A set activation fee pay telephone permits a telephone customer to place a telephone call from a pay telephone if the customer presents valid billing information, and charges the customer a fixed fee for the call, plus any other applicable network charges. The set activation pay telephone accepts two inputs: a telephone number the customer desires to call and billing information. The set activation fee pay telephone stores the telephone number locally and transmits the billing information to a network element. A determination is made as to whether the billing information is valid. Typically, the determination is made by querying a billing database. If the billing information is valid, then an approval signal is transmitted to the set activation fee pay telephone. Once the set activation fee pay telephone receives the approval signal, it passes the telephone number stored in memory to the PSTN and the call is placed normally. Once the customer terminates the call, a set activation fee is added to the customer's bill reflecting the cost for the use of the set activation fee pay telephone in addition to any other applicable network charges.