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SEGAL: You should look somewhere between $180
per month and up. Actually, $180 is pretty marginal.
It's just like the vending and games busines~; some
locations are good and some locations are not as goo.cl.
PLAY METER: How can you tell if a phone manu-
facturer knows what he 's talking about or if he 's just
selling a bill of goods?
SEGAL: There are three questions I ask th~m. Just
three, and I can tell. First, I ask if their phone has a
stored rate table. Second, I ask if it's true pre-pay. By
that , I mean it doesn't have any buttons the customers
has to push; it works just like a Bell phone. As I said
before, an example of a post-pay phone is where you
put in your quarter when the party answers. And the
third question is, if they say they 're going to program
the rate table for me, I ask how much is the tariff from
prefix X to prefix Y, and I'll have done my homework
and know the answer ahead of time.
PLAY METER: Are there any other questions the
operator should ask?
SEGAL: Ask for the FCC number of the telephone. I
had one guy who told me it wasn't important for his
phone to be approved by the FCC. He said getting an
FCC approval was like Underwriters Laboratories. So
I knew with that one question right there the man
didn't know what he was talking about because all
phones have to be FCC registered .
And one other thing, beware of the quick sale.
Th~re are some manufacturers who got into this as a
sca lb.' So .any operator who's going to get into this
busin~ss_ .h a s to do his homework before he plunks
down tehs' of thousands of dollars .
'
-~\
,'"-
PLAY MET:ER: Obviously, there's a diversity of
state laws. Do~ you see this as good or bad?
SEGAL: We · ·· .. kit's bad. I think pay phone equip-
ment' should. !i'~ , r~gulated by the FCC, like the FAA
, regula~es airpla nes. They don 't regulate airfares, but
tney ·11Jike _sure certain features are mandatory on all
airplan:ti.:°F.Qr in.stance, all airpl anes have to have
wings and·~~~g; n ma'. sks and seat belts and certain
communication devices. The federal government can
establish certain standarc!,s.
Presently the FCC's s ~a nda rds are too general.
They should investigate what the public needs and
make those features manda t'or: on all pay phones.
Instead, that's all left up to the~ ate commissions, and
they know absolutely nothing about pay telephones.
They rely on their staffs, and their staffs rely upon the
Bell telephone company as the experts. So, obviously,
Bell is going to write tariffs that are self-serving.
We 're fortunate here in Illinois to have a favorable
tariff. In some states you ·can't even afford to go into
business. When they put a charge on a phone call and
put a low limit on how much you can charge, you can't
make money.
1
78
PLAY METER: Is operating telephones for every-
body?
SEGAL: I think a game operator or vending opera-
tor can make some money if he has a favorable tariff in
his state and wants to operate 50 or 100 phones in his
present locations . On the other hand, the guy who
wants to operate ten phones out of his basement will
find it's more trouble than it's worth. And a large
entity that wants to operate thousands of telephones
in favorable tariff areas could do very well.
PLAY METER: So you're saying pay phones is a
serious financial commitment. You can't just buy a
couple of telephones, like you can a couple of games,
and stick them out there?
SEGAL: It's just not worth the trouble . It's like the
vending industry in that respect. It's hard to make
money being little, and it's hard making money being
medium. You've got to be healthy.
PLAY METER: Would you say the security on the
pay phones is good?
SEGAL: The more expensive phones are built very
well, as far as the security on them. Then again, there
are some phones out there that are not built well
enough to withstand the abuse they're going to get.
And the less secure ones include the less expensive
ones and some of the expensive ones as well.
What you should look for is the locking
mechanism, just as you do on vending equipment. You
should look for the security measures the manufac-
turer took to protect the coins in the box not only from
a vandalism type of theft but also from employee
pilferage. Look for cash accountability within the
electronics of the telephone and some type of sealing
device which keeps the money.
PLAY METER: How long do you think it will be
before this industry has the equipment it'll need?
SEGAL: Within three to six months you'll see
equipment out there that the public will accept. Right
now the FCC regulates telephones based on where you
can get electrocuted when you use it. But I think you
might see the FCC step in because the regulations are
so screwed up throughout the states.
What happened was the industry opened up
and moved a lot faster than the technology and the
manufacturing were capable of handling. Of course,
you could say there aren't that many states that are
opened up at this time; so maybe it's right on schedule.
But my recommendation would be not to sign up to
buy 100 phones from anybody until you know you got
a phone that's going to work 100 perent like a Bell
phone. I think you' re gong to see a lot of changes
coming in the next three to six months. And be·
looking for it.
,
My last bit of advice is simply be careful. •
PLAY METER, April 15. 1985