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FCC Says Owners of Pay Phones Entitled to Compensation

July 12, 1991

WASHINGTON (AP) _ Pay telephone owners are entitled to compensation when callers decide to use their own long-distance companies, the Federal Communications Commission says.

However, the commission still must decide how much compensation the phone owners should receive and how they should receive it. The FCC will seek public comments on those issues.

″We’re delighted that the FCC has at long last recognized the significant role competitive pay phone providers play in delivering services to the public, and that compensation for these services is required as a matter of fundamental equity,″ said Jeff Hanft, chairman of the American Public Communications Council.

The council is a trade association that represents manufacturers and distributors of public phone systems.

The rules adopted by the five-member panel set up a timetable for hotels, airports, hospitals and other owners of public phones - called aggregators - to unblock direct-dial access, via ″10XXX″ codes, to the long-distance service of choice.

The rules will become effective 30 days after they are published in the Federal Register and the owners will then have six months to begin implementing the changes.

Congress last year instructed the FCC to make sure that people using public phones have access to the long-distance companies of their choice.

Customers of MCI and US Sprint can use either a toll-free 800 area code number or a local number beginning with 950 to reach their long distance companies. Or, they can dial a five-digit access code - 10333 to reach Sprint, for example.

But AT&T depends solely on its 10288 access code. The company has said it would cost as much as $50 million to set up and $250 million a year to operate an 800 access number.

Aggregators often route the calls through a single ″operator service company,″ which has a contract with a long-distance company that actually carries the calls.

Operator service companies may charge two or three times what the customer would normally pay for the call on one of the major long-distance carriers. The phone owner usually receives a commission for each call made.

The aggregators receive no compensation when customers use their own long- distance companies. The public communications council had lobbied heavily for payment for the calls and had gained some support in Congress.

In April, the FCC adopted rules that require the operator service companies to identify themselves to callers and tell customers, if they ask, how much the call will cost. They also must allow the caller to hang up before charges begin.

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