Alaska's payphones to disappear soon

With the emergence of cell phones, public telephones no longer make economic sense

Posted: Monday, April 19, 2010

Sometimes the sound of progress is silence.

Payphones across Alaska will no longer ring as two major telephone companies disconnect phone lines and remove public telephone booths throughout their service areas.

Alaska Communications Systems will decommission 1,000 payphones statewide by the end of the month. GCI has already removed about 500 this year. Both companies are getting out of the business.

The growing use of cell phones has practically rendered payphones obsolete, making it easy to find a teenager these days who has never even used one. And with fewer people dropping coins into payphone slots, the service has become a losing business proposition, the companies said.

It takes about 150 calls a month to cover payphone operating costs, according to published interviews with national companies operating in other parts of the country. Lines and booths have to be maintained, coins collected and vandalism fixed.

ACS and GCI could not provide cost and profit data for this story, but GCI Vice President of Commercial Sales and Marketing Brad Spees said only a few of its hundreds of payphones generated a reasonable return.

"One of the things businesses have to constantly do is offer services customers want and need. And the thing with payphones - they're just there. The public's not using them," he said.

ACS said use of its payphones dropped 69 percent between 2008 and 2009.

The companies are following national trends. The number of payphones nationwide dropped more than 50 percent, down to 870,000 in 2007 from 2.1 million in 1998, according to the Federal Communications Commission. During that time, the number of cell phones more than tripled.

Qwest, AT&T and Verizon already opted out of the payphone business.

Payphone decommissions are sometimes contentious because telephone access can be a security issue, and some people just like the convenience. Cell phones don't always get service, their batteries run out and not everyone has one.

City officials in Juneau aren't comfortable with the disappearance of every one of the city's payphones. They discovered plans to remove them in March, after one was taken out by GCI at the downtown parking garage.

"It's a concern for us because several are out there for public service purposes and we hadn't had an opportunity to make other arrangements," Executive Assistant Angela Hull said.

In addition to the parking garage location, the city wants to keep payphones outside city hall, on the wharf and at the airport. A full inventory is planned.

At a meeting with the city Friday, Spees said GCI agreed not to remove any more payphones that officials are concerned about until the two entities can work on a solution.

"We want to be good partners in the city so we're collaborating with them about the best transition away from payphones," Spees said. Details and costs had not been determined as of Friday.

City officials in Laguna Beach, Calif., found subsidized payphones too expensive. They decided to drop the service in beaches and parks after determining it would cost nearly $10,000 a year to operate 11 payphones on city property, according to The Orange County Register.

Pacific Telemanagement Services, the company offering Laguna Beach the service, charges $75 a month to maintain a payphone but the phone must generate at least 150 calls a year, the company told the newspaper.

Spees said courtesy or emergency phones might be an option in Juneau, but city officials want phones to support tourism. On the wharf, cruise ship crews line up at a bank of payphones constantly in use when ships are in, Port Director John Stone said.

Also Friday, the Regulatory Commission of Alaska opened an investigation into ACS's payphone decommissions, asking for public input and questioning whether the commission's permission is required to stop the service. ACS and other companies provide services under a certificate of public convenience and necessity granted by the commission, which regulates all the state's public utilities.

ACS sent the commission a letter describing its intentions on Feb. 11. The letter was a courtesy and the company does not believe permission is requires, ACS Director of Corporate Communications Heather Cavanaugh said.

An RCA spokeswoman was unaware Friday that GCI also is removing payphones.

Cavanaugh said ACS would respond by the commission's April 23 deadline. The company plans to finish removing its payphones by April 30.

ACS will leave three phones in operation on Kodiak Island, in the communities of Akhiok, Karluk and Ouzinkie. The phones were designated by RCA as public interest payphones and qualify for state funding. The communities will be responsible for maintaining them, Cavanaugh said.

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