Payphone
A payphone is a public telephone instrument, either coin-operated or coinless, that imposes a charge on a per-call or per-use basis to connect users to the telephone network without requiring a personal subscription.[1] Invented by William Gray and first installed in a bank in Hartford, Connecticut, in 1889 following his patent issuance (U.S. Patent 408,709), the device arose from practical necessity when Gray sought to call a doctor for his dying wife but lacked access to a private telephone.[2] Payphones proliferated globally during the 20th century, providing essential public access to communication and reaching a peak of approximately 2.6 million units in the United States by the mid-1990s.[3] Their deployment facilitated universal telephony by allowing calls from streets, stations, and buildings, often with provisions for free emergency dialing.[2] The advent of cellular telephones, with ownership exceeding 95% in the U.S. by the 2010s, precipitated a sharp decline, reducing numbers to under 100,000 by 2016 amid corporate exits like AT&T in 2007 and Verizon in 2011.[3][4] Although largely obsolete in developed nations, payphones endure in limited capacities for reliability in low-coverage areas or as regulatory mandates, with remnants operational in regions worldwide where mobile infrastructure lags.[3]History
Invention and Early Development
The concept of public telephone access emerged shortly after Alexander Graham Bell's invention of the telephone in 1876, with the first public exchanges established by 1878 in New Haven, Connecticut.[5] Early public phones, installed in telephone company offices during the 1880s, required users to pay an attendant for service rather than operating independently.[6] This attendant-mediated system limited scalability and accessibility, prompting innovations in automated payment mechanisms to enable broader, unsupervised public use. The first coin-operated payphone was patented by William Gray, a Hartford, Connecticut inventor, on August 13, 1889, under U.S. Patent No. 408,709 for a device that accepted coins to initiate calls without operator intervention for payment.[7] [8] Gray's motivation stemmed from a personal experience in which he was denied use of private telephones to summon a doctor for his dying wife, highlighting the need for impartial public access.[9] The initial installation occurred in 1889 at a bank in Hartford, marking the debut of automated payphone technology and allowing calls for a small coin fee, typically a nickel or dime depending on distance.[2] [10] Following the patent, Gray founded the Gray Telephone Pay Station Company to commercialize the invention, issuing subsequent patents for refinements, including an improved coin mechanism under U.S. Patent No. 454,470 on June 23, 1891.[11] These early devices featured mechanical slots for coins that unlocked the line after deposit, with mechanisms to return coins for unsuccessful connections or retain them upon completion.[2] Adoption grew in the United States during the 1890s, primarily in banks and stores, as telephone networks expanded, though widespread outdoor installations awaited further infrastructure development into the early 1900s.[12]Expansion in the 20th Century
The expansion of payphones accelerated in the early 20th century as telephone infrastructure proliferated, particularly in the United States under the Bell System monopoly. Initial installations, often indoors in hotels, stores, and offices, grew rapidly; by 1911, Western Electric introduced mass-produced coin-operated models like the 50A, featuring improved coin return mechanisms.[8] Outdoor payphones appeared around 1905 in locations such as Cincinnati, enabling broader public access amid rising urbanization and travel.[13] By the 1920s, payphone booths numbered 25,000 in New York City alone, reflecting dense urban deployment to serve commuters and shoppers.[14] The Bell System reached its one-millionth payphone installation by 1960, driven by technological advancements that reduced costs and a 10-minute local call price of 10 cents, making service affordable.[15][11] This growth paralleled the overall telephone network expansion, with payphones providing essential connectivity for those without private lines, especially during the interwar period and post-World War II economic boom. Internationally, payphones followed similar trajectories in industrialized nations, becoming fixtures in public spaces as state-owned or private telecom operators extended services. In Europe, telecom monopolies facilitated installations from the 1890s onward, though growth varied by country; by mid-century, they supported increasing mobility and emergency communications.[16] By the late 20th century, the U.S. alone had over 2 million payphones, underscoring their role in achieving near-universal public telephony access before widespread private subscriptions.[2] This proliferation was causal to enhanced social and economic connectivity, as payphones bridged gaps in personal telephone ownership, which remained limited until the 1960s in many areas.[17]Technological Advancements and Peak Usage
