Telecommunications Taxes and Fees

Federal Communications Program Fees

Federal Universal Service Fund (FUSF)

The Telecommunications Act of 1996 requires that DLS contribute to the Federal Universal Service Fund (“FUSF”) based on revenue derived from certain Services. The FUSF helps to make phone service affordable and available to all Americans, including consumers with low incomes; those living in areas where the cost of providing telephone service is high; public schools and libraries; and rural health care providers. The FCC delegates the administration of the FUSF to the Universal Service Administrative Company (“USAC”). Each quarter, USAC announces, and the FCC approves, a “contribution factor.” The contribution factor is a percentage of the total interstate/international end-user revenue that the carrier is responsible for contributing to the FUSF in order to sustain the FUSF System. As permitted by FCC regulations, DLS has opted to bill FUSF as a separate line item to end-user customers. Consistent with such regulations, the Company only bills FUSF line item charges in an amount equal to the quarterly contribution factor currently in effect. This is a permissible pass-through fee but is not a tax or charge mandated by the government. Please visit USAC’s Website for more information on the FCC’s Universal Service Fund.

Regulatory Recovery Fee (RRF)

A charge entitled “Regulatory Recovery Fee” will apply to all invoiced amounts collected by DLS. This charge is being imposed to recover costs associated with compliance with the Company’s legal, regulatory, tax, intellectual property and other compliance-related expenses, including, but not limited to the following:
  • Costs related to ensuring customer privacy protection;
  • Costs related to ensuring anti-fraud protection;
  • Contributions and/or charges associated with telecommunications services for the sight and hearing impaired, local number portability, North American Numbering Plan administration, and administrative costs;
  • Fees and expenditures related to compliance with Federal regulatory programs and annual FCC regulatory fee obligations;
  • State and local tax and regulatory compliance obligations.
This is a permissible pass-through fee but is not a tax or charge mandated by the government. For more information on the various FCC programs supported by the RRF, please see below.

Federal Telecommunications Relay Services (TRS) Fund

The Telecommunications Relay Services (“TRS”) Fund was established by the FCC in 1993 to reimburse TRS providers for the cost of providing interstate TRS services. TRS services are telephone transmission services that provide hearing or speech challenged individuals with the ability to use a traditional telephone. Under the FCC’s rules, DLS must contribute a percentage of its interstate and international end-user telecommunications services and Interconnected and Non Interconnected VoIP revenues to the TRS Fund. And, DLS may collect these fees from customers. The contribution percentage varies annually.

Local Number Portability Administration (LNPA)

Local Number Portability (“LNP”) is a customer’s ability to keep existing phone numbers when switching to another service provider. DLS must provide LNP, as well as contribute to the FCC’s LNPA program, designed to diffuse the costs of administering LNP. DLS pays a proportionate share of the LNP costs in each region in which it operates and has customers. This fee varies frequently by region.

North American Numbering Program Administration (NANPA)

The North American Numbering Plan (“NANP”) is an integrated telephone numbering plan for the Public Switched Telephone Network (“PSTN”) serving multiple countries including the United States and its territories. It is administered by the North American Numbering Plan Administration (“NANPA”). Under the FCC’s rules, DLS must contribute to the costs of numbering administration. Contributions are based on a percentage of DLS’ revenues from customers using international, intrastate and interstate services. The percentage varies annually.

Administrative Fee

A 2.75% fee is assessed on gross receipts for Internet access excluding taxes. The receipts from the fee are used to cover the costs of administering and maintaining lawful intercept facilities.

State and Local Taxes

States, counties, cities, and special taxing districts may assess various taxes on DLS’ Services and/or phone sales. These may include specific taxes on communications services, sales, use and excise taxes, gross receipts taxes, property taxes and others. DLS collects applicable taxes from customers and remits them to the taxing authorities.

State and Local E911/911 Fees

Some states and localities require DLS to collect a fee to help support state and local Enhanced 911 (E-911) Funds. These funds support state and local 911 services. These fees vary by state and locality. DLS collects these fees from customers and remits them to the various fund administrators.

State and Local Regulatory Fees

State USF

DLS may also be required to contribute to State Universal Service Funds. The funds may be used to assist in providing universal service and to support a variety of other programs at the state level. DLS collects applicable charges from customers. These charges are permissible pass-through fees but are not taxes or charges mandated by the government.

State Telecommunications Relay Services (TRS) Funds

Some states also require contributions to state Telecommunications Relay Services (“TRS”) funds to offset the cost of providing local transmission services that provide hearing or speech challenged individuals with the ability to use a traditional telephone. Some states require DLS to collect this fee and remit it to the governing authority. DLS collects applicable fees from customers and remits them to the relevant authorities.