An American Workhorse at Risk

In most neighborhoods and public areas, finding a pay phone is not difficult. And when you find one, the cost of a local call usually is just 20 cents. Cellular phones may have status, but millions of Americans every day turn to that workhorse so common across the country, the pay phone.

However, this instrument that we all take for granted may soon be harder to find and require more than two dimes for local calls because the Federal Communications Commission recently lifted restrictions on pay telephone companies. Worse, pay phones may be altogether unavailable in poor urban areas or in lightly populated rural areas because deregulation of the $4-billion industry means that companies, in addition to being free to charge whatever they choose, will no longer be required to maintain pay telephones in unprofitable locations.

The Telecommunication Reform Act of 1996 gives the FCC the power to usurp state regulatory authority and remove most controls over pay telephone pricing and financial subsidies. In California, pay phone rates were capped in 1990 in so-called captive locations where there were few competing pay phones. Other regulations were tightened after numerous consumer complaints about price gouging and malfunctioning phones that gobbled up change without making a connection.

The FCC now believes that competition will keep rates down at the nation’s 1.85 million pay telephones, 250,000 of them in California. But the agency is allowing states to make special accommodations to maintain so-called “public interest” pay phones in poor urban and rural areas where pay phones are vital for the health, safety and convenience of these communities. It is up to the states to set up financial mechanisms to do so.

The California Public Utilities Commission has about a year to do this important job. The state agency currently mandates that GTE and Pacific Bell maintain “public interest” pay phones. Statewide there are about 1,000 such phones, supported in part by surcharges paid by private pay phone operators. In the new scheme the state might establish a fund similar to the one that provides “lifeline” phone service. And when state and local governments grant phone contracts, they should insist that public interest pay phones be included in the package.

The proliferation of cellular phones is not the answer. Too many people cannot afford them. When you need a pay phone, one should be available. Security demands it.