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Other Rate Plan Costs

Activation Fees and your First Bills

Most carriers charge an activation fee for setting up new service. These fees vary, but most are currently around $35. Family plans incur an activation fee for each line, although it may be lower for each line after the first one. Activation fees are pretty much pure profit for the carrier. However, they are an accepted part of the industry pricing structure. Just be aware that they exist, and that they will have to be paid either at sign-up or with your first bill.

Speaking of that first bill, most carriers will prorate charges for the partial first month of service and then bill you in advance for the first full month. So, for example, if you sign up for a $40 plan on January 15, you may get a bill on or before February 1 that charges you $20 for January and $40 for February.

Your Second Bill

The second bill you get is likely to be the first one reflecting a full month's usage. This is a good time to make sure you have the right number of minutes in your plan. If you find yourself with overage charges, and you think your usage for the month was typical, call your carrier ASAP and change your plan to include enough minutes to avoid these charges going forward. Most carriers are quite agreeable to this; after all, a user committing to a higher rate plan is a more valuable customer.

Fees and Taxes

As with many other purchased services, a number of government taxes will be added to your bill. These vary by jurisdiction, but will likely add 15% or more to your bill. These taxes can't be avoided, but most are percentage based, so if you are able to minimize your monthly cost for service, you will also be minimizing the dollar amount of your taxes.

Some good news on the tax front: As of July 2006, the 3% federal excise tax, previously assessed on subscribers' wireless bills was no longer being collected.

Cost Recovery Fees

In addition to required taxes, most carriers charge a monthly amount for “cost recovery.” These fees are theoretically to recoup expenses the carrier incurs to administer mandatory government programs like number portability, universal service, and “E911,” but they are not required fees. The government allows these fees to be listed separately on the bill.

Monthly cost recovery fees (per line) among the major carriers are as follows:

  • AT&T Up to $2.39
  • T-Mobile $1.41
  • Verizon $1.50
  • Sprint $0.99

As of 07/2014 per carrier websites

Directory Assistance

Unlike the above cost items, directory assistance is optional, and you are getting some benefit (a useful phone number) back from the operator. However, calling 411 is relatively expensive, so we include it here because the charges can quickly add up on your bill.

Per-call charges to 411 for the major carriers are as follows:

  • AT&T $1.99
  • T-Mobile $1.99
  • Verizon $1.99
  • Sprint $2.49

As of 07/2014 airtime additional

Getting a Cell Phone Number from Directory Assistance

Today, cell phone numbers are generally unavailable via directory assistance. With more people using their cell phone as their primary phone, some would like to have their number available to others. In recent years, there have been a couple attempts by the wireless industry to develop an opt-in directory. However, some carriers refused to participate (Verizon being especially vocal in its opposition), and those efforts have ceased.

It is illegal for telemarketers to call a cell phone number with an automated dialer. However, if you want added protection, you can add your cell phone number to the National Do Not Call Registry. There is an e-mail that occasionally goes around saying that the ban on telemarketing will end in some other short timeframe. This is false, and can be ignored.