The FCC has announced new VRS rates for 1 year:

http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-115A1.pdf

General Announcement:

For Immediate Release:                                         News Media Contact:

June 28, 2010                                                         Dan Rumelt at (202) 418-7512

FCC TAKES ACTION TO PROTECT AND SUSTAIN VITAL SERVICE FOR THE DEAF

Commission Votes Unanimously on Immediate and Long-Term Approaches

Washington, DC — The Federal Communications Commission has taken two actions to protect and ensure the sustainability of a vital service for persons with hearing or speech disabilities. This service, called Video Relay Service (VRS), allows persons with these disabilities to use American Sign Language (ASL) to communicate with friends and family and to conduct business in near real time.  The Commission’s two unanimous votes – one to begin a fresh look at the VRS program, and another that sets out how VRS companies will be compensated during the next year while the review is underway – will protect a program that has developed through two decades of work initiated by the Americans With Disabilities Act (ADA).

Twenty years ago, the ADA established a fund, under the FCC’s oversight, to ensure that persons with hearing or speech disabilities could use special telephone services at costs comparable to those that hearing people pay for regular telephone service.  Today, the VRS service supported by that fund has become an essential part of the lives of people who have hearing or speech disabilities.

Recently, the fund that supports VRS has been threatened on two fronts. A number of individuals associated with VRS companies have been indicted for fraud and abuse of the system; they appear to have generated extra revenue from calls that were not legitimate uses of the fund.  In addition, recent data has shown that the payments from the Fund to VRS companies were on a higher scale than the FCC intended, because they were based on cost estimates that turned out to be far higher than VRS  companies’ actual costs.

The Commission has now set interim levels for payments to VRS companies for the year July 2010 through June 2011.  The FCC estimates that these new compensation levels, together with steps that have been taken to reduce fraud, will save the fund about $275 million over last year’s estimated costs.  The FCC has worked with the Department of Justice to identify companies that may have acted fraudulently, and the number of questionable charges has already dropped as a result. The savings from reduced fraud and new payment levels will benefit American ratepayers, who support the fund through charges on their telephone bills.

At the same time, the Commission has released a Notice of Inquiry asking fundamental questions about the ways that the market for VRS should be structured and how companies that provide VRS should be compensated.  Together, the Commission’s two actions today help put the future of VRS on a solid and sustainable course.

“Video relay service has greatly improved life for people who are deaf or hard of hearing and their friends and families,” said Joel Gurin, Chief of the Consumer and Governmental Affairs Bureau of the FCC, which oversees access to communications services for persons with disabilities.  “The Commission’s actions will help ensure the continuity of this essential service while also ensuring that ratepayers are not overcharged. The Notice of Inquiry will begin an in-depth process to review the entire structure of the VRS program and ensure its long-term viability.”

The Commission expects to complete the Notice of Inquiry proceeding before Fund year 2011-12, which begins on July 1, 2011.  The Commission also adopted compensation rates for July 2010 through June 2011 for all other forms of TRS paid from the fund.

Action by the Commission June 28, 2010, by Notice of Inquiry (FCC 10-111 ) and Order (FCC 10-115).

- FCC -

CG Docket 10-51

CGB Contact: Mike Jacobs at (202) 418-2859.

The VRS program is managed by the Federal Communications Commission (FCC) to provide “functionally equivalent” communication for the deaf over the standard phone system.

Sign language interpreters are hired by VRS Service Providers to interpret calls between deaf and hearing callers.

Fees collected on every land line and cell phone in the U.S. go into a TRS fund which compensates VRS Service Providers for each minute of interpretation provided – currently over $6 per minute.

The National Exchange Carriers Association (NECA) has submitted a new rate proposal to the FCC which would substantially reduce rates for VRS, especially for the dominate service provider – SorensonVRS.

SorensonVRS has released a captioned/signed video claiming the new rates, if adopted, will devastate VRS consumers and lead to VRS service provider bankruptcy.

According to Sorenson, the proposed rates will lead to:

1. longer hold times

2. fewer interpreters

3. curtailed R&D for “functionally-equivalent” technologies for the deaf

4. bankruptcy for a number of VRS service providers, including Sorenson

Hysteria?

Probably. But I can understand that the new rates would cost Sorenson millions of dollars per month, and would likely cause them to lose market share.  No one wants the gravy train to end.

VRS service providers give equipment to deaf individuals which is pre-programmed to use their service. Unless the deaf caller makes manual changes, all calls made are routed through the default service provider who gave you the equipment.

(Federal law prohibits requiring a free equipment recipient to use a particular service, but most do anyway.  It’s simply easier, and the callers are not paying anyway.  The only reason to change would be if a different company had better interpreters.)

At $6+ per minute (current rates), VRS companies can recover their marketing and outreach costs very quickly.

Proposed Rates: Reasonable or Destructive?

When the 800 pound gorilla in the VRS phone booth pounds his chest, I imagine the bureaucrats will bend a little and raise the rates after the period for public discussion is over.

While I don’t have access to Sorenson’s financials, it’s hard to believe lower rates will lead to bankruptcy. Even the lowest proposed rates come to $233 an hour – hardly restrictive.

Given that technology and bandwidth costs are dropping every year, it’s hard to conclude that a VRS service provider cannot make a profit even while paying decent salaries to certified sign language interpreters.

What is likely to happen is that smaller service providers will innovate and be quite content with the VRS rates. If Sorenson cannot maintain it’s current level of “superior service and enhanced features”, as it claims in its video message, then it could well lose market share to the small, lean companies hungry for business.

Conclusion:

Lower rates will hurt the big providers temporarily until the dust settles. Free equipment for deaf individuals could be reduced or eliminated for service providers looking to cut costs.

On the other hand, competition from smaller VRS service providers could well lead to superior service and technological innovation, as well as savings for taxpayers.

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Charles Lamm is a retired attorney now serving as a legal/technical consultant for Accessible Communication for the Deaf (ACD) in Sunrise, Florida – http://acdterps.com