Where are all the payphones? - Page 5

Deregulation and industry greed are wiping out a form of old technology that's a critical lifeline

Their male counterparts, mostly collectors in the coin department, are now gone, accounting for the loss of 25 to 30 union jobs in the past five years. Besides gathering coins from pay phones, the collectors maintained the phones and removed graffiti (which is more prevalent these days).

Pay phones once meant union jobs, and as their numbers have declined, so has the union. Local 9410 membership is down from 3,000 when Chew took office in 2003 to 750 today, with those still around mainly technicians who install and repair phones.

Chew calculated that one job here is financially equivalent to six jobs in India or the Philippines, where 1-800 calls are processed and workers are paid $400 a month. The city and the state lose local business tax revenues when jobs go overseas, he said, and the costs of vanishing pensions as workers are laid off are eventually externalized and borne by local residents when demand for public services rises.

There may be greater demand for pay phones soon: the major phone companies are expected to raise home-phone rates. Basic service rates have generally been averaged geographically, within a major company's service "footprint," Lehman said, but deaveraging can soon occur, which will drive up the price of basic rural and high-cost urban services.

Meanwhile, two state programs supporting pay phones are being axed.


Two pay phone regulatory programs remain on the books, one frozen and one barely operating. The PUC created both programs in 1990 as part of a legal ruling, when new pay phone providers were struggling to gain a foothold in former Pac Bell (now AT&T) and GTE (now Verizon) monopoly territory and consumers were encountering new system abuses.

One program, the Public Policy Payphone Program (PPPP, or Quad-P), was designed to subsidize phones located "in unprofitable locations to serve the health and safety needs of the public," while the other, the Payphone Enforcement Program (now known as Payphone Service Providers Enforcement), was established "to ensure that pay phone consumer safeguards are being followed." Both programs, which were expanded statewide, were funded by a monthly per-line surcharge on the industry, unlike other telecom public policy programs, which are supported by a percentage surcharge on consumers' monthly phone bills.

But the list of potential state locations for subsidized pay phones was reduced from 67,000 in 1988 to 22,000 in 1989, just before the state programs were initiated, and to 1,975 in 1993. By 1998, when deregulation was complete and pricing went to market rates, Pac Bell had only 300 subsidized business phones out of 140,000, attributing the change to the increased number of independent providers and to multiphone contracts, which enabled revenues and costs to be averaged out.

Applications to designate or install Quad-P phones have to pass through the PSPE advisory committee, which hasn't aggressively solicited them or approved more than two or three (with just one installed) of the 33 received since 2001, according to the Division of Ratepayer Advocates.

Almost nobody knows that Quad-P exists — or that anyone can file an application if a proposed site meets certain criteria. Currently, there are only 14 Quad-P phones statewide, mainly in parks, down from 40 in March, with 13 supported by AT&T and one by Verizon.

The PSPE was set up "to enforce, through random inspections, consumer safeguards for all public payphones ... such as signage requirements, and rate caps for local, long distance and directory assistance calls within California."

Until recently, inspectors made the rounds of for-profit as well as subsidized pay phones, numbering more than 400,000 in the '90s, on a rotation schedule that took a decade to complete.

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