Understanding Taxes, Surcharges and Fees
In addition to the monthly service charges billed for AireSpring, Inc. (“AireSpring”) services, surcharges, taxes, fees and other charges may be applied to your monthly invoice based on the type of service you have and your geographical location, among other factors. Certain taxes, fees or surcharges may show up as separate line items on your invoice. Examples include, but are not limited to, the following.
Taxes and Surcharges
Federal Surcharges
Federal Universal Service Fund (FUSF). The Telecommunications Act of 1996 requires AireSpring to contribute to the Federal Universal Service Fund (“FUSF”). 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 healthcare providers. The Federal Communications Commission (“FCC”) delegates the administration of the FUSF to the Universal Service Administrative Company (“USAC”). Each quarter, the FCC adopts a “contribution factor” for FUSF support. The contribution factor is a percentage of the total interstate and international end-user telecommunications and Interconnected VoIP (“I-VoIP”) revenue that each carrier is responsible for contributing to the FUSF. As permitted by FCC regulations, AireSpring has opted to bill the FUSF surcharge as a separate line item to end-user customers. Consistent with such regulations, AireSpring only bills FUSF line item charges in an amount equal to the quarterly contribution factor currently in effect multiplied by the invoiced amount subject to the FUSF. This is a permissible pass-through surcharge but is not a tax or charge mandated by the government.
Please visit USAC’s Website for more information on the FUSF.
State & Local Taxes and Surcharges
State & Local Regulatory Surcharges
State Universal Service Fund (USF). AireSpring may also be required to contribute to State Universal Service Funds (“SUSF”). The funds may be used to assist in providing universal service and to support a variety of other programs at the state level. AireSpring collects applicable charges from its end-user customers. These charges are permissible pass-through surcharges but are not taxes or charges mandated by the government.
Telecommunications Relay Services Fund. 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 certain communications services. Many states require AireSpring to remit this fee to the governing authority.
AireSpring collects applicable fees from customers and remits them to the relevant authorities.
State & Local Sales and Use Tax
All states, with limited exceptions, impose some form of state-level sales and use tax. The sales and use tax is generally imposed on the sale or use of tangible personal property and certain services. These taxes are intended to be passed on to the end user/consumer.
In many states, local jurisdictions also impose a sales or use tax. In some instances, the local sales and use tax is administered by the local jurisdiction. In other instances, the state administers the local sales and use tax.
Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).
AireSpring collects sales and/or use taxes as required by state and/or local law.
Communications Services Tax
Some state and local jurisdictions impose communications specific taxes on communications services in addition to or in lieu of sales or use tax. The communications services tax is intended to be passed on to the end user/consumer. The rates for communications services taxes are usually different than the sales and use tax rates and vary by jurisdiction.
Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).
AireSpring collects communications services taxes as required by applicable state and/or local law.
E911 Fees
In order to fund the provision of 911 emergency telephone service, state and local jurisdictions impose E911 fees on certain communications services. These fees are sometimes administered by the state department of revenue, but the majority of E911 fees are assessed and administered by local jurisdictions. E911 fees are intended to be passed on to the customer on the invoice. Sales for resale are generally exempt from E911 fees. Non-profit organizations are generally subject to E911 fees, whereas they might be exempt from taxes or other fees.
AireSpring collects E911 fees from customers when required by applicable state and/or local law.
Gross Receipts Taxes
A number of states impose a gross receipts tax on communications service providers. In some states, gross receipts taxes are intended to be passed on to the end user/consumer. In other states, the gross receipts tax is the responsibility of the seller, and there is no pass-through to the end user.
Certain exemptions may exist for gross receipts taxes that are intended to be passed on to the customer, based on the type of entity making the purchase (e.g., the federal government, state and local governments, non-profit entities, etc.).
AireSpring pays gross receipts taxes and collects them from customers when required (or permitted) by applicable state and/or local law.
Local License Taxes
Local license taxes are imposed by cities and counties in a limited number of states.
Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).
AireSpring pays local license taxes and collects them from customers when required (or permitted) by applicable state and/or local law.
Local Utility Taxes
Local utility taxes are imposed by cities and counties in a select number of states. Certain exemptions apply for sales for resale, and sales to certain types of entities (e.g., the federal government, state and local governments, non-profit entities, etc.).
AireSpring pays local utility taxes and collects them from customers when required (or permitted) by applicable state and/or local law.
Other Fees
Access Administration Fee
The Access Administration Fee (“AAF”) is a non-discountable monthly charge applied to partially recover the cost of administration of access circuits ordered by AireSpring on behalf of customer from third party providers. The Access Administration Fee is equal to the total of all local loop/access circuit MRC’s, multiplied by 4.99%. This is a permissible fee but is not a tax or charge mandated by the government.
