line Charge)

Why do I pay the Federal Access Charge?
After the break-up of AT&T in 1982, the Federal Communications Commission adopted access charge rules to govern the way the local phone companies recover the costs of providing their network to long distance companies. Long distance calls can't be made or completed without using the local company's network. 

What is the Federal Access Charge?
The Federal Access Charge is a charge billed to the users of residential and business telephone lines by local telephone companies across the United States. This charge is mandated by the FCC, but it is not a tax and the government does not receive the money raised by the charge. Instead, the money is used by local telephone companies to insure that all Americans have adequate and affordable access to telephone service.

Where does the money go?
Funds raised by the Federal Access Charge are collected and distributed on a national level. The money is collected by local phone companies, but they do not necessarily receive the funds raised by the charge. Instead the money is distributed to phone companies who use it to offset the high cost of providing phone service to consumers in sparsely populated areas or regions where natural barriers such as mountains or rivers make phone service difficult. Companies use the funds to make sure their phone service is affordable to all consumers, not just those who live in easily accessible urban and suburban settings.

Why is my Federal Access Charge going up?
The FCC had decided that local telephone companies must reduce the amount of money they collect from the long distance companies for the use of their local networks. The increase in your Federal Access Charge is due to the reduction in what long distance companies will pay to the local telephone companies.

How much is my business' Federal Access Charge going up by?
All multi-line business customers will see their per line charge increase to $9.20 on August 1, 2004. The rate for single-line business and residential customers will not increase at this time.

Who is responsible for deciding that the Federal Access Charge should go up?
The Federal Communications Commission (FCC) is responsible for decisions made about Federal Access Charge and has mandated this rate increase.

Would changing long distance providers change the amount of my Federal Access Charge?
No. This Federal Access Charge increase is not affected by which long distance company you use.

Should I be receiving a reduction in my long distance rates to compensate for the increased Federal Access Charge?
It is up to your long distance carrier to decide whether or not you will receive any corresponding reduction in your long distance rates.

The FCC's web site says that the Federal Access Charge goes to the local telephone company. So, how can you say that you won't benefit from this Federal Access Charge increase?
The Federal Access Charge pays for part of the long distance companies' use of the local network to originate and terminate their calls. Your increased Federal Access Charge compensates for the federally mandated rate reductions that local phone companies must charge long distance companies. The change in revenues for the local telephone company is zero.

The FCC's Consumer Information Bureau says that the FCC only raised the Federal Access Charge cap and that the local telephone companies are the ones raising the rates. 
When the FCC mandated that local telephone companies must reduce the amount of money they collect from the long distance companies for the use of their local networks, they raised the cap on the Federal Access Charge so that those lost funds could be recovered from the customer. The telephone company does not gain any revenue from the Federal Access Charge increase, it just recovers some of its costs. The FCC reduced the access charges that long distance companies pay to local telephone companies knowing that an increase in the Federal Access Charge cap would be necessary if the local telephone companies were to remain whole. 

Who can I contact to share my concerns?
You may wish to share your concerns with Congress. Contact information for your representatives in the U.S. House can be found at www.house.gov. Contact information for your U.S. Senators can be found at www.senate.gov.

Updated 6/25/04

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