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

Letterless Keypads

a. The Notice

294. In the Notice, the Commission expressed a concern that use of letterless keypads may frustrate the intent of Congress, as expressed in TOCSIA, to permit callers to reach the OSP of their choice from payphones. We also stated that letterless keypads ultimately frustrate Congressional intent, as expressed in the 1996 Act, "to promote competition among payphone service providers and promote the widespread deployment of payphone services to the benefit of the general public[.]" Therefore, the Commission tentatively concluded that the use of letterless keypads violates both TOCSIA and the 1996 Act by preventing callers from accessing their OSP of choice, and we solicited comment on how the Commission should take action to prohibit use of these "by-pass" letterless keypads to restrict the availability of "vanity" access numbers.

      

     b. Comments

295. A wide range of commenters, including IXCs, RBOCs, independent LECs, state utility commissions and PPOs, share our concern that letterless keypads prevent consumers from reaching their OSP of choice and inhibit competition in the payphone industry. The Ohio PUC cites complaints by consumers and "representatives of persons with communications disabilities." In addition, many of the commenters agree with the Commission's tentative conclusion that letterless keypads violate both TOCSIA and the 1996 Act. A significant number of commenters encourage the Commission to ban these devices entirely. Alternatively, Sprint argues for promulgation of positive rules requiring alphanumeric keypads on all payphones. MCI, Scherers, and the Indiana URC argue for penalties to be assessed against offenders. In particular, MCI calls for "significant Commission forfeitures," while Scherers endorses punitive fines and disconnection of service as a response to violations. Sprint proposes further that no IXC should be required to provide compensation to any PSP found to be violating the proposed rule on letterless keypads.

      

     c. Discussion

296. We now conclude, as we tentatively concluded in the Notice, that the use of letterless keypads violates both TOCSIA and the 1996 Act. We find that an exclusively numeric payphone keypad defeats a caller's attempt to reach its OSP of choice through the use of commonly-used "vanity" access sequences such as AT&T's "1-800-CALL-ATT" and "10ATT" or MCI's "1-800-COLLECT." Such access sequences, which can be easily remembered by consumers, require the presence of both alphabetic and numeric characters on payphone keypads. A letterless keypad, therefore, clearly defeats a consumer's attempt to utilize these heuristic sequences. In their sales material, letterless keypad manufacturers have specifically positioned these devices as "by-pass keypad[s]" that "prevent[] dial around [calls]." No party has commented on a plausible purpose for these devices other than to restrict access to a non-presubscribed carrier.

      

297. To promote consumer access to OSPs, TOCSIA required the unblocking of 800 and 950 access numbers at aggregator locations and directed the Commission to mandate the unblocking of 10XXX access codes and/or the establishment of 800/950 access numbers by each OSP. We conclude that letterless keypads violate the unblocking requirements of TOCSIA by preventing consumers from reaching their OSP of choice through the dialing of vanity access sequences. A payphone keypad without alphabetic characters serves the same purpose as the blocking that is prohibited by TOCSIA. Accordingly, we will take enforcement action, including forfeitures, if such devices are used, just as we would take action against other forms of blocking. Moreover, OSPs may not pay commissions to PSPs whose payphones block access.

      

298. Independent of TOCSIA requirements, we conclude that the practice of deploying letterless keypads inhibits consumer choice in the selection of OSP services and is anticompetitive. Likewise, we conclude that such deployment restricts the availability of payphone OSP services to the general public. The 1996 Act seeks "to promote competition among payphone service providers and promote the widespread deployment of payphone services to the benefit of the general public[.]" Therefore, we conclude that use of letterless keypads is inconsistent with the 1996 Act.