Administrative Expense Fee
The Administrative Expense Fee (“AEF”) is a monthly charge for the services supplied by AireSpring to implement, administer and comply with the FCC and State PUC administered Universal Service Fund programs and to help absorb certain service-related fees AireSpring incurs from its underlying providers. The Administrative Expense Fee is equal to Customer’s total charges for all Services (excluding taxes), including non-telecommunications Services, multiplied by 3.18% except if AT&T is the underlying provider the Administrative Expense fee percentage will instead be 6.18%. This is a permissible fee but is not a tax or charge mandated by the government. “AT&T” is a registered trademark of AT&T Intellectual Property II, L.P. AT&T Intellectual Property, Inc
AT&T Wireless Administrative Fee
The AT&T Wireless Administrative Fee (“AWAF”) is a non-discountable monthly charge applied to help defray certain expenses including i) the cost of charges AT&T or its agents pay to interconnect with other carriers to deliver calls and ii) charges associated with cell site rents and maintenance. This fee will not be applied to other AireSpring services that do not utilize AT&T’s wireless network service. The AT&T Wireless Administrative Fee shall be $0.76 per AT&T wireless line, regardless of whether the line is used for voice or data traffic. “AT&T” is a registered trademark of AT&T Intellectual Property II, L.P. AT&T Intellectual Property, Inc.
Franchise Tax Recovery Fee
The Franchise Tax Recovery Fee (“FTRF”) is a non-discountable monthly charge to help recover a portion of the franchise tax fees imposed by some states or municipalities. The Franchise Tax Recovery Fee is equal to Customer’s total charges for all Services, including non-telecommunications Services, multiplied by 0.7%. At this time, the FTRF applies to customers located in the State of Texas.
Network Administration Charge
The Network Administration Charge (“NAC”) is a monthly charge, applied to recover costs for AireSpring’s services including (i) costs, fees and assessments on network facilities and services paid and/or received directly or indirectly by AireSpring and (ii) charges we, or our agents, pay local telephone companies, wireless providers, or intermediaries for delivering calls from our customers to their customers. The Network Administration Charge is equal to Customer’s total charges (excluding taxes) for all Services, including non-telecommunications Services, multiplied by 3.06%. This is a permissible fee but is not a tax or charge mandated by the government.
Property Tax Fee
The Property Tax Fee (“PTF”) is a monthly charge, applied to help AireSpring administer and pay the property tax assessments and other related fees imposed by certain taxing jurisdictions upon AireSpring or upon its underlying providers and passed on directly or indirectly to AireSpring. The Property Tax Fee is equal to Customer’s total charges (excluding taxes) for all Services, including non-telecommunications Services, multiplied by 2.34%. This is a permissible fee but is not a tax or charge mandated by the government. In addition to the Property Tax Fee, an additional monthly Property Tax Allotment Fee (“PTAF”) of $13.99 per circuit applies for Dedicated Internet circuits provided by AT&T. This is a permissible fee but is not a tax or charge mandated by the government. “AT&T” is a registered trademark of AT&T Intellectual Property II, L.P. AT&T Intellectual Property, Inc.
Regulatory Management Services Fee
The Regulatory Management Services Fee (“RMSF”) is a monthly charge, applied to recover regulatory fees and contributions (excluding universal service fund fees) paid to federal, State, and local governments and AireSpring’s compliance costs (including, but not limited to, legal, general compliance, payroll, property, and infrastructure expenses). The RMSF is equal to Customer’s total charges for all Services (excluding taxes), including non-telecommunications Services, multiplied by 3.96%.
This is a permissible fee but is not a tax or charge mandated by the government. Following are examples of some of the programs supported by the RMSF:
Federal Telecommunications Relay Services (TRS) Fund. The 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, AireSpring must contribute a percentage of its intrastate, interstate and international end-user communications revenues to the TRS Fund. 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. AireSpring must provide LNP, as well as contribute to the FCC’s LNPA program, designed to diffuse the costs of administering LNP. AireSpring 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, AireSpring must contribute to the costs of numbering administration. Contributions are based on a percentage of AireSpring’s revenues from customers using international, intrastate and interstate communications services. The percentage varies annually.
Annual Regulatory Fee. AireSpring, as an interstate service provider, must pay an annual regulatory fee to the FCC. This fee varies annually.
