Date: Wed, 20 Jan 1993 02:00:57 -0600 (CST)
From: wdp@gagme.chi.il.us (Bill Pfeiffer)
Newsgroups: comp.dcom.telecom
Subject: Chicago Pay Phone Rip-Off; COCOT Triumph!
Organization: TELECOM Digest
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 13, Issue 36, Message 2 of 8

I have not seen this matter dealt with much in the TELECOM Digest so I
am writing about it.

About a month ago, Illinois Bell began re-programming their pay
telephones to require 30 cents for a local call that used to cost a
quarter.  My understanding is that this was their remedy for having to
refund some kind of an ill-gotten rate increase that they had levied
against residential customers.

I find this practice very inconvenient and a bit insulting.  First,
now I have to have AT LEAST two coins to complete a local call from a
Ill Bell payphone, while COCOTS remain at a quarter (although they are
timed while Bell phones are not).  Second, it is quite aggrivating to
realize that Bell is allowed to hike the cost of local pay service to
the HIGHEST in the nation, so that they can pay back a bogus rate
charged to other customers.  They claim that the surcharge is only
temporary.  Their idea of 'temporary' is five years!  I have never
seen a 'temporary' surcharge reversed.  When it is time to do so,
inflation will be sited as a reason to keep the charge in place.  The
Illinois Toll Roads were built in the 1950's as 'temporary toll'
roads.  Guess what, the toll booths are still there and the fees go up
every few years.  Surprise, surprise!

It is not so much the extra nickle, as it is the inconvenience of
having to feed multiple coins into the phone and what appears to be a
blatent act of robbery.  If Ill. Bell collected monies that they
shouldn't have, then they should have to pay it back themselves, not
burdon the public phone users with an additional fee.  How many calls
will be completed using two quarters or a quarter and a dime simply
because the caller does not have a nickle?

In addition, calls that once cost the basic rate of 25 cents now cost
thirty-five (or more) cents, indicating that the boundries of what is
considered a 'local' call have been shrunk.  What arrogance!

I have seen stickers on many COCOTS saying "Local calls still a
quarter".  My business requires that I make several short (one to
three minute) calls to clients when paged.  I now seek out COCOTS
rather than avoid them as I used to.

Maybe this is designed to make cellular more attractive.  Perhaps it
will, but if I do have to go cellular, it darned sure will not be with
Ameritech, the carrier connected with Ill Bell.


William Pfeiffer
Moderator - rec.radio.broadcasting - Internet Radio Journal
To submit articles send them to rrb@airwaves.chi.il.us
To subscribe, send e-mail to journal@airwaves.chi.il.us


[Moderator's Note: Bill, you and I have been personal friends for
fifteen years; we've lived in Chicago most of our lives and I presume
you read the papers as I do. Let's put the record straight here: A tax
was imposed many years ago on local telephone calls made from pay
phones. The tax was/is one cent. Being unable to collect one cent in a
payphone, IBT decided to spread the tax over all their subscribers,
more or less by a formula which took the number of payphone calls made
in a period of time, multiplying this by one cent each, dividing by
the total number of subscribers and tacking it on the bill of each
divided by 12, the number of bills in a year.  The billing, collection
and payment of taxes on telephone calls and service with the varying
rates involved is an enormously technical and complicated process.

Someone sued and said subscribers should not have to pay the taxes of
the pay phone users. IBT asked, "Don't you also use payphones, on
average, X times per year? ... So pay your taxes ..."  But that
argument did not wash. The court said to refund the tax (which had
already been paid to the city/county/state) paid by subscribers and
henceforth to collect the tax from payphone users who actually made
the calls and incurred the tax liability. So now the payphones collect
an additional five cent coin, which is the closest present technology
can come to collecting one penny. One penny pays the tax for the pay
phone call being made at present; the other four pennies compensate IBT
for the taxes they paid in the past but had to refund to subscribers
without being allowed to collect-back from the governments here who
said essentially, "hey, the calls were made and you owe us the penny
for each one .. ". (The old system was in effect for twenty years.)

I think technically, pay phone calls are 25 cents, tax is one penny
and 'adjustment for tax previously paid on user's behalf' is four
pennies. IBT estimated that five year's worth of collecting the extra
'adjustment pennies' would compensate them for what they were forced
to refund yet unable to reverse back to the governments in the same
process. After five years, yes, you will still continue to deposit 30
cents in payphones for calls, barring other unforseen changes, but the
distribution of the money will change: IBT will no longer be compen-
sating themselves four pennies at a time, although unless the technol-
ogy changes, they'll still be getting the pennies but putting them in
a different pocket. The COCOT taxes are a little different as are
taxes on 'semi-public' coin phones where someone is paying IBT to
have the coin phone there.  I won't go on, this is already outrageously 
boring.  Utility tax collection/remittances/pro-rations and tax
credits are a very technical, detailed and complex process.  Add to
payphones the fact that the local telcos have to collect and
distribute the tax money on long distance calls to the various
carriers, etc. Lots of people are employed in the Tax Accounting
department at IBT and other telcos.  PAT]