MCI and US Sprint officials, frustrated over not being considered for a pay telephone contract at Salt Lake International Airport, say the Airport Authority's deal with American Telephone & Telegraph Co. could prove costly.
The Airport Authority Board voted unanimously to award the two-year contract to AT&T to provide long-distance service for the approximately 250 pay phones at the airport.AT&T agreed to pay a 12 percent commission on interstate long-distance calls made from the airport.
MCI Telecommunications, however, offered a 17.5 percent commission, said Beck Thornton, a company business marketing manager.
The difference between the two commissions over the contract period is $187,000. MCI estimates the airport's 10.5 million travelers make $1.7 million in interstate, long-distance calls annually.
US Sprint would have offered a 16 percent commission, said Jack McDonald, district sales manager. The company, however, had been told the Airport Authority planned to stay with AT&T.
"Their basic philosophy was, `We don't want to rock the boat and we want to see how this thing shakes out,' " McDonald said. "You get disappointed when you don't at least have the opportunity to present your company."
Louis Miller, director of the Airport Authority, questioned MCI's estimates and the company wanted an answer by Feb. 1, sooner than the board could act.
"What we wanted to do is buy ourselves a little bit of time so we could put together an all-encompassing proposal," Miller said.
The Airport Authority, which has annual revenues of $35 million, plans to prepare a bid for the entire public telephone system at the airport within the next two years. That contract will be put to bid.
"We have been just waiting for the entire telephone industry to shake out," Miller said.
The Airport Authority will receive additional revenue from its pay phones under the new AT&T contract. The contract previously was based on passengers, while the new contract is based on revenues and has a guaranteed $150,000 minimum.
MCI would not guarantee a minimum payment.
"At least with AT&T I get a guaranteed amount of revenue," Miller said. "You have to look at the whole package."
In October, U.S. District Judge Harold Greene, the federal judge overseeing the breakup of the AT&T system, ruled the pay phone market for interstate, long-distance calls should be opened to competition.
Previously, AT&T handled long distance calls made from pay phones owned by the Bell operating firms. Now, the owner of the premise can choose which company will provide the service.