Payphones underwent significant technological refinements in the mid-20th century, transitioning from rotary dial mechanisms to touch-tone (dual-tone multi-frequency, DTMF) dialing systems. This advancement, introduced commercially in 1963 and applied to payphones by the mid-1960s, enabled faster dialing and compatibility with automated switching systems, reducing connection times compared to pulse dialing.[5][18] Concurrently, mechanical coin validators evolved from multi-slot designs accommodating nickels, dimes, and quarters to single-slot models, streamlining operation and reducing jamming incidents.[5] In the 1960s, "dial tone first" service was implemented, allowing users to receive a dial tone without initial coin insertion for local calls or emergencies, enhancing accessibility while maintaining revenue through post-dial collection.[9] By the 1970s and 1980s, electronic integration advanced further with microprocessor controls, introduced around 1984 in models like those resembling the Nortel Millennium, enabling features such as fraud detection, call progress monitoring, and programmable tariffs.[19] These "smart" payphones incorporated digital logic for precise coin validation and integration with centralized billing systems, improving reliability and reducing maintenance costs.[20] The late 20th century also saw the advent of alternative payment methods, including credit card readers and prepaid telephone cards, which began appearing in the 1980s to accommodate rising call costs and user convenience, though coin operation remained dominant.[20] These innovations peaked in deployment during the 1990s, when payphones benefited from robust electronic infrastructure before mobile telephony eroded demand. Usage reached its zenith in the mid-1990s, with approximately 2.6 million payphones operational in the United States by 1995, reflecting widespread installation in urban, rural, and institutional settings amid these technological enhancements.[9][3] Globally, payphones were similarly ubiquitous, supporting universal telephony access in developed nations, though precise worldwide figures are unavailable; in the U.S., this peak represented over one payphone per 100 residents, underscoring their role in public communication before cellular alternatives proliferated.[3][21]Decline and Near-Obsolescence
The number of payphones in the United States peaked at approximately 2.6 million units in 1995, before entering a steep decline driven primarily by the rapid adoption of cellular telephones.[9] By 2016, fewer than 100,000 payphones remained operational nationwide, representing a reduction of over 95 percent from the early 2000s peak of more than 2 million units.[4] Federal Communications Commission data document a consistent year-on-year decrease from 1997 through 2016, with payphone providers reporting revenues falling to $286 million by 2015 amid eroding usage.[22][23] The primary causal factor in this obsolescence was the proliferation of mobile phones, which offered portable, coin-free communication and eliminated the need for fixed public stations; U.S. cellphone subscriptions surged from 90.6 million in 2000 to 217.4 million by 2006, directly correlating with payphone disuse.[24] Additional contributors included rising operational costs from vandalism and maintenance, as well as localized regulatory pressures, such as 1992 lobbying in Chicago to remove payphones due to associations with drug-related crime, accelerating removal in high-risk urban areas.[3] Payphone compensation payments, once substantial, declined by 99.3 percent from their 2005 peak by the late 2010s, rendering many units unprofitable.[25] Similar trends manifested globally, with payphone revenues in Canada plummeting from $47.4 million to $3.6 million between the early 2010s and 2022, reflecting ubiquitous mobile penetration.[26] By 2017, the FCC ceased stringent oversight of payphone regulations owing to their negligible market presence, underscoring near-total displacement by personal wireless devices.[27] Residual units persist in select locations for emergency access or in regions with limited cellular coverage, but widespread removal has rendered payphones relics of pre-mobile telephony infrastructure.[28]Technology and Design
Core Mechanical and Electronic Components
The core mechanical components of traditional payphones, such as the Western Electric models used in the Bell System, centered on the coin handling system designed for secure operation and fraud resistance. The coin hopper, a metal assembly with chutes and validators, accepted coins through dedicated slots for nickels (5 cents), dimes (10 cents), and quarters (25 cents) in three-slot variants prevalent from the 1950s onward; validators employed mechanical gates, springs, and weights to discriminate genuine U.S. coins by diameter, thickness, and mass, rejecting slugs or counterfeits.