Discussion
of Issues
Issue 1:
Should the Commission approve FTRI's proposed iPad/Samsung
Tablet Pilot Project (Tablet Pilot)?
Recommendation:
No. Staff recommends the Commission deny FTRI’s
proposed Tablet Pilot based on the absence of statutory authority. (Williams,
Fogleman, Imig, Harper)
Staff
Analysis:
As part of
FTRI’s proposed budget for Fiscal Year 2023/2024, FTRI included a Tablet Pilot
(see Attachment C). FTRI notes that equipment distribution and client servicing
has been declining because clients and potential clients are transitioning to
newer advanced technologies. The purpose of the Tablet Pilot is to address this
issue by offering more advanced technologies as part of its equipment
distribution program.
FTRI’s
stated purpose of the Tablet Pilot is to make available iPad and Samsung
(Android) Tablets for underserved Floridians with hearing loss, including those
who are Deaf, hard of hearing, Deafblind, and those with speech disabilities.
The tablets will be pre-loaded with communication applications. FTRI also seeks
to evaluate the effectiveness of using these tablets with Wi-Fi broadband
connection for the purposes of the communication application. The tablets will
not connect directly to cellular networks and the cost associated with Internet
access is not supported by the pilot. FTRI also states that:
It is our goal for this
iPad/Samsung Tablet Pilot Project to become permanent once [the] State
Legislature makes changes to TASA to allow FTRI to continue offering
telecommunications equipment with broadband connectivity, including
iPad/Samsung Tablets.
Tablet
Procurement
FTRI seeks
approval to purchase up to 220 iPad and/or Samsung S6 Lite (Android) Tablets. FTRI intends to purchase these tablets with
warranty and support agreements through Teltex, a disability equipment
supplier. FTRI projected start-up funding of $221,600 during the first year of the
pilot project. The initial cost (as of 8/30/22 per Teltex) for each device is
as follows: iPad 64GB Wi-Fi with a 10.2” screen or Samsung S6 Lite 64GB Wi-Fi
with 10.4” screen, at $980.00 for Deaf and Hard of Hearing or $1,280.00 for
Speech Disabilities. The Tablet Pilot budget proposes 200 TDD tablets and 20
tablets with the additional speech disability software.
Qualification
Process
FTRI initially
proposed to set income-eligibility for Deaf customers at 200 percent of the
federal poverty level, and for individuals who are hard of hearing or speech
impaired at 400 percent of the federal poverty level. Those receiving benefits
from Supplemental Security Income/Social Security Disability Insurance, Veterans
Affairs, Social Security, Supplemental Nutrition Program for Women, Infants,
and Children, or Welfare would be exempt from this financial eligibility
requirement. However, in response to a staff data request, FTRI modified its proposal to set a uniform
financial eligibility threshold of 200 percent of the 2023 Federal Poverty
Guidelines (income of less than $29,160 for one person). Clients can also be
eligible to participate in the Tablet Pilot if they meet Lifeline eligibility requirements.
Other
States
FTRI notes that some state programs
are able to distribute more advanced types of equipment. In response to a staff
data request, FTRI reports a survey it
conducted via Telecommunications Equipment Distribution Program Association
(TEDPA) members in November 2022 that showed at least 14 states have
distribution programs providing various types of iPad and/or Android devices. FTRI
also stated that Teltex has deployed over 20,000 Apple and Android devices to
at least 25 state programs as of June 1, 2023.
According to FTRI, two states reported that they use a state relay
surcharge on landlines to cover the cost of iPad and Android devices.
Furthermore, of the 21 states that responded to FTRI’s survey, 14 have both
landline and wireless surcharges, and 3 states responded that they rely on
public funding instead of a surcharge to pay for the wireless services.
Legal Barriers
Because the TRS industry is evolving
and basic TRS and Captioned Telephone Service (CapTel or CTS) users are
transitioning to Internet Protocol (IP) Relay, Video
Relