Telecom : Tariffs

Tariffs are filed with both the state and federal government. Tariffs governing interstate services are filed with the FCC, while tariffs governing intrastate services are filed with the state’s Public Utilities Commission (PUC). Telecom tariffs contain information on services offered, terms and conditions, and pricing. When a customer signs up for a new contract with a long-distance carrier, the contract always refers back to the tariff, and many of the specifics, such as price, are not documented in the contract itself.

The following quote is from an AT&T contract that illustrates that the rates are not disclosed in the actual contract but listed in a tariff. The two-page contract was offered to a customer with a 24-month term commitment and a $1,000 gross monthly revenue commitment. This contract is probably the most common long-distance contract in force today, and it serves as an accurate representation of the industry as a whole.

The service and pricing plan you have selected will be governed by the rates and terms and conditions in the appropriate AT&T tariffs as may be modified from time to time ¼ AT&T reserves the right to increase from time to time the rates for the services provided under this tariff, regardless of any provisions in this tariff that would otherwise stabilize rates or limit rate increases¼ (AT&T’s Business Service Simply Better Pricing Option Term Plan Agreement).

The contract quote reveals that rates are not specifically listed; instead, the customer is referred back to the “rates and terms and conditions in the appropriate AT&T tariffs.” The sad news is that the average customer never sees the tariff. In many cases, the actual phone company sales representative who is offering the contract has never viewed the tariff either and is only familiar with the sales literature, proposals, contracts, and billing. I have negotiated more than 200 long-distance contracts. In only one case was the actual tariff provided to the customer, and in that instance, it was not because of a pricing issue.


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