Dial Around Juggernaut - Page 4

Under this new law, dial around access from payphones was required to be free to the caller, meaning that PSPs could no longer require a coin deposit for toll free calls if their phones allowed free access to a presubscribed operator service provider. In addition, the new law required the FCC to consider the need for prescribing a system of compensation for PSPs for dial around calling. After taking an industry consensus, the FCC determined that compensation should be required to be paid to the PSPs by the traditional operator service providers to whom the customers were dialing around. Although the FCC determined that a per call compensation system was the appropriate system, it observed that a system of per call tracking could not be widely implemented in the public network for some time. Therefore, for an interim period of time, effective in 1992, the FCC's dial around compensation system required the carriers who received dial around calls to pay compensation to PSPs on a per phone basis rather than on a per call basis. The FCC struggled to obtain further industry consensus and pin down just how and when a per call tracking system could become viable. Ultimately, it did so by adopting FLEX ANI as the technical means for per call tracking, and required FLEX ANI to be widely implemented in the public network in late 1996 when it was viable. A true per call compensation system didn't actually become effective until late 1997. Until that time, the system remained a per phone compensation system.

But here, in 1992 when the FCC first created the dial around compensation system, it did something rather bizarre. It implemented its unblocking regulations under the new operator services law by requiring PSPs to unblock all forms of toll free calls – not just calls going to operator service providers – even though the companion compensation system precluded compensation for toll free calls not going to operator service providers. The calls precluded from compensation are better known as subscriber toll free calls, which were also generally being handled and billed by the traditional long distance carriers. These are the calls that permit an end user to reach a business simply by dialing the toll free number associated with that business. Because both the interim system of compensation (per phone) and the per call system of compensation were created by the FCC premised on the number of actual calls made from payphones, even the interim per phone compensation system was based upon exclusion of the subscriber toll free calls. The PSPs were being treated unfairly under the law. The matter was taken to the court of appeals.