The payphone surcharge

Prior to the Telecom Act of 1996, payphone owners received no compensation for 800 calls from their payphone. Their $1,000 payphone equipment was being used for free, and the “free caller” tied up the phone, preventing a paying customer from using it. Today, this has changed. If a caller dials an 800 number from a payphone, the long-distance carrier handling the call must pay the payphone owner $0.28 for each call. This small amount of revenue slowly trickles in, but in the high-overhead payphone business, revenue from the surcharge makes all the difference.