T-Mobile's new simple billing explained

T-Mobile is trying to simplify how it and other wireless companies sell you phone service - and how they bill you for it.

If it works, it could help clear up those headaches you may get while trying to decipher what you're actually paying for month after month. In an announcement Thursday, T-Mobile said that beginning Jan. 22, it will only sell a single cellular plan to new customers: a plan that gives you unlimited talk, text and data (though heavy users may still experience reduced internet speeds during periods of high demand).

This plan, known as T-Mobile One, has been around for a while now. But T-Mobile's decision to sell only this plan moving forward is an effort to streamline what can be a confusing jumble in the industry of different-size data buckets, temporary promotional discounts and opaque billing that adds up to billions every year, according to the company.

The centerpiece of this new approach is the notion of single-figure billing: You see one number on your bill, and you pay it. That's it - no additional line items for taxes or other fees. As an example, a family of four might previously have paid $40 a line, and then additional miscellaneous charges on top of that, upping the total.

"What ... is a 'smartphone line access fee'?" said chief executive John Legere. "The bill is so confusing, it's insane."

Under the new approach, that hypothetical family would pay the price it saw in the advertising when it signed up: $40 a line, for a total of $160 a month.

So what happens to the taxes and fees? Do they vanish? Does T-Mobile pay them for you? What's going on?

To clarify, the company told me Thursday that customers will still be responsible for taxes and fees; the company is just effectively lowering the cost of its cellular service so that whatever you pay in taxes and fees won't bump you over the official plan price you're given in the store.

Think of it this way: Whereas before our four-person family might have paid $40 a line plus taxes and fees, the "new" T-Mobile One plan might really be charging, say, $20 or 30 a line for service to make room for those extra bits tacked on. You won't know exactly where the bill for service ends and the taxes and fees begin, because it will all be compressed into a single number.