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GTE Corp, following hot on the heels of Bell Atlantic Corp (CI No 3,289), is raising its rates for local calls on public pay phones throughout California to $0.35. GTE says it is the first such rate increase since 1984 when the rates were raised from $0.10 to $0.20. GTE operates more than 40,000 pay phones in California and 120,000 nationwide. The Telecommunications Act of 1996 deregulated the pay-phone business, allowing market-based rates. Prior to October 7 of this year, when the new regulations took effect, state regulatory commissions set pay-phone rates based loosely on the actual cost of providing the service. A telecommunications provider like GTE would have to plead its case for a rate increase to state regulators, who could then decide whether it was justified and, if so, how much the rates could be increased.

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