University of New York, you've been listening to Exploration, a program devoted to science,
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Join us every Wednesday evening from 8 o'clock to 9 o'clock when Exploration tackles these
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Good evening.
Dance to support the labor struggle in El Salvador.
The New York Labor Committee in support of democracy and human rights in El Salvador
and UAW District 65 will host the second annual benefit dance for Central American unions.
Join us on Saturday, June 22nd at 9 p.m. at District 65, 13 Astor Place in New York City.
Come dance to the sounds of Boston's very hot Pan-American world beat band Flor de Caña.
Help the Salvadoran labor movement survive.
Every penny raised will go to unions struggling for workers' rights in the face of death squad
repression.
That's Saturday, June 22nd, 13 Astor Place.
For more information, call the New York Labor Committee at 344-5940.
That's 344-5940.
This announcement is a public service of WBAI on behalf of the New York Labor Committee
in support of democracy and human rights in El Salvador, a non-profit organization.
New York City is in crisis.
We're facing millions of dollars in cuts in basic human services.
Millions of workers will be out of work by the end of this year.
Homelessness and crime are on the rise.
Our education system is in tatters.
How will the present administration deal with these problems?
Hi, I'm Jenny Bourne, news editor here at WBAI.
Tune in to Live from City Hall on Thursday, June 27th from 2 to 4.30 p.m.
Join me and Santiago Nieves, host of the Thursday Morning Show, as we speak with Mayor Dinkins
about these and other pressing issues facing the city.
And be prepared to call in with your questions for the mayor, who will be joined by other
top city officials.
That's Live from City Hall, Thursday, June 27th from 2 to 4.30 p.m., only on listener-sponsored
WBAI 99.5 FM.
And you're listening to WBAI in New York.
It's just about 9 o'clock, time for Off the Hook.
And I guess expecting the best from the worst, or expecting the worst from the best, is kind
of the way things seem to happen with emerging technology.
You never know what to expect, you never know what the little surprises are going to be.
Well, there have been a lot of surprises, and one of the biggest surprises has taken place in the
alternative payphone industry.
Those are the strange phones you see walking down the street.
You never know what they're going to do.
You never know how much money they're going to ask for, and you never really know if they're
going to work.
Well, today we'll be speaking with the president of a company that is involved with such phones.
We'll be doing that a little bit later on in the program.
We'll be taking your phone calls and looking at this week's news in the world of high tech.
It's all coming up on Off the Hook.
Those of you who spend time in supermarket checkout lines may have come across this story from the
weekly world news.
Now, I say story, I put it in quotes and hyphenate it and italicize it and all that kind of thing
because anybody that would take something like this seriously would need a lot more help than we
could possibly provide in this hour.
But the title of the article, and this is sort of to get us off to a rather humorous start tonight,
the title is, Man Catches Computer Virus.
Bizarre Illness Jamming Up His Brain Waves.
And the caption reading, Sick Computer Passed on a Bizarre Virus to Programmer John Stevens.
Above, After It Became Ill from an Infected Software Program.
The story was written by Michael Todd, who was a very special correspondent for the weekly world news
on June 18th, 1991.
John Stevens has a lot in common with his home computer.
Both think logically, both like numbers, and both are sick with a virus.
The same virus.
Stevens, a computer programmer who works out of his home in a Philadelphia suburb, is convinced his
lingering and debilitating illness is something he got from his sick computer.
And the victim's doctor agrees.
I've run every test I can think of to trace the origin of his illness, said Dr. Mark Fordland.
He has a virus, but it's not like any virus I've ever seen.
Stevens is 32.
He says his computer began to show signs of a virus, which is a software program designed to eat up
and destroy other software data.
He first noticed the signs of this about a week before he got sick.
I was careless about borrowing software programs from other people I didn't know well, Stevens admits.
Dr. Fordland, himself a computer expert, agrees.
Borrowing software programs from friends and strangers is like having sex with someone you don't know well.
When you sleep with someone, you sleep with everyone they've ever slept with.
Which means you're probably sleeping with the entire world.
When you borrow someone's software program, you're connected to everyone who's ever used that program.
I sense people swearing all over New York tonight that they're never going to touch a computer again.
Well, remember, this is the humorous bit of the program.
Anyway, Dr. Fordland concludes that Stevens's symptoms are identical to that of a software virus's attack on a computer.
Stevens has become forgetful, like something is eating up his memory, his data.
He has less and less energy. He can't hold onto thoughts.
Even an EEG of his brainwaves keeps changing.
It's becoming more and more erratic.
This virus could just eat him up until his mind is a blank and he's like a vegetable.
Well, that's about as traumatic as we're going to get tonight.
You gotta be careful out there.
Always wear gloves when you are using a computer.
And a couple of goggles wouldn't help either, I guess.
In fact, if at all possible, try using your computer from a remote room, where you don't have to be in the same room as the computer itself.
And of course, the same goes for telephones.
Continuing right along here to the news that has come from the non-weekly world news part of things.
This is from the Electronic Newsletter Risks Digest, which we touch upon each week.
All about the new California driver's licenses that have thumbprints digitally encoded onto them.
This is from Mark Sikoff.
