The Personal Communications Industry Association and a coalition of alphanumeric paging dispatchers have filed petitions to either stay or reconsider, respectively, the Federal Communication Commission’s Pay Telephone Compensation Remand Order.
PCIA believes the ruling will cause economic and competitive harm to the paging industry, and the FCC should therefore stay the order until “local exchange carriers provide unique coding digits for transmission by pay-phone service providers to enable call blocking, and IXCs demonstrate that they can offer call blocking to end users at a reasonable price for substantially all subscriber 800 and access-code calls from originated pay phones.”
The group of dispatch centers, led by New Jersey-based American Alpha Dispatch Center Inc., filed a petition for reconsideration asking in particular for provisions for wrong numbers and a modified calling party pays option.
The compensation scheme, put in place Oct. 7, places a 28.4 cent surcharge on each 800 number call originating from a pay phone, to be paid by the owner of the 800 number (long-distance carriers) to the appropriate pay-phone service provider. Since then, long-distance carriers have marked up that charge to 30-35 cents to those purchasing 800 numbers. Paging carriers and dispatch centers, among many other businesses, have protested the ruling.
“From the beginning, PCIA and the paging industry knew that the FCC’s pay-phone decision would cause many more problems than it solves … and that’s exactly what’s happening,” said Rob Hoggarth, senior vice president of paging and narrowband personal communications services for PCIA. “Many industries, not just the paging industry, are severely impacted by this decision. The new commissioners should take a fresh look at this critical issue.”
The dispatch centers filing the petition to reconsider include American Alpha, Absolute Best Monitoring Inc., Affordable Message Center Inc., Procommunications Inc., National Dispatch Center Inc., Abacus Inc., United Cellular Paging Inc., Dispatch America Inc., Alphanet Inc. and All Office Support Inc.
They claim to represent 90 percent of alphanumeric pages sent in the country and estimate about 28 percent of calls made to all centers originate from pay phones. In the petition, the petitioners charge that the cost of the compensation scheme is ultimately borne by consumers and that it does not allow sufficient protection against misuse and fraud. They also offer possible alternatives.
In the petition, the dispatching parties noted that each provider along the line will pass on and mark up the surcharge until the customer has to pay a fee, which may be more than the compensation rate.
“Thus, the impact of this proceeding on the dispatching parties is enormous,” read the petition. “Implementation of the compensation rules as detailed in the Second Report and Order has the possible impact of making the dispatching parties non-competitive in the communications marketplace.”
In a separate written comment to the FCC, David Kane, vice president of All Office Support, estimated the compensation scheme would “amount to an increase of $28,000 per month in our phone bill alone with no increase in call volume or revenue.”
Dispatch centers do not see the ability to block their 800 number calls from pay phones as much help either. They say this is not only a service limitation that reduces the value of their service, but also is harmful to both consumers and PSPs, since the consumer would be unable to make a call from a pay phone and the PSP would then not generate revenue from that call. Instead, they ask in the petition for a caller pays option, where end users would deposit a fee at the pay phone to make an 800-number call.
“The PSPs would be properly compensated for the usage of their equipment,” read the petition. “The caller has the freedom of choice to deposit coins or not make the call from a pay telephone … the same freedom they have in deciding that they do not wish to pay 35 cents to make a `local’ call.
“The increased cost of a `local’ call will aid the consumer because there will be more competition in the pay-phone industry and more phones will then become available in more remote areas. Likewise, the suggested `Modified Caller Pays’ plan would allow more competition in the paging industry by providers not needing to pass inflated costs along to their consumers.”
Also at issue is what dispatch centers call the lack of fraud protection in the ruling. Dispatch centers across the country already have reported instances of mass auto-dialing from pay phones to their 800-number dispatch lines since the compensation scheme went into effect.
The calls are recorded messages that say, “What’s that? (pause) I’m sorry. I must have dialed a wrong number,” and then disconnects. Each call lasts about 5-6 seconds and blocks the dispatch centers’ caller identification systems. Dispatch centers believe that the calls are being made by pay-phone service providers looking to cash in on the surcharge.
“Whoever this is, they know what they are doing,” Kane said. “Most (long-distance carriers) bill in 6-second increments, so they will be very difficult to spot.”
Because the pay-phone compensation scheme makes no provision for wrong numbers, 800-number owners have no choice but to pay up. In the petition, the dispatching parties suggest the FCC rule that there should be no compensation for calls lasting less than 15 seconds, eliminating the wrong-number issue.
The petitions filed represent merely the beginning, not the end of the fight against the ruling, opponents say.
“If the commission can’t work to replace these rules in a timely fashion, then we will be forced to pursue this matter with the court of appeals,” Hoggarth said.
As for dispatch centers, American Alpha has organized an open forum for all involved in the issue to air their views Dec. 10 at the Watergate Hotel in Washington, D.C.
“The goal is to present (the dispatch) industry’s concerns to other interested parties and to come out with a common understanding and common solution amenable to all parties involved,” said Sid Mandel, president of American Alpha.
Representatives from various dispatch centers, FCC officials, PCIA members, a representative from the American Public Communications Commission (which represents PSPs), Comptel and members of the media, among others, are expected to attend.
