Payphones Are Disappearing, Their FCC Audit Rules Will, Too

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The FCC voted to eliminate outdated and costly payphone audit rules on Thursday. Payphones have been disappearing for years from America’s streets and buildings. Payphone use peaked in 1999, when more than two million payphones were in service, according to the Commission.

In 2003, the agency adopted audit rules to make sure that long-distance and other providers that handled calls originating on payphones compensated payphone providers as required. But with the rise in cell phone use, the number of payphones has dropped — to less than 100,000 by the end of 2016.

“I remember when the only way to report a traffic accident by calling 911 was to find a working payphone,” said FCC Commissioner Mignon Clyburn as she voted for the change. Her colleague, FCC Commissioner Michael O’Rielly, said payphone audit obligations and the associated reporting requirements “no longer make any sense.” The cost of an audit now “significantly exceeds payphone compensation,” he said.  

He wanted the item to further help carriers. Some companies proposed that payphone compensation be submitted annually or eliminated altogether rather than be done quarterly, according to O’Rielly: “We should have addressed this today, but I am pleased that the Chairman is open to considering further deregulation in this area in the future.”

The elimination of the audit rules does not change the amount of compensation due to payphone providers or their ability to seek redress for compensation they believe they are due.

February 26, 2018

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