Tariff (regulation)

A tariff or tariff schedule is a special type of

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...

between a regulatory agency, such as a public utilities commission or a government such as a

municipality A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the go ...

, and a business, to provide a product or service to the public, often in exchange for being granted an exclusive

franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television p ...

to provide the tariffed product or service within an exclusive area. Tariffs have generally been required for providers of

public utilities A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and ...

such as water,

natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...

electricity Electricity is the set of physical phenomena associated with the presence and motion of matter that has a property of electric charge. Electricity is related to magnetism, both being part of the phenomenon of electromagnetism, as describ ...

telephone A telephone is a telecommunications device that permits two or more users to conduct a conversation when they are too far apart to be easily heard directly. A telephone converts sound, typically and most efficiently the human voice, into e ...

, and

cable television Cable television is a system of delivering television programming to consumers via radio frequency (RF) signals transmitted through coaxial cables, or in more recent systems, light pulses through fibre-optic cables. This contrasts with bro ...

. They have also generally been required for such businesses as moving companies,

taxicab A taxi, also known as a taxicab or simply a cab, is a type of vehicle for hire with a driver, used by a single passenger or small group of passengers, often for a non-shared ride. A taxicab conveys passengers between locations of their choi ...

s, and

tow truck A tow truck (also called a wrecker, a breakdown truck, recovery vehicle or a breakdown lorry) is a truck used to move disabled, improperly parked, impounded, or otherwise indisposed motor vehicles. This may involve recovering a vehicle damaged ...

operators. In most cases, the company wanting to offer the service would obtain a

, granting them the exclusive right to provide the tariffed product or service to a specific area either permanently or for a specific number of years (with the right to renew). The company intending to provide the product or service would write a legal proposal describing exactly what product(s) or service(s) were to be provided and the price(s) to be charged for them. This proposal would then be submitted to ("filed with") a regulatory agency such as a public utilities commission, or, in some cases, a

such as a

county A county is a geographic region of a country used for administrative or other purposes Chambers Dictionary, L. Brookes (ed.), 2005, Chambers Harrap Publishers Ltd, Edinburgh in certain modern nations. The term is derived from the Old French ...

city A city is a human settlement of notable size.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Penguin.Kuper, A. and Kuper, J., eds (1996) ''The Social Science Encyclopedia''. 2nd edition. London: Routledge. It can be def ...

town A town is a human settlement. Towns are generally larger than villages and smaller than cities, though the criteria to distinguish between them vary considerably in different parts of the world. Origin and use The word "town" shares an ori ...

, or

township A township is a kind of human settlement or administrative subdivision, with its meaning varying in different countries. Although the term is occasionally associated with an urban area, that tends to be an exception to the rule. In Australia, C ...

, for approval. The proposal is a type of contact between the regulatory agency and the business providing the product of services. If the contract is approved (either with or without changes) it is considered a ''tariff'', and the company will be permitted to provide the tariffed goods or services at the rates specified in the tariff. In many cases the granting of a tariff also granted the exclusive privilege to provide the product(s) or service(s) within a specific geographic area. Contract law Legal documents Regulation {{gov-stub