Sorenson, Smaller VRS Rivals Dispute FCC Rates; Consumer Groups Focus on Service

Sorenson urged the FCC to "adopt a market-based, more efficient methodology to set rates that sustain VRS" over the long haul. "The proposal in the FNPRM for continuation of a four-tier structure over four years is arbitrary and capricious, and would set rates at levels that would impose substantial end-user charges -- amounting to hundreds or even thousands of dollars -- on deaf consumers, in violation of the Americans with Disabilities Act of 1990," said the top VRS provider in its lengthy comments in docket 10-51. "[T]o avoid such a result, VRS rates should not be set lower than $4.19 [per minute] unless as the result of an auction or private contracting, and, in any event, the rate for Tier III should not be reduced further." Under the FCC's proposal, Tier III would cover VRS providers with more than 2.5 million monthly minutes of calling.

The smaller VRS providers backed the FCC's "proposed reforms" to the VRS compensation structure. "Immediate, meaningful VRS rate reform is necessary to preserve the ability of the Non-Dominant Providers to continue to provide VRS service" as the agency considers long-term structural reforms, said the joint filing of ZVRS (CSDVRS), Purple Communications, Convo Communications and GlobalVRS (ASL Services Holdings). They urged the commission to adopt their proposal for boosting compensation rates for all tiers except for Tier III, which they proposed to lower further below its current $3.49 per minute.

Keeping a tiered rate structure will create the long-term stability that providers need to ensure continued operations, make investment decisions, improve service and promote competition, the smaller providers said. "Adopting the proposed rates will move each VRS provider’s reimbursement -- including the dominant provider -- closer to its allowable costs of providing service; and applying the new rates retroactive to January 1, 2017 will help stabilize the Non-Dominant Providers by recouping losses they have incurred so far this year," they wrote. ZVRS/Purple, Convo and GlobalVRS also submitted separate comments making further arguments in docket 10-51. Ex-FCC Commissioner Harold Furchtgott Roth, in response to a ZVRS request, provided "comments from an economic perspective."

But Sorenson said the FCC must ensure VRS users don't pay higher rates to obtain the service -- which requires broadband-enabled video connections -- than hearing individuals pay to receive voice communications. "According to the FCC’s own survey data, the average urban voice subscriber pays a little more than $32 per month for voice telephone service, whereas broadband upload capacity of 5 Mbps costs almost $84 per month," Sorenson wrote. "With this disparity already present, the Commission cannot lawfully set VRS compensation rates -- and disallow cost recovery from the TRS Fund -- in a manner that would lead to even greater end-user charges on deaf consumers than they already must pay just to obtain broadband." If the FCC keeps cost-based VRS levels instead of relying on market mechanisms, it must ensure the Tier III rate is set at a sustainable level that doesn't impose higher charges on deaf consumers than hearing consumers, the provider wrote.

Advocates for the deaf and hard of hearing called for giving "adequate compensation to all VRS providers for their services" and didn't take sides in the industry dispute. "This compensation should include reimbursements for research and development and service quality enhancements, which are critical to achieving functional equivalency," said the joint comments of Telecommunications for the Deaf and Hard of Hearing, National Association of the Deaf, Deaf and Hard of Hearing Consumer Advocacy Network, Hearing Loss Association of America, Association of Late-Deafened Adults, Cerebral Palsy and Deaf Organization, Deaf Seniors of America, and California Coalition of Agencies Serving the Deaf and Hard of Hearing. "Because no proposed rates or methodologies can guarantee sufficient service performance until the Commission first defines what sufficient service performance entails, any rates adopted should be interim."

"The alleged 'large gap' between the cost of VRS services provided and the amount the Commission reimburses providers concerns the Consumer Groups and makes us question whether the Commission’s allowable costs are sufficient to maintain interest from providers to participate at all and consistent with providers’ costs to enable the provision of functionally equivalent VRS services that evolve and keep up with technological innovation," they wrote, noting they didn't have the information to analyze specific industry cost issues and provide recommendations.

The Video Relay Services Consumer Association also backed a rate structure that "promotes functional equivalency for VRS consumers," but said it wasn't addressing the four-year rate plan and the different rate levels. The FCC should "adequately compensate all VRS providers to cover essential costs that allow them to grow, and invest in research and development to innovate and remain competitive, and facilitate improved service to their customers," the group commented.