I still have an old California driver's license. It'll expire in late 92.
I fear that when I get a new one, the magnetic strip on the back may accidentally be erased by some chance encounter with a strong magnetic field.
After all, I've had credit card strips fail.
And as some of you may know, when credit card strips fail, the card issuers don't rewrite the magnetic strip.
They just give you a whole new card.
And actually, failed strips are a problem for merchants as well as credit card users,
because merchants get a discount on the fee they pay to the bank if they swipe a card, rather than just taking an imprint.
Because it is unlawful to alter any driver's license in any manner non-authorized,
a police officer would have probable cause to arrest the holder of a license with a bad magnetic strip
if he became aware of that circumstance after, say, discovering that a portable reader can't read the strip.
Note that a police officer doesn't need probable cause to inspect your driver's license
if you appear to be in control of an automobile,
and refusing to produce the license is an offense.
Now, unless the prosecutor could prove that the erasure was deliberate,
the license holder probably wouldn't be convicted, but would already have spent the night in jail,
or, if cited and released, would have at least had to come to court.
Worse, a license holder might be violating the law without knowing it because the strip isn't human-readable.
Any system that might code information on the magnetic strip
that didn't appear in human-readable form on the license card is inherently evil.
Data on magnetic strips is fragile.
I don't see how I'll be able to guard against the accidental erasure of the magnetic strip on any license issued to me,
given my innocent predilection for toying with permanent magnets
and the fact that I work with various sorts of electrical and electronic equipment.
Who can say when an accidental erasure might occur?
Why it could even happen within minutes of my receipt of the new license.
You know, this guy sounds like a troublemaker.
I'm sure he's already been marked as such.
And more on the new California licenses, which are creating quite a stir all throughout the country,
and nothing like it has come to New York yet, but give it some time.
One person theorized,
I could imagine it would be awfully tempting for law enforcement agencies
to combine databases such as the Mugshot database with the Fingerprint database.
And Michael Robinson replies,
It is, and they will.
But as with most risks, there are countervailing risks.
The California driver's license and its relative, the California identification card,
is intended to be positive legal identification.
You don't have to have a legal ID, but if you do have one, it has to identify you, at least in theory.
Obtaining fictitious identification has always been trivial and it is almost always used for illegal purposes.
The Department of Motor Vehicles has a statutory obligation to enforce one man, one card, to the best of its ability.
By whatever means are technologically feasible.
In this case, the technology may skirt the margins of a potential tool of repression,
but that doesn't get me nervous yet.
I don't see how the Thumbprint photo database would allow law enforcement to threaten my rights or privacy in any novel manner.
What does get me sort of nervous is the magnetic stripe on the back.
The only advantage I can see to that is the ability to process a lot of people really quickly.
Well, any system that has a whole lot of people stored in it and is retrievable very quickly
has potentials for abuses, potentials for all kinds of categorization.
And to give you an idea of how fast things are moving,
Alan Dahl writes about the technical aspects of such databases.
Current matching technology is perfectly able to search a database of 20 million people
very, very quickly.
He says, we are in the process of converting our system to a newer, two times faster machine
that should make this sort of search even easier.
With a Morpho AFIS, automated fingerprint identification system,
the search would not be too labor intensive either.
Our system is not very labor intensive at all.
It is true, however, that some other companies' AFIS systems are too labor intensive for this sort of work.
We currently have an installation in New York with over 4.5 million ten-finger records.
And we regularly run hundreds of latent and ten-print searches a day against this record database.
Average ten-print to ten-print matching time is under two minutes per search.
With a 20 million record database and the same hardware matching time,
that would increase to about three minutes or so per search.
Adding more hardware could shorten this down to 30 seconds if the customer desired.
And the current accuracy rate is 98% matched in the first position
with most of the other 2% in the second position.
Whether that print is a thumbprint or not will not affect the accuracy of the search at all.
We have talked to the State of California Department of Motor Vehicles
about installing an AFIS system for commercial driver's licenses only.
As far as I know, everything is on hold and there are no plans at this time to purchase such a system
either from us or our competitors.
He works for North American Morpho Systems in Tacoma, Washington.
He also says there are serious legal ramifications to using driver's license fingerprint data for anything else
besides checking for duplicate licenses and aliases.
Most states have laws that state that someone must be suspected of a crime
before their prints can be searched against a criminal database.
And what is worrisome here is that the driver's license data could perhaps be used
for checking the legality of applicants for welfare, food stamps, and other non-criminal uses.
And one final note here concerning the risks of certain kinds of technology left unguarded.
The risks of certain kinds of technology left unguarded.
Speaking about answering machines, this comes from the San Francisco Chronicle.
Either a disgruntled employee or a disgusted fan somehow changed the telephone message
at the Minnesota Vikings offices recently.
Instead of the regular message, callers hear this.
Thank you for calling the most rotten, stinking team in the history of man.
That's right, you have reached the Minnesota Vikings.
Well, answering machines are wide open, as are very many other forms of technology.
And the best defense is education.
We're going to be speaking next with the president of North American Industries of New York.
Manufacturer, installer of pay phones, alternative pay phones.
Things that we've talked about many times here on this program.
