The country’s three largest long-distance phone companies-AT&T Corp., MCI Communications Inc. and Sprint Corp.-have each announced they are offering their 800-number customers the ability to block toll-free calls originating from pay phones.
This blocking service is considered crucial to the paging industry, which has been fighting the Federal Communications Commission’s pay-phone compensation plan, delivered Oct. 7. The rule states that long-distance companies must pay a pay-phone provider 28.4 cents for every 800-number toll-free call made from a pay phone. That charge is then passed on to the companies that buy the 800 number from the long-distance carrier, marked up to 30 cents or more.
AT&T spokesman Mike Cuno said the company started to offer the blocking service this month at no charge. Customers are being notified in their billing statements or through direct sales contact.
MCI spokesman Paul Adams said his company began to offer its blocking service Nov. 15, for $150 a month. The price is for each account, not each phone number, Adams said.
However, not all pay phones contain the coding that identify them as pay phones, which is what the long-distance carriers need to block 800-number calls from going through. This means that until all pay phones are encoded to identify themselves as pay phones-a process not expected to be finished until March-blocked 800-number calls may get through from some pay phones. In those cases, Cuno said, “at this moment, no surcharge is applied to them and we are not being billed for them.”
At press time, the only paging carrier to announce it will block calls is Tri State Radio Inc. in New Jersey. According to Mitchell Sacks, TSR president, the carrier uses very few 800 numbers and does not expect the blocking to greatly affect service. Other carriers contacted withheld comments on their intentions, for competitive reasons or because they still are considering their options.
Paging service providers will have to weigh whether it is better for them to block 800-number calls from pay phones to keep prices down but end up with some dissatisfied customers.
Carriers and dispatch houses claim anywhere from 15 percent to 30 percent of alphanumeric pages originate from a pay phone. Blocking that ability would mean denying their customers access to service. Perhaps most at risk are alphanumeric dispatch houses, which provide the majority of 800 numbers for alphanumeric services.
Carriers offer their reseller and corporate accounts alphanumeric service through a dispatch house, which provides the 800 numbers for customers to access the carrier’s network. According to Sid Mandel, president of New York-based American Alpha Dispatch Services Inc., about 10 alpha dispatch houses handle about 90 percent of the alpha pager service used in the country via 800 numbers.
“Our goal is to provide a way for customers to receive 800 number calls from pay phones, or not, depending on what their needs are,” said Scott Baradell, director of corporate communications at Paging Network Inc.
To do so, providers would need to offer one plan that does not allow pay- phone access and another plan that does. What remains to be seen is whether a pay-phone accessible alphanumeric service plan will be more expensive than one that blocks pay-phone calls.
“The question is, are consumers really going to pay this extra cost?” asked Alexander Ott, president of Affordable Message Center, a New York-based dispatch center and reseller.
“Alpha has been pushed as a cheap, reliable way of getting across messages and the `cheap’ has just been taken out of the equation,” Mandel said. He also fears that alpha users who wish to be reached via pay phone may opt instead for personal communications services-which callers can access via pay phone by simply depositing a quarter, and for close to the same monthly cost of what pay phone-accessible alpha service may end up costing.
Already, several dispatch houses charge their reseller customers an added $3 a month for alpha service. Those resellers, in turn, may add their own markup to end users, who could end up paying as much as $5 in extra monthly costs.
“You tell me that’s not going to affect the growth of paging,” Mandel said.
In essence, a pay phone is like a vending machine for the paging industry, and the industry will continue to pursue a caller-pays scheme to reflect that view. As such, the paging industry will continue its fight to have the per-call cost be passed over to the caller, in which case the caller would pay a quarter at the pay phone to access an 800-number paging account.
Mandel said he is in the process of organizing a forum for alpha dispatch houses to meet with officials from the FCC and the Personal Communications Industry Association to collectively discuss the direction the industry should take on this matter and to share information. Mandel hasn’t released a date, location or attendance list.
