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New Cost at Pay Phones Irks Users

Communications: Deregulation lets providers charge whatever they want for local calls; many set price at 35 cents.

January 20, 1998|TOM SCHULTZ | TIMES STAFF WRITER

Dorothy Garwood got an unpleasant surprise when she lifted the receiver on a pay phone at Santa Monica's Third Street Promenade.

A local call cost Garwood, 77, nearly twice as much as it had a few weeks ago--35 cents, not the 20 cents she expected.

"This was the first time I had noticed," Garwood said. "I think they should have made us a little more prepared, given us a little more notice.

"It seems very high for an ordinary phone call."

Across Los Angeles, callers on street corners, at hotel lobbies, airport terminals and restaurants have encountered various pay phone rates recently. Many are irritated at the added cost and at having to come up with the correct coins to place a call.

"Some phones are 20 cents, some are 25, some are 35," said Ray Perkins, 41, moments after the Seattle ship painter got off a Greyhound bus in downtown Los Angeles.

"When you're on the move like this, you probably use the phones five, six times a day checking bus schedules," said Perkins, destined for his father's home in Glendora. "I don't see why they had to raise rates."

Nearby, Tanya McLane waited in line to buy a bus ticket to Sacramento and griped about the new rate.

"You can get ahold of a quarter, but you can't always get ahold of 35 cents," said McLane, 39.

Across town, Ben Rosen had a similar complaint. "I paid 50 cents" for a call, the 16-year-old said, "just because I don't have a dime."

Deregulation of controls long maintained by the Federal Communications Commission took effect Oct. 7 and allowed pay phone providers to charge whatever they want for local and directory-assisted calls. The changes were part of an overhaul of the $5-billion industry mandated by the federal Telecommunications Act of 1996.

GTE, which runs 40,000 of the 277,000 pay phones scattered across California, began a national campaign Nov. 14 to convert its pay phones to 35-cent machines--a job currently half finished in California, said Larry Cox, a GTE spokesman.

"We waited awhile," Cox said. "We wanted our customers to get used to the idea."

GTE officials plan to finish conversions by the end of March, Cox said. Mechanisms within pay phones must be updated and their price signs changed.

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Pacific Bell officials finished conversion of the company's 141,000 California pay phones to 35-cent machines last month, leaving only phones at high-security research labs, mountain summer camps closed for the winter and other hard-to-reach places unchanged, said Stevan Allen, a Pacific Bell spokesman.

"We're 99.5% complete," Allen said. "From the public's perspective, they're basically all completed."

Pacific Bell and GTE are two California pay phone providers in a state with 4,000 to 6,000 such vendors, according to company and industry analyst estimates.

"Some of those 4,000 own one or two phones," said Tracie Nutter, executive director of the California Pay Phone Assn., which helps its 250 vendor members with legal and other support services.

Uncertainties remain as to how many of the state's small providers raised or plan to raise their pay phone prices. This means that pay phone users can expect to encounter, from time to time, machines that still cost 20 cents and others that might exceed the 35-cent rate emerging as the new industry standard.

Before deregulation, operators of pay phones complained that cellular phones, prepaid calling cards and toll-free phone numbers were hurting business.

They argued that government-controlled prices were not high enough to recoup costs and keep pace with inflation. Pay phone rates last rose in 1984.

Opponents of price increases contend that telecommunications companies made satisfactory profits from their coin phones before deregulation. They argue that deregulation is unfair because pay phones most often serve a captive audience that cannot choose which provider to use at any given moment a call must be made.

Consumer advocate Michael Shames said rate increases hurt poor residents of inner-city neighborhoods the most because those consumers rely on pay phones more than middle- and upper-class suburbanites.

The Utility Action Network, which Shames directs, plans to release a six-month study on the impact of the rate changes in March.

"We've had a lot of complaints about the fact that it happened," Shames said.

The California Public Utilities Commission oversaw pay phone rates in the state before deregulation and lost a 1997 bid to reverse the new law in federal court.

"There were other states that also filed . . . because, gosh, what if rates got raised to 75 cents?" said Robert Weissman, a programs supervisor at the commission's telecommunications division. "If anybody has a question about the rate change, they should contact the FCC."

Its legal bid over, the PUC released a consumer advisory with some common sense advice for Californians: "Carry enough change so that no matter what the cost, you'll be ready and able to make the call you want to make."

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