Tony V from Newark, NJ. Working on a telecom audit for a client with 40 phone lines and 3 T1 circuits through Verizon Business. The Universal Service Fund surcharge on the monthly bill is $1,847. That seemed extremely high so I looked up the current FCC USF contribution factor — it is 15.5% of interstate revenue. My client interstate charges total about $4,200/month. 15.5% of $4,200 is $651. So the USF should be around $651 but they are being charged $1,847. Almost 3 times the correct amount.
USF surcharge on telecom bill is way higher than it should be
Tony, USF overcharges on commercial telecom accounts are rampant. The carriers have wide latitude in how they assess the USF — they can apply it to interstate revenue, interstate and intrastate combined, or to the entire bill depending on how they classify the services. Verizon Business has been known to apply USF to charges that should not be subject to it, like equipment leases and inside wiring maintenance. Pull the bill apart line by line and identify exactly which charges the USF is being applied to.
Randy, did the breakdown. Verizon is applying USF to the full bill including local service, equipment rental, directory listings, and inside wiring maintenance. The FCC only authorizes USF on interstate and international telecommunications revenue. Local service, equipment, and maintenance are not subject to USF. If I strip out the non-qualifying charges, the USF base drops from $11,900 to $4,200 and the correct USF is $651/month.
Tony, this is extremely common with Verizon Business accounts. I have audited about 15 Verizon commercial accounts in New England and every single one had USF applied to non-qualifying charges. The overcharge ranged from $200 to $3,000/month depending on the account size. Verizon will correct it if you dispute but they never fix it proactively.
Vince, $1,196/month overcharge on my client. Over 3 years that is $43,000. Do you know if Verizon will backdate the correction or just fix it going forward?
In my experience Verizon will backdate 12 months without much pushback. Beyond 12 months you need to escalate to their executive complaints department and cite the FCC rules on USF applicability. I have gotten 24 months on two accounts and the full 36 months on one where the client had documented a prior complaint that Verizon ignored.
Filed the dispute with Verizon Business citing FCC Order 06-36 on USF contribution methodology and identifying the non-qualifying charges included in their USF base. After 6 weeks of back and forth, Verizon agreed to correct the USF calculation going forward and credit 18 months retroactively. Credit: $21,528. Not the full 3 years but a solid recovery. Going forward the client saves $14,352/year.
$21,528 recovery plus $14K/year going forward on a telecom surcharge error. Tony, this is a reminder that utility auditing extends beyond electric and gas. Telecom bills are full of surcharge errors and most businesses never question them. Good work.