nEWS
DISTRIBUTOR SUES
TO PLACE PRIVATE PAY PHONES
Privately owned pay telephones
could be a viable part of the coin-op
industry,but they are controversial
in many states.
Dave Madden of San Antonio , a
distributor for Tonk-A-Phone , filed
suit against Southwestern Bell Tele-
phone Company for the right to sell
coin-op phones to businesses and
individuals who want a private ver-
sion of the familiar public phone .
" Southwestern Bell was confis-
cating phones as fast as I could put
them in ," Madden said . "One loca-
tion was a private club that met the
criteria of the tariff. They came in
and used some strong hand tactics,
including abusive language , to
eliminate the phones . That was the
final straw for me so I filed suit. "
Madden said he lost $15 ,000 " as a·
direct result of harassment of my
customers by Southwestern Bell. "
Madden is referring to South-
western Bell 's tariff (company policy
with the Public Utilities Commis-
sion's stamp of approval) which
states that no one is allowed to resell
phone services . This m ans that
locations that have public access
cannot resell the service .
Madden said he sells the phones
to businesses whose requests for
public pay phones have been
rejected by Southwestern Bell. The
only difference between private pay
phones and their public version ,
according to Madden, is that the
private owner has the keys to the
cash box.
Several others, including the club ,
have joined Madden in the suit.
Alan Irvin of the PUC has agreed
to hear the complaint. In a state-
ment to The Dalla Morning News ,
he said , " Under the current rule ,
Bell has the authority to cut off a
customer if he puts a Tonk-A-Phone
on the end of the Bell li~ . I' m not
sure I agree with that, though , so I
want another chance to take a look
at it."
Southwestern Bell currently places
pay phones in locations after
making a market survey showing
there is a potential for making a
profit. A location receives no com-
mission on the first $75, and the
maximum commission after $75 is 10
percent. Southwest Bell's coin
division took in more than $87
million on local calls on 104,800 pay
phones last year.
However, Madden believes it's
hard for an operator to make a profit
because a location may only make
$12.50 on $200 in revenues. In his
argument to the PUC, he said that a
phone requires about 5 square feet
of space, hardly making it profitable.
Richard Harris, vice president of
Revenues and Public Affairs for
Texas, said the issue is not whether
anyone else should be providing
coin-op phones, but whether Texas
telephone customers' interests wi ll
be affected. Southwestern Bell's
customer rates could be increased if
there is a loss of pay phone
revenues . Other issues Southwestern
Bell said it must consider are cus-
tomers getting their money back if a
call is not completed and if private
coin-op phones will allow for free
emergency dialing.
•
'DIGEST' TO MONITOR LEGISLATION
To strengthen the coin-op indus-
try's legislative awareness, AGMA
will provide a monthly information
service detailing relevant legislative
proposals and actions taken in aliSO
states.
The first issue of AGMA's Legisla-
tive Digest summarizes 142 bills
either pending or passed in 35
states. The document covers a wide
range of measures, including taxing ,
licensing, and zoning proposals ;
arcade operation and curfew restric-
tions; and miscellaneous bills such
as Connecticut ' s attempt to set
criminal penalties for breaking and
entering coinboxes .
PLAY MmR. July 1 5. 1984
The digest provides a state-by-
state legislative analysis, identifying
each bill by its sponsor, number,
short title, description , history, and
latest action taken in the respective
state House .
"Because successful legislative
efforts depend on information, it's
critical that individuals and groups
affiliated with this industry exchange
ideas and information based on
common experiences and problems.
We hope the digest will help foster
this type of expanded communica-
tion and coordination between all
levels and areas of the coin-op
amusements industry," Glenn Bras-
well , AGMA executive director,
said.
Based on information from the
AGMA computerized Legislative
Service, the digest will be sent
regularly to AGMA members, the
AVMDA,AMOA, and NCM I,aswell
as to state and loca l operato r s
associations. Indus try members who
want a copy should contact AGMA's
office at 703/548-8044.
AGMA's computerized legislative
data also is available to any industry
member for legislative information
or updates on these or other topics.
Contact AGMA Legislative Counsel
Peter Kopke at 703/548-8044.
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