SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Pay Telephone Protection 
Act of 1998''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) Some payphone service providers have increased the 
        charge for the use of a coin-operated pay telephone for a local 
        call to 35 cents but have not put into place a system for 
        providing change to users of such telephones for amounts 
        deposited in such telephones in excess of such charge.
            (2) Payphone service providers should charge pay telephone 
        users only for the actual time of use of pay telephones.
            (3) Most consumers, if given a choice, would prefer that 
        any amount of such excess deposits that are not refunded to 
        consumers be used for pay telephones for public health, safety, 
        and welfare purposes rather than have such excess deposits 
        accrue to the financial benefit of payphone service providers.
            (4) There are approximately 2,000,000 pay telephones in the 
        United States, and payphone service providers accrue 
        substantial revenue at the expense of Americans who do not have 
        the exact amount of the charge for their use.
            (5) A decision of the Federal Communications Commission to 
        deregulate the provision of payphone service was premature and 
        did not address adequately the need for local competition that 
        would benefit users of pay telephones.
            (6) The decision of the Commission does not promote the 
        widespread deployment of affordable payphone service that would 
        benefit the general public, nor does the decision promote the 
        widespread deployment of public interest telephones.
            (7) The use of coin-operated pay telephones represents an 
        increasing commercial activity that substantially affects 
        interstate commerce.
            (8) Public interest telephones should be maintained in each 
        State and should be provided to promote the public safety, 
        health, and welfare.
    (b) Purpose.--The purpose of this Act is--
            (1) to require payphone service providers--
                    (A) to provide cash change to pay telephone users 
                who deposit amounts for local telephone calls in excess 
                of the amounts charged for such calls; or
                    (B) in the event that such providers do not provide 
                such change, to transfer amounts equal to such change 
                to appropriate State entities for public interest 
                purposes related to telephone service;
            (2) to encourage such changes in pay telephone technology 
        as are needed to assure that payphone service providers--
                    (A) do not overcharge pay telephone users who do 
                not have the exact amount of the charge for local pay 
                telephone calls; and
                    (B) do not charge pay telephone users for any time 
                in which pay telephones are not actually in use; and
            (3) to require the Federal Trade Commission to determine--
                    (A) whether dysfunctions exist in the market for 
                payphone service including locational monopolies in 
                which the size of the market concerned results in the 
                availability of payphone service from a single 
                provider; and
                    (B) whether rates for coin-operated pay telephones 
                for local telephone calls are market based.

SEC. 3. PUBLIC INTEREST PAY TELEPHONES.

    Section 276(b)(2) of the Communications Act of 1934 (47 U.S.C. 
276(b)(2)) is amended to read as follows:
            ``(2) Public interest pay telephones.--
                    ``(A) Sense of congress.--It is the sense of 
                Congress that--
                            ``(i) in the interest of the public health, 
                        safety, and welfare, public interest pay 
                        telephones should be available and maintained 
                        in locations where there would not otherwise 
                        likely be a pay telephone; and
                            ``(ii) such public interest pay telephones 
                        should be fairly and equitably supported.
                    ``(B) Use of funds.--In accordance with such 
                regulations as the Commission shall prescribe, each 
                State agency that receives amounts under subsection 
                (c)(2)(A) shall use such amounts to promote or 
                otherwise support the installation, maintenance, and 
                use of public interest pay telephones, including 
                specially designed payphones for the disabled and the 
                provision of payphone service in remote locations, 
                nursing homes, emergency homeless shelters, hospitals, 
                facilities that assist the disabled, schools, and other 
                appropriate locations determined by the State agency 
                concerned.''.

SEC. 4. REQUIREMENT FOR CHANGE AT PAY TELEPHONES.

