Dial Around Juggernaut - Page 1
The dial around compensation system in the United States took nearly fifteen years for the FCC to fully implement into the "completing carrier pays" system that exists today. During those fifteen years, which took place between 1990 and 2004, the D.C. Circuit Court of Appeals either vacated or reversed important aspects of the system on four different occasions. In addition to the challenge faced by the FCC of trying to tweak the system to the court's satisfaction, the FCC also had to grapple with the challenge of trying to implement the per call compensation system in a way that simultaneously satisfied the two primary parties who had to participate in the system: the payphone service providers (PSPs) who are entitled to compensation and the long distance carriers who are charged with paying the compensation, for each completed call placed at a payphone.
"Dial Around" is a phenomenon that grew out of the federal government's breakup of AT&T's telephone monopoly in the United States in 1984. It is a reference to the ability of an end user making telephone calls to dial an access code to connect a call using the carrier of his or her choice. As an immediate result of the AT&T breakup, competing long distance carriers were free to enter the newly competitive telecommunications marketplace in the United States and vie for customers alongside AT&T. In those early days, many of the long distance carriers offered two kinds of calling for their customers: direct billing to preexisting accounts, and operator services for customers on the go.
The operator services marketplace in the aftermath of the AT&T breakup is what spawned the phenomenon of dial around. At that time, many operator service providers began to hit the scene. There emerged a new breed of long distance carrier that exclusively offered operator services and didn't offer traditional direct-dialed services at all; or, if they did, only at an insignificant level. These charlatan companies shamelessly gouged an unwitting public into paying exorbitantly high rates for their telephone calls. These carriers were easily able to gouge the customer in this manner because they had a captive audience, and their billing agents were the local telephone companies. If the customer failed to pay for the calls being billed, the local phone company might shut off the customer's phone service. The operator service providers didn't market their services directly to the public. Instead, they marketed their services to business establishments that traditionally had transient customers in need of making telephone calls, such as hospitals, hotels, dormitories, payphone service providers, and the like. As a sidebar, payphone services had also become a competitive industry as a result of the AT&T breakup in 1984.