BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION UT-970301 Comments of United Telephone ) Company of the Northwest ) Possible Rulemaking ) Relating to Payphones ) Questions relating to Public Interest Payphones Can a public entity enter into a contract with a payphone provider with the result that one or more payphones at a location would be subsidized by the commissions from other payphone locations without being required to follow the FCC guidelines for public interest payphones? A public entity could place payphones in any location that it chose as long as the over-all contract was profitable to the provider. However, FCC orders would appear to prohibit formal subsidization of any such payphones. Could a government agency, representing a variety of public property owners (local, state, port, etc.) negotiate a set of contracts with payphone service companies with the expressed objective of subsidizing unprofitable locations with revenues from profitable locations? Could that agency disregard the FCC guidelines for public interest payphones? Same answer as to the previous question. Can you envision a situation where the contract between a public entity and a payphone service provider would have to follow the FCC guidelines for public interest payphones? If there were a formal subsidization mechanism, such as a fee or surcharge, for specifically defined and identified “public interest” phones then the FCC guidelines would have to be followed. From payphone service providers, we would like to know: Whether any type of review or audit has been contemplated by your company regarding the removal of unprofitable payphones as a result of the FCC payphone order and by payphone competition. What were the results of the results of the review or audit? United has not performed an audit or formal review. How many payphones have been removed since October 1996 because they were found to be unprofitable? Three. How many payphones have been removed since October 1996 because they were found to be unprofitable as a result of changes in FCC rules? None. How many payphones have been removed since October 1996 because they were found to be unprofitable as a result of payphone competition? Three. Of those payphones that were removed, how many were located on privately-owned land and how many were located on publicly-owned land? All on privately-owned land. How does the possibility of a higher coin rate and the new compensation for toll-free calls figure into projections of a payphone’s profitability? Only the dial-around compensation would make a significant difference and it would reduce the number of unprofitable phones. In cases where the location provider compensates the payphone company for a payphone, what is the average amount of compensation? United has no payphones, other than the remaining grandfathered semi-pub locations, for which the location provider compensates the company. From public entities and location providers, we would like to know: How many payphones have been pulled from locations because the payphone provider determined the site was unprofitable? N/A Of those locations where payphones have been pulled, how many still do not have a payphone? N/A If you have had to compensate the payphone provider for providing service, please provide the number of sites involved and the amount of compensation for each site. N/A Do you have any current locations where a payphone is needed but you have been unable to obtain payphone service? N/A The design of a “public interest payphone” program The FCC order defines public interest payphones as those which fulfill a public policy objective in health, safety, or public welfare. How should that public policy objective be defined? What criteria should be used to identify an eligible location? United defines a public interest payphone as follows: The phone location is one to which the general public has unrestricted access without a user fee; The phone is not part of a contract or agreement that provides monetary benefit to the vendor or to the entity on whose property the phone is located; The phone is not part of a bank of two or more public payphones; and The phone is unprofitable to the vendor providing it. The FCC order precludes a location provider with an existing contract for a payphone from also having a contract for a public interest payphone. Would this preclude a public entity, which holds a contract with a provider, from having a public interest payphone at one of its locations? If so, how should that public entity be defined (e.g., State of Washington, State Parks & Recreation Commission, or Millersylvania State Park)? United’s position in contracts with public entities for the provision of payphones is that, as long as the over-all contract is profitable, the public entity can place phones anywhere it wants. We believe the FCC order addresses specifically the issue of competitive and public interest phones in the same location. The FCC order prohibits a public interest payphone from being located in competition or proximity with a competitively-placed payphone. Is there a need to define the term “proximity” in that context? Probably there is a need to define “proximity,” but United has no specific suggestions at this time. If a state universal service fund were created, would you support funding a public interest payphone program from that fund? What other funding source or sources would be acceptable? As indicated in the answers to previous questions, United believes that payphones in non-profitable locations would best be