Pay phones once held a special place in both popular culture and interpersonal communications. The corner phone booth not only gave Superman a place to change, it offered everyone else the opportunity to check in at home, get messages from the office, conduct business, call a cab or arrange a rendezvous with a lover. It was the original pay-as-you-go plan. But Superman’s modesty aside, everything a pay phone once did a cellphone can do better.
And so today the fate of Canada’s pay phones now hangs in the balance.
Earlier this year, Bell Canada, Bell Aliant and Télébec, dominant pay phone providers throughout Ontario, Atlantic Canada and Quebec, applied to double the cost of a pay phone call—from 50 cents to a dollar. The cost of using a prepaid debit card would rise to $2 a call. These prices were previously doubled five years ago.
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In the face of criticism from various social justice groups, last week Bell filed new documents with the Canadian Radio-television and Telecommunications Commission (CRTC), warning that if its price hike is denied, it may begin to dismantle its entire network of pay phones. Tough talk, for sure. But even if Bell carries out its threat, will anyone notice?
According to the CRTC, less than one per cent of Canadian households currently lack access to their own phone. Nearly 80 per cent of us have a cellphone. For the overwhelming majority of Canadians, pay phones have thus evolved into a rarely used emergency tool—of interest only if your cellphone battery dies. Most pay phones these days seem to get more attention from graffiti artists and litterers than hurried callers.
Once reliable money-spinners, the profitability of pay phones has been dropping for decades. Between 1999 and 2002, revenue per phone fell at the rate of 12 per cent a year. Figures filed recently with the CRTC now contemplate revenues declining in the future at approximately 20 per cent annually. Those same filings suggest a quarter of Bell’s pay phones are losing money right now. Adding a further burden for owners of Canada’s 75,000 pay phones is the need to upgrade every phone to accept the new, lighter 2012 loonies. There’s no money in pay phones these days, literally and figuratively.
With the telecommunications business in Canada supposedly based on market principles, it seems obvious pay phones must either evolve to become profitable once more or disappear completely. Bell wants to charge a price that reflects the new, rarely used, call-of-last-resort nature of pay phones. They say they may also choose to vary prices across the country—a call from downtown Toronto might cost more than one from Rimouski—as is already the case with hotel rooms and haircuts. If it’s denied, Bell warned in a filing last week that it “may proactively start removing its most unprofitable pay telephones.”
Fighting the idea that pay phones ought to pay their own way are anti-poverty groups such as Canada Without Poverty and the Public Interest Advocacy Centre. They argue that pay phones remain well-used by the poor and thus constitute an essential service requiring federal protection. “A 100 per cent price increase in pay phone rates will disproportionately affect lower-income Canadians who are least able to afford sudden large increases in expenses,” the groups stated in a brief to the CRTC.
While consumer groups once defended the importance of a pay phone every 100 m, the only stricture the CRTC currently places on pay phone owners is that they provide 60 days notice prior to removing the last pay phone from a community. In other words, Bell and other firms could disconnect the vast majority of their pay phones immediately if they so desired. The controversial rate increase request is simply an effort to keep the dial tone humming.
Ultimately, it should be up to consumers to decide for themselves whether a price hike is appropriate. The economics of pay phones is clearly deteriorating faster than buggy whips at the dawn of the automobile age; no amount of federal diktats is going to change this. And regardless of sympathy for low-income Canadians, guaranteed access to street corner pay phones is most certainly not a corporate responsibility. If Bell thinks they can make a buck by doubling the price of a call, let them try. And if they can’t, the door is always open to other competitors.
Whatever nostalgia Canadians may have for pay phones, it’s time to face reality. You’ll have to insert more coins if you want this call to continue.