State Pay Phones to Get Outside Competition Soon
California--the last of the nation’s major pay telephone markets that is still monopolized by local phone companies--will be opened to outside competition Feb. 18, the Public Utilities Commission said Friday.
The PUC approved an end to Pacific Bell’s monopoly last November, but the effective date of the order was postponed until details could be worked out, including the rates that Pacific Bell can charge owners of private pay phones for hooking up to its local network. (The order, however, does not apply to the state’s second-largest local phone company, Thousand Oaks-based General Telephone.)
“It’s caught on a lot quicker than we expected,” said Gail Sherman, vice president of marketing with Cointel Communications of Calabasas, which markets a line of pay phones. “We expected it to take three or four years” for state regulators to respond to the new option, she said.
Steve Galloway, Western sales manager for Van Nuys-based Pacific Pay Telephone Co., said California ranks among the nation’s top three markets. “It’s very good news,” he said. The national coin phone market generates an estimated $4 billion a year, but Pacific Bell declined to disclose California’s share of that revenue.
Pacific Bell initially filed proposed rates for private pay phone owners last February. But, after a protest by Cointel and others, the commission slashed those while also ordering that directory assistance calls be free rather than chargeable to the vendor, as Pacific Bell requested. Nonetheless, Pacific Bell’s project manager for the coin phone program, Jean Green, said the company is pleased with the order and will also offer its existing pay phones for sale. Pacific Bell owns about 165,000 coin-operated phones in its California service areas.
Wary of potential price gouging, the PUC clamped tight rate rules on private pay phone operations. Owners can charge no more than 25 cents for a local call--5 cents more than Pacific Bell charges. And their toll rates can be no more than 10 cents higher than those charged by Pacific for local toll calls and charged by AT&T; Communications for long-distance calls between local service areas.