Miscellaneous Charges/Fees
Access Arbitrage Surcharge
According to the terms of service, Customer agrees to not intentionally route AireSpring non-RBOC (non-Regional Bell Operating Companies owned and operated tandems) termination or origination minutes. AireSpring will monitor Customers monthly call distribution and identify excessive traffic originating from or terminating to High Cost Area (“HCA”), defined as high-cost LATAs and non-Regional Bell Operating Company served telephone numbers. AireSpring reserves the right to apply an Access Arbitrage Surcharge or High Cost Area (HCA) Surcharge of up to $0.04 per minute of use to the number of minutes by which Customer’s HCA and Non-RBOC outbound terminations and inbound originations exceed usual and customary call patterns for business users.
Credit Card Processing Fee
A Credit Card Processing Fee of three percent (3%) of the amount of the payment may be applied if Customer pays AireSpring using a Visa, Mastercard, American Express or Discover credit or debit card. This charge is designed to offset the cost that credit card companies charge AireSpring for processing payments.
Directory Assistance Per Call Charge
Directory Assistance (including ‘411’ and ‘npa-555-xxxx’ calls) charge $1.99 per call.
Excessive Call Attempts Surcharge
Customers that utilize the AireSpring underlying network for termination of Long Distance services shall be subject to an Excessive Call Attempts Surcharge. A minimum outbound call completion ratio (defined as percentage of completed calls versus attempted calls) of 50% (fifty percent) is required, and is calculated on total outbound call attempts on a monthly billing basis per unique customer account. All incomplete calls below this threshold will be assessed a per call attempt surcharge of $0.005. As an example, if during a monthly billing period, Customer attempts 100,000 outbound calls, and completes 45,000 outbound calls, then the call completion ratio for this customer is 45%. Therefore, in this example, the customer is 5% below the minimum threshold requirement of 50%. Therefore 5% of the total call attempts of 100,000 will be surcharged, resulting in a surcharge of 5,000 call attempts at $0.005 per call attempt.
Finance Charge
A Finance Charge of one-and-one-half percent (1.5%) per month of the outstanding balance will be applied if Customer has not paid their outstanding balance by the 25th day after such billing.
Extreme High-Cost Areas (XHCA)
For customers with Blended Rate Plans on all resold underlying carrier networks, calls originating from or terminating to certain LATA/OCN’s, defined as Extreme High Cost Area (XHCA) LATA/OCN’s, a list of which may be found at www.airespring.com/service-terms (the “XHCA List”), and which is incorporated into this Agreement by this reference, shall be billed at separate rates as specified on the XHCA List.
Payphone Access Charge
A non-discountable Payphone Access Charge shall apply to each coinless call that AireSpring identifies as placed from a domestic payphone, either to a Customer Toll-Free Number or by Customer or a User to an access code.
Payphone Access Charge $0.65 per call.
Primary Interexchange Carrier Charge (PICC)
The Presubscribed Interexchange Carrier Charge (PICC) is a monthly recurring charge applied for each business outbound long distance switched access line, as provided in the Rate Table below. The line status determination is based on available AireSpring, underlying carrier and/or LEC-provided information. If AireSpring cannot determine the line status based on available AireSpring and/or LEC-provided information, the multi-line charge applies.
Rate Table: Presubscribed Interexchange Carrier Charge (PICC) Line Status Carrier Line Assessment
Single-Line $0.00
Multi-Line $4.40
Centrex Line $0.47
BRI Line $4.40
Switched Access PRI Line $24.00
Return Check Fees
A Return Check Fee may be applied to Customer’s bill for each occasion that a check, bank draft, or an electronic funds transfer item is returned for the reason of insufficient funds or no account.
Return Check Fee, per occasion $45.00
Service Reconnection Fee
Should AireSpring interrupt service for non-payment or other breaches, service cannot be restored if the Local Exchange Carrier (LEC) or any intermediate disconnections have occurred. Customer’s service may be restored upon payment or elimination of the breach prior to LEC or any intermediate disconnection. In such cases, a re-connection fee will apply. Charges are $175 for each dedicated service, and $19 per Billing Telephone Number (BTN) for Switched Services.
Short Duration Surcharge
For ALOC Rate Deck Customers
For AireSpring Customers with a rate deck designated for a minimum Average Length of Call (“ALOC”), if Customer’s total Short Duration Calls (defined as all calls with a duration of 6 seconds or less) is more than 10% (ten percent) of total calls during a monthly or other billing period, Customer shall be assessed a Short Duration Surcharge of $0.02 per call for all Short Duration Calls. Customer shall be provided three (3) calendar days’ prior written notice to cure prior to being assessed this Short Duration Surcharge.