Payphones Carry Their Own Set of Surcharges
Coin rates for all local calls made from payphone are not subject to Federal Communications Commission (FCC) regulation. Prior to 1996, most payphones were provided by local telephone companies and paid for by monies they received from 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 public.
In 1996 in order to encourage competition and the greater availability of payphones, Congress required that payphones no longer be regulated. The FCC determined that de-regulating local coin rates and allowing the marketplace to set the price of local payphone calls was an essential step needed to achieve the goals set by Congress.
De-Regulation allowed payphone service providers (PSPs) to receive fair compensation for their services and encouraged the widespread placement of payphones. The FCC also anticipated that de-regulation would provide Americans with greater access to emergency and public safety services. States may choose to place public interest payphones in areas where payphones are necessary for health and safety reasons. Numerous states continue to regulate the rate for local collect calls. Check with your state public utility commission or local phone company for rates in your area.
Emergency and Toll Free Calls
Calls made to emergency numbers, such as 911, and local calls in Telecommunications Relay Service (TRS) - a service that enables calls to persons who are deaf, hard of hearing, or speech impaired - are free of charge. You can also continue to reach an operator without depositing a coin.
Toll Free calls, including calls billed to calling cards, also do not require a coin. The Communications Act however, requires the FCC to establish a per-call compensation plan to ensure that all PSPs are fairly compensated for every completed intrastate and interstate call using their payphone - except emergency calls. The 800 number subscriber, calling card service or credit card company generally pays the compensation, but this amount may be reflected in the user charges of the 800 number subscriber, calling card service, or credit card company.
How PayPhone Service Providers are Compensated
FCC rules currently require that long distance companies pay payphone service providers 24.8 cents for each call they receive from payphones, except those calls for which the PSPs already collect compensation under a contract. The 24.8 cents per call compensation rates 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 current average is 35 cents) The FCC encourages 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 the PSPs. The FCC left it to each long distance company to determine how it will recover the cost of compensating the PSP.(currently at the rate of at least 11 cents profit on each call)
Tips for Consumers
If you think 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 is in a PSP's best interest to meet the needs of its customers. The PSP's number should be on the payphone.
Contact your preferred long distance company and ask for instructions on how to place a call that originates from a payphone. Also ask what the rates or charges are for calls placed from a payphone. Let the company know if you believe the rates are too high. With Chamberlain Communications, you will find most of our providers list the payphone charge in the fine print section at the bottom of each product's page. We also encourage all of our customers to make more than one call at a time from a payphone by using a calling card's multiple call feature. Without hanging up, you can avoid paying more than one fee for several calls.