[29] Coins passing validation entered an escrow position—a temporary holding slot—preventing immediate deposit until central office confirmation of call connection via a supervisory signal. A secure vault, often with a capacity for thousands of coins and accessed via specialized keys, stored accepted payments, while a return chute diverted unaccepted or refunded coins. The handset cradle incorporated a robust hookswitch mechanism to detect off-hook status and initiate the calling sequence, complemented by a rotary dial or later keypad mounted on a die-cast metal frame for durability against vandalism.[30] Electromechanical relays formed the backbone of control logic, with the double-coil coin relay in Western Electric designs using separate windings—one for deposit (energized by central office polarity reversal) and one for refund—to route coins from escrow without mechanical linkage vulnerable to tampering; this relay, operating on line current pulses, ensured coins dropped into the vault only after validation or were returned on disconnect.[31] The telephone network comprised an anti-sidetone induction coil to balance transmit and receive signals, reducing echo; electrolytic capacitors for AC filtering and DC blocking; and resistors for current limiting in the talk circuit. Power derived entirely from the telephone line's -48 VDC central office battery, supplemented by transient ringing voltage (around 90 VAC at 20 Hz) to actuate the polarized mechanical bell ringer via a dedicated circuit.[32] Terminal strips facilitated wiring to the line, with hookswitch contacts grounding or looping the circuit for signaling; early models lacked solid-state electronics, relying on these passive and relay-based elements for metering calls by time or distance as signaled from the exchange.[33] In single-slot variants like the Western Electric 1C from the 1930s, simplified mechanisms accepted only one denomination (e.g., dimes), but core principles persisted until electronic upgrades in the 1970s introduced microprocessor boards for validation and anti-fraud.[34]Evolution of Payment Mechanisms
Payphone payment mechanisms originated with coin-operated systems in the late 19th century, designed to validate inserted coins before enabling calls. The first automatic coin payphone, installed in Hartford, Connecticut, in 1889, used mechanical validators to detect genuine U.S. nickels, dimes, and quarters based on size, weight, and material composition, preventing widespread use of counterfeit slugs. [35] These early devices employed electromechanical relays: upon coin insertion into designated slots, a validated deposit would activate a circuit to connect the line, with call duration controlled by timed coin credit or operator intervention in post-pay models. [36] By the mid-20th century, coin mechanisms had standardized in major markets, featuring three-slot designs in the United States for nickel (5 cents), dime (10 cents), and quarter (25 cents) acceptance, while European variants adapted to local currencies like pre-decimal British pennies and shillings. [37] Validation improved with electromagnetic sensors and microswitches to discriminate against slugs—often lead or brass fakes mimicking coin profiles—reducing fraud rates but not eliminating coin box vandalism or theft, which prompted innovations in secure vaults and armored enclosures. [38] In operator-controlled systems, such as those by AT&T's Bell System, coins were held pending call completion, with refunds routed via gravity-fed returns for unanswered or faulty connections, ensuring revenue retention only for successful usage. [39] The shift from coins to prepaid telephone cards began in the 1970s to address escalating vandalism and collection costs associated with coin handling. Italy introduced the world's first prepaid phone cards in 1976, using magnetic stripe technology readable by payphone slots, which stored call value and reduced physical cash risks by fivefold compared to coin units. [40] [41] This model proliferated in Europe: the United Kingdom trialed optical cards in 1981 via BT Phonecards, encoding value through light transmission patterns scannable without contact, lasting until 1996 before magnetic and chip transitions. [42] Germany launched large-scale smart card systems in 1986, embedding microchips for encrypted value deduction and fraud-resistant PIN verification. [43] In the United States, coin dominance persisted into the 1990s due to regulatory divestiture enabling customer-owned coin-operated telephones (COCOTs), though prepaid cards gained traction post-1984 with magnetic and chip variants in select deployments, often alongside coins for hybrid flexibility. [44] [45] By the late 1980s, card systems evolved to chip-based for precise decrementing per call unit, minimizing revenue leakage from imprecise coin timing, while some units integrated credit or debit swipes in the 1990s, foreshadowing digital decline amid mobile telephony's rise. [37] These mechanisms prioritized causal reliability—ensuring payment preceded service—over user convenience, with empirical data showing card adoption correlating to 20-30% lower operational costs in high-vandalism areas. [41]Enclosures, Booths, and Security Features
