LCPI Communications
1-800-685-0335


Federal and State Laws
Affecting Telephone Service & Phone Cards
UPDATED February 14, 2000

REGULAR TELEPHONE SERVICES

The following Federal Regulations effect both business and residential customers. These laws effect all carriers. We are committed to keeping you informed about industry-wide issues that will effect your invoice. Recent Federal Communications Commission orders change the structure of changes that long distance carriers pay to local telephone companies to access their networks. As a result, two new charges will appear on your invoices. Wholesalers, Distributors, Retailers and Customers should be aware of these laws affecting their communication services.
Presubscribed Inter-exchange Carrier Charge

The Presubscribed Inter-exchange Carrier Charge (PIC) is a new charge that all long distance carriers must pay to your local telephone company for network access. The rates are based on the type of customer (residential or business) and the number of lines assigned to your long distance carrier. For a residential line the rate is $1.25 and for business lines the rate is $2.75 per line.

The FCC does not mandate that the long distance company pass this charge on to the customer, however, most will. Many long distance companies will actually increase this amount--sometimes up to $4.95 and higher. LCPI/Telegroup charges our customers only what the FCC requires us to pay the local phone company and not a penny more.

You will see this monthly charge on your invoice under "Taxes and Surcharges" as "Presubscribed Inter-exchange Carrier Charge".
 
Universal Service Fund

As a result of the Telecommunications Act or 1996, the FCC has mandated that long distance carriers contribute into the Universal Service Fund. The Universal Service Fund is a contribution that is paid to the National Exchange Carrier Association to provide discounts for all telecommunications services to schools, libraries, low income consumers and rural health care providers and to subsidize high cost areas. On February 14, 2000 the amount of the surcharge was raised by the FCC from 3.8% to 5.8599% on Interstate and international calls. Intrastate calls, which was at .06%, was eliminated.

Again, the FCC does not mandate that the long distance company pass this charge on to the customer, however, most will. Many carriers will increase this amount--sometimes up to 8 and 10%. We charge our customers 7%.

All long distance companies will incur these charges. We have chosen to present these surcharges in a clear and straightforward manner.

PHONE CARDS & Toll Free Numbers

he following Federal Regulations affect both Prepaid Calling Cards, Post Paid Calling Cards and all Toll Free Numbers that use an 800/888 access number to place calls from a pay phone. Wholesalers, Distributors, Retailers and Customers should be aware of these laws effecting the calling card usage.

Pay Phone Dial Around Compensation

As a direct result of Congress passing Section 276 of The Telecommunications Act of 1996, on October 10, 1997, the FCC issued regulations to insure all pay phone providers are fairly compensated for each completed interstate, intrastate, and international call when a caller uses a toll free (800/888) number from a pay phone. The FCC has defined a completed call as a "call that is answered by the called party". The FCC has determined that pay phone providers should be compensated $.284 per minute for every call completed from a pay phone using a toll free (800/888) access number.

Effective November 1, 1997, each time one of our customer successfully completes a call using one of our Prepaid Phone Card or a Calling Card toll free access numbers in the U.S., a $0.35 access fee will be assessed to the customer's card balance. This charge will be in addition to the regular cost of the call. If the caller receives a busy signal or no answer it will not constitute a completed call. If the customer uses a pay phone to call to the card platform to use the enhanced services such as voice mail, or to program speed dial numbers, use message delivery, etc. then the customer has used the toll free number to their advantage and is considered "connected to the called party" and their card balance will be assessed the $0.35 fee in addition to any regular charges. If the caller completes additional calls by using the 56 function (call re origination, many times this is done by pressing the # key twice (##) ) another $0.35 access fee will be assessed for each completed call made. If the customer does not have enough funds to cover the access fee and one full minute of talk time the call will not be allowed to complete. The $0.35 pay phone fee is only for calls that "originate" from U.S. pay phones. International pay phone origination is not effected.
Federal Excise Tax Law Revision

Effective November 1, 1997, based upon the Internal Revenue Code Federal Excise Tax Law, Title 26, Section 4251 D, all carriers are required to collect a 3% Federal Excise Tax on the RETAIL amount paid by the end user for a PREPAID calling card. The amount to be collected by the carrier is based on the RETAIL dollar denomination (the card's retail face value) provided to the carrier at the time the prepaid cards are activated. Other taxes required to be paid, 10% of the User's Card balance for PREPAID calls originating in the U.S., will continue to be deducted.
Requirements For Prepaid Cards and Card Back Instructions

Due to abuses by a minority of prepaid card providers and resellers, many states have passed (or are in the process of passing) new legislation aimed at protecting consumers. All prepaid phone cards must list the service provider. Everyone purchasing prepaid card time from the carriers must print: "Service provided by (name of carrier). Many states have passed legislation requiring that prepaid phone cards clearly indicate specific information on the card and/or accompanying material. These requirements include but are not limited to:

Full disclosure of all access fees and surcharges on all printed materials.
End user must be given enough information at the point of sale to be able to know or compute the price per minute for intrastate calls.
Print an expiration date on all calling cards.
Print a face amount in $, minutes, or units on all calling cards.
Provide a toll free access number for customer support.

DISTRIBUTORS...We now require that you provide a copy of card front and the card back instructions and any other support materials prior to card printing for recommendations and approval. Our fax number is 1-727-466-9117

We thank you for your understanding regarding these changes that have been mandated by the Federal and State Governments. We will continue to work for you and your business by providing competitive rates on the most advanced world-wide calling card network. If you have any questions please fell free to call us at 1-800-685-0335.

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