PHONE CHARGES

Dominion, Volume 14, Issue 299, 12 September 1921, Page 5

PHONE CHARGES

z REVISED SYSTEM FAVOURED What America is doing MONTHLY ACCOUNTS RECOMMENDED During a visit to Europe ano America, the Chief Telegraph Engineer (Mr. E. A. Shrimpton) made many inquires regarding i systems of'charging for telephone service. This is a matter that has attracted much attention in New Zealand, where a charge based on distance Is in vogu6. This system is not used In any of the countries visited by Mr. Shrimpton. ,"In discussing rates with a prominent telephone official in the United States, I explained tour eystom of Charging to him," says Mr. Shrimpton. "Ho seemed amused, and asked mo whether, the same system' was adopted for all .public-util-ity services, For* instance, ho asked whether a person living near a gasometer got hie gas at a cheaper rate than one living two miles from it; also whether a consumer adjacent to the electric-power station paid lass for electricity than the others located eomO distance away. . Before going abroad I w'as of the opinion that 'measured rate’ was the most equitable one for telephone service, but after careful study of the various systems m Europe .and America my opinion has changed.' Measured rates are the exception rather than the- ■rule in the American telephone sex-vice, ■ Expert. ' opinion is divided on the subject, but is generally in favour of flat rates for spnall towns and residential areas. Opinion has been influenced by the fact ' that the introduction of machine-switch-ing is facilitated by the existence of a flat rate. (

. FAULTS OF EXISTING SYSTEMS. "Whilst it is desirable to maintain the principle of measured-rate service—namely, to charge for service on a quantitative basis —it cannot he overlooked that existing systems of recording and collecting the charges ore cumbersome, expensive, and more or less unreliable, thus causing disputes which waste time and money making inquiries. It involves not only complex accounting, but ’ also increased' capital expenditure, maintenance -. costs, , and traffic charges. To equip all the 'subscribers’ lines in New Zealand with meters would cost soisw thing like ,£M,OOO- Measured rate is in vogue in New York, but the American Telephone and Telegraph Company’s officials informed me that wholesale in- / troduction of automatic telephone switching will no doubt cause them to materially revise their policy, and the result ' will probably be that flat rate en the • «one system will be adopted, measured ' rate being retained only for business connections ip large multi-offic’e areas having, say, over- fifty thousand lines. "The flat rate on the 'zone' or 'area’ system is generally the most popular in the United States, with both companies and subscribers. Los Angejes Exchange, with as nihny as eighty-fiye thousand x subscribers connected with it, charges for service under this system. \The system referred to, briefly put, is “eH" - follows: —

An area known ns the 'base charge’ area - is determined for all cities and towns. This area is enclosed in a map of the respective city or town. The 'base area’ need not necessarily be the city area , proper nor tho town boundary. In determining this area several factors ere taken into consideration so as to assist 1 ip the study of development of the wire plant and cabling to provide a service which will pay interest on capital, working expenses, depreciation, and obsolescence. Some of the factors used for arriving at this ‘base area’ are density of population, the class of residences from a telephone point of view, natural barriers to overcome for cable distribution, etc.—generally, factors to assist one to arrive at an area so that the greatest number possible may be served at an equitable flat rate—one for private residences arid another for, businesses, the business rate in the larger areas being at least double the private-resi-dence rate. All subscribers outside this area are charged an additional mileage rate to the nearest quarter of a mile,' the air-line distance being taken. If a fair number of subscribers can ’ be secured in a township adjacent to e. city, this township is mapped out to include an area for a mileage charge to be paid in addition to tho city’s base charger" LOCAL APPLICATION. "Take the Hutt, lor instance-, a person or business located in what would be known' as the ‘Hutt area’ would have ' intercommunication with all the city exchanges, and tho charges would bo the chargo for Wellington 'base area,’ plus the Hutt area charge. There would be an area charge for Fetone, East- ' bourne, and perhaps as far* - away as Upper Hutt. I recommend charging for telephone service by an area rate in place of the conductor length of circuit rate now in existence, such areas to be defined by maps or plans with lines enclosing multi-office and single-office areas as outlined above. Tho following classes of services to be provided for:—Within bate area for multi-office areas: Oneparty line, business; one-party liJJp, residence; two-party line, business (both subscribers to be in the same city or town block); two-party line and four-party lihe, residence. Outside: the base-area rato, lines for 'single office areas, and connections to exchanges, to be. designated ‘rural exchanges'; one-party, twoparty, four-party, six-party, eight-party, ten-party: The Department to have the right of arranging the parties SYSTEM OF ACCOUNTS. "Telephono officials: generally attach great importance to'the American practice of rendering monthly accounts to subscribers. It is maintained that this practice, combined with other attractive features in the way of party-lino accounts, fosters the telephone habit among smaller users, particularly residential areas. I was informed also (that the monthly account system is favoured by the business houses. The monthly accounts are a complete statement of all charges against the suuBcriber—i.o., rental qharges, toll talks, etc. It must be admitted that our system of rendering. accounts —half-yearly for rentals and monthly for toll charges —is most unsatisfactory. A large percentage of the accounts io for such small amounts —as small as 3d. —that the subscribers neglect to pay them, and on

demand frequently ask that the amounts be included in their half-yearly ac- \ counts. I strongly recommend rendering accounts monthly for all telephono service, the accounts to be a complete statement of all charges agajnst the subscriber. , '’The method adopted by us to facilitate collecting telephone tariffs is so well known that I need not describe it. Briefly put, it is to disconnect all subscribers who do not pay up by a certain date. I may say that' the same action is taken in Australia, but there a defaulting subscriber has to pay an additional ss. before his severed connection is completed again. The ss. is» termed ■ a ‘joiningup’ fee. In America the accounts are rendered monthly, and payment has to bo made before tha 10th of the following month. AU those not having paid on that date are reminded by telephone to . de. so. A week later those subscribers' who still have their Accounts unpaid are visited by a man who has to either collect the account er remove the telephone from the •übsc-rib-

er’s premises. If the subscriber electa to pay tho rnan, ho may do so, provided he pays au additional 50 cents for tho man’s time in making the. visit. At ono citv I got the following information: At the" end of the month, 83,000 accounts were rendered; 2500 telephone requests for payment were made; 300 subscribers were Visited; 25 (were removed.” i