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What is a Phone Tariff?

Phone tariffs are detailed listings of prices and fees for telephone service.
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  • Written By: Dale Marshall
  • Edited By: Kristen Osborne
  • Last Modified Date: 10 October 2014
  • Copyright Protected:
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    Conjecture Corporation
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A phone tariff is a document that describes all the services offered and the basic rates charged for the different types of telecommunications services offered by providers. In the United States, phone tariffs related to interstate service must be filed with the Federal Communications Commission (FCC), and tariffs related to services entirely within a single state must be filed with that state's public utilities regulatory authority, such as a public utilities commission (PUC). A phone tariff must be approved by the regulatory authority in order for the provider to be able to do business in that jurisdiction, and for this reason can properly be considered a contract between the provider and the public and enforced as such.

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One of the purposes of utilities regulation in most countries is to protect the interests of the general public while permitting utilities to make a reasonable profit. For this reason, many tariff documents are highly complex and detailed, illustrating every type of service available, such as call waiting and voice mail, as well as many different types of service that are not commonly used, such as incoming local service only or outgoing local service only. Of course, basic, local analog service &emdash; sometimes called "plain old telephone service," or "POTS" &emdash; is also found in a phone tariff, and it's priced very reasonably, because it's considered an essential service, unlike some other features whose tariff rates are much higher than their cost. This is different from the tariffs and rate structures filed by other utilities, such as water or electricity, where usage rates and types are relatively simple and straightforward.

To maximize their profits, most telecommunication providers market service packages that combine many different services – for instance, many providers have packages they refer to as “basic,” which are actually combinations of many different features, each of which drives up the cost of the plan to the consumer. These packages are marketed aggressively, but consumers who want only a POTS line will be able to subscribe to that service at the rate defined in the phone tariff.

In addition to the rates for different services enumerated on a phone tariff, customers' invoices for telecommunication services also include taxes and other charges often called “junk fees” - charges added to every bill, some of which are paid over to the taxing authority and some of which are additional revenue streams for the provider. It's the existence of these fees that makes it difficult for consumers accurately to predict their telecommunications costs from published tariffs.

While it can be useful to the consumer who wants only bare-bones phone service, or POTS, a phone tariff is of limited utility to most because of its complexity, the frequency with which it's amended by the provider, and their treatment of taxes and junk fees.

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