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 NEWS  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974).  News  Media  Information  202  /  418-  0500  Internet:  http://  www.  fcc.  gov  TTY:  1-  888-  835-  5322 
 FOR  IMMEDIATE  RELEASE:  NEWS  MEDIA  CONTACT:  October  1,  2003  Michael  Balmoris  202-  418-  0253 
 Email:  mbalmori@  fcc.  gov 
 FCC  ADOPTS  NEW  PAYPHONE  COMPENSATION  RULES 
 Washington,  DC  –  On  September  30,  2003,  the  Federal  Communications  Commission  (FCC)  adopted  rules  concerning  the  compensation  of  payphone  service  providers  (PSPs).  These  rules  place 
 liability  on  certain  facilities-  based  long  distance  carriers  to  compensate  PSPs  for  payphone-  originated  calls  that  are  completed  on  those  carriers’  platforms.  Those  facilities-  based  long  distance  carriers  are 
 defined  as  switch-  based  resellers  (SBRs),  which  complete  payphone-  originated  calls  on  switches  that  they  own  or  lease.  The  Order  also  establishes  a  payment  mechanism  for  SBRs  to  compensate  PSPs. 


 The  FCC  adopted  these  rules  to  ensure  that  PSPs  are  “fairly  compensated”  for  all  SBR  completed  calls  made  from  their  payphones  under  section  276  of  the  Communications  Act  of  1934, 
 as  amended  by  the  Telecommunications  Act  of  1996.  These  rules  satisfy  section  276  by  identifying  the  party  liable  for  compensation  and  establishing  a  mechanism  for  PSPs  to  be  paid. 


 The  Order  is  the  result  of  a  court  remand  of  an  earlier  attempt  by  the  FCC  to  remedy  problems  in  the  payphone  compensation  rules.  In  January  2003,  ruling  on  a  petition  for  review,  the 
 United  States  Court  of  Appeals  for  the  District  of  Columbia  Circuit  (D.  C.  Circuit)  vacated  and  remanded  this  proceeding’s  Second  Order  on  Reconsideration  on  the  grounds  that  parties  were  not 
 afforded  proper  notice  and  opportunity  for  comment.  The  D.  C.  Circuit  stayed  its  mandate  and  its  vacatur  of  the  Second  Order  on  Reconsideration  through  September  30,  2003. 


 In  May  2003,  in  response  to  the  D.  C.  Circuit’s  decision,  the  Commission  issued  a  Further  Notice  of  Proposed  Rulemaking  seeking  comment  on  whether  the  rules  adopted  in  the  Second  Order 
 on  Reconsideration  or  other  new  rules  were  necessary  to  satisfy  section  276’s  requirements.  To  provide  carriers  time  to  transition  to  these  new  rules  and  to  meet  Office  of  Management  and  Budget 
 (OMB)  requirements,  the  FCC  re-  adopted  its  previous  rules  on  an  interim  basis  until  the  first  day  of  the  first  full  quarter  after  the  new  rules  become  effective. 


 -FCC- 
 Docket  No.:  CC  96-  128 
 Action  by  the  Commission  September  30,  2003  by  Report  &  Order  (FCC  03-  235). 
 Wireline  Competition  Bureau  Staff  Contact:  Henry  Thaggert  at  202-  418-  1580. 
 News  about  the  Federal  Communications  Commission  can  also  be  found  on  the  Commission’s  web  site  www.  fcc.  gov. 
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