Days are numbered for 10-cent phone calls
By Jon Brodkin
Daily Free Press Staff Writer

Start saving your change because the days of 10-cent local phone calls are numbered.

In 1954, local pay phone calls across the country cost a mere dime. But in the 42 years since then, every state but four has allowed the rates to rise.

The 10-cent rate, which has persevered only in Arkansas, New Hampshire, Vermont and Massachusetts, was eliminated by the 1996 Telecommunications Act, which removes states' rights to set pay phone prices.

Massachusetts currently sets the rate for local calls at 10 cents, even though costs have risen to at least 19 cents a call, according to NYNEX.

That leaves the company subsidizing the other nine cents.

But while NYNEX, which has 50,000 pay phones in Massachusetts, can afford that price, other smaller companies can't afford it and would need to charge as much as a quarter to operate their phones.

To level the playing field between the smaller companies and bigger corporations like NYNEX, the Federal Communications Commission passed the Telecommunications Act.

"Over the course of time, costs rise... We have kept rates stable through subsidization," said Rick Colon, a NYNEX spokesman. "We really believe that competition is good for the consumer and the industry."

AT&T, Sprint, cable companies, start-up corporations and even entertainment companies will be able to compete with NYNEX as a result of the act, Colon said.

"We will now all play by the same rules," Colon said.

NYNEX has to propose a new rate to the Department of Public Utilities sometime before April 15, 1997, at which time the department will decide if that rate is fair, said Mike Eisenberg, acting director of the Telecommunications Division of the DPU. Starting in October of next year, all pay phones will be required to charge the market rate.

"They would have to justify that rate based on cost studies," Eisenberg said. "We would investigate it to see if it was just and reasonable." If the DPU decides the rate NYNEX proposes is not fair, it will have the power to change it, Eisenberg said.

"Whatever rate we set would be kept until October, when the market-based rate sets in," Eisenberg said.

Five other states have set their pay phone rates at the market value, Eisenberg said. Of those five states, four have a rate of 35 cents, and the other charges a quarter.

The FCC has been planning to propose the changes in the Telecommunications Act for about three years, according to an FCC official who wished to remain anonymous.

He said one reason for it was to increase services.

The default rate on a pay phone which does not have a set rate is 35 cents.