Return to Transcripts main page

American Morning

Pay Phones Rates on the Rise

Aired July 09, 2001 - 11:54   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: The next time you reach out and touch someone via pay phone, you may need some extra change. At more than 400,000 pay phones operated by SBC Communications, the cost of a call will soon go from 35 cents to 50 cents. And that is coming in September.

The company blames the hike, which will affect 13 states, on the increased use of cell phones and prepaid phone cards. But does a decision hurt some consumers?

Joining us now from Austin is Janee Briesemeister of the Consumers Union.

Janee, good morning. Good to see you.

JANEE BRIESEMEISTER, CONSUMERS UNION: Good morning.

KAGAN: Who is this 50 cent cost going to hurt the most?

BRIESEMEISTER: Well, it really will hurt all consumers, because we all use pay phones at one time or another. But it will most seriously affect the poorest of the poor who don't have phones in their homes and rely heavily on pay phones, and just anyone who is stuck and needs to make a phone call, whether it's for an emergency and whatever reason and they don't have a wireless phone available to them.

KAGAN: So we're hearing that part of this is because more people do have cell phones, so there's fewer people using pay phones. But this doesn't make sense in the old supply-demand theory that we all learn in Econ. 101.

If there are fewer people that are demanding the cost -- demanding the service, you would think the price would come down to encourage people to use the pay phones.

BRIESEMEISTER: Well, exactly. And this price increase may make wireless phones more affordable for some families. But, as I said, we all end up using pay phones at one time or another. Our cell phone battery might be out. We might be in an area without coverage. Or we're just stuck in a remote place and we need a phone.

But what we've seen recently is a great decline in the number of pay phones that are available. And there are some real public-policy questions with that. There are some safety reasons why pay phones need to be available on the lonely stretch of highway or in lower- income areas.

And we fear that these price increases will just continue that cycle where fewer people will be able to afford the phones and more phones will disappear.

KAGAN: OK, quickly, anything people can do about it if they are upset?

BRIESEMEISTER: The only thing you can do is complain to the location where the pay phone is -- the convenience store, the sports arena, whatever -- because pay phones are located with contracts between the pay phone provider and the location. And they get a share of the revenue. And they can have a say in how much the calls cost.

KAGAN: Janee Briesemeister, thank you so much.

BRIESEMEISTER: Thank you.

KAGAN: We appreciate your time.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com