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Published: December 2011

Payphones should be funded and fixed

Coalition: Telecommunications

In a letter to the Federal Communications Commission (FCC), Consumer Action and National Consumers League expressed support for two pending petitions from the American Public Communications Council (APCC) regarding payphones.

Below is the full text of the letter:

The National Consumers League and Consumer Action believe that payphones continue to play an important role in providing a needed communications link for millions of consumers and workers. It has come to our attention that the Commission is currently considering two petitions submitted by the American Public Communications Council (APCC) that would halt the imminent disappearance of the nation’s payphone infrastructure and preserve the critical functionality that these telephones provide to consumers, particularly those with lower incomes.

As consumers at all income levels have embraced mobile phones, payphones have increasingly been relegated into obsolescence. In 1999, there were approximately 76 million wireless subscribers and more than 2 million payphones in the U.S. As of June 2011, there were more than 322 million wireless subscribers and the number of payphones had dwindled to less than 500,000. NCL believes that the Commission correctly took the pro-consumer step of providing Universal Service Fund support to prepaid wireless Eligible

Telecommunications Carriers (ETCs). However, one consequence of this action has been to hasten the demise of payphones as an economically viable consumer communications technology.

While the FCC’s decision to subsidize prepaid wireless service through the Lifeline and Link Up programs has helped millions of consumers access telephone service, we submit that these benefits are limited. For example, consumers may only purchase one Lifeline- subsidized prepaid handset per household. When the handset is taken out of the household or when a member of a household is away from the residence, the benefit of this subsidy is lost. In such a scenario, the availability of public payphones meets a critical need, particularly in emergency situations. NCL is also concerned that, absent a robust payphone network, workers without subsidized wireless telephones may not have access to communications service while on the job.

We are cognizant of the Commission’s long-term goal of transitioning the Universal Service Fund away from supporting voice telephony to supporting broadband service. While we applaud this goal, we would note the Joint Board on Universal Service’s recommendation that the Commission continue to support voice service during this transition, particularly in unserved and underserved areas. We would also note examples internationally where the payphone infrastructure has served as the basis for providing public wi-fi hotspots6 or augmenting existing cellular networks.

The Communications Act of 1996 directed the Commission to “ensure the widespread deployment of payphone services to the benefit of the general public.” While consumers are clearly less dependent on payphones today that they were when Congress gave this guidance to the Commission, we submit that millions of consumers continue to depend on payphones as a critical communications link. In furtherance of its universal service mission, we therefore believe it to be appropriate that Commission allow Universal Service Fund (USF) monies to support payphone service.

While we believe that the USF funds should support public payphones, we would urge the Commission to require payphone providers to keep qualifying payphones in good working order. For example, a recent report found that one in three payphones in the New York City subway system did not fully work in the summer of 2010.  
 
To ensure that payphones may continue to provide a critical communications link for consumers, we therefore urge the Commission to grant the pending APCC petitions and allow USF funds to support payphone service.

Lead Organization

National Consumers League and Consumer Action

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