Calling Phone Companies on Fee

The Federal Communications Commission began considering action this week to stop telephone companies from passing on to customers more than the government charges them for a fund that subsidizes services for the poor.

That could mean a drop in one of the line-item charges--typically described as a “universal service fee”--that consumers see on their monthly long-distance bills.

Specifically, the commission is looking at a proposal that would constrain phone companies from collecting more through this line-item charge than the percentage they contribute to the government fund.

The FCC now requires telecommunications carriers to contribute 6.9% of their interstate and international revenues to a pot of money used to keep phone connections affordable for low-income consumers and provide schools and libraries with cheap Internet hookups. About $5 billion is collected annually for the subsidies, and each quarter the commission reevaluates how much to charge the industry.

It’s up to phone companies to decide how and how much to recover from their customers. Most carriers collect from consumers by assessing them a percentage of their total long-distance charges. But this percentage can be significantly higher than what the government asks of the phone companies, the FCC noted in its proposal.