And you'll have a chance to call in and ask some questions a little bit later on in the program.
And we'll be getting to that interview in just about a minute.
Oh yeah
Police and thieves in the streets
Oh yeah
Fighting the nation with their
Guns and ammunition
Police and thieves in the streets
Oh yeah
Scaring the nation with their
Guns and ammunition
From Genesis
To Revelations, yeah
But the next generation
Will be
Hear me
All the crimes committed
Day by day
No one tried to stop it
In any way
All the peacemakers
Turned war officers
Hear what I say
Hey, hey, hey, hey, hey, hey
Police and thieves in the streets
Oh yeah
Fighting the nation with their
Guns and ammunition
From Genesis
To Revelations, yeah
From Genesis
To Revelations, yeah
From Genesis
I'm attending what is undoubtedly a hot topic.
I'm here at a Communications Fraud Association meeting
where we are discussing exactly the issue that you just raised,
which is the subject of fraud.
Now, it seems to be a lot easier, at least from the mind of a criminal,
to commit fraud from one of these pay phones, and why is that?
I don't know if that's exactly true.
It's certainly easier today to make fraudulent phone calls
from any public pay phone.
There's no reason to differentiate between the private
and the local telephone company pay phones.
Criminals love to use pay phones principally because they are anonymous.
They don't leave a trail as to who made the call,
and people can use those phones essentially as their storefront.
And fraud is right now approximately a $5 billion-a-year business.
Pay phones happen to be probably the McDonald's franchise of the 1990s.
But AT&T has filed a lawsuit against your company, correct,
for fraudulent calls that have not been paid for in some way.
So people are using your particular pay phones.
Is there some kind of a vulnerability that affects your phones?
Is there a reason why?
Does New York Telephone not provide you with the same kind of service
that it provides to its own pay phones?
That's exactly right.
The kinds of lines that the private pay phone industry have provided
are virtually the same as the business line that you might have in the station right now.
By contrast, the kind of line that New York Telephone Company uses
to protect its own pay phones has different anti-fraud protections
and devices built in that they will absolutely not make available
to the private pay phone industry.
Well, if I understand correctly, the New York Telephone pay phone lines
are completely different lines.
All the intelligence is in the central office,
whereas with your particular phones, all the intelligence is in the actual instrument.
That is correct.
And it's being sent down a regular phone line.
So if somebody can simply tap into that regular phone line,
they can bypass the intelligence of your particular piece of equipment, right?
That's very true.
Now, what happens when you try to get that particular kind of pay phone line?
Are you saying New York Telephone does not allow anybody else to have a pay phone line?
New York Telephone doesn't allow anybody to have their kind of line
except New York Telephone Company.
Now, as far as what the Public Service Commission says about all this,
is there a rule that says they have to provide that, or is there such a rule pending?
When the private pay phone industry initially was permitted back in 1985,
the Federal Communications Commission decided that the private pay phone industry
should be offered one of two types of lines,
either the business line, which we've already discussed,
or the New York Telephone type line, which we call a coin line.
New York Telephone Company, however, did not give our industry a choice.
They said we could only get the business line.
Had we been given a choice,
we're convinced that a very significant percentage of the fraud
that we've previously experienced would not have been a problem.
I see.
So the real solution to this, as far as you're concerned,
is for New York Telephone to provide equal access to many different people and organizations.
That's one of the solutions. That's correct.
And even that will not take us all the way to stopping the problems of fraud.
What other kinds of problems do you face?
Well, I think one of the first things you have to recognize
is just the enormity of the subject of fraud.
As I said before, it's approximately a $5 billion a year business.
Fraud happens not only because people tap onto a line.
Tremendous amounts of fraud are now perpetrated by people using stolen calling cards,
hackers gaining access into networks and finding out which code numbers work
and then calling at night and on the weekends
and literally getting access into the network by calling up major corporations
and using their switchboards.
Associations or entities such as the United Nations, NASA,
and a whole host of major corporations including IBM
and many, many other large corporations have been defrauded of many, many millions of dollars
because of this kind of fraud.
Fraud sounds like an easy subject.
It's extremely complicated from the payphone point of view.
Coin lines or their equivalent protective and defensive measures
would go a long way to reducing the problem,
but it certainly would not eliminate the problem.
Now, the immediate problem that you're facing right now
is that AT&T wants you to pay for calls that have been made
that have not been paid to you. Is that correct?
That is correct.
Somebody along the line that is somewhere between our phone and the central office
stole the dial tone.
AT&T only knows that the call went into their network.
They are demanding payment from us.
We are turning around and have sued New York Telephone Company
and alleged two different points of view.
The first is that whatever the failure was,
it was within the complete control of New York Telephone Company.
They control the network.
They could have and should have done some things to stop the fraud.
In some instances, we bought and paid for services
which New York Telephone Company failed to provide us,
and in failing to provide us with the service,
that allowed the fraud to go out.
So that's the first cause of action.
The second cause of action we have essentially concerns what I said earlier,
which is that we believe that New York Telephone Company
should have given us the choice between a business line and a coin line.
