PSC - Fact Sheet - Alternative Operator Service

PSC Telecommunications Fact Sheet

Issue:	Alternative Operator Service Provider

Description:	Alternative Operator Service Providers (AOS) are basically nontraditional companies providing telephone operator services. The traditional providers include AT&T, MCI, Sprint and the local telephone companies, such as Ameritech. Operator services involve operator assistance in placing a call. The most common are alternative methods of paying for a call, such as collect calling, charging the call to a third party or paying by credit card (either a major credit card or telephone company calling card.). AOS providers are resellers (see factsheet on resellers for more information) who also provide operator services to payphones, hotels and other locations used by travelers and the general public. Resellers who provide limited operator services only to their residential customers at their homes or business customers at their businesses, and who do not serve payphones, are not considered AOSs. The concept of serving the walk-up public is critical to being an AOS
Status:
Related Issues:	Long Distance Resale Debit Cards

Docket/File No.:		Notice Date:
Hearing Date:		Order Date:
Staff Contact:	Peter Jahn	Telephone No.:	(608)267-2338
Creation Date:	5/96	Revision Date:	May 2005

In most circumstances, the market does a good job of controlling prices. When companies charge too much, their customers take their business to lower-priced competitors. The high-priced company finds it has no customers and either cuts its prices, or goes out of business.

With AOS companies; however, the market does not work because the person choosing the operator service provider was not the person paying for the service. In this case, the chooser is not as concerned with the price of the service. Under such circumstances, market forces are less likely to control prices.

What made it worse; however, was that the chooser was often given a percentage of the revenues collected. For example, consider a payphone at a corner gas station. Each AOS company will compete to have the gas station owner choose it as the operator service provider for that public telephone by offering more money. The AOS companies compete by offering the station owner a portion of the money they collect from customers using the payphone at the gas station. The owner is likely to choose the company charging the highest rates because that company could offer the highest payment.

Since the market is incapable of controlling rates for AOS companies, the Commission has had to impose regulatory controls. The Commission has ruled that AOS companies cannot charge more than AT&T for interLATA calls, and no more than Ameritech for intraLATA calls. (The state was divided into four LATAs by the court when it broke up the old AT&T system in 1984. AT&T is the largest carrier of calls between LATAs. Ameritech dominates the long distance calls within the LATAs. LATA stands for Local Access and Transport Area.) The Commission also requires AOS providers to identify themselves before the call and provide rates on request.

The Public Service Commission of Wisconsin has authority only over calls within Wisconsin. Calls that go outside the state come under the jurisdiction of the Federal Communications Commission (FCC) in Washington, DC. The FCC has not imposed ceilings on the price of interstate calls, so callers should be particularly vigilant when using credit cards to place interstate calls.

Consumers can do several things to protect themselves against being overcharged. First, listen to the identification at the beginning of the call; you can then call the contact number for that company (it should be posted on payphones, hotel telephones and the like) and if the charges are reasonable, use that AOS company. Or, you can find another telephone. Another option is to dial a special code or 800 number to use another long distance provider. To find out how, contact your provider. (Sometimes the instructions are written on the back of your calling card.)

Do not assume that by using a calling card from one particular long distance provider you will be charged that provider's rates. A calling card is a credit card, and when you place a call, the provider you use will charge its own rates. This works with all credit cards: JCPenney lets you use a Discover card (Discover is owned by Sears), but charges you JCPenney's prices, not Sears' prices.

If you feel you have been charged an excessive rate, complain to the appropriate Commission: either the Public Service Commission for calls within Wisconsin at 1-800-225-7729, or the Federal Communications Commission for interstate calls: (202) 632-7553, or by mail at: