WASHINGTON-Taking advantage of a recent court decision that the Federal Communications Commission re-examine its pay-phone compensation scheme, the Personal Communications Industry Association continues to urge the FCC to institute a caller-pays or coin-in-the-box scheme for pay-phone compensation rather than the current carrier-pays scheme. A coin-in-the-box scheme requires that customers 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, people are able to place calls to the subscriber’s pager without incurring long-distance charges. Currently, pay-phone users can avoid inserting coins, even for local calls, by dialing a toll-free number.
Indeed, in its recently filed reply comments, PCIA told the FCC that some paging customers use pay phones and pagers as their means of staying connected. “Many low-income persons … use toll-free 800 services in conjunction with pagers as their sole means of telecommunications, rather than subscribing for residential local and long-distance services,” PCIA said.
The decision from the United States Court of Appeals for the District of Columbia Circuit involves 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.
This is the second pay phone compensation decision from the D.C. Appeals Court. The same court last year told the FCC to re-evaluate the 35 cents and base the compensation amount on market forces. On Oct. 9, 1997, in the FCC’s response to the court’s first decision, the agency reset the compensation amount to 28.4 cents. Several parties, including PCIA, sued again disputing the market rate calculation. The Appeals Court’s second decision keeps in place the current compensation rate of 28.4 cents.
The court did not rule in either decision whether the coin-in-the-box scheme would have been more appropriate than the compensation plan that was instituted.
PCIA must convince the FCC to scrap its current scheme and institute coin-in-the-box. This may be a hard sell for PCIA because sources within the FCC are not persuaded that the court believes the coin-in-the-box is a better option for pay-phone compensation. “I don’t see where the court’s decision will resurrect the (coin-in-the-box) mechanism,” one FCC source said.
