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The Phone Handbook

Local Service

Do I Have a Choice for My Local Telephone Service?

Minnesota customers can often choose between companies when signing up for local phone service, though some areas of the state still have only one available provider. To find out if there is competition for telephone service in your area, contact the Minnesota Department of Commerce. The Department of Commerce maintains a searchable database of local service providers available in Minnesota cities, along with contact information for each provider. This searchable database can be found hereexternal link icon You may also contact the Department of Commerce’s Telecommunications Division by telephone at 651-539-1883 or by email at telecom.commerce@state.mn.us.

Technological advances have also given customers increased options for their telecommunications services. Consumers may now obtain service from the cable company, choose to use their wireless phones exclusively, and even place calls over their broadband lines using special equipment and VoIP, or Voice over Internet Protocol, technology. While the service may function essentially the same as traditional landline telephone service, consumers should note that cable, wireless, and VoIP service are not subject to the same telephone service standards and regulations. Consumers should also consider whether their telephone service will function in case of emergencies and power outages, and whether enhanced 911 (E911) technology, which allows operators to automatically identify a caller’s number and location, is supported.

What is the Cost of Local Phone Service?

The cost of local service varies widely. Before selecting a local service provider, call several and request a price list of all the services they offer. This list should give you a good idea of what is available to you and what it costs. If you do not understand the information, ask the telephone company about it. The rates are also part of the company’s “tariffs,” which are filed with the Minnesota Department of Commerce and available to consumers. Be sure to ask about all applicable surcharges and fees so that you can compare among service providers. It is also a good idea to ask in advance what you can expect your first bill to look like.

Companies are increasingly promoting “bundles,” or packages of services combining your local service with extra features like voicemail or call waiting, long distance, Internet, wireless service, and cable or satellite television. When responding to any marketing or offers for bundled services, make sure that the price offered will not expire after a few months and then increase. You should note that the price offered in the promotional materials often includes neither surcharges that apply to the individual services within the bundled package nor all applicable taxes. Combined, these additional charges can significantly increase the actual monthly price that you will pay for the bundle of services. You should also note whether you are being asked to sign a fixed-term contract and whether an early termination fee will apply if you seek to cancel any of the services before the end of the contract term.

How Can I Reduce the Price of My Local Phone Bill?

Look closely at your phone bill. Review your extra features, such as call waiting and caller ID, and cancel those that you do not use. Custom packages that include several features for a flat fee are only a value if you consistently use many of the features. The savings in monthly charges could be a lot. For example, if you use “voice messaging,” a service that may cost $6.95 per month, you will pay $83.40 in a year! To save money in the long run, you could buy a phone with an answering machine (with remote access) for about $25.

If you don’t make very many local calls, you may be able to lower your bill by changing your local phone to “measured service.” This means that you will be billed based on your actual per minute local usage instead of a single rate. Since you will be charged an installation fee when setting up a new service, this is the best time to switch from basic service to measured service (or vice versa). Call your local telephone company for details on measured service.

Other features like last-call-return and three-way-calling may be automatically available on your telephone at a cost of about a dollar each time you use them. If you use such services often, it may be cheaper to pay for them on a monthly basis.

What are the Charges on My Telephone Bill and are They Required?

Telephone bills have become more complex in recent years. The following list identifies and describes some of the various charges that you may see on your bill.

“911, Tele-Relay, and Telephone Assistance Plan Surcharges”

Local telephone companies are required to collect these monthly fees from all telephone service subscribers. The money is distributed directly to the agencies that operate the services. The 911 surcharge helps maintain the 911 emergency network. The Minnesota Relay Service is a communications service that connects deaf, speech impaired, and hard-of-hearing persons with hearing persons via the telephone. The Telephone Assistance Plan surcharge helps offset the cost of basic telephone service for low-income senior citizens and disabled persons.

“Number Portability Fee”

Local telephone companies are allowed to collect this fee to recover costs associated with allowing customers to retain their existing telephone numbers when switching to another local provider. Local companies are permitted, but not required, by the Federal Communications Commission (FCC) to pass on these costs even if a customer has no local service choice. Local telephone companies may continue to assess this charge on their customers’ telephone bills for five years from the date the local telephone company first began itemizing the charge on the bill. Some companies have already stopped billing for this charge.

“Federal Access Charge” or “Federal Subscriber Line Charge”

This fee is charged by local telephone companies to all customers to cover part of the cost of operating and maintaining the telephone network used to provide interstate long distance telephone service. The charge is not a government charge or tax. The maximum allowable access charges per telephone line are set by the FCC, but local telephone companies are free to charge a lesser amount or not at all. The fee varies depending on the company providing your service. The maximum charge is currently $6.50 for a single line.

