WASHINGTON-The Federal Communications Commission last week rejected a proposal from the
Personal Communications Industry Association to institute a caller pays, or coin-in-the-box, plan for pay-phone
compensation rather than the current carrier-pays setup.
A coin-in-the-box proposal would require customers to
deposit coins equal to the local call rate in a pay phone to make a toll-free call.
Many paging companies offer toll-
free numbers to their customers as an incentive for subscribing. When a customer chooses this service, others are able
to place calls to the subscriber’s pager without incurring long-distance charges. Additionally, paging customers can
retrieve messages by dialing a toll-free number. Currently, pay-phone users can avoid inserting coins, even for local
calls, by dialing a toll-free number.
Last week’s decision was no surprise to PCIA, which had realized there
“was little political will” for the coin-in-the-box proposal months ago, said Rob Hoggarth, senior vice
president for messaging.
In addition to a lack of political will, the FCC is not sure it has the authority to institute a
coin-in-the-box scheme. “The order points out that the FCC is dubious whether [it] has the authority [to
authorize] coin-in-the-box,” said Glenn Reynolds, deputy chief of the FCC’s Common Carrier Bureau’s
enforcement division. At press time, the FCC had not released the text of the order.
The FCC’s decision was in
reaction to a decision last year from the U.S. Court of Appeals for the District of Columbia Circuit involving FCC rules
dating back to 1996, requiring end users to compensate pay-phone operators 35 cents for each coinless call. The FCC
instituted the rules after Congress said pay-phone owners should be compensated for “each and every” call
placed from a pay phone. Prior to the Telecommunications Act of 1996, pay-phone operators were not compensated for
coinless calls.
In its latest action, the FCC set the compensation amount at 24 cents. PCIA believes this amount is
still too high. The FCC’s compensation rate “fell significantly short of our expectations.” The record
reflected a rate of 10 cent to 16 cents, Hoggarth said. Pay-phone operators took the opposite view, saying the 24-cent
rate was too low. “Pay phone service providers and their customers were short-changed by the FCC … The true
cost of providing pay phones is much higher than the 24-cent per-call compensation rate,” said Jim Hawkins,
chairperson of the RBOC/GTE Payphone Coalition.