Payphone enclosures and booths evolved from simple protective structures to provide privacy, weather resistance, and security against tampering. Early telephone booths emerged in the 1880s following the telephone's invention, initially as small wooden or glass-enclosed spaces with doors for acoustic isolation and visual signaling of occupancy.[46] The first outdoor payphone was installed in 1905 on a Cincinnati street, initially lacking partitions or walls for privacy or protection, but booths soon incorporated folding glass doors, lighting, and windows to indicate usage.[47] By the mid-20th century, deluxe booths featured amenities such as swivel chairs, writing shelves, automatic fans, and electric lights to enhance user comfort in public settings.[48] Enclosures transitioned from full booths to more open designs in later decades, using materials like clear tempered safety glass for side panels, sloped stainless steel shelves, and steel pedestals for mounting to balance accessibility with protection. These structures often included secure coin vaults at the base and rotary dials in upper housings made from durable plastics.[49] Modern remnants and specialized booths employ vandal-resistant materials such as fiberglass-reinforced polyester, cold-rolled steel with powder coating, or polyethylene plastics with UV resistance and acoustic insulation up to 15 dB.[50][51] Security features focused on preventing coin theft, vandalism, and sabotage, with enclosures designed to withstand physical attacks. Western Electric payphones incorporated robust locks on coin boxes, including multi-point mechanisms requiring dual unlocking—one integrated into the lid and another four-armed system—to access funds.[52][53] Anti-theft devices in coin mechanisms, used from 1965 to the late 1980s, deterred unauthorized entry, while reinforced steel diaphragms and Chubb locks protected internal components.[54] Manufacturers introduced steel-sheathed handset cords, recessed unbreakable plastic dials, and key-traps with periodic rekeying of coin boxes to counter theft techniques like short-circuiting wires.[55][56][57] In Britain, such vulnerabilities led to 55,000 attacks on payphone cash compartments in the 1992-93 financial year, costing £20 million and prompting further hardening of enclosures against drilling and smashing.[58]Operation and Usage
Process of Making a Call
In traditional coin-operated payphones, particularly those deployed by the Bell System in the United States, the process began with the user lifting the handset to initiate contact with the telephone exchange. Dial Tone First (DTF) operation, which became prevalent after the 1960s, provided a dial tone without an initial coin deposit, allowing the user to dial the number using the rotary or push-button mechanism.[59] [60] For local calls, upon the receiving party answering, an automated announcement prompted the caller to deposit the required coins—typically a nickel, dime, or quarter depending on the era and location—into the appropriate slot. The payphone's internal relay mechanism validated the coin's weight, size, and material via electromagnetic detection, confirming legitimacy before fully bridging the audio circuit and starting the call timer, usually in three-minute increments. Failure to deposit valid coins resulted in disconnection, while additional time required further deposits signaled by beeps or announcements.[61] [62] Long-distance calls required dialing a prefix such as 0 or 1, connecting to an operator who announced the rates and supervised coin deposits or facilitated alternative payment methods like collect calls. Automated Coin Toll Service (ACTS), introduced in the 1970s, allowed operator-assisted long-distance calls with voice-guided prompts for deposits. Emergency calls to 911 were typically free, bypassing payment requirements.[63] [64] Earlier Coin First systems, used before widespread DTF adoption, demanded an initial deposit to obtain the dial tone, reducing unauthorized dialing but limiting access for information or uncompleted calls. Card-operated payphones, emerging in the 1980s, modified the process to require swiping or inserting a prepaid telephone card before dialing, with electronic validation replacing mechanical coin relays.[60] [65]Accessibility Features and Public Service Obligations
Payphones incorporate specific design elements to accommodate users with disabilities, as mandated by regulations such as the Americans with Disabilities Act (ADA). For wheelchair users, accessible payphones must provide a clear floor space of at least 30 inches by 48 inches adjacent to the phone, with the operable parts—including the handset cord, dial, and coin slot—positioned no higher than 48 inches above the floor for forward approach or 54 inches for side approach.[66][67] These standards ensure that individuals with mobility impairments can independently operate the device without obstruction.[68] Auditory accessibility features include volume controls capable of amplifying incoming signals by at least 20 decibels, aiding those with hearing loss, and compatibility with hearing aids through inductive coupling.