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Telecom Revenues 
A local exchange carrier's revenues come from a variety of sources in addition to the rates they charge customers as approved by the Missouri Public Service Commission. For example, when a local company connects a long distance call, the long distance provider pays the local company an access charge. On average, access charges can account for two-thirds of a local exchange carrier's revenue stream. Wireless carriers also pay local exchange companies access charges to complete calls that use the local network. Local carriers also can receive revenues from the federal Universal Service Fund and the Subscriber Line Charge.
For rate-of-return carriers that have rates and profits regulated by the Public Service Commission, a change in any one of these categories, such as a reduction in access charges, requires changes to one or more revenue categories to keep the company whole. For example, the Subscriber Line Charge (SLC) was recently increased by the FCC from $3.50 to $6.00 per month for residential lines. The SLC is a fixed, federally mandated fee on each telephone line that helps pay for the local network. The recent increase was made to accommodate reductions in the access charges that local companies collect from long distance carriers. Long distance providers are required to lower their rates to reflect this reduced access charge.
The Universal Service Fund is a special program of the Federal Communications Commission to provide financial support to low income populations, high cost areas, schools, libraries and rural health care providers. The mandatory fee that funds this program is assessed on any telecommunications carrier that provides interstate service.
Wireless carriers, long distance providers and Internet companies have fewer restrictions than local exchange carriers, but competition among these service providers is much stronger, and profit margins are very thin.
Many telecommunications providers are expanding revenues by offering new services, such as broadband and video. Additional services and product offerings will add value to their companies and diversify their revenue streams.
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