Dial Around Juggernaut - Page 5

STRIKE 1. The D.C. Circuit Court of Appeals reversed the FCC's conclusion that the operator services law precluded subscriber toll free calls from the dial around compensation system. Florida Public Telecommunications Association. v. FCC, 54 F.3d 857 (D.C. Cir. 1995).

Shortly after this judicial development hit the dial around compensation system, Congress further deregulated the telecommunications industry in the United States with the passage of the Telecommunications Act of 1996, Public Law Number 104-104, 110 Stat. 56 (1996). Section 276 of this new law required the dial around compensation system to include subscriber toll free calls because section 276 prescribed compensation for each and every call completed from a payphone (except emergency calls). In response to section 276, the FCC immediately modified its existing interim per phone compensation system so that it would include compensation for subscriber toll free calls being dialed from the payphones. In doing so, the FCC arbitrarily chose as a basis for compensation a rate of $.35 per call.

STRIKE 2. The D.C. Circuit Court of Appeals vacated the FCC's arbitrary rate of $.35 per call for payphone compensation. Illinois Public Telecommunications Association v. FCC, 117 F.3d 555 (D.C. Cir. 1997). The FCC responded by calculating a new rate of compensation as a basis for the dial around compensation system, this time by declaring that the per call compensation rate should be based on the local coin rate, and somehow the FCC figured that the marketplace sustained an average of $.35 per call.

STRIKE 3. The D.C. Circuit Court of Appeals vacated the FCC's second rate of compensation, which turned out to be $.284 per call after adjustments. Once again the court said that the FCC's basis for the rate was arbitrary. MCI Telecommunications Corporation et al. v. FCC, 143 F.3d 606 (D.C. Cir. 1998). The FCC responded one more time by calculating a new rate of compensation using a more thoroughly reasoned approach. The newly calculated rate turned out to be $.24 per call, and this third time, the D.C. Circuit Court of Appeals affirmed. American Public Communications Council, et al. v. FCC, 215 F.3d 51 (D.C. Cir. 2000).