DE 98-048
                                     
                         Public Interest Payphones
                                     
              Investigation Pursuant to Section 276(b)(2)   
                   of the Telecommunications Act of 1996
                                     
        Order Approving Definition of Public Interest Payphones and
               Directing Establishment of Petition Process 
                                     
                         O R D E R   N O.  23,077
                                     
                             December 7, 1998

         APPEARANCES: Victor D. Del Vecchio, Esq. for Bell
     Atlantic; William Stafford and Christian Rand for Granite State
     Telephone, Inc.; Beth Osler for Merrimack Telephone Company and
     Contoocook Valley Telephone Company; Stephen Nelson for Dunbarton
     Telephone Company, Inc.; Linda Griebsh for the New Hampshire
     Coalition Against Domestic Violence; New Hampshire Legal
     Assistance by Alan Linder, Esq. for Save Our Homes Organization;
     James A. Sanborn for Union Telephone Company; Kenneth Traum and
     William Homeyer for the Office of the Consumer Advocate on behalf
     of residential ratepayers; and E. Barclay Jackson, Esq. for the
     Staff of the New Hampshire Public Utilities Commission.
     
     I.   PROCEDURAL HISTORY
               The New Hampshire Public Utilities Commission opened
     this docket on April 10, 1998 pursuant to the Congressional
     mandate of Section 276(b)(2) of the Telecommunications Act of
     1996 requiring each state to investigate whether public interest
     payphones (PIPs) should be maintained and, if so, to insure that
     such public interest payphones are funded fairly and equitably.
               At the duly noticed prehearing conference on May 5,
     1998, the Parties and Staff summarized their positions and the
     Commission conducted informal discussion on the issues.  By Order
     No. 22,940, (May 18,1998), the Commission granted intervenor
     status to Union Telephone Company (Union), the New England Public
     Communications Council, Inc. (NEPCC), New Hampshire Legal
     Assistance on behalf of the Save Our Homes Organization (SOHO),
     Bretton Woods Telephone Company, Inc., Contoocook Valley
     Telephone Company, Inc., Dunbarton Telephone Company, Inc.,
     Merrimack County Telephone Company, Wilton Telephone Company,
     Inc., Hollis Telephone Company, Inc., Granite State Telephone
     Company, Inc., Northland Telephone Company of Maine, Inc., and
     Dixville Telephone Company.   New England Telephone and Telegraph
     Company (Bell Atlantic) was recognized as a mandatory party to
     the docket and the Office of the Consumer Advocate (OCA) is a
     statutorily recognized intervenor.  Order No. 22,940 provided
     additional time, until June 5, 1998, for other interested parties
     to intervene.  The following parties filed for intervention by
     June 5, 1998: the New Hampshire Coalition Against Domestic and
     Sexual Violence, the New Hampshire Coalition for the Homeless,
     Chichester Telephone Company, Meriden Telephone Company, and
     Kearsarge Telephone Company.  Order No. 22,940 also established a
     procedural schedule comprised of several rounds of written
     comments, technical discussion sessions and settlement
     discussions.  
     
               As a result of the technical sessions and settlement
     discussions, Staff and most of the Parties reached agreement as
     to a definition of a PIP.  On September 23, 1998, the Commission
     heard evidence regarding the agreed upon definition and on
     recommendations as to whether the Commission should take further
     action at this time to institute a PIP program.  On October 5,
     1998, Bell Atlantic filed, as a supplement to Exhibit 18, an
     order issued by the Vermont Department of Public Service
     regarding PIPs.
     II.  POSITIONS OF THE PARTIES AND STAFF
          A.   Definition of Public Interest Payphone
               Staff and all but two of the Parties agreed that the
     Commission should adopt a particular definition of public
     interest payphone.  The proposed definition contains eight
     criteria and is reported below.  Neither SOHO nor the New England
     Public Communications Council supported the proposed definition.  
     The NHPCC did not object to the proposed definition but suggested
     that the Commission should not finalize the definition until
     after December 1999 when the competitive payphone market will
     have developed more fully.  SOHO concurred with parts of the
     definition but objected to others, as discussed below.
     