By limiting our choice to only a business line,
which affords none of the anti-fraud features,
we believe that New York Telephone Company
acted in an anti-competitive manner
and are suing New York Telephone Company
on the basis of an anti-trust action.
And the significance of that is,
under New York Telephone Company's tariff,
even if we were successful in proving our first cause of action,
that they guaranteed to provide us with certain services
and then failed to do so,
New York Telephone Company then hides behind their tariff
and says that even if they were negligent,
their tariff does not require them to reimburse us
for any monies that we might owe AT&T.
However, if we were successful on the anti-trust cause of action,
a tariff does not provide a defense against anti-trust actions.
I see.
Now, as far as solutions to your problem immediately,
what kind of solutions have you undertaken?
It mentions in the article that you don't put phone numbers on the phones,
you don't allow them to ring,
and you don't allow people to be able to find out what the numbers are,
but to me those seem like very temporary solutions,
and in fact they might even take away some of the services
that you could be offering.
Is there something a bit more solid as far as solutions to the problem?
Well, one of the things that the industry is doing
is trying to get a handle on exactly what causes the problems,
and as I mentioned, I'm in New Orleans right now
at a telecommunications fraud conference,
and one of the speakers today identified more than 100 different ways
that fraud is perpetrated from different types of phones.
So there is no one simple answer that's going to solve the entire subject of fraud.
However, there are some fundamental things that can be done.
One of the big frustrations that I think that all people should have
is that fraud for the telephone company happens to be a very significant profit center.
New York Telephone Company and all other local telephone companies
make a great deal of money each year by charging an access charge on every call,
whether the call is legitimate or not.
They get paid from the long-distance company even on a fraudulent call.
We believe that fraud should not be a profit center
to any company in the telecommunications industry.
That's one of our first goals, which is to stop that profit center.
The second is to try and change some of the laws.
Unfortunately, right now most telecommunications fraud
is assigned to the Secret Service,
and of course they're busy with lots of other important things.
So many of the known perpetrators of very large amounts of criminal fraud
are never fully prosecuted
because the resources of the Secret Service are directed in other areas.
So we'd like to see the crime statutes changed
and the ability to go after some of the people committing these crimes
handed over to local law enforcement authorities
that we think are better in getting the problem resolved.
Those are just some of the things that we're doing.
In addition, we're working on network fixes,
things that we know are available that we simply want made available to our phones
as they are to other phones.
Such as the ACT system that asks you for money from the central office itself.
Well, that would be one approach.
We would certainly like to have New York Telephone Company,
and I don't mean to single them out
because the problems that I'm describing right now
are endemic throughout the United States to all the phone companies.
But there are very sloppy practices.
One of the problems that certainly exists out there,
and I'm sure you've seen it, maybe not ever even have noticed it,
is that New York Telephone Company installs their jacks in many accessible areas
and people sometimes find those jacks and plug their own phones into them.
That helps generate fraud.
We believe that all of those jacks should be up out of the way,
perhaps only accessible by a ladder.
I'm talking about the jacks to your kinds of phones.
To our phones or to the sides of buildings.
Frequently telephone service is brought into a building
and what is called the junction box is readily accessible.
And if you pop it open and you put your princess phone in,
you've got dial tone and you're now going to be making a phone call
and charge it to anybody that you want.
Unfortunately, it's going to be paid or at least billed to somebody.
And so those are just some fundamental things that are going on out there.
New York Telephone Company and others use security screws that are,
in terms of the devices that are capable of opening them,
available in virtually any hardware store.
That's a practice that should have stopped many years ago.
As I mentioned earlier, without getting very specific,
because I don't think it's appropriate to do so,
there are network fixes that they can and should be doing
that we think that ought to be made available to our industry,
not just to their own pay phones.
Well, you mentioned that you don't think it would be good to get too specific,
but in a way, don't you think that would help if you pointed out to everybody
just how easy it is to rip off these companies?
The average person would say, this is not fair.
This should not be going on. Something should be done.
Well, on the one hand, you're absolutely right.
But on the other hand, if we describe some of the ways that fraud is perpetrated,
I wouldn't be sued by AT&T for only a million.
I'd be in court for $100 million.
Interesting. Now, you say this is happening all over the country.
Is there any one part of the country where things are working out nicely?
Things are not getting better in any part of the country,
and in fact are probably getting worse.
Statistically, New York City probably accounts for about 65 percent
of all the telecommunications fraud committed nationally.
New York is unique in that respect.
It has a tremendous foreign population.
A lot of those people cannot afford the real cost of calling back home,
and so the operation of what are called call cells
is a very, very large business in New York.
In fact, it's such a large business, and it's so endemic
that if you went to the Port Authority tomorrow,
you'd find that most of their phones now have been completely restricted,
and you can no longer dial an international call from the Port Authority
because the level of fraud is that high.
I've noticed that, too. I'm aware of that fact,
and I see that as hurting everybody else
because some people are abusing the system,
and I see that as something being inherently wrong with the system.
It's like some cities are actually removing touch-tone phones
and replacing them with rotary dial phones
because they don't want drug dealers to use beepers,
and I find that to be kind of cutting off your nose to spite your face.