    (a) Requirement.--Section 276 of the Communications Act of 1934 (47 
U.S.C. 276), as amended by section 3 of this Act, is further amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (b) the following new 
        subsection (c):
    ``(c) Change at Pay Telephones.--
            ``(1) Requirement.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), a payphone service provider shall provide any 
                individual using a pay telephone of such provider to 
                make a telephone call described in subparagraph (B) an 
                amount of cash change equal to the amount (if any) by 
                which the amount deposited by the individual for the 
                call exceeds the charge for the call.
                    ``(B) Covered telephone calls.--Subparagraph (A) 
                applies to any local telephone call the charge for 
                which exceeds 10 cents.
            ``(2) Alternative use of excess collections.--
                    ``(A) Transfer.--In accordance with such 
                regulations as the Commission shall prescribe, a 
                payphone service provider may, in lieu of providing 
                cash change under paragraph (1)--
                            ``(i) transfer any excess amounts collected 
                        by the provider at pay telephones to the State 
                        agency in the State in which the telephones are 
                        located that is responsible for the support of 
                        public interest pay telephones under subsection 
                        (b)(2); or
                            ``(ii) if the State has no such agency by 
                        reason of a determination under subparagraph 
                        (B), transfer such excess amounts to the 
                        Commission for use under subparagraph (D).
                    ``(B) State option.--
                            ``(i) State option.--The chief executive 
                        officer of each State may determine whether or 
                        not to permit the transfer of funds to an 
                        agency of such State under subparagraph (A).
                            ``(ii) Revocation.--The chief executive 
                        officer of a State may revoke any previous 
                        decision with respect to the State under this 
                        subparagraph.
                            ``(iii) Notice.--The chief executive 
                        officer of a State shall notify the Commission, 
                        in writing, of any determination or revocation 
                        of a determination under this subparagraph.
                    ``(C) Use by states.--
                            ``(i) In general.--A State agency receiving 
                        amounts under subparagraph (A) shall utilize 
                        such amounts for purposes of promoting and 
                        supporting public interest pay telephones in 
                        the State under subsection (b)(2).
                            ``(ii) Additional use.--In the event that 
                        amounts received by a State agency under 
                        subparagraph (A) exceed the amounts determined 
                        by the agency to be required to properly 
                        promote and support public interest pay 
                        telephones in the State, the agency shall 
                        utilize the excess amounts for purposes 
                        relating to providing universal service or 
                        improving telephone service in the State under 
                        section 254.
                    ``(D) Use by commission.--
                            ``(i) Deposit.--The Commission shall 
                        deposit any amounts received by the Commission 
                        under subparagraph (A) in an account in the 
                        Treasury established for that purpose.
                            ``(ii) Availability.--Under such 
                        regulations as the Commission shall prescribe, 
                        the Commission shall utilize amounts in the 
                        account under clause (i) to assist States that 
                        receive amounts under subparagraph (A) with 
                        additional assistance to promote and support 
                        public interest pay telephones under subsection 
                        (b)(2).
                    ``(E) Notice to consumers.--
                            ``(i) In general.--In the event a payphone 
                        service provider decides to transfer excess 
                        amounts deposited at any given pay telephone 
                        under subparagraph (A) for purposes of 
                        supporting public interest pay telephones under 
                        subsection (b)(2), the provider shall post at 
                        such pay telephone a notice informing potential 
                        users of such pay telephone that any such 
                        excess amount shall not be returned as cash 
                        change or credit but shall be utilized for such 
                        purposes.
                            ``(ii) Additional notice.--Nothing in 
                        clause (i) shall be interpreted to limit 
a State from requiring additional notices with respect to the matters 
set forth in that clause.
            ``(3) Regulations.--
                    ``(A) Requirement.--Not later than one year after 
                the date of enactment of the Consumer Pay Telephone 
                Protection Act of 1998, the Commission shall prescribe 
                the regulations required under this subsection.
                    ``(B) Additional elements.--The regulations shall--
                            ``(i) provide for the monitoring of the 
                        compliance of payphone service providers with 
                        the provisions of this subsection;
                            ``(ii) ensure that such providers do not 
                        pass any costs relating to such compliance to 
                        consumers; and
                            ``(iii) ensure that the implementation of 
                        such provisions do not result in any reduction 
                        in payphone service, including the imposition 
                        of time limits on local telephone calls or 
                        other reductions or limitations in such 
                        service.
                    ``(C) Effective date.--The regulations shall 
                provide that the provisions of the regulations take 
                effect not earlier than 6 months after the date of the 
                final issuance of the regulations and not later than 12 
                months after that date.''.
    (b) Study of Alternative Technologies.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Federal Communications Commission 
        shall submit to Congress a report on the availability of 
        technologies or systems that permit persons who do not have 
        exact change to utilize pay telephones for local telephone 
        calls without being overcharged for such calls.
            (2) Elements.--The report shall address the use of tokens, 
        cash debit cards, systems for crediting the monthly telephone 
        bills of individuals who use pay telephones, and such other 
        technologies and systems as the Commission considers 
        appropriate.