supported as a part of contracts that are profitable over all. What part of the payphone service should be supported by a public interest payphone program? Could support be limited to access lines or should it include the payphone equipment, answer supervision, and/or location commissions? How should the amount of the support be determined? If the public interest phones were included as part of profitable contracts, this would not be a relevant consideration. What rates should be charged to consumers at public interest phones? The local coin rate should be the prevailing competitive rate. Please identify any other issues that you believe the Commission should consider in developing a state policy for ensuring the provision of payphones that meet health, safety, or public welfare objectives. United has no further suggestions. Comments on the following issues where additional rules may be proposed: Registration of Payphone Service Providers (PSPs) in a very abbreviated fashion, possibly a certification process, or “check the box” type process in conjunction with a standard business license through the Department of Licensing’s Master Business License Center. Non-applicable requirements of telecommunications companies would be specifically waived. The reason for requiring registration would be to secure information that may be essential in responding to public inquiries and in managing a program for public interest payphones. United has no objection to a simple, abbreviated certification process. Clear and legible disclosure of the rate for local calls, including any variations, or restrictions on the length of calls. PSPs should be prohibited from charging or collecting more than the posted rate. United has no objection. Clear and legible disclosure of directory assistance charges. PSPs would be prohibited from charging or collecting more than the posted rate. United has no objection. Addition of the area code to current requirements for displaying the telephone number of the payphone. United has no objection. Full uses of automated systems that require keypad tones. United has no objection. Prohibition of advance payments of any kind for access code calls or toll-free numbers. United has no objection. Adoption of a specific time period for updating the placard when an OSP changes. United has no objection. Limitation of advertising to that which does not in any way affect the various disclosure requirements or confuse the customer. United has no objection. A requirement that reported malfunctions of the payphone or rule violations be corrected within a reasonable period of time. United has no objection as long as the period of time in question is truly reasonable. Posting of a toll-free Commission number for consumer complaints. United has no objection. Fair and Equitable Competition / Please comment on the following issues: Prohibiting any form of discrimination among PSPs by the Local Exchange Company (LEC). Staff intends that LEC owned or operated payphones not have any competitive advantage over other PSPs and that LEC payphones not have any requirements beyond those of other PSPs. United has no objection. Requiring unbundling of any network service or feature that the LEC makes available to the LEC owned payphones or any other PSP. United has no objection. Establishing the right of a PSP to presubscribe to an Operator Service Provider (OSP) chosen by the PSP for local, intraLATA and interLATA long distance, as long as the OSP is registered with the Commission; has an appropriate tariff or price list on file with the Commission for the proposed service; and is technically capable of complying with all applicable OSP rules, particularly those dealing with public health, safety and welfare. United has no objection. Establishing a process or procedure for Commission staff to accept, investigate, and expeditiously resolve complaints regarding anti-competitive or discriminatory behavior among PSPs; misleading, deceptive or fraudulent acts against consumers; and anti-competitive or discriminatory behavior by the LEC. To the extent that complaints involve issues beyond the Commission’s authority to remedy, the staff intends to accept the complaint, investigate to the extent practicable, and forward our files and recommendations to the appropriate federal or state enforcement agency. United has no objection. What rules are still necessary given the informal and formal resolution of intercompany and equity (rate parity) issues through the following dockets: UT-970066, UT-970068, UT-970658, UT-970828 and UT-970835? United has no comment on this matter at this time. Would the companies agree that informal and/or formal complaint processes also be used to address any future intercompany and/or equity issues? United has no comment on this matter at this time. Comment on Locational Monopolies: United has no comment on this matter at this time. Other: Please identify any other issues that you believe the Commission staff should consider in the payphone rules. United has no further suggestions. Do you feel its worthwhile or necessary to conduct another workshop, or a similar type meeting? If so, would you recommend a workshop with staff and representative affected stakeholders; or a public meeting forum? Or, would you prefer to receive and review draft rules; provide written comments, and participate in a subsequent workshop or public meeting at that juncture? United would prefer to receive and review draft rules and provide written comments with a subsequent workshop or public meeting to be held later.