Well, in point and fact, I can give you a very simple solution
that the private payphone industry has come up with,
which we have found so far to have been 100% effective in stopping fraud.
So there are some pretty effective solutions out there
that are not very expensive.
Specifically, when a telephone call is made from a payphone,
two different signals go down the line.
The first is something that we call ANI,
A-N-I, which stands for Automatic Number Identification,
and what that really says is this is the phone number
that originated the phone call,
and the local telephone company looks for that phone number
and then knows where to bill the call to.
What the private payphone industry has done, however,
is we've added a second number,
and the second number we call an authorization number,
and the way we are now operating is we will not give the caller dial tone
unless we've seen the first number, that is the phone number,
and the second number, which is the authorization code,
coming down the line.
So in other words, the payphone has to send a particular code itself.
That's correct, and the code can only be sent
by people using the phone properly,
that is, by using the keys on the keypad.
If somebody were to clip into one of our lines,
although they would be able to generate the first number, the ANI,
a Princess phone or any other phone clipped onto the line
or plugged into the line improperly or illegally
would not send the authorization code down the line,
and therefore we would not give dial tone.
But now I don't understand how somebody clipping into the line,
just getting a regular New York telephone dial tone out of your line,
wouldn't be able to just make all the calls they wanted.
Because what we've done is we've programmed all of those phone lines now
to send all the traffic to one of our switches,
and we've set up a proprietary switch in New York.
All the traffic now goes to our switch.
Our switch has a computer which looks now for each of those two numbers.
If it sees one and not the other, it will not pass dial tone.
So is that bypassing New York telephone?
We're not bypassing so much as it is by filtering it
before we give it to New York telephone company,
and we've demonstrated how small companies that are entrepreneurial
but seem to be far more concerned about stopping fraud
can come up with solutions that New York telephone could have developed
over the last 100 years they've been in business.
Now does this add a significant amount of time to the processing of the call?
Quite the contrary.
The process that I just described literally takes less than a second.
However, it does increase the cost to us
because now what's happening is we're paying to transport the call
from the payphone to our switch and then from the switch out
rather than just from the payphone right directly into New York telephone's network.
Now there's all kinds of different forms of...
Do you call them COCOTs too, or is there another word for them in the industry?
Well, the fact of the matter is that people are very confused about what COCOTs are,
so one of the things that we've decided to call ourselves
is we call ourselves Competitive Payphone Providers, also known as CPPs.
If you wanted to call me a CPP, that would be okay.
Okay, I'll do that then.
How many different kinds of CPPs do you work with?
Is there one particular style, or are there many different ones?
I believe you're asking approximately how many different manufacturers
of private payphones are there.
That you work with, yes.
Well, there are probably at this time certainly less than 10 different manufacturers.
We as a company work presently with 4 different manufacturers' brands.
Because the average person I would imagine listening now
that has dealt with CPPs or COCOTs
has seen many different kinds in the streets of New York,
and to be honest, quite a few of them have gotten a bad reputation
because either A, they don't work,
B, they charge too much,
C, they don't provide service or connection to certain things
that you expect connection to,
or they maybe cut off your touch tones after you connect to something.
Is this something that your organization
and the organizations you're affiliated with,
is this an image that you're trying to reverse?
There's no question that the payphone industry,
like lots of new industries, had some problems at the beginning.
We would describe ourselves as being populated by lots of people out west,
certainly with lizard boots and lots of gold chains.
Those people, for the most part, are now gone from the industry.
And what you've got left are people that are professional,
that are committed and frequently have their life savings invested
in those black boxes that are hanging on the wall.
The last thing they want is for the public to walk away from their phone.
The last thing they want is for legislation to be passed
that effectively puts them out of business and makes their business worthless.
So there is a very strong movement underway
to try and correct the abuses and the problems.
But that really falls in two different camps.
The first is what we can do for ourselves,
which is right now we have developed a code of ethics
and have brought in very responsible business people
that are working in a very genuine and concerted way to solve the problems.
But the second is to try and change the system a little bit.
And you've touched on something that certainly is always
in the minds of the consuming public,
which is why do we generally have to pay more
to make a coin or non-coin call from a private pay phone
than we do when we go to a New York telephone pay phone.
And the principal reason for that is that we buy services
from New York Telephone Company that we can't get anywhere else.
They are the ones that tell us to dial tone.
They are the ones that provide us with the services
that we need to process non-coin calls,
such as validating calling cards,
and then having them send out the bill and collect it.
Unfortunately for us, New York Telephone Company
has seized upon our industry as a huge profit center.
So the rates that they charge us are truly astounding.
And in fact, when you compare the rates that we as an industry are charged
compared to, let's say, AT&T,
you'll find that we are typically charged hundreds of percent more
for the same identical services.
Well, no business manual can stay in business
when its cost base is different without passing those costs through.
So what we're in the process of doing right now
is educating the Public Service Commission
and the Federal Communications Commission
about the tremendous overcharges that we are being exposed to,
trying to work to get those charges down
so that we can pass those savings through to the calling public.
In point in fact, if we were paying the same prices
for the same services that AT&T gets,
I think you'd find that the average private pay phone out on the street
would not only charge the same as AT&T,
but we, in fact, think that we could charge a little bit less
and offer the same level of service.
