A dime in New Orleans. Fifteen cents in the District of Columbia and suburban Maryland. Twenty cents in Northern Virginia. And a quarter in Miami, Houston and Cincinnati.
Those are examples of the differences in the cost of making a telephone call from a Bell System coin telephone in some U.S. cities. The variations generally reflect decisions by the many local regulatory commissions that have jurisdiction over phone company rates in their areas. Some have kept the coin rate down in recent years while others have permitted increases.
But now the Bell System, which faces new competition in the telecommunications industry, has begun a drive to raise coin-telephone rates and coin-telephone operation revenues.
"The thrust is to go to 25-cent coin charges. That is the nationwide pricing policy for the Bell System," said Web Chamberlin, a representative of the C&P Telephone Co., a wholly owned Bell subsidiary.
Requests from Bell to raise coin rates to 25 cents are pending in 15 jurisdictions, including the District of Columbia, Maryland, Alabama, Kansas, Rhode Island, Georgia, Nebraska, South Dakota, Tennessee, New Jersey, New York, Illinois, South Carolina, North Dakota and West Virginia. Six states that already have 25-cent coin charges are Florida, Idaho, Kentucky, Oregon, Texas and the state of Washington. Cincinnati also has a 25-cent coin-phone charge.
Before the 1950s the coin-phone charge throughout the country typically was five cents. In the early '50s, it climbed to 10 cents in most areas as the Bell System asked for and won rate increases. In the early 1970s the company tried to get the coin charge set at 20 cents. Some jurisdictions approved the request; others refused and a few compromised and adopted 15-cent rates.
The 10-cent coin charge is still in effect in 28 states. Five others have 15-cent rates -- besides D.C. and Maryland, they are Nevada, North Dakota and Oklahoma. States that have 20-cent charges are Virginia, Arizona, Colorado, Delaware, Indiana, Maine, Michigan, New Mexico, North Carolina, Ohio, Vermont and Wyoming.
Chamberlin said the company effort to establish 25-cent rates stems in part from the pinch of inflation -- "a coin telephone costs us $443.04 today, up 590 percent since coin rates were raised six years ago in D.C."
A second reason for the campaign, he said, is the change in the company's pricing philosophy. In the past, before deregulation began to affect the telephone industry, Bell's telephone charges were designed so that monthly service rates subsidized coin phone charges. Now, he said, the company wants to change that. He said Bell wants the people using the coin-phone service -- typically travellers in town only for a short time -- to pay the bulk of the coin-service cost, rather than area residents.
At present, C&P Telephone takes in about $6.4 million a year from the 11,100 pay phones in the District. If the coin rate increased by 10 cents as requested and if the same number of coin-phone calls were made as before, C&P would reap an additional $3.2 million a year from this operation, Chamberlin said.
However, because increased rates probably would mean a decline in the number of calls made on coin phones, C&P projects that the 10-cent increase would add only about $1.3 million to its revenues.
Chamberlin said the company would ask that monthly phone rates go up $1.3 million if the coin phone increase is denied by the D.C. Public Service Commission. "It has to come from somewhere," he said.
According to telephone company projections, C&P could raise $1.3 million by imposing an additional charge of 30 cents a month on residential customer bills -- or by charging 25 cents for local coin-phone calls.
In its request for an increase in the District, the phone company cited a study showing that 72 percent of the residential telephone customers surveyed would prefer a 25-cent coin-phone charge to a 30-cent increase in their monthly bills.
But People's Counsel Brian Lederer, who represents consumers in utility cases before the D.C. Public Service Commission, says the telephone company strategy is aimed at assigning as much cost as possible to service where it has a monopoly so it can charge less for long-distance and business services in which it faces stiff competition.
He said it is virtually impossible to determine how much of the cost for telephone service goes to pay for local calls and how much is for long distance.