Has this happened to you?

You sign up for that great deal on wireless service, but when it’s time to pay up, you’re treated to a painful case of bill shock. Suddenly, that $70 monthly payment shows up on your cell phone bill as $80. If that sounds familiar to you, you’re probably wondering why your cell phone bill has suddenly, and without warning, gone up.

You’re not alone.

The Tax Foundation , a consumer tax and spending think tank, says that average cell phone service fees and taxes have skyrocketed by 4.5% over the past 10 years, to a whopping 18.6%. On average, Americans pay $225 per year above and beyond their wireless service charges.

What are the extra charges on your wireless bill?

The first thing you need to understand is that the amount you pay in extraneous charges is largely dependent upon where you live. These charges vary from state to state, and even from city to city.

Incidentally, consumer advocacy non-profit ACTwireless reports that the state of Washington is the most expensive place to live in terms of cell phone fees, at 25.42%. Oregon is the cheapest at just under 9%.

Extra charges on your phone bill are made up of a combination of fees and taxes. Some charges are government mandated, and some are fees that cellular providers choose to impose.

Understanding your cell phone bill

One of the main challenges in understanding your bill is deciphering the language used to itemize each fee.

  • 911: There’s no mystery here – this fee is used to fund access to emergency services in your area. The National Emergency Number Association provides a list of each state’s wireless 911 tax rate.
  • Universal Service Fund: The federal government requires carriers to pay a percentage of their revenue into the USF, which helps provide rural and low-income communications services. Carriers are not required to pass this cost along to their customers, but they might do it anyway.
  • State Telecommunications Excise Surcharge: This fee may also be called Gross Receipts Tax Surcharge or similar. According to Verizon, this is how they recover state and local taxes they owe to the government.
  • Regulatory Charge: Despite the name, this is not a mandated charge. It’s a way for wireless providers to mitigate their own costs of complying with government regulations.
  • Administrative Charge: Carriers charge an administrative fee to cover costs like maintenance and interconnection (i.e., when you make a phone call to someone on a different wireless network than yours).
  • State and Local Taxes: Each state, county, and city imposes its own taxes on wireless service. You will pay the relevant taxes in your location.

When you look at the breakdown of each fee on your cell phone bill, it becomes apparent that some are valid, while others are simply a way for wireless carriers to pass some of their business expenses along to you.

What are the carriers saying?

Here’s an overview of what you can expect from each of the major providers in the way of hidden cell phone fees and taxes, on top of mandated charges like the 911 fee and other taxes.

Verizon Wireless:

  • Universal Service Fund fee
  • Regulatory Charge
  • Administrative Charge

Verizon provides a government tax and fees estimator tool so that you can figure out exactly what you’ll pay in your area.

AT&T:

  • Universal Service Fund fee
  • Regulatory Charge
  • Administrative Charge
  • Other AT&T Surcharges (it’s unclear what these charges may be)

T-Mobile:

T-Mobile has revamped the way they structure your cellular bill. All fees and taxes are included in the advertised price – this is something no other major wireless carrier offers at the time of this writing.

There is a catch, however: you must opt in to get this benefit. If you don’t, either by visiting the T-Mobile website or calling a T-Mobile customer service representative, you may see these charges on your bill:

  • 911 Surcharge
  • Regulatory Programs Fee
  • Telco Recovery Fee
  • Universal Service Fund Fee
  • Utility User Tax

You must also enroll in auto-pay if yo

Sprint fees “include, but are not limited to”:

  • Regulatory Charge
  • Administrative Charge
  • Gross Receipts Recovery
  • 911 Charges
  • Universal Service Fund
  • State and Local Taxes
  • E-Waste Recycling Fee (California)

How To Save On Cell Phone Fees

As frustrating as these extraneous charges are, there’s not much you can do about them. The way the law currently stands, wireless carriers have the right to pass these expenses along to the customer. There are, however, some things you can do to lessen the pain.

Here are some tips on how to lower your cell phone bill:

Enroll In Autopay

  • Verizon: Up to $10 per month discount for enrolling in autopay with a checking account or debit card (credit cards do not qualify) and paperless billing
  • AT&T: $5 per month on one line, $10 for a multi-line account, must enroll in autopay and paperless billing, must use a debit card or checking account, applies only to Unlimited Choice and Plus plans
  • T-Mobile: $5 per month per line for enrolling in autopay with a credit/debit card or checking account
  • Sprint: $5 per month per line for enrolling in autopay with a credit/debit card or checking account

Negotiate

It can pay to wield the ultimate consumer negotiation tool: the threat of leaving your provider. Be polite yet firm. Carriers are usually motivated to keep you as a customer and may lower your rate to do it.

Comb Your Bill

Now that you know what all those hidden cell phone charges mean, you’re in a better position to know what shouldn’t be on your bill. You should also be familiar with your rights when it comes to your phone bill. The FCC provides guidance on these issues.

Ultimately, since you have little control over the extra fees and taxes on your wireless bill, you should choose the carrier that offers the lowest rate for a plan that fits your talk, text and data needs. The lower the base rate is for your actual service, the less you’ll pay in fees and taxes.

u want the “Un-carrier’s” advertised rates.