Well, you know, it's interesting.
I did see a pay phone in New York City
that offered an alternative pay phone
that offered a connection anywhere in the country
for, I believe, 30 cents for one minute,
which is something that is unequal by any New York telephone pay phone.
And that's the kind of thing that I expected to see more of
when this first happened back in 1985.
I expected to see more undercutting of prices by New York telephone
and alternative services such as multilingual operators,
being able to leave a message at a busy number, that kind of thing.
And I've been a little disappointed
as far as the way the industry has been growing,
and hopefully educating the PSC and the FCC will make a difference.
I'm also concerned about things such as access.
For instance, the other day,
I was trying to place a 9-5-0 call.
Are you familiar with 9-5-0 numbers?
Of course.
Yeah.
Well, some pay phones still don't allow you to have access to that.
They ask for $9.95.
Some just cut off your touch tones when you're connected.
And that doesn't cost you anything, does it, to connect to a 9-5-0 number?
No, and I would suggest that something was undoubtedly wrong
with that particular phone.
The private pay phone industry and the CPPs
have no problem whatsoever in allowing a caller
to dial a long-distance company by dialing a 9-5-0 or an 800 number.
We don't want people to be able to reach their long-distance company
by dialing what is called a 10-XXX number,
that is, a 102-22 for MCI or a 102-88 number by reaching AT&T.
And the reason for that is that opening up 10-XXX
opens up a whole new Pandora's box for us regarding the subject of fraud.
Well, you would get billed, wouldn't you?
Well, the problem is that the network is really not capable at this point
of distinguishing whether or not the caller was going to be paying for that call
or whether or not the call would be billed to the pay phone.
We clearly only want to get billed for calls that we get paid for.
So that's one of our gripes.
The second gripe is that right now if you go to a New York telephone pay phone
and you make a 9-5-0 or an 800 or a 10-XXX call,
they get paid for that call.
But if you go right down the street to a private pay phone company
and you make the same identical call under the law as it's currently written,
we don't earn anything on those phone calls.
And that's another reason why we have to sometimes charge more for our services
because we don't have access to all the revenues that our arch competitor,
the New York telephone company, gets for their phones.
If you have to charge more, though,
how can you expect people to go to your phone instead of a New York telephone phone,
one that has been around for longer?
It seems like the odds of getting somebody to do that are almost insurmountable.
Well, one of the reasons that we think that this is going to become a little bit moot
is that in less than the next 30 days the Federal Communication Commission
is going to decide once and for all whether or not the private pay phone industry
is going to be compensated for those 800-type calls that we talked about,
what we call dial-around.
We believe that they're going to decide in our favor.
Once we get the revenue from those calls
that historically have provided lots of wear and tear for our instruments
but nothing in the way of revenue,
once that revenue starts to come to us,
it'll take some of the financial pressure off us,
and I think you'll see some of the other rates go down.
Another thing that the industry has done is we've lobbied at the FCC
to get another charge removed.
Right now, for example, every private pay phone
is charged $6 a month by a New York telephone company.
But New York telephone company doesn't charge themselves the $6.
Our position is that they either ought to be paying the $6
or alternatively we shouldn't be paying the $6.
And if we're successful on that, again, our expenses will go down
and therefore the calling rates will go down as well.
Do you think there should also be competition on the local level?
Well, I think you'll find that no matter where you look in telecommunications
or most other industries, competition has always been healthy.
I know that when you speak to the average person
and you talk about calling rates, for example,
they're not aware of the fact that in the last five years
long-distance calling rates have come down 45%.
Sprint and MCI have continued to reduce their prices,
AT&T has played catch-up,
and the calling public has certainly benefited tremendously from that.
Now, although the private pay phone industry
has not yet been able to charge lower rates,
principally because the rates we pay are just so high,
we have, in fact, brought lots of benefits to the calling public
because of our competitive presence.
And if you like, I can talk about a couple
that I think your readers perhaps may have overlooked,
your listeners have overlooked in thinking about private pay phones.
Okay, what are they?
Well, you touched on one before which we think is a fabulous service,
and that is that private pay phones, for the most part,
when you use them, if you can't reach the party you're attempting to reach,
encounter a busy signal with no answer,
private pay phones allow you to leave a message
in your own voice of 30 seconds,
and the phone will then automatically attempt to deliver your message
every 15 to 20 minutes for a period usually of four hours.
That's very, very convenient.
It's a service that somehow was overlooked
by the local telephone companies for 95 years before we came along.
You mentioned multilingual operators.
They really didn't exist except for AT&T before we came along.
Our phones offer public service spots.
When you go to our phones, for example,
they say say no to drugs or support Easter Seals.
We, in fact, have a charity of the month.
We're beginning to experiment with something that we call
directory assistance assistance,
which means that when you go to a phone and you dial directory assistance
and you get a phone number that you now want to call,
if it's noisy or you didn't hear the number very well,
you can stay on the line and the phone will now automatically dial it for you.
You don't have to remember the number.
I see.
I see a lot of people that are visiting the United States and may not speak English.
This way it's a fully automated program.
