II. Background

III. Issues
The Payphone Marketplace
Compensation for Each and Every Completed Intrastate and Interstate Call Originated by Payphones
1. Payphone Calls Subject to this Rulemaking and Compensation Amount
2. Entities Required to Pay Compensation
3. Ability of Carriers to Track Calls from Payphones
4. Administration of Per-Call Compensation
5. Interim Compensation Mechanism

Reclassification of LEC-Owned Payphones
1. Classification of LEC Payphones as CPE
2. Transfer of Payphone Equipment to Unregulated Status
3. Termination of Access Charge Compensation and Other Subsidies
4. Deregulation of AT&T Payphones

Nonstructural Safeguards for BOC Provision of Payphone Service

Ability of BOCs to Negotiate with Location Providers on the Presubscribed InterLATA Carrier

Ability of Payphone Service Providers to Negotiate with Location Providers on the Presubscribed IntraLATA Carrier

Establishment of Public Interest Payphones

Other Issues
1. Dialing Parity
2. Letterless Keypads on Payphones
3. Oncor Petition

IV. Procedural Matters
1. Petitions for Reconsideration
2. Paperwork Reduction Act Analysis
3. Regulatory Flexibility Act Analysis

Conclusion

Ordering Clauses

Appendix A
Text of Section 276
Appendix B
List of Parties Filing Comments
Appendix C
List of Parties Filing Replies
Appendix D
Immediate Rules Adopted by This Order
Appendix E
Rules Adopted by This Order
Appendix F
Interim Compensation Obligations

ABILITY OF PAYPHONE SERVICE PROVIDERS TO NEGOTIATE WITH LOCATION PROVIDERS ON THE PRESUBSCRIBED INTRALATA CARRIER

253. Section 276(b)(1)(E) directs the Commission to provide all payphone service providers with the right to participate in the selection of the intraLATA carriers presubscribed to their payphones. In implementing this mandate, we seek to eliminate existing barriers upon any payphone service provider's ability to compete on this basis.

      

     1.The Notice

254. Section 276(b)(1)(E) of the 1996 Act directs the Commission to "provide for all payphone service providers to have the right to negotiate with the location provider on the location provider's selecting and contracting with, and, subject to the terms of any agreement with the location provider, to select and contract with, the carriers that carry intraLATA calls from their payphones." In the Notice, we tentatively concluded that all PSPs, whether LECs or independent payphone service providers, should be given the right to negotiate with location providers concerning the intraLATA carrier. We also tentatively concluded that the intraLATA carrier presubscribed to a payphone should be required to meet minimum Commission standards for the routing and handling of emergency calls.

      

     2.Comments

255. Commenters generally agree with the tentative conclusion that all payphone service providers should have the ability to negotiate with location providers for the selection of intraLATA carriers from their payphones. Those who commented on the issue also agree with the our tentative conclusion that minimum standards for the handling and routing of emergency calls should be required of all intraLATA carriers presubscribed to a payphone.

      

256. Some commenters, including AT&T, MCI and SCPCA, assert that, in order to ensure effective competition in the intraLATA market, the Commission should specifically preempt any state requirement mandating the routing of intraLATA calls to the incumbent LEC. AT&T also argues that the Commission should preempt any other state requirements that are inconsistent with the provisions of Section 276, including those requiring the inclusion of ILEC payphones in the presubscription process in states with toll dialing parity orders issued prior to December 15, 1995. AT&T additionally asserts that the Commission should require immediate intraLATA presubscription for all BOC payphones located in areas where intraLATA presubscription is technically feasible. Florida PSC argues that end-users placing 0- calls often seek assistance from live operators for emergency purposes, and therefore the Commission should continue to allow 0- traffic to be routed exclusively to the LEC.

      

257. The RBOCs assert that the Commission should not mandate the adoption of new technologies in order to allow intraLATA presubscription at the central office switch. The RBOCs state that such a requirement is neither technically feasible, nor necessary, since independent payphone service providers can program their "smart" payphones to select a presubscribed intraLATA carrier without relying on the local exchange carrier's central switching programming. Instead, the RBOCs contend that central office based presubscription for payphones should be addressed at the same time as all other intraLATA presubscription issues under Section 251 of the 1996 Act.

      

258. ACI-NA asserts that while all payphone service providers should be authorized to negotiate with location providers on an equal basis, the Commission should make it clear that payphone service providers may not contract with a carrier over the objections of the location provider. Independent payphone service providers also argue that the Commission should make explicit that the right to choose an intraLATA carrier includes the right to use the carrier for local sent and non-sent paid calls. SCPCA also contends that all PSPs should be able to negotiate with location providers for selecting the local operator service for their payphones.

      

     3.Discussion

259. We affirm our conclusion that all payphone service providers should have the right to negotiate with location providers concerning the intraLATA carriers presubscribed to their payphones. This conclusion is consistent with both the specific language of Section 276, as well as with the 1996 Act's goal of bringing competition into this industry segment.

      

260. We also affirm our tentative conclusion that intraLATA carriers presubscribed to payphones should be required to meet our minimum standards for routing and handling of emergency calls. We recently addressed this issue in CC Docket 94-198, in which we extended to aggregators, including payphone owners, standards for routing emergency calls. This conclusion reflects our finding, also discussed in connection with public interest payphones, that payphones often serve a critical role in accessing emergency service. By mandating the application of these minimum standards to intraLATA carriers presubscribed to payphones, we seek to ensure that individuals can receive timely and proper assistance when they rely on payphones for 0- or 911 emergency calls.

      

261. Because Section 276(b)(1)(E) establishes that all payphone service providers are to have the right to negotiate for intraLATA carriers for their payphones, we find that state regulations which require the routing of intraLATA calls to the incumbent LEC are inconsistent with the 1996 Act. Section 276(c) specifically states that "to the extent that any State requirements are inconsistent with the Commission's regulations, the Commission's regulations on such matters shall preempt such State requirements." Since we have found state requirements that mandate the routing of any or all intraLATA calls to an incumbent LEC to be inconsistent with the requirements of Section 276(b)(1)(E), we conclude that all such state requirements are preempted by the Commission's regulations.

      

262. We take particular note, however, of Florida PSC's argument that states should be allowed to mandate that 0- calls from payphones be routed exclusively to the incumbent LEC. Florida PSC notes that such a requirement is necessary to ensure that emergency calls, where the caller simply dials "0" and nothing else, are delivered to a live, local operator. We believe that requiring 0- calls to be initially routed to the LEC is not necessarily inconsistent with the provisions of Section 276(b)(1)(E), so long as the state does not mandate that the LEC ultimately carry non-emergency intraLATA calls initiated by dialing "0" only.

      

263. As with the selection of an interLATA carrier, payphone location providers will have ultimate decision-making authority in the selection of intraLATA carriers for payphones located on their premises through their selection of a payphone service provider. Obviously such choice is predicated on the development of competition in the in-region, intraLATA market. Once choice of intraLATA providers becomes available, however, PSPs can be expected to compete for locations through, among other things, the intraLATA carriers presubscribed to their payphones. As with the selection of interLATA carriers, interference with existing agreements between location providers and payphone service providers or intraLATA carriers, as well as undue coercion restricting the location provider's exercise of choice of such carriers, may constitute unjust and unreasonable practices in violation of Section 201(b) of the Act.