INDEPENDENT PAYPHONE ASSOCIATION OF NEW YORK

The Independent Payphone Association of New York is a not-for-profit statewide trade organization representing the owners of independent public telephones of 130+ small independent companies with 40,000 anis in New York State. The association was incorporated in 1987, 3 years after AT&T was forced to divest itself of its public payphone operations creating regional (RBOC) BELL's (BELL Atlantic – NYNEX) across the country. The Courts order of divestiture called for competition, thus allowing the creation of other telecommunication companies to compete with the monolithic AT&T.

From 1985 to the present, predominately small MA & PA companies sprung up providing public telephone service in areas not served by the Regional Bells (low socio-economic and crime ridden neighborhoods).

Today, there are some 60,000 public payphones owned by the independents vs. 150,000 owned by the RBOC in New York State.

The competition that was intended didn't materialize with the AT&T divestiture because the wiring, networks, switching were owned and operated by the Regional-Bells, so, the independents had to rent access over the Bell lines and pay tariffs that amount to almost 50% of the local coin drop. In addition, the independents were precluded from curbside installations in the large cities such as New York City until only this past year and to a very small percentage.

The cities only recognized and franchised the Bells until almost the present time.

Needless to say, it was tough getting started, capitalizing a company, buying equipment, purchasing leases from storefront owners and space within the interior retail establishments.

In 1996, the Telecom Act of '96 was passed by Congress and signed by President Clinton with the intent to open competition and make the playing field level. The intended result is a cheaper, cleaner and more efficient phone service to the public.

The Telecom Act precluded cross subsidization that the Bells practiced. Formerly, they could and did support their public payphone operations from other areas, i.e., support operations, network services, cable, etc, The Bells reduced their presence in areas where profits were negatively impacted. This turned out to be a blessing for the small guy, who filled the vacuums in under served areas of the cities. In addition, because the independents didn't have large capitalized networks, they turned to manufacturers that produced modern "smart" phones, Each phone is a computer advising of service, coin, problems vs. the equipment of the Bells which are predominantly "Dumb" requiring massive service operations. The "Dumb" system uses a central computer that is outdated and inefficient.

The Telecom Act of ‘96 went a long way in attempting to level the playing field but only time will tell whether the FCC and the court decision results in a true leveling of the playing field.

In New York City, prior to this year, there were no curbside public payphones. Bell controlled the environment. New York City has been in the process of "Franchising" all telephone operations for the past 4 years. At present, there are some 34,000 public payphones in New York City streets and the independents have 25,000 of them, mostly in communities, certainly not on midtown street curbs, although there is a small, slow process to allow the independents to get there. It is very costly, trenching is approximately $100/ft and the Bells still have the only wiring and do not exactly seek the competition.

Thanks to the Governor, the State Legislature, and the state PSC, effective this past September 1999, state and local sales tax (on the coin) became exempt, thus reducing the load by 8.25% to the already enormously taxed industry.

We came a long way over a long, hard road to achieve legality and public appreciation The courts, the Federal Communication Council (FCC) and The New York State Public Service Commission has leveled the playing field for the independents, giving us the parity we are entitled to.

There's a lot to be achieved - our goal is to provide clean, efficient service at a cost that’s competitive not only to the existing Bells but to cellular and phone cards.

By becoming a member of IPANY, you automatically become a member of the national organization, the American Public Communication Council (APCC).

Our track record and that of the APCC's speaks for itself. What we have accomplished in the last 10 years is something short of a miracle. Prior to the divesture of AT&T in 1984, there was no such thing as an independent public payphone. Today there are over 60,000 in New York State.

IPANY, with its team of professionals, represents the industry in the State Legislature, Public Service Commission and the local municipalities throughout the State.

We have achieved major successes relating to the success of your business, These impact your revenues, programming, etc. We are a recognized industry approaching parity with the LECs.

IPANY consists of a large group of growing businessmen and women. In unity and numbers there is strength. We have an Administrator, Attorneys, Lobbyists and are involved in every issue from Dial-Around Compensation to PICCs and State Sales Tax exemption issues. We recently achieved a major victory by getting the State of New York to give a Sales Tax exemption to calls where the initial drop does not exceed $.25. We are presently working to extend the exemption to $.35 and having it applied to the Gross Receipts Tax (utility tax).

IPANY was responsible for reducing the time of the local coin drop from 5 minutes to 3 minutes. We are responsible for recently getting the Public Service Commission (PSC) to eliminate the charges of thousands of dollars for curb-side installations to almost nothing. We are responsible for negotiating a fair franchise in New York City, giving us total legitimacy and increasing the value of our sites. We are involved in issues with municipalities throughout the State; from Long Island to Rochester and Buffalo.

With all that has happened, there is still a great deal to do and there is always the need to protect what we already have.

Call IPANY and speak to our Administrator, Les Shafran, at (914) 725-8500 and find out how you can benefit. If you would like a copy of our magazine, "Connections", call our office at (914) 725-8500; or email us at IPANY@acedsl.com
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