So there are lots of things that the private payphone industry has done
in terms of improving service to the calling public,
but probably the most important is that the private payphone industry
has gone into neighborhoods where New York telephone has pretty much abandoned,
and that's why you see lots and lots of private payphones
because they've gone into poor neighborhoods
where there was generally no other service available.
We're now working as hard as we can to get the expenses that we pay down,
and as those expenses come down,
you will undoubtedly see calling rates go down as well.
I see.
Another idea that I've had for service you might want to provide
is a simple feature that is so hard to get, the time of day.
You're standing around at a payphone.
The operator will not tell you what time it is.
You've got to call a 976 number,
and all of your phones have the time programmed into them.
What would it be to have a simple button or chain of buttons just tell you what time it is,
maybe charge you a nickel for that or something?
Frankly, I think that's a wonderful idea,
and I will certainly see what we can do about implementing it,
and if you like, we can chat again sometime in the future
and we can tell you whether or not it was capable of being done.
Okay, that sounds promising.
Is there anything else that we wanted to cover here?
Well, alternative operator companies,
that's something that came up a couple of years ago as far as long distance,
and I know it's not really a payphone issue
except for the fact that a lot of payphones seem to have been associated with these companies.
Nowadays, though, New York Telephone payphones
are just as capable of connecting to AOS companies using O+.
I've seen a lot of New York Telephone payphones in tiny prints saying,
your O plus calls are carried by this particular company,
and if you check the rates, the rates are higher.
Has that kind of image pretty much left the alternative payphones?
Well, what you've seen essentially is a tremendous, tremendous change
within the private payphone industry since it started.
Remember, it's an industry that's only about six years old,
and in the first two years of the private payphones industry formation,
there was no way that we could earn money except from coins going into the phone.
All of the non-coin calls were absolutely revenue neutral to the private payphone industry,
and I don't know if you're aware of it, Emmanuel,
but literally for every $1 in cash that goes into a phone,
more than $2 in non-coin calls are run through those phones.
So for the first couple of years of its formation,
the private payphone industry was not able to earn any revenue off the non-coin calls.
The AOS, or Alternative Operator Service, industry
began because it offered private payphone companies an opportunity
to get revenue that was going to AT&T and the Bell companies,
and that's what started the industry.
However, that industry, the AOS industry, was burdened with two different problems.
The first is that they set up a central location
and had to transfer the calls from the originating payphone
very long distances to their operator center,
typically many, many, many miles away, usually 1,000 or more miles.
The second is that the call was then handled by a live operator.
Both of those features contributed very significantly
to the core structure of the AOS industry,
and those costs were passed through to the calling public.
That's changed tremendously because of the advances in technology.
So, for example, when you go to any of our phones nowadays,
the call is literally transmitted from the payphone
to Great Neck, New York, where it's processed.
And instead of using a live operator, our payphones now offer callers
all the calling convenience that AT&T does,
but we do it with literally not a live body in sight.
It's done fully automated, and if, as, and when
somebody has to speak to a live operator,
then and only then does a live operator intervene.
So technology has driven the costs down, has improved service,
and I think you're going to see that as this technology begins
to filter into and get embraced by the other private payphone companies,
rates are going to continue to go down.
They've started already.
They've been in a decline now for approximately six months,
and I think you'll see over the next year rates will fall tremendously.
Okay. One final question for you.
One of our listeners called in a couple of weeks ago
and told us that they found a particular kind of alternative payphone
that when they call it, apparently they had the phone number for it,
they could hear the sounds of the street around it.
In other words, there was some sort of a monitoring function.
Is that something common in alternative payphones, a function like that?
I really don't know what it is that you're referencing.
It seems to me that there's certainly no monitoring function in a private payphone.
It could be that there's just simply something wrong with the phone.
If the caller wants to reach out to me, they can do that
and give me the phone number, and I'll see if I can help them out there.
Okay. We've been speaking with Barry Berman,
who is the head of North American Industries,
a company that operates payphones throughout New York and Texas, I believe.
That is correct.
Are there any phone numbers or addresses you'd like to give out
for people who want more information or who want to ask questions?
Well, if anybody wants to call us, we certainly are happy to take their calls.
Our business number is 516-829-2000.
And if anybody wants to send us a letter with perhaps requesting information
or alternatively if they've had a problem,
we're located at 185 Great Neck Road in Great Neck, New York,
and our zip code is 11021.
And if people wanted to express their opinions to, say,
the Public Service Commission or the FCC,
do you have any of that information handy?
I don't have it with me, but I think you'll find that if anybody has a problem
at any of the payphones nowadays,
the law requires that information be posted at each phone that not only provides
the New York State Public Service Commission 800 number,
but also provides the mailing address for the Federal Communications Commission.
Okay.
Well, I want to thank you very much, Mr. Berman,
for taking time out tonight to talk to us.
And we'll be watching this in the newspaper,
see how things resolve in the future and how things change.
Okay, and we'll get back to you and see what we can do about your time directory.
Okay, great.
We'll be able to make that work for you.
Thanks again.
Thank you very much, Emanuel.
Good night.
Bye.
Our telephone number here is 212-279-3400,
and that's for people that are interested in calling in and asking any particular questions.