               The following definition is proposed by Staff, Bell
     Atlantic, Bretton Woods Telephone Company, Chichester Telephone
     Company, Contoocook Valley Telephone Company, Dunbarton Telephone
     Company, Meriden Telephone Company, Merrimack County Telephone
     Company, Wilton Telephone Company, Hollis Telephone Company,
     Granite State Telephone Company, the NHCADSV, the New Hampshire
     Coalition for the Homeless, and the OCA.
               A PIP is one which meets all of the following criteria:
               1.   The payphone fulfills a public welfare, health or
     safety policy objective.
               2.   It is a single payphone at the location address,
     such that payphones which are part of a bank of phones will not
     be considered public interest payphones, and has no other   payphone located within 750 feet, as measured along the route of
     ordinary pedestrian travel, which is physically accessible during
     the operating hours of the facility where the phone is located.
               3.   The request for the PIP is not from an applicant
     who has signed a contract with a payphone provider.  This
     requirement applies to federal, state, or local government
     agencies that have signed a contract with a payphone provider, as
     well as private parties.  A requested PIP may not be located on
     property owned or controlled by a party who has a signed contract
     with a payphone provider unless the property owner agrees to the
     PIP placement.  Agencies or individuals with signed contracts can
     and should include payphones that fulfill public policy
     objectives in their payphone contracts.
               4.   The PIP would not otherwise exist as a result of
     the operation of the competitive marketplace and a need exists
     for the payphone.  The need for the payphone must be demonstrated
     by the fact that the payphone has an actual or projected revenue
     minimum of $30 per month on an average annual basis or, in cases
     where usage can be measured, has an actual or projected average
     usage of 3.5 calls per day.  Revenue includes all coin and  non-coin revenue for local, intra-, and interLATA calls as well
     as any commissions or per call compensation paid to the payphone
     provider.
               5.   The payphone is not a coinless payphone.
               6.   The payphone accepts incoming phone calls.
               7.   Unless extraordinary circumstances exist to
     dictate otherwise, the general public has unrestricted physical
     access to the payphone 24 hours per day.
               8.   The agent on whose property the payphone is
     located receives no compensation from any source whatsoever
     related to the placement of the payphone nor any revenues
     generated from the payphone.
               SOHO objected to criteria 2, 3, and 4.  According to
     SOHO the 750 foot distance, required by No. 2, between a PIP and
     any other payphone may be too far; No. 3 unreasonably prohibits a
     municipality from petitioning the Commission for a PIP; and No. 4
     unreasonably requires that a PIP location have a projected or
     actual minimum average number of calls per month.   Furthermore,
     SOHO recommended that the Commission define PIPs as payphones at
     existing locations as well as future locations in order to
     preclude any PIP from the risk of removal.  SOHO stated that the
     better policy is for critical payphones to remain in existence
     rather than be subject to removal and then re-installation after
     being identified as PIPs.  SOHO prefers that existing uneconomic
     payphones be designated as a PIP and hence avoid the jeopardy of
     removal.  
          B.   Whether Further Action Is Required by the Commission
               The Parties and Staff disagree as to whether the
     Commission should take further action on PIPs at this time.
               1.  Bell Atlantic
               According to Bell Atlantic, establishing any plans for
     PIPs at this point in the evolution of the competitive payphone
     market would be premature because the market is adjusting to
     changes instituted by FCC rules to promote competition. Bell
     Atlantic argues that the competitive market may well provide for
     payphones in areas the current market does not serve.  
               Bell Atlantic recommends that any inquiries the
     Commission receives should be analyzed by the criteria specified
     in the stipulation.  The analysis should be undertaken by the
     government agency responsible for the public's safety which owns
     or controls the property for which a PIP is requested.  Only
     after a request has been analyzed and found to meet the criteria
     for a PIP, Bell Atlantic argues, should the Commission decide
     that a PIP program is needed.
               2.  New England Public Communications Council, Inc.
               NEPCC generally agrees with Bell Atlantic that the
     Commission should defer any action on PIPs for a minimum of 16
     months while competitive market forces respond to the needs for
     payphone service in New Hampshire.  During that time, NEPCC
     recommends that the Commission monitor data regarding payphone
     deployment and complaints and invite comment by specific user
     groups not being served adequately by the market.  
     
               3.   Independent Telephone Companies
               Bretton Woods Telephone Company, Chichester Telephone
     Company, Contoocook Valley Telephone Company, Dunbarton Telephone
     Company, Meriden Telephone Company, Merrimack County Telephone
     Company, Wilton Telephone Company, Hollis Telephone Company, and
     Granite State Telephone Company, referred to collectively as the
     Independent Telephone Companies (ICOs) agree with Bell Atlantic
     that further action is premature at this point.  However, the
     ICOs represented their willingness to join in a program if one is
     deemed necessary by the Commission.
               4.   SOHO
               It was SOHO's position that the evidence adduced at
     hearing established a need for PIPs in New Hampshire.  Based upon
     testimony by SOHO, the New Hampshire Coalition for the Homeless
     and the New Hampshire Coalition Against Domestic and Sexual
     Violence, SOHO recommended that the Commission rule that the need
     exists and commence a program to provide PIPs.
               5.   New Hampshire Coalition Against 
                    Domestic and Sexual Violence
     
