CITY'S BID TO BAN SOME PAY PHONES GOES TO COURT

RALEIGH - Like liquor stores and pawn shops, pay phones have come
under attack in some cities from those who say they feed the vices
that plague poor neighborhoods by attracting drug dealers and other
criminals.

Responding to complaints from neighborhood groups in East and
Southeast Raleigh, the city banned stand-alone pay phones in
residential neighborhoods. The city's rationale is that pay phones
are businesses, and zoning ordinances prohibit businesses in
residential areas.

But one company is fighting back. Now the pay-phone industry is
watching to see whether Triangle Telephone Co.'s federal lawsuit
succeeds in challenging Raleigh's authority to restrict the location
of pay phones.

Other cities, such as Denver, Minneapolis and Hollywood, Fla., have
put restrictions on pay phones, but Raleigh is the only North Carolina
city to prohibit them outright in residential neighborhoods.

"They say just take out the phones and that will solve the problem,"
said Hayes Lancaster, a vice president of the Cary-based Triangle
Telephone. "Of course, pay phones have nothing to do with the problem.
We've always felt that if you give in to one of these municipalities
that chose to ignore federal law, you're setting up for a snowball
effect that could filter throughout the area."

Triangle Telephone Co., which owns more than 3,500 pay phones
throughout the Southeast and about 600 in the Triangle, filed its suit
in U.S. District Court last month seeking to stop Raleigh from
prohibiting pay phones in residential districts.

Phone companies are regulated by the federal Telecommunications Act of
1996, which opened the market to an influx of smaller, local
companies, and other federal laws. Therefore Triangle Telephone
contends that state and local authorities can't interfere with its
business. It also points out that a pay-phone company is a utility
regulated by the N.C. Utilities Commission and not by cities or counties.

Commercial uses have been prohibited in Raleigh's neighborhoods for at
least 40 years. But the city did not begin to enforce the ban on pay
phones until 1996, when complaints about illegal activity prompted
the police and the city manager to have the zoning inspector take a
look at the problem.

"A lot of community people have a major concern about these phones,"
zoning supervisor Larry Strickland said recently.

Neighborhood activists in Raleigh say pay phones in poor parts of town
reinforce negative stereotypes and end up costing the people who can
least afford it.

"These pay phones are nothing but problems," Raleigh community
organizer Octavia Rainey says. "They're just preying on poor folks."

Raleigh has never done a comprehensive study to prove a firm
connection between crime and all pay phones in poor neighborhoods, but
Rainey and other activists say common sense and their own everyday
experience show that there is a link. They say illicit drug deals are
made over the phones, sometimes drugs are left hidden between the
pages of phone books in the booths, prostitutes use them, and
delinquents congregate around the booths.

After looking into it, Strickland declared that pay phones are
businesses: People put money into them for a service.

It was obvious to Strickland that about two dozen pay phones, all in
East and Southeast Raleigh, ran afoul of the ordinance. He notified
the companies that owned them that they had to remove them or face
fines.

The city's position is bolstered by a Federal Communications
Commission ruling that zoning restrictions imposed for the public's
health, safety and welfare are legitimate. BellSouth, the state's
biggest pay-phone operator, was the first to pull its phones out of
those neighborhoods. A small company, Quartercom, removed a single
phone that it had there.

Two other small firms, the Raleigh-based Southeastern Telephone
Service Inc. and a Garner company called JGS Payphones, appealed but
ran into organized neighborhood opposition. In August they lost the
final round at the city Board of Adjustment. Strickland then sent
notices to all the companies that

hadn't taken out their phones, setting a deadline to remove them or
face fines of $100 a day per phone.

Triangle Telephone Co. and Southeastern Telephone Service, in the
meantime, altered their phones to make local calls free, as a way to
avoid being designated a business; but the city said that as long as
they charged for long-distance calls they could not get around the
ordinance.

Southeastern, which owns several hundred phones in the Triangle, ended
up taking out a dozen of its pay phones rather than continue the
fight. The company is also saddled with about $1,000 in fines because
it didn't remove the phones in time, according to Stan Lee, the president.

Lee said Southeastern is hoping Triangle Telephone will win in court
and is keeping its hardware and lines in place in hopes of
reinstalling its phones some day.

"We're not big enough to fight city hall," Lee said. "We're taking our
losses and going about our business. Right now we're waiting to see
the outcome of the Triangle lawsuit."

Triangle's phones are still in place, offering free local calls, while
its lawsuit challenges the zoning enforcement.

Phone companies chafe at being portrayed as callous businesses
profiting from the poor. They say they are providing an important
service to the people who need it the most - people who don't have
phones in their homes - and they say most pay-phone calls are made for
legitimate purposes.

They say the activists that have run the pay phones out of certain
neighborhoods have their own telephones and have hurt those who don't.

"These so-called do-gooders have gone around and forced the issue,"
Lee said. "They've removed phones from a lot of neighborhoods they
don't even live in.

"The city of Raleigh is more than happy to bend to the whims of these
people because they can chalk it up that they're doing something to
fight the drug trade in town."

Lee said tenants in the Fox Ridge Manor apartment complex in Southeast
Raleigh, for example, asked for pay phones, but Southeastern had to
pull its four phones out because they were accessible to the public.

Lancaster, of Triangle Telephone, said people in high-crime
neighborhoods need public phones more than others.

The farther somebody has to run to dial 911, he said, the greater the
danger.

Triangle Telephone and some of the other companies have tried to
address the concerns by blocking incoming calls and shutting off the
phones at night except for 911 calls. Lancaster said they have also
offered to give police access to all their phone records, which could
be useful in drug cases, but the police have never taken them up on
it.

Vincent Townsend of the N.C. Payphone Association said companies have
successfully worked with police and neighbors in Charlotte and
Winston-Salem to make specific phones less attractive to criminals by
using those tactics and others. Townsend met with the Raleigh
neighborhood activists and said he thinks their concerns are
legitimate but could be addressed at each phone.

"Otherwise, all it does is move the criminal to somewhere else," he
said. "It comes down to whether people are willing to work with the
phone provider to make sure those features are in place."

But Rainey, the community activist, said the companies' motives are
not so altruistic.

"That's not for the betterment of the inner-city community," she said.
"It's about money, it's not about service."

She said pay phones send the wrong message to people who live in poor
communities. It discourages families from getting their own phones,
which they need for school, doctor appointments and to keep jobs, as
well as to keep up with the computer age.

"We don't want our children growing up thinking this is their destiny:
to run around the corner and use the pay phone," she said.

She pointed out that there are no stand-alone pay phones in Raleigh
neighborhoods to the west and north.

Besides, she said, most homes even in poor areas do have phones. And
many people without phones, she said, don't realize they qualify for a
federal aid program called Lifeline that would cut their monthly bill
to about $6 - a lot cheaper than relying on a pay phone.

The working poor don't qualify for that program, however. One agency
that is trying to expand the list of those who are eligible, the N.C.
Justice and Community Development Center, said every home should have
a phone, and it doesn't buy the industry's argument that pay phones
provide a service that wouldn't be there otherwise.

"Sure, something is better than nothing, but we could avoid the whole
debate," staff attorney Bob Schofield said. "Pay phones have a niche,
but they shouldn't be there as a basic service for people. This isn't
Hooterville, where you have to go to the general store to make a phone
call."