WARNING:

Changes in appearance and in display of formulas, tables, and text may have occurred during translation of this document into an electronic medium. This HTML document may not be an accurate version of the official document and should not be relied on.

For an official paper copy, contact the Florida Public Service Commission at contact@psc.state.fl.us or call (850) 413-6770. There may be a charge for the copy.

 

 

DATE:

April 24, 2014

TO:

Office of Commission Clerk (Stauffer)

FROM:

Office of Telecommunications (Williams)

Office of General Counsel (Page)

RE:

Docket No. 110013-TP Ė Request for submission of proposals for relay service, beginning in June 2012, for the deaf, hard of hearing, deaf/blind, or speech impaired, and other implementation matters in compliance with the Florida Telecommunications Access System Act of 1991.

AGENDA:

05/09/14 Ė Regular Agenda Ė Proposed Agency Action Ė Interested Persons May Participate

COMMISSIONERS ASSIGNED:

All Commissioners

PREHEARING OFFICER:

Brisť

CRITICAL DATES:

July 1, 2014 Ė Effective date of Florida Telecommunications Relay, Inc. budget.† Notification of any change in the Telecommunications Access System Act surcharge must be made to carriers prior to July 1, 2014.

SPECIAL INSTRUCTIONS:

Anticipate the need for sign language interpreters and assisted listening devices.† Please place near the beginning of the agenda to reduce interpreter costs.

 

Case Background

The Florida Relay System provides deaf and hard of hearing persons access to basic telecommunications services by using a specialized Communications Assistant that relays information between the deaf or hard of hearing person and the other party to the call.† The primary function of the Florida Relay System is accomplished by the deaf or hard of hearing person using a Telecommunications Device for the Deaf where the person using the Telecommunications Device for the Deaf types a message to the Communications Assistant who in turn voices the message to the other party, or a Captioned Telephone which displays real-time captions of the conversation.†

The Telecommunications Access System Act of 1991 established a statewide telecommunications relay system which became effective May 24, 1991.† The Telecommunications Access System Act is authorized under Chapter 427, Florida Statutes.† Section 427.701(1), Florida Statutes, provides that the Florida Public Service Commission shall establish, implement, promote, and oversee the administration of the statewide telecommunications access system to provide access to telecommunications relay services by persons who are deaf, hard of hearing or speech impaired, or others who communicate with them.† It is estimated that 3 million of the estimated 19 million persons living in Florida have been diagnosed as having hearing loss.† This system provides telecommunications service for deaf or hard of hearing persons functionally equivalent to the service provided to hearing persons.†

The Telecommunications Access System Act provides funding for the distribution of specialized telecommunications devices and provision of intrastate relay service through the imposition of a surcharge of up to $0.25 per landline access line per month.† Accounts with over 25 access lines are billed for only 25 lines.† Pursuant to Section 427.704(4)(a)1, Florida Statutes, a surcharge is collected only from landline access lines.[1]

Florida Telecommunications Relay, Inc., a non-profit corporation formed by the local exchange telephone companies, was selected by the Florida Public Service Commission to serve as the Telecommunications Access System Act Administrator.† On July 1, 1991, the local exchange telecommunications companies began collecting an initial $.05 per access line surcharge pursuant to Order No. 24581.† Since that time, the surcharge has changed to reflect budgetary needs, but has been maintained at $0.11 per month since June 2007.

The purpose of this recommendation is to address Florida Telecommunications Relay, Inc.ís 2014/2015 fiscal year budget.† The Commission is vested with jurisdiction over these matters pursuant to Chapter 427, Florida Statutes.

 


Discussion of Issues

Issue 1

 Should the Commission approve Florida Telecommunications Relay, Inc.ís proposed budget as outlined in Attachment A for fiscal year 2014/2015, effective July 1, 2014, and should the Commission maintain the current Telecommunications Relay Service surcharge of $0.11 per month?

