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PAY PHONES GOING WAY OF DINOSAUR
OUTLETS FEWER, INCOME LESS AS CELL USE THRIVES
The Associated Press
The New Orleans Times-Picayune
Raymond Spera says he is almost always on the phone checking
messages at work, calling his children at home or making appointments
with friends and associates.
But these days he doesn't bother to hunt down a public phone.
"Quite honestly, I don't use a pay phone at all, because I have
this," said Spera, 34, waving a cellular phone, which rang
insistently on a recent Sunday afternoon in Philadelphia's upscale
"Before, I would run into vandalized or out-of-order pay phones
all the time. I would only use them when I had to," he said.
Spera is among a fast-growing number of consumers who shun pay
phones in favor of increasingly affordable wireless phones that can
be used to send or receive calls anytime, anywhere and then be tucked
away in a pocket or purse.
Pay phone providers are feeling the pinch.
Nationwide figures are not kept on the decline, but pay phone
providers across the country say it is noticeable, especially in
larger cities where the volume of calls is bigger.
"I don't think there is any question that wireless phone usage has
had a definite impact," said Vince Sandusky of the American Public
Communications Council, which represents independent phone companies.
"Most of the companies ... don't just throw up a pay phone wherever
they might want one anymore."
Bell Atlantic Corp., which operates 90 percent of the public
booths in the Northeast, says it had a 14 percent drop in 1999 pay
phone revenue and a 10 percent decline in 1998. Pacific Bell said a
similar decline seemed "intuitively correct," though it did not have
It's a far cry from the days of the first coin-operated phone,
introduced in 1889 by William Gray in Hartford, Conn., said Sheldon
Hochheiser, a historian for AT&T Corp.
"The story goes that he had a wife who had taken ill," he said.
"He didn't subscribe to a phone. So he went to the nearest place --
a local shop -- but the foreman wouldn't let him use the phone. It
got him thinking there should be another way."
It was a clunky wooden thing, with a listening receiver, a speaker
to talk into and no coin return, Hochheiser said. But Gray's coin-
operated phone worked, and it got rid of an earlier generation of pay
phones, which required costly attendants who collected fees.
It also opened up service to about 90 percent of the population
who could not afford a home line. In 1902, more than 81,000 pay
phones were in use nationwide, a figure that increased considerably
in 1912 when New York installed 25,000 pay phones. By that time,
companies had switched to a standardized metal design that basically
remained until the 1960s, Hochheiser said.
The United States has about 1.6 million pay phones and only 3
percent of the population lacks home service, officials say. But the
number of pay phones is likely to decline as several companies are
tearing down underused phones, concentrating those that remain in
more lucrative locations such as transportation centers, downtown
street corners and office buildings.
The chief reason for this re-evaluation comes from the roughly 80
million cell phones in use nationwide, a number that continues to
grow rapidly as the devices become smaller and cheaper, according to
the Cellular Telecommunications Industry Association of Washington,
In addition, the rise of prepaid calling cards and dial-around
calling plans -- such as the 10-10 discount programs -- have
siphoned away revenue, because pay phone providers only receive small
compensation when a competitors' card or calling plan is used at
their public booths.
And then there's the image and upkeep. In larger cities, companies
say vandalism can be commonplace, leaving phones run down and out of
All these factors could lead to the extinction of pay phones, said
Anand Anandalingam, a professor of information management at the
University of Pennsylvania's Wharton School of Business.
"The chances are, the traditional pay phones that are wired are
going to become obsolete," he said. "They may be replaced by a
wireless equivalent ... so when you enter a mall, you can pick up
some kind of cordless phone to make a call."
Nicholas Economides , an economics professor at New York
University's Stern School of Business, agreed. Already, at least one
entrepreneur is developing a prototype for a "disposable" cell phone,
which comes with prepaid minutes, Economides said.
But fans of pay phones aren't writing them off just yet, saying
they still offer the greatest protection from dropped calls, static
interference and even bugged lines.
And that may have benefited at least one group.
"Amongst gangsters, they're reluctant to talk on cell phones and
in their homes because their lines could be wiretapped or picked up,"
said Fred Martens, former executive director of the now-defunct
Pennsylvania Crime Commission, which tracked the Philadelphia crime
family and other groups.
"So a pay phone is still a vehicle for them," he said. "As long as
the mob is alive, pay phones will have a viable market."