Carrier Surcharge Recovery

Frequently Asked Questions Regarding Surcharges

1. Why is Nitel charging these surcharges to customers?

Answer: The surcharges nitel will be charging are associated with certain taxes, and getting reimbursed for these costs is both consistent with our customer agreements and standard in the industry. These fees are allowed under our standard customer contracts and most carriers recover these fees in the form of surcharges.

2. What are the costs that Nitel is offsetting with these surcharges?

Answer:

• Cost Recovery Fee – recovering regulatory fees and expenses incurred.
• Property Tax Surcharge – recovering state and local government levies on property assessed to Nitel carriers for facilities Nitel's carriers have built and maintained for the benefit of customers.
• Franchise Cost Recovery – local government franchise fees and right-of-way costs incurred for use of the public right-of-way
• Federal Access Recovery Fee - The Federal Access Recovery Fee (FARF) is a charge designed to recover, in part, Nitel's costs of purchasing local access service from Local Exchange Carriers (LECs), which include regulatory fees that LECs assess on Nitel.

3. How are these surcharges calculated?

Answer:

• Cost Recovery Fee – 1.5% of all interstate, intrastate and international services.
• Property Tax Surcharge – 2.5% of interstate, intrastate, international, and unregulated services.
• Franchise Cost Recovery – rates and application vary based on jurisdiction.
• Access Recovery – rates and application vary based on jurisdiction.

Your may not necessarily see all of the fees described above. It depends on which services you purchase from Nitel.

4. Can this surcharge be waived?

Answer: Only those customers that have contractual language that prohibits passing these surcharges through will be exempt from any of these surcharges. If you believe your contract language prohibits Nitel from applying one or more of these surcharges, please submit a dispute to billing@nitelusa.com and include a copy of your contract calling out the specific language that applies.

5. What if our account is tax exempt?

Answer: “Exemption certificates” are documents that Nitel collects to allow Nitel to avoid paying a particular tax (such as a sales tax or USF contribution). The taxes for which Nitel seeks reimbursement through these surcharges are not subject to the same exemption process – Nitel incurs these expenses and is assessing charges to get reimbursed for these expenses from our customers. Thus, the standard tax exemptions rules do not apply. These surcharges apply to every customer unless prohibited by customer contract.

8. How will these surcharges be displayed on the my invoice?

Answer: These surcharges will be in the tax and surcharge section at the bottom of the invoice. These surcharges will bundled and will be displayed as one line item called Carrier Surcharge Recovery.

9. Do we pay taxes on these surcharges?

Answer: Yes. These surcharges are subject to the same taxes as the underlying service.