[69] For users who are deaf or have speech disabilities, teletypewriter (TTY) or telecommunications device for the deaf (TDD) compatibility is required on at least one payphone per bank of four or more public telephones, particularly in interior locations, allowing text-based communication via relay services.[67][64] Public payphone TTY models often feature large displays for low-vision users and integration with standard enclosures to facilitate relay calls without additional payment.[70] Regulatory frameworks impose public service obligations on payphone providers to maintain essential access, particularly for emergencies and underserved populations. In the United States, federal rules under 47 CFR § 64.1330 require states to ensure that all payphones provide free access to dial tone, 911 emergency services, and telecommunications relay services (TRS) for hearing-impaired users, exempting such calls from compensation obligations.[71][72] Emergency calls must connect without coin deposit or charge, supporting direct access to public safety answering points (PSAPs).[73] To promote universal service, the Federal Communications Commission (FCC) mandates state reviews of payphone regulations to eliminate barriers to entry while preserving "public interest payphones" (PIPs) in locations lacking viable alternatives, such as remote or low-income areas where cellular coverage is inadequate.[74][75] These obligations stem from the 1996 Telecommunications Act, which aimed to ensure payphone availability for non-subscribers, though enforcement has varied as mobile telephony expanded, leading to reduced PIP designations in many jurisdictions.[76][25]Economic Aspects
Revenue Generation and Cost Structures
Payphones traditionally generated revenue through direct user payments for calls, including coin insertions for local and short-duration domestic calls, prepaid telephone cards for similar usage, and commissions from toll-free or operator-assisted long-distance calls.[77] In the United States, following the 1984 divestiture of AT&T, independent payphone service providers (PSPs) operated most units, often negotiating revenue splits with location owners such as bars or stores, where prime urban sites like Manhattan bar payphones averaged $2,044 annually in 1986.[78] A significant portion derived from operator service commissions on collect, credit card, or third-party billed calls, with PSPs retaining high markups—sometimes 50% or more—due to limited competition and regulatory lags; additionally, federal rules mandated "dial-around" compensation from long-distance carriers, providing PSPs approximately 24-28 cents per 800-number access call to bypass higher PSP rates.[77] [79] Total U.S. payphone industry revenue peaked near $1 billion in 1999 amid over 2 million units, though unevenly distributed, with high-traffic locations netting up to $10,000 yearly from coins alone in the 1980s.[80] Operating costs encompassed capital expenditures for equipment purchase and installation, typically $2,000 to $7,000 per unit in the late 1990s and early 2000s, alongside recurring expenses for telephone line leases (around $14-50 monthly), maintenance, vandalism repairs, and secure coin collection services that claimed a percentage of retrieved funds.[81] [79] [82] Monthly operational overheads exceeded $100 per phone by 2001, driven by thinly staffed PSPs handling nationwide upkeep, while location agreements often required revenue shares reducing net PSP intake.[81] Vandalism and theft posed persistent challenges, inflating repair costs, as did regulatory compliance for accessibility and compensation flows.[79] These structures yielded profitability in high-usage eras through leveraged toll call premiums offsetting fixed costs, with schemes like ETS Payphones promising investors $83 monthly returns per unit in the 1990s before collapsing as a Ponzi operation amid overexpansion.[79] However, as cellular adoption surged post-1990s, average per-phone revenue fell below maintenance thresholds—dropping to under $500 annually by the 2010s for many units—forcing widespread decommissioning when usage dipped to once-daily or less, rendering operations unviable without subsidies or niche placements like prisons.[24] [80] Industry-wide revenue contracted to $286 million by 2015 across far fewer phones, underscoring how static costs outpaced declining call volumes.[83]Profitability Trends and Market Dynamics
Payphone revenues in the United States peaked in the late 1990s, reaching $2.536 billion in 1998 and $2.218 billion in 1999, before entering a sustained decline amid falling usage.[84] By 2008, annual revenues had dropped to $379 million, and further to $286 million by 2015, reflecting a contraction of over 85% from the peak within less than two decades.[84][83] The number of installed payphones followed a parallel trajectory, growing from approximately 2 million in 1985 to a high of over 2.1 million by 1999, then plummeting to 555,128 by 2009 and fewer than 100,000 by the early 2020s.[84]| Year | Approximate Number of Payphones | Revenue (USD millions) |
|---|---|---|
| 1998 | 2,100,558 | 2,536 |
| 1999 | 2,121,526 | 2,218 |
| 2008 | 700,826 | 379 |
| 2015 | ~100,000 | 286 |