Recommendation

 Yes.† Staff recommends that the Commission approve Florida Telecommunications Relay, Inc.ís proposed budget operating revenue of $8,528,177 and proposed budget expenses of $8,263,702 for fiscal year 2014/2015, effective July 1, 2014.† Staff also recommends that the Telecommunications Relay Service surcharge be maintained at $0.11 per month per access line (up to 25 access lines) for fiscal year 2014/2015, effective July 1, 2014.† The Commission should order all telecommunications companies to continue billing the $0.11 surcharge for fiscal year 2014/2015, effective July 1, 2014. (Williams, Page)

Staff Analysis

 Minutes of use for traditional Telecommunications Relay Service have been declining.† AT&Tís projections indicate that the traditional minutes will continue to decline during the 2014/2015 fiscal year.† Specifically, AT&T projects that Telecommunications Relay Service minutes of use will decline from 69,679 in July 2014, to 57,505 in June 2015.† Traditional relay users are transitioning to the more efficient technologies of Internet Protocol Relay,[2] Video Relay Service,[3] Captioned Telephone Service,[4] Internet Protocol Captioned Telephone Service,[5] Internet Protocol Speech to Speech service,[6] and Blackberry or Palm wireless devices.† The traditional Telecommunications Relay Service cost as approved in AT&Tís contract remains at $0.76 per session minute.†

 

CapTel Service

CapTel service uses a specialized telephone that provides captioning of the incoming call for a deaf or hard of hearing person.† AT&Tís projections show that CapTel minutes of use will also decrease during the 2014/2015 fiscal year.† Specifically, AT&T projects that CapTel minutes of use will decline from 166,484 in July 2014, to 160,305 in June 2015.† The CapTel cost as approved in the AT&T contract remains at $1.47 per session minute.†

 

Review of Florida Telecommunications Relay Incorporated

 

The Florida Public Service Commissionís Office of Auditing and Performance Analysis released its Review of Florida Telecommunications Relay, Inc. in September 2013.† The audit examined Florida Telecommunications Relay, Inc.ís current programs, administrative processes, internal controls, and compliance with federal and state laws.† A total of seven audit findings were made, and each finding was discussed in detail.† Staff reviewed the report to gain a greater understanding of Florida Telecommunications Relay Inc., particularly its budgeting process and operations that may affect its budget.† Staff also met with Florida Telecommunications Relay, Inc. staff on November 21, 2013, to discuss each finding.

 

There were three audit findings presented that staff continues to monitor to assess their impact on Florida Telecommunications Relay, Inc.ís budget.† The three findings address:

1)      Improved effectiveness of outreach and equipment distribution events conducted by Regional Distribution Centers and of marketing and outreach efforts in general;

2)      Improved efforts to reduce expenditures in the areas of personnel, equipment, and outreach; and

3)      The rotation of audit firms and partners as outlined in the Sarbanes-Oxley Act.

On March 28, 2014, Telecommunications staff forwarded a Data Request to Florida Telecommunications Relay Inc. addressing† various issues in its fiscal year 2014/2015 proposed budget.† In the Data Request, staff requested an update on implementation of the above findings and related recommendations.†

Florida Telecommunications Relay Inc. provided responses stating that it will continue efforts to market and promote its programs in the most cost effective manner, and that it intends to collaborate with other vendors to combine efforts to make a broader impact.† In the area of Employee Compensation, Florida Telecommunications Relay Inc. stated that staff has been reduced from 15 to 12 employees.† Lastly, in response to the rotation of audit firms recommendation, Florida Telecommunications Relay, Inc. stated that it plans to solicit bids after the 2013/2014 annual audit is completed.

Telecommunications staff will continue to monitor implementation of the recommendations to assess their impact on Florida Telecommunications Relay, Inc.ís budget.

 

Florida Telecommunications Relay Inc. Budget

††††††††††† Attachment A reflects Florida Telecommunications Relay Inc.ís 2014/2015 fiscal year budget, which was reviewed and adopted by the Florida Telecommunications Relay Inc. Board of Directors on March 10, 2014, prior to filing with the Florida Public Service Commission.† Staff sent a data request to Florida Telecommunications Relay, Inc. on a number of issues included in its proposed budget.† Florida Telecommunications Relay, Inc. responses were filed April 15, 2014, and are included in the docket file.†

The recommended budget includes a decrease in expenses of approximately $1,873,593 from the 2013-2014 Commission approved budget.[7]† The 2014/2015 budget projects total operating revenues to be $8,528,177 and total expenses to be $8,236,702.† Florida Telecommunications Relay, Inc. believes the Telecommunications Relay surcharge can remain at $0.11 per access line for the 2014/2015 fiscal year.