               The New Hampshire Coalition Against Domestic and Sexual
     Violence submitted a list of 38 proposed locations where a
     payphone would meet the public interest and no payphone currently
     exists.  While these 38 locations have not been investigated in
     light of the proposed definition, the Coalition advised against
     waiting for competitive forces to address the problem.  The
     Coalition argued that the need has been demonstrated and that
     significant lead time will be required to develop the program. 
     Efforts to develop the program can go forward, the Coalition
     suggested, during the time the market is adjusting to FCC ordered
     changes.  If the market resolves the problem before funds must be
     raised, so much the better.  However, the Coalition doubted that
     few of the identified 38 locations would be served by the newly
     competitive market because they are very rural.  Therefore, if
     any of the 38 meet the criteria of the definition, the Coalition
     expects those locations to need funding.
               6.   OCA 
               The OCA recommended that the Commission commence a
     program to provide PIPs by establishing a method for citizens to
     petition the Commission.  The OCA suggested that the Commission
     establish an Advisory Group, made up of various social agencies
     as well as telecommunications carriers, to make the determination
     whether a location meets the criteria contained in the
     definition. 
     
               7.   Staff
               Staff argued that the Commission needs to take
     additional steps now to insure that PIPs are maintained in New
     Hampshire.  Specifically, Staff recommended that the Commission
     perform an investigation of locations for which PIP petitions are
     filed to see whether those locations qualify as a PIP under the
     proposed definition of a PIP.  At the time any location is found
     to be qualified, Staff recommended that the Commission implement
     a PIP program, including funding.  In order to avoid a lag
     period, Staff recommended that the Commission investigate funding
     mechanisms now.
     III. COMMISSION ANALYSIS
               We have considered the evidence presented and
     appreciate the thoughtful efforts of those involved, especially
     those social service organizations which devoted time and
     resources to address this issue.  Based on the record, we are
     convinced that a need exists in New Hampshire to implement a PIP
     program, as well as to define a PIP.  
               Addressing the definition first, we will adopt with
     certain modifications the PIP definition contained in the
     stipulation among the majority of the parties.  The definition as
     proposed requires clarification.  References to "payphone" must
     be changed to "public interest payphone" in certain instances. 
     In addition, we believe the definition would be clearer if it
     were divided into two parts: one part concerning the
     characteristics of the payphone itself and one part concerning
     the characteristics of the location where the payphone is placed. 
     In addition, we believe that the definition should be modified in
     order to provide the opportunity for a waiver from the payphone
     characteristics requirements.  We believe there should be an
     opportunity to request a waiver from any of the characteristics
     requirements, such as the requirement that a telephone take
     incoming calls, if extraordinary circumstances exist.  With this
     in mind, we direct our Staff to meet with the parties to
     reorganize and rewrite the definition to meet these concerns. 
               Addressing the need to implement a PIP program, we find
     that there is a need to establish a process for evaluating
     individual locations in light of the definition adopted.  It is
     our intent that this process be used to evaluate requests for
     PIPs that would not otherwise be addressed by the free market
     situation that exists with payphones in general.  We will direct
     Staff to meet with the parties to establish a process for
     evaluating individual locations for which petitions may be
     received by the Commission. We specifically make no finding at
     this time concerning whether any particular locations qualify for
     a PIP. 
               As to funding, in the event that it is determined that
     there are PIP locations that meet the definition, a process will
     need to be established for developing a funding source for the
     PIP.  After we have had an opportunity to review the revised
     definition and the proposed process for evaluating petitions, we
     would entertain suggestions on how to address the funding issue. 
     We are open to suggestions from Staff and the parties on how such
     suggestions should be presented to the Commission, i.e., through
     a hearing or merely through written comments. 
               We further find that the qualification process should
     not include establishing an advisory group to review and
     recommend disposition of PIP petitions.  Such an advisory group
     would create an unnecessary, possibly duplicative, component in
     the process.  We believe that Staff can adequately perform this
     function.
               Based upon the foregoing, it is hereby 
               ORDERED, that the proposed definition of a PIP shall be
     modified pursuant to our discussion above and then submitted for
     our approval within 30 days from the date of this order; and it
     is
               FURTHER ORDERED, that Staff and the Parties shall meet
     to formulate the PIP petitioning process and shall submit their
     recommendation for such process to us for our approval.
               By order of the Public Utilities Commission of New
     Hampshire this seventh day of December, 1998.
     
     
     
                                                                                   Douglas L. Patch                         Susan S. Geiger
           Chairman                               Commissioner                             
     
     Attested by:
     
     
     
                                      
     Thomas B. Getz
     Executive Director and Secretary