MIAMI – Consider this: You’re new in town and need phone service. Enter BellSouth, the major local phone provider in south Florida, offering basic phone service, with no extras like Caller ID or call waiting, for $11.04. Not bad for someone on a budget.

But your monthly bill reads $27 – nearly $16 are fees and taxes. A single fee of $6.50, called an FCC line charge, accounts for more than a quarter of the total bill. Despite the official-sounding name, this fee isn’t a tax. The dollars go to BellSouth.

Your long-distance bill from AT&T is equally disturbing: You spent only $8.61 on calls and there’s another $8.63 tacked on in fees and taxes, including $2.49 to have the AT&T charges appear on your BellSouth bill.

When consumers closely examine their phone bills, whether it’s for local, long-distance or wireless service, their blood boils.

“It’s expensive and it’s deceptive,” said Dominique Virchaux, who runs Virchaux & Partners, an executive recruiting firm in Coral Gables, Fla.

Virchaux, who also maintains a home office with eight phone lines, gets clobbered by that FCC line charge eight times. BellSouth, his local phone company and most phone service providers charge this fee per line.

Linda Sherry at Consumer Action in San Francisco tells consumers to add about 15 percent to advertised prices for local and long-distance or wireless packages to cover all the extra fees. “That way people won’t get caught short.”

The industry says the fees are necessary to recoup normal business expenses.

Those fees add up to significant dollars. T-Mobile USA, a major wireless provider, reported that two fees it adds to subscribers’ bills contributed a neat $58 million to its fiscal first-quarter revenues.

No end in sight to escalating fees

Nearly a year ago, wireless companies were required to let customers take their number with them when they changed phone carriers. To cover their costs, cellular companies added a so-called number portability fee to all their customers’ bills. Some companies began charging the fee in early 2002, more than 18 months before the service was offered.

The Center for Public Integrity in Washington figures wireless companies are collecting about $94 million a month in portability fees.

The rub for consumers is that there’s no end in sight when it comes to escalating fees.

A telecom industry group plans to ask the Federal Communications Commission for permission to raise that FCC line charge to $10 per line by 2008. The filing is expected in the next few weeks. If the major telecom companies get their way, the first increase will come in mid-2005.

When the FCC first allowed phone companies to implement this charge in 1984 after the break-up of the AT&T phone monopoly, the rationale was that local phone companies would recoup access fees they paid to long-distance companies to terminate calls on their networks. The FCC line charge was initially $3.50. Today it stands at $6.50.

The industry now proposes to eliminate the access fees between companies, allowing the local carriers to raise the FCC line charge to make up the lost revenue, and long-distance companies would lower their rates if they no longer had to pay access fees.

Richard Whitt, senior director for federal law and public policy, said the FCC line charge increase to $10 is not a given. He expects competition among carriers might keep a lid on the charge and perhaps force some companies to keep it down.

Those fees “are a slush fund for the phone companies,” said Bruce Kushnick, who runs a small New Jersey-based watchdog group known as TeleTruth.

Kushnick and the National Association of State Utility Consumer Advocates have petitioned the FCC to better enforce its Truth-in-Billing requirements.

Rich Sayers, editor of 10-10PhonesRates.com, a Web site that keeps tabs on fees and surcharges imposed by long-distance companies, alerted consumers to two new fees that MCI, Qwest and Primus are adding to customers’ bills.

MCI was set to charge a $2 “additional line fee” to customers who have two phone lines with long-distance service, starting Oct. 1. In August, Qwest added a 99-cent “interstate services fee” to most of its long-distance plans. In October, it will add that charge to the $2 it already collects from the popular Qwest Choice service, said Sayers.

Primus is also instituting a $15 “low usage” fee to business customers who spend less than $25 a month in long distance.

Still paying for the Spanish-American war

“You can’t avoid those charges,” said Mark Cooper, director of research, Consumer Federation of America. “The consumers have to elect a set of public policy makers that understand that consumers are getting ripped off.”

The federal excise tax on telecommunications, charged by local and long-distance companies, is really a war tax.

Congress enacted it to pay for the Spanish-American War in 1898. Since only a few thousand Americans had phones then, the one-penny tax was a luxury tax.

It was repealed in 1902, but reinstated in 1914 to pay for World War I. In 1990, Congress made the tax permanent, setting it at 3 percent. In 2000, the U.S. House of Representatives passed a measure to eliminate the phone tax, but the U.S. Senate never took up the bill.