AT&Tís estimated fiscal year 2014/2015 traditional Telecommunications Relay surcharge minutes of use are 758,792 at a rate of $0.76 per minute for a total of $576,682.† AT&Tís estimated CapTel minutes of use for fiscal year 2014/2015 are 1,964,401 at a rate of $1.47 per minute for a total of $2,887,669.

After analysis of the proposed budget, staff believes Florida Telecommunications Relay, Inc. should have sufficient funds for its 2014/2015 fiscal year budget and reserve account.† Therefore, staff believes the surcharge should be maintained at $0.11 per month to cover the† 2014/2015 budget.† A comparison of Florida Telecommunications Relay, Inc.ís 2013/2014 Commission Approved Budget, Florida Telecommunications Relay Inc.ís 2014/2015 proposed budget, and staffís recommended 2014/2015 Florida Telecommunications Relay, Inc. budget is shown below.††


 

 

Commission Approved

FTRI †Proposed

Staff Recommended

 

2013-2014

2014-2015

2014-2015

 

 

 

 

Operating Revenue:

 

 

 

Surcharges

$ 8,270,823

†$ 8,013,558

†$ 8,013,558

Interest Income

††††††† 41,753

†††††† ††55,787

†††††† ††55,787

NDBEDP[8]

††††† 458,832

††††† 458,832

††††† 458,832

Total Operating Revenue

$ 8,771,408

†$ 8,528,177

†$ 8,528,177

 

 

 

 

Operating Expenses:

 

 

 

Relay Provider Services

† $† 3,846,539

†$ 3,464,351

†$ 3,464,351

Equipment and Repairs

††††† 2,543,446

††† 1,537,932

††† 1,537,932

Equipment Distribution And Training

††††† 1,197,390

††† 1,018,089

††† 1,018,089

Outreach

†††††††† 684,503

†††††† 607,200

†††††† 607,200

General & Administrative

††††† 1,379,585

††† 1,150,298

††† 1,150,298

NDBEDP

†††††††† 458,832

†††††† 458,832

†††††† 458,832

Total Expenses

$ 10,110,295

†$ 8,236,702

†$ 8,236,702

 

 

 

 

Annual Surplus†

†††† (1,338,887)

†††††††† 291,475

†††††††† 291,475

Total Surplus†

$ 11,170,856

$ 16,077,354

$ 16,077,354

 

In regards to the $0.11 surcharge, it is important to point out that Chapter 427, Florida Statutes, requires that the relay system be compliant with regulations adopted by the Federal Communications Commission to implement Title IV of the Americans with Disabilities Act.† The Federal Communications Commission mandates the minimum requirements for services a state must provide, certifies each state program, and periodically proposes changes in the stipulated services.† One such proposed change is the possibility of the states funding the intrastate portion of the cost to provide Video Relay Service, Internet Protocol Relay Service, and Internet Protocol Captioned Telephone Service.† Traditional relay users are transitioning to these Internet Protocol technologies which are more efficient, and presently being paid through the interstate TRS fund.† However, the Federal Communications Commission has stated that this arrangement is only temporary.† The Federal Communications Commission believes Title IV and its legislative history make plain that Congress intended that the states be responsible for the cost recovery for intrastate relay services provided under their jurisdiction.[9]

 

If the Federal Communications Commission were to mandate state funding of Video Relay Service, Internet Protocol Relay Service, and Internet Protocol Captioned Telephone Service, it is estimated that approximately $32 million would be needed to adequately fund the state program.† The Commission, by Order PSC-06-0469-PAA-TP, issued June 1, 2006, in Docket No. 040763-TP, maintained the Florida Telecommunications Relay Service surcharge at $0.15/month for one year in lieu of a surcharge reduction, to prepare the state Telecommunications Relay Service Fund for assuming intrastate costs of Video Relay Service and Internet Protocol Relay, and to allow time to determine how the costs should be recovered.†

 