“Universal Connectivity Fee” or “Universal Service Fee”

All telephone companies that provide voice service between states and internationally, including wireless and VoIP providers, must contribute a percentage of their revenues derived from these services into the federal Universal Service Fund (USF). This fund helps make local telephone service affordable to rural and low-income consumers. It also helps provide inexpensive Internet access to schools, libraries, and rural health care providers. Although not required to do so, many service providers choose to pass their contribution costs to the USF on to their customers in the form of this charge on customer bills. This charge is not a government-mandated charge or tax, nor is it required to be a separate line item on your bill. The charge may not exceed the provider’s actual cost of contributing to the USF.

“Federal Excise Tax”

This tax was imposed in 1898 to help pay for the Spanish-American War. It was designed as a tax on wealthy Americans, back when phone service was considered a luxury. The collection of this tax on long distance service has been eliminated, and the tax will also no longer be imposed on cellular or VoIP services. A three percent excise tax on local phone calls will still be charged.

Is Inside Wire Insurance A Good Deal?

Several local telephone companies sell “inside wire insurance.” Inside wire insurance is an unregulated and optional service. Telephone companies claim that repairs to the wiring inside your home may be costly if you do not have this insurance.

When deciding whether you need this service, keep in mind that damage to inside wires is very rare. In the event you have a problem with your inside wiring, an electrician or other independent repair person may be able to repair it for less than the phone company would charge. If you live in an apartment, it is likely the landlord is responsible to repair any wiring problems. If you are already paying for the insurance, it can be canceled by a simple phone call to your local telephone company.

How Can I Prevent Disconnection of My Phone Service?

Your local telephone service can be disconnected only if you fail to pay your local bill. Notice must be given at least five days prior to disconnection, excluding Sundays and legal holidays. Your local telephone service cannot be shut off for failure to pay long distance or “900” calls if you pay the remainder of your bill on time. If you have questions regarding disconnection of utility service, contact the Minnesota Public Utilities Commission.

Is There Any Assistance Available to Help Pay for My Telephone Service?

Assistance programs are available for low-income and other qualified customers. The following assistance programs are available to help you afford basic phone service:

Telephone Assistance Plan (TAP)

TAP is a state program that offers a monthly discount of $3.50 on local phone service for Minnesotans enrolled in certain government programs or those whose incomes are at or below 135 percent of federal poverty guidelines. The discount is available for local wireline telephone service only. Visit the Minnesota Public Utilities Commission website at www.mn.gov/pucexternal link icon to download an application or learn whether you qualify. You may also direct questions to your local telephone company, the Minnesota Public Utilities Commission, or the Minnesota Department of Commerce.

Lifeline

This is a federally funded program that provides eligible low-income users a discount on monthly charges for one phone line, including a cellular telephone. Qualifying users can receive up to $9.25 a month in credits. Further information regarding Lifeline, including eligibility requirements, is available at www.lifelinesupport.org.external link icon

Telephone Equipment Distribution (TED)

The TED program provides equipment for those who have a hearing loss, speech, and/or mobility impairment that limits their use of a standard telephone. To be eligible, you must have phone service or have applied for phone service, and meet certain income guidelines. Contact the Minnesota Department of Human Services or click hereexternal link icon for more information or an application

Different programs are available for residents of tribal lands. For more information, consult the FCC Consumer Guide entitled Lifeline: Promoting Telephone Subscribership on Tribal Lands.external link icon

Telephone Service for the Communication Impaired

If you or someone you know uses a teletypewriter device (TTY), you may want to take advantage of Minnesota Relay Service to make calls between special TTY telephones and standard phones. TTY callers can dial the relay service, give the requested information, and the operator will place the call. The operator will read the TTY-user’s words aloud to the voice-user and type the voice-user’s words to the TTY-user. All calls are confidential. The service operates 24 hours a day, 365 days a year. To place a call through Minnesota Relay Service, just dial 711 or 1-800-627-3529.

What if There is a Delay In Obtaining My Telephone Service?

If there is a delay in obtaining local telephone service, your telephone company may be required to offer you credit on your monthly bill or to provide you with temporary use of a wireless telephone. If you have not obtained service by the date you requested, you should contact your local telephone company to explore your options.

Complaints

If you have a complaint that you are unable to resolve or simply would like to inform someone about the quality of service you have received, please notify the Minnesota Public Utilities Commission. The Minnesota Attorney General’s Office also helps resolve problems with telephone companies.

Minnesota Public Utilities Commission
121 Seventh Place East, Suite 350
St. Paul, MN 55101
(651) 296-0406 or (800) 657-3782
www.mn.gov/puc

Tip: Get into the habit of keeping any contracts, service agreements, or other written information you get regarding your phone service. They will be very helpful to refer to if you have questions or disputes.