Where are all the payphones? - Page 6

Deregulation and industry greed are wiping out a form of old technology that's a critical lifeline
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Between December 2001, when the project came under PSPE administration (it was formerly run by the industry), and June 2007, civil-service inspectors logged 133,893 violations on 39,444 phones, a rate that has slowed with staff downsizing. The DRA estimates its activities reduced the average rate of violations significantly. The inspection staff was cut in half last fall, to three, and other program staffers were transferred to other divisions to cut expenses.

The number of pay phones to monitor has declined, but with reduced inspections, violations have begun to rise. Numbering too few to be proactive, inspectors now respond only to consumer complaints registered on the PUC's consumer fraud hotline. This number, not posted on pay phones, is 1-800-649-7570; it accepts calls between 9 a.m. and 3 p.m. Monday through Friday. There's no after-hours message machine, but if you've got a computer and are still primed when you get home, you can log on to the PUC Web site, at www.cpuc.ca.gov, to report a complaint. Patterns of systemic abuse — and dead phones — are less likely to be detected from reactive, hotline-triggered complaints.

Last summer the industry's PSPE advisory committee formally requested that both programs and the committee itself be eliminated and program surcharges ended, citing reduced activity and need. "All that Quad-P has done is subsidize its own costs," said Mattes, the attorney for the California Payphone Association. "It deserves a quiet burial."

The DRA argues that the reduction of these state programs is premature: even if dramatic market changes have made pay phones a distant second choice over wireless for many, the old technology is still important.

For one thing, predictions of the death of pay phones may be exaggerated. "It is likely that some core base of payphones will continue to be used regularly and earn a profit," the division observed in a July 2006 report, responding to gloomy industry forecasts.

For another, the actual basis for the pay phone network's decline is far from clear. The division noted "a distinct lack of quantitative analysis regarding both the reduction ... and demographic information about the location and need for payphones" in its program review comments, part of the PUC's formal rule-making process (to be concluded in coming months, following administrative law judge Maribeth Bushey's findings).

Acknowledging that "concerns about migration to wireless phone plans and cost recovery issues (including interconnection costs, phone card fraud, and 911 services)" need to be addressed, the division restated the universal service goals of both the '96 act and the original 1934 Telecom Act, quoting a commission ruling from a decade ago, now more urgent: "Parties have not substantiated that telephone service will continue to be available at unprofitable locations to satisfy public health, safety, and welfare needs. Nor have they convinced us that the marketplace will replace the existing public policy payphones or fulfill the public policy objective in public health, safety, and welfare."

The DRA recommends a two-pronged strategy for stabilizing the for-profit market and assessing the need for subsidized pay phones — one that could potentially restore proactive inspections.

Instead of eliminating Quad-P oversight, it said, "the task, rather, is to address these problems by reforming and strengthening the program, as well as by assessing [systematically] the continuing public need for payphones" and finding ways to meet it.

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