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.  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 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.

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. This Federal Access Charge increase is not affected by which long distance company you use.

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 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.

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.

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. 

The Federal Communications Commission (FCC) is responsible for decisions made about Federal Access Charge and has mandated this rate increase.

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.