PICC and USF Fees
Since the beginning of 1999, long-distance phone companies began tacking two new fees onto the bills of business customers: the PICC and the Universal Service Fund Fee. What hasn't helped the confusion is that the long-distance carriers are billing these fees to customers under different names and in different ways.
The fees are mandated by the Federal Communications Commission (FCC). However, the actual amount that is billed is determined by the carrier, not the FCC.
So, what's PICC? Also referred to as the Carrier Line Charge, the Presubscribed Interexchange Carrier Charge reflects the new way local companies charge long-distance providers to connect callers to their network. Every time you make a long-distance call, it must first be routed by the local phone company. In the past, the charge for this routing was billed based on the length of the call. But the actual cost of local access depends on the number of phone lines, not the duration of a call. So the Federal Communications Commission (FCC) ordered local access charges be billed on a per-line basis and per minute fees be decreased -- and PICC is the result.
PICC charges are based on the number of phone lines that you have, with the FCC mandating that carriers pay no more than 53 cents per month for single-line business customers and $2.75 per line per month for multiple-line companies. While long-distance carriers are not required to pass on the cost of PICC, they all do
A second fee that has started appearing is the Universal Service Fund Fee. This fee was established to underwrite the cost of providing discounted Internet and telecommunications services to schools, libraries, rural health care providers, and low-income citizens.
By law, long-distance companies are required to pay about 3.9 percent of what they bill into this fund. Once again, although this tax is the carrier's responsibility, the customer bears the costs -- and more Service fund charges range from 4.5 and 6.2 percent. The higher charges seem designed to offset the customer service costs related to explaining and administering the fees.
These FCC mandated fees are likely to change, as the FCC has promised to review and adjust the fee structure regularly. Now, businesses may pay as much as $9 per month per phone line.