NEWSNEWSReport No.  DC 95-113                 ACTION IN DOCKET CASE          September 8, 1995

         CURRENT PAYPHONE COMPENSATION RULES GENERALLY AFFIRMED;
                COMMENTS SOUGHT ON PER-CALL COMPENSATION
                            (CC DOCKET 91-35)
                                    
     The Commission has generally affirmed its earlier decisions establishing the process
by which owners of payphones may be paid by long-distance companies for originating calls. 
In addition, in an accompanying Notice of Proposed Rulemaking, the Commission seeks
comment on whether certain long distance companies should pay compensation to payphone
owners on a per-call instead of a flat-rate basis. 

     This Order generally affirmed the Commission's 1993 Reconsideration Order, which,
in turn, affirmed the 1992 Second Report and Order prescribing an interim mechanism by
which owners of payphones may be paid by long-distance companies.  In addition, the
Commission clarified certain requirements of those rules and granted a petition by Allnet that
it be removed from the list of compensation payors because it does not provide "operator
services," as defined by the Telephone Operator Consumer Services Improvement Act
("TOCSIA"). 

     In 1984, the Commission authorized competitive entry into the payphone market. 
Previously, all payphones had been owned and operated by the LECs.  Today, competitive
payphone owners offer premises owners a commission on coin and 0+ calls originating from
their payphones.  The competitive payphone owners earn revenues by reselling local and 1+
long distance service from their payphones and by presubscribing their payphones to IXCs. 
Prior to 1992, the competitive payphone owners earned no revenues when a caller "dialed
around" the presubscribed carrier to reach the long distance carrier of his choice.  A caller
"dials around" by using an access code (e.g., 1-800-CALLXXX or 10XXX) that connects the
caller to a particular long distance company.  







                                  (over)



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          In April 1992, the FCC adopted rules that prescribed an interim mechanism by which
competitive payphone owners may collect a flat rate of $6 per payphone per month from
certain IXCs for originating interstate access code calls from their payphones.  In its action,
the Commission has asked for comment on a per-call payment mechanism.  The Commission
tentatively concluded that the largest IXCs, those with annual toll revenues exceeding $1
billion, should be required to pay compensation on a per-call basis.  Under this mechanism, a
carrier would pay the competitive payphone owner a certain rate for each call that a caller
originates using an access code.

     Action by the Commission August 23, 1995, by Memorandum Opinion and Order on
Further Reconsideration and Second Further Notice of Proposed Rulemaking (FCC 95-374). 
Chairman Hundt, Commissioners Quello, Barrett, Ness and Chong.

  -FCC-

     News Media contact: Susan Lewis Sallet at (202) 418-1500.
     Common Carrier Bureau contact: Michael Carowitz at (202) 418-0960.