Understanding your Telephone Bill – PICC Fees

By Ken Rothacker

You’ve heard the presentations, seen the PowerPoint presentations, and done the spreadsheets. As you know, evaluating telecommunications services is no picnic. But the finish line is in sight and you are poised to sign that new service agreement. However, there are certain questions you should ask your service provider, whether incumbent or new, before you sign on the dotted line. For example:

What are your PICC fees? PICC stands for Presubscribed Interexchange Carrier Charge, a charge that appears on your long distance bill and is charged on each of your phone lines each month. A product of the Telecom Act of 1996, PICC fees have been charged since January 1998. The purpose of PICC is to help your local phone company cover the costs of providing service. So, your long distance carrier is just collecting the money and giving it back to your local company. If a long distance carrier is not assigned to a given line, the local company has the prerogative to charge the fee anyway. Different carriers charge different amounts for PICC. If this is a mandated cost, why is this so? Some carriers pass more of the cost through to you, while others absorb more of the cost. PICC costs are usually around $4 to $5 per month, per line. If you have dozens of lines, this can start to add up. For Centrex lines, the PICC fee will be less – between 50 cents and $1 per line. If your local service is delivered on an ISDN PRI circuit, you may get another break.

The long distance carrier does not bear a PICC cost for numbers on a PRI, so they should pass those savings through. As is so often the case, though, you have to ask. Usually, your long distance carrier will charge you a PICC fee for just the lead number, or billing telephone number, on a PRI circuit. Your salesperson may not know that you use Centrex or PRI. Make sure they know which you are using. If you have been charged excess PICC fees during your relationship with a long distance carrier, be sure to ask for that money back. Your carrier should be willing to refund that money – especially if it means the difference between keeping and losing your business. Single-line businesses and residences are exempt from PICC fees.

Strategy: While PICC is a mandated fee, the actual cost you pay is both variable and negotiable.

While this might be a question that your rep doesn’t want to get into, knowing this information empowers you to compare programs accurately and positions you to make the best decision for your business.

In the next issue, we will cover the Universal Service Fund or USF.

Industry veteran Ken Rothacker is president of OmniConnect, Inc, a Chicago based telecommunications services agency. Contact Ken via email at  ken@omni-connect.com. For more Understanding Your Telephone Bill, see Ken’s subsequent article.

[From Connection MagazineDecember 2002]

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