PROVIDENCE, R.I. -- Making a local call from a Verizon pay phone in Rhode Island will soon cost 35 cents, a 10 cent increase. Verizon's last price increase was in 1994.
Adjusting each pay telephone to handle the new rate will take several weeks. As the telephones are adjusted, technicians will post the new price on the phone.
The price of local pay phone calls was deregulated by the Federal Communications Commission (FCC) in 1997 as a result of the Telecommunications Act of 1996. Since then, most local telephone companies and major independent pay phone companies across the country have increased the price of a local pay phone call to 35 cents.
"For many years, the price of local calls from pay phones was kept artificially low because of subsidies from other services," said William M. Freeman, president of Verizon Public Communications. "Now that pay phone service is no longer regulated, the subsidies are gone and competition in the marketplace is setting the price.
"Letting the market establish fair prices promotes the availability of pay phones, enabling Verizon and our competitors to recover the cost of providing pay phone service," Freeman said. "Customers we've talked to in other markets have told us a local call is still a great value at 35 cents."
The local coin rate in Rhode Island was 5 cents until 1983 when it was increased to 15 cents. This price did not increase again for another 10 years, going to 20 cents in 1993. The rate was raised to 25 cents in 1994.
"We compete with hundreds of other companies for sites where customers need pay phones. We must pay competitive commissions to property owners who permit us to put our pay phones in their businesses, whether they are fast food outlets, gas stations, airports or municipalities responsible for sidewalk phones," he said. "Competitive prices also give Verizon the revenue needed to keep pay phones in good working order and clean."
After studying the telecommunications market in 1996, Congress said the pay telephone business is competitive and ordered it deregulated. Congress also required that all direct and indirect subsidies of pay phone service be eliminated. Its goal was "to promote competition...and the widespread deployment of pay phone services to the benefit of the general public," according to the Telecommunications Act. FCC rules eliminating subsidies and deregulating prices took effect in 1997.
Customers who use Verizon phones can reach emergency services (911) and toll-free calling at no charge from its pay phones.
Verizon Communications Inc. (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with more than 101 million access line equivalents and more than 26 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.