SEC. 5. STUDY OF COMPETITIVENESS OF PAY TELEPHONE MARKET.

    (a) Study.--
            (1) In general.--The Federal Trade Commission shall, in 
        consultation with the Federal Communications Commission, carry 
        out a study of competition in the market for intrastate 
        payphone service, including--
                    (A) whether or not locational monopolies in such 
                service exist by reason of the size of particular 
                markets for such service;
                    (B) whether or not potential users of such service 
                are effectively barred from choice in such service in 
                particular markets by reason of difficulties in 
                identifying a variety of payphone service providers in 
                such markets;
                    (C) whether or not rates for local pay telephone 
                calls are market-based; and
                    (D) whether or not there is evidence of monopoly 
                pricing in such service.
            (2) Scope of comment.--In carrying out the study, the 
        Federal Trade Commission shall seek comment from a variety of 
        sources, including State and local public entities, consumers 
        and consumer representatives, and payphone service providers 
        and their representatives.
    (b) Report.--Not later than one year after the date of enactment of 
this Act, the Federal Trade Commission shall submit to Congress a 
report on the results of the study carried out under subsection (a). 
The report shall include the findings of the Commission with respect to 
the matters set forth under paragraph (1) of that subsection.
    (c) Federal Communications Commission Action.--Notwithstanding any 
provision of the Communications Act of 1934 (47 U.S.C. 151 et seq.), 
the Federal Communications Commission may, as a result of the study 
under subsection (a), conduct a rule-making proceeding in order to 
accomplish any of the following:
            (1) To set limitations on rates for local pay telephone 
        calls.
            (2) To permit the States to establish rates for such calls 
        on a cost basis.
            (3) To set limitations on the commissions that payphone 
        service providers may pay to persons who lease space to such 
        providers for pay telephones.
            (4) To prohibit payphone service providers from entering 
        into exclusive contracts with persons who lease space to such 
        providers for pay telephones which contracts cover multiple 
        locations.
Consumer Pay Telephone Protection Act of 1998 - Amends the Communications Act of 1934 to express the sense of the Congress that: (1) public interest pay telephones should be available and maintained in locations where there would not otherwise likely be a pay telephone; and (2) such telephones should be fairly and equitably supported. 
Directs each State agency that receives amounts representing unrefunded change from the use of public pay telephones to use such amounts to promote or support the installation, maintenance, and use of public interest pay telephones, including specially designed payphones for the disabled and the provision of payphone service in remote locations, nursing homes, emergency homeless shelters, hospitals, facilities that assist the disabled, schools, and other appropriate locations. 
Requires a payphone service provider to provide an individual using such payphone the amount of change which exceeds the actual cost of the call, applying such requirement to any local telephone call which exceeds ten cents.  Authorizes such provider, in lieu of providing such change, to transfer all excess amounts collected to the appropriate State agency or the Federal Communications Commission (FCC) to promote and support public interest pay telephones.  Directs the FCC to:  (1) prescribe regulations to carry out such requirements; and (2) report to the Congress on the availability of technologies or systems that permit persons who do not have exact change to use pay telephones for local calls without being overcharged. 
Directs the Federal Trade Commission to study and report to the Congress on the competitiveness of the intrastate pay telephone market. Authorizes the FCC, after such study, to:  (1) limit the rates for local pay telephone calls; (2) allow the States to establish such rates on a cost basis; (3) limit commissions that providers pay to persons who lease space to such providers for pay telephones; or (4) prohibit providers from entering into exclusive lease contracts which cover multiple locations.
Consumer Pay Telephone Protection Act of 1998