Your Carrier Is Watching the Tariff Situation.
You Should Be Watching Your Contract.
The tariff environment has shifted faster than most enterprise IT teams can track. The average effective U.S. tariff rate now sits above 25% — the highest since 1909. Juniper Research has flagged that carriers will pass network upgrade costs to enterprise customers. Your carrier’s finance team is already modeling the impact.
The question your carrier is asking is different from the one your team should be asking.
Carriers are asking: “What can we pass through to enterprise customers under existing contract language?” Your team should be asking: “Does our carrier contract actually permit what’s appearing on our invoice?”
Those are not the same question. And most enterprise IT organizations are only equipped to answer the first one.
The Clause You Haven't Read
Most enterprise master service agreements contain what’s commonly called a tariff pass-through clause — language that permits carriers to bill customers for government-mandated costs. The exact language varies by carrier and contract vintage. Some clauses are narrow and specific. Others are broad enough to cover a wide range of increases with minimal documentation requirements.
What almost none of them require is advance notification to the customer before the clause is invoked.
That means the first time many enterprise IT teams learn their carrier has activated a tariff pass-through is when they see an unexplained line item on an invoice — without context, without documentation, and often without a carrier representative who can explain it clearly.
The Governance Gap
This is not primarily a contract negotiation problem. It’s a governance problem.
Contract negotiation is a periodic event. Billing errors — including those created by improperly invoked pass-through clauses — are a monthly occurrence. The governance question is not “what does our contract say in general?” It’s “does this month’s invoice reflect what the contract actually permits?”
That distinction matters because pass-through clauses interact directly with whatever errors already exist in your baseline billing. If a carrier calculates a tariff surcharge as a percentage of existing charges — and those existing charges include billing errors, over-tiered services, inactive circuits, or duplicate line items — the surcharge calculation is built on a flawed foundation. You’re not just paying the pass-through. You’re paying a pass-through on top of charges you shouldn’t have been billed for in the first place.
What Validation Looks Like
Governing carrier pass-through invoicing requires three things to be in place before the first surcharge notice arrives:
- An accurate, current inventory of every service, circuit, and contract in your environment — so there’s a clean baseline to validate against.
- A line-item review process that flags new charges for classification before payment — so pass-through charges are identified, documented, and evaluated against contract language rather than processed automatically.
- A dispute protocol that moves quickly — because most carrier contracts have narrow dispute windows, and pass-through charges are no exception.
None of those three things require switching carriers. They require governance infrastructure that runs every billing cycle — not just when something looks wrong.
What We See
In a 30-month governance engagement with a multi-brand retail portfolio, Bearstone identified $2,122,436 in carrier overcharges and recovered $1,852,314 — an 87% collection rate. The portfolio’s expected telecom budget dropped 16.9% from FY2024 to FY2025.
Those results didn’t come from renegotiating contracts. They came from validating invoices against what each contract actually permitted, every month, and disputing what didn’t match.
Tariff volatility doesn’t change that process. It makes it more necessary.
The Right Response
If finance is asking about carrier tariff exposure right now, the answer depends on two things: what your MSA actually permits the carrier to pass through, and whether your current billing governance process can validate each invoice against that permission.
If you don’t have a clear answer to the second question, that’s the gap to close.
Bearstone’s Executive Brief outlines the governance framework we use to validate carrier invoices — including how we approach pass-through clause review and what a monthly validation cycle looks like in practice.
