TELECOM Digest OnLine - Sorted: Re: MCI Now Charging Extra on Payphones When Using Phone Card!

Re: MCI Now Charging Extra on Payphones When Using Phone Card!

William Van Hefner (
Thu, 9 Jun 2005 23:27:05 -0700 wrote about: MCI Now Charging Extra on Payphones
When Using Phone Card! on: 8 Jun 2005 17:52:19 -0700

> MCI now charging extra payphones when using their phone card!!!

> MCI has started charging a 65 cent surcharge on calls using their =
phone cards ...

Most companies have been adding payphone surcharges to their calling
cards for a long, long time. This is absolutely nothing new. I have
some MCI pre-paid calling cards that I bought at Costco last
Christmas, and they plainly state that all calls made from payphones
will be hit with a 10 minute/unit surcharge. At the rate I bought the
cards at, that is a 29 cent surcharge.

It's simple to understand why carriers are charging this fee. First of
all, carriers have been forced to pay surcharges to payphone providers
(via their carrier, OSP or reseller) on each call for years now. The
compensation rate for these charges was raised more than six months
ago to an all-time high.

When you add the existing charges to the fact that carriers like MCI
have to cut individual checks to hundreds of different carriers and
resellers each month, you are talking about a major accounting
nightmare. In some cases, MCI itself may be the payphone carrier,
and it then has to cut a check to a division of its own company,
which in turn has to send checks to literally thousands of
independent payphone owners all over the country. If the payphone uses
an MCI reseller or OSP, you have to add yet another middleman.

You can blame our own Federal Communications Commission for caving-in
to payphone owners and others involved in the industry for raising the
limit on these surcharges. I guess that they feel sorry for the
payphone companies, who have probably seen their revenues drop by 90%
in the past 10 years.

William Van Hefner
Editor - TheDigest.Com

[TELECOM Digest Editor's Note: But I have to wonder what was wrong
with the old 'Separations and Settlements' process AT&T used for
about ninety years. And by the way, we had a response on this
yesterday as well, where the writer claimed that the 'fee to write
checks' also cut into the profit telco made on calls using calling
cards, etc. Actually, even without a master 'Separations and
Settlements' process like AT&T used to administer, the telcos all
have their own proceedures for this, and for the benefit of our
writer yesterday, each time someone makes a call from a payphone,
the carrier does not sit down and write a check for 65 cents or
whatever. They go for about a year at a time, then they subtract
what one owes the other from what the second one owes the first
one and settle up the difference. In other words, John Q. Payphone
Owner has a thousand dollars due him from MCI, and he owes MCI nine
hundred fifty dollars. MCI offsets what they owe each other, and
send John Q. Payphone Owner the difference, if any, or a bill if
he owes them. Now John Q. may have been collecting the aggragate
differences each month from the local telco -- let's call them
Verizon for example (via the same technique) so when MCI makes an
annual or semi-annual settlement with Verizon one of them says
"do not forget about John Q and what he has coming"; they compare
notes and give John his few dollars due. There is _not_ all that
massive numbers of checks written and 'major expenses which cuts
down on the profits' as our correspondent yesterday claimed. PAT]

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