Calls Made From Payphones ____________________ The Communications Act requires the FCC to take actions to promote competition among payphone service providers and the widespread deployment of payphone services to the benefit of the general public. The Act also requires the FCC to ensure fair compensation to payphone service providers for each and every call placed from payphones. A payphone service provider is the person or entity who owns the payphone instrument, such as the local telephone company; an independent company; or the owner of the premises where the payphone is located. Payphone service providers are called "PSPs" in this brochure. This brochure explains the actions the FCC has taken to carry out its responsibilities. Are The Coin Rates For Local Calls From Payphones Regulated? No. Effective October 7, 1997, the FCC deregulated coin rates for all local calls made from payphones. Prior to 1996, most payphones were provided by local telephone companies and received indirect subsidies through the rates paid by consumers for other types of services. States regulated the coin rate for a local call. The resulting artificially low prices tended to discourage new companies from entering the payphone market and also limited the number of payphones available for the benefit of the public. In 1996, Congress required that payphones no longer be subsidized in order to encourage competition and the greater availability of payphones. The FCC determined that deregulating local coin rates and allowing the marketplace to set the price of local payphone calls is one of the essential steps needed to achieve the goals set by Congress. Deregulation will allow PSPs to receive fair compensation for their services and will encourage the widespread placement of payphones. Also, the FCC anticipates that Americans will have greater access to emergency and public safety services. States may also choose to place public interest payphones in areas where payphones are necessary for health and safety reasons. The Commission intends to actively monitor the payphone marketplace by regularly meeting with representatives from the states, PSPs, and consumer advocates. Must I Pay For An Emergency Call? No. Calls made to emergency numbers, such as 911, and to the Telecommunications Relay Service, a service of use to people with disabilities, will be provided free of charge from payphones. You can also continue to reach an operator without depositing a coin. Can I Still Make Toll-Free Calls From Payphones Without Depositing A Coin? Yes. However, the Communications Act requires the FCC to establish a per- call compensation plan to ensure that all PSPs are fairly compensated for each and every completed intrastate and interstate call using their payphone -- except for emergency calls and telecommunications relay service calls for hearing disabled individuals. Prior to 1996, PSPs often received no compensation for completed intrastate and interstate calls -- including completed toll-free calls -- no matter how frequently callers used payphones to originate calls. The FCC carried out its responsibilities by adopting rules that require long distance telephone companies to compensate PSPs 28.4 cents for each call they receive from payphones, except those calls for which the PSPs already collect compensation under a contractual arrangement. Payphone- originated calls that are unlikely to be the subject of a contract with the PSPs include calls to 800 telephone numbers or 10XXX access code calls which connect callers to long distance telephone companies. The 28.4 cents per-call compensation rate is a default rate that can be reduced or increased at any time through an agreement between the long distance company and the PSP. The FCC encouraged long distance companies and PSPs to contract with each other for more economically efficient compensation rates. Some long distance companies are advising consumers that the FCC decided that consumers making calls from payphones should pay a per-call charge to compensate the PSP. The FCC did not make such a decision. Long distance companies have significant leeway on how to compensate PSPs. The FCC left it to each long distance company to determine how it will recover the cost of compensating PSPs. Tips For Consumers Companies compete for your payphone business. Use your buying power wisely and shop around. If you think that the rate for placing a call from a payphone is too high, a less expensive payphone could be around the corner. Also let the PSP know that the rates are too high. It's in their best interest to meet the needs of their customers. Contact your preferred long distance company and ask for instructions for placing calls through that company from a payphone. Also ask what rates or charges apply to calls placed from payphones. Let the company know if you believe their rates are too high. Then call other long distance companies and ask about their rates.