But we only have about three minutes, so make it quick.
We don't have all that much time.
Let's see who's out there.
Good evening.
Hello.
Go ahead.
Well, guess what happened to me on our phone bill.
$1,347 phone bill with calls from Penn Station and Port Authority in Senegal, Tunisia, Morocco.
Well, that's something to show the kids, isn't it?
Yeah, yeah.
Put it in your family album.
Well, now, what's the first thing you did when you got that besides yelling, screaming, and running around?
Well, basically, when I first saw it,
well, we had had a call in the middle of the night asking if it was okay,
so we'd already canceled our credit card, so we kind of had a feeling that this was coming.
But when I first saw it, you know, I just kept calm and called the phone company.
And what I realized was that I think that a member of our family had made a credit card call
down in one of those places to one of her friends because I recognized the number.
That was at 8 o'clock at night on one night.
Then within 20 minutes, there were like three different calls,
one to Memphis, one to, you know, around the United States.
So somebody had looked over her shoulder.
That's what I think.
Then in the next two days, there were calls all over the place.
For one question, did you get all the calls taken off without a hassle?
You bet.
Okay, that's the important thing.
A lot of people seem to think that when they get a $1,500 phone bill, they've got to pay it.
And obviously, if you didn't make the calls,
you see, this is something where I think the technology just is not capable enough of handling it.
Obviously, a 14-digit number is all that prevents you from catastrophe
if somebody happens to learn that number.
They don't have the card.
They just have the number.
Now, it's funny because now my credit card, the card that I use,
I have one of the AT&T Universal cards,
and you have a special, like, identification number that you can plug in,
which is not on the card or anything.
Right, yeah.
They're coming out with all kinds of new ideas, which really aren't all that new,
but they're finally implementing them.
They should have a voice verification, like, for instance,
something like your mother's maiden name or something,
which they use for some of these credit cards.
Yeah, but that would be pretty easy to get over.
After an initial period, I'm sure there would be a way to figure that out, but it's something.
Yeah, do you have a bulletin board, by the way?
I have some computer stuff to ask you about, too, but I know you don't have much time.
Well, we don't have a bulletin board at the magazine,
but we have accounts on the well in California.
I can give you the phone number for that.
It's account on the well?
Yeah, well, it's an Internet address,
so if you don't have access to Internet, you really wouldn't be able to do it.
I have a computer with a modem, so I could conceivably plug in there,
but I don't really know, you know, Internet.
I heard a program on that a while ago.
Well, actually, I can just give you a phone number now,
but I'm not going to be able to get into much more detail
because we are rapidly running out of time.
The number is 415-332-6106,
and if you get an account there, you can send mail to 2600 or Emanuel
or names like that I'm sure you'll get through.
Thanks so much for calling.
Let's see if we have time for one or two more.
Good evening.
Yeah, I'd like to make a comment.
Yeah, go ahead.
Yeah, I work for the New York Telephone Company,
so I may be biased, but I'm also a consumer,
and I find that the New York Telephone Company phones are much better
in terms of that you can get a refund from the operator
if you have a problem with your call.
With no problem, the operator will take your name and your address
and send you a refund.
Even in the days when it was 10 cents to make a phone call,
you would get that 10 cents back in the mail.
And the other advantage to pay phones that are New York Telephone
is that you get directory assistance free.
In New York State from pay phones, that is correct.
I think, though, the point that the gentleman before was making
is that these companies, well, they're obviously not New York Telephone.
They're other companies.
For instance, when they call directory assistance, they get charged for it,
so obviously for them to provide that service for free would be impossible
and foolish.
The rules, though, require that such pay phones should have phone books
either next to them or on the premises somewhere,
so that is part of the PSC ruling there.
Yes, New York Telephone service is better.
I don't think anyone's going to deny that,
but the fact of the matter is they do have quite an advantage.
They actually do have an advantage,
but it is the government that has set up this advantage.
Do you think it's time that things become a little bit more even?
I don't necessarily think that competition is always the answer to problems
in terms of providing service for customers.
I, myself, as a telephone worker, have not benefited from competition at all.
If anything, there has been tons of layoffs.
As a lot of people know in AT&T,
they have done massive layoffs up to 25 years' service into their company.
Well, that's within AT&T,
but there's also 20 or 30 new phone companies that you could work at
that weren't there before, right?
It depends.
Now, this gentleman that just recently was talking,
he was talking about how fully automated their systems are,
which obviously means that they're not into hiring people,
into providing machines that give service,
which is exactly what my union is fighting against
because we don't think that people like talking to machines.
We think they rather have the human touch.
Well, that's something that was underlined recently by New York Telephone
replacing the machine on repair service with the human
that it originally had replaced with the machine.
So, yes, I think you are right as far as that goes.
We, unfortunately, are out of time.
We want to thank everybody for calling
and apologize to all those people we did not get to this week.
Hopefully, we'll be able to get to them next week.
The program has been off the hook.
This is Emanuel Goldstein.
I will be back next Wednesday at 9 o'clock.
We'll be talking about similar such things.
And stay tuned now for The Personal Computer Show.
Good night, everyone.
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