As presented in its budget, Florida Telecommunications Relay, Inc.ís projected reserve account at the end of the 2014-2015 fiscal year would be $16,077,354.† The Federal Communications Commission has acknowledged that should it decide to mandate state funding, such transition would come with a reasonable phase in period of up to several years to provide states with sufficient notice.†

 

Staff also researched the possibility of a reduction to the relay surcharge this year, but determined it would not be a viable option at this time.† The surplus projected in the annual 2014-2015 Florida Telecommunications Relay, Inc. budget would only be approximately forty percent of what is needed to reduce the surcharge by one cent.† In addition, staff believes the total relay surplus fund should be maintained in preparation for the assumption of states assuming the costs of intrastate† Internet Protocol relay services.

Conclusion†

Staff has reviewed Florida Telecommunications Relay, Inc.ís 2014/2015 fiscal year budget request and believes it is reasonable.† The current Telecommunications Relay Service surcharge of $0.11 should meet Florida Telecommunications Relay, Inc.ís budget needs for the 2014/2015 fiscal year.† Therefore, staff recommends that the Commission approve Florida Telecommunications Relay, Inc.ís proposed budget operating revenue of $8,528,177 and budget expenses of $8,236,702 for the fiscal year 2014/2015, effective July 1, 2014.† Staff also recommends that the Telecommunications Relay Service surcharge be maintained at $0.11 per month per access line up to 25 access lines for the fiscal year 2014/2015, effective July 1, 2014.† The Commission should order all telecommunications companies to continue to bill the $0.11 surcharge for the fiscal year 2014/2015, effective July 1, 2014.


Issue 2

 Should this docket be closed?

Recommendation: No. A Consummating Order should be issued unless a person whose substantial interests are affected by the Commissionís decision files a protest within 21 days of the issuance of the proposed agency action.† The docket should remain open to address all matters related to relay service throughout the life of the contract.† (Page)

Staff Analysis:

  A Consummating Order should be issued unless a person whose substantial interests are affected by the Commissionís decision files a protest within 21 days of the issuance of the proposed agency action.† The docket should remain open to address all matters related to relay service throughout the life of the contract.

 


 



[1] Florida Telecommunications Relay, Inc. projects a 3.2 percent decrease in landline access lines subject to the relay surcharge for the budget year 2014/2015.†

[2] IP Relay allows people who have difficulty hearing or speaking to communicate through an Internet connection using a computer and the Internet, rather than a TTY and a telephone.

[3] Video Relay Service is a form of Telecommunications Relay Service that enables persons with hearing disabilities who use American Sign Language to communicate with voice telephone users through video equipment, rather than through typed text. Video equipment links the VRS user with a TRS operator so that the VRS user and the operator can see and communicate with each other in signed conversation. Because the conversation between the VRS user and the operator flows much more quickly than with a text-based TRS call, VRS has become a popular form of TRS.

[4] A telephone that displays real-time captions of a conversation.† The captions are typically displayed on a screen embedded into the telephone base.

[5] IP captioned telephone service allows the user to simultaneously listen to, and read the text of, what the other party in a telephone conversation has said, where the connection carrying the captions between the service and the user is via an IP addressed and routed link.

[6] Speech to Speech relay service utilizes a specially trained CA who understands the speech patterns of persons with speech disabilities and can repeat the words spoken by such an individual to the other party to the call.† IP STS uses the Internet, rather than the public switched telephone network, to connect the consumer to the relay provider.† Instead of using a standard telephone to make the relay call, an IP STS user can use a personal computer or personal digital assistant (PDA) device and, with the installation of softphone application software, can make a voice call via the Internet to the relay provider.†† The call is initiated by the user clicking on an icon on his or her computer or PDA; the relay user is then connected to a CA over the Internet and tells the CA the number to be dialed; the CA then connects the IP STS user with the called party and relays the call between the two parties.

 

[7] These figures do not include the National Deaf-Blind Equipment Distribution Program (NDBEDP) expenses since they are totally reimbursed by grants.

[8] National Deaf Blind Equipment Distribution Program.

[9] Federal Communications Commission Report and Order, Order on Reconsideration, and Further Notice of Proposed Rule Making† in CG Docket No. 03-123, released on June 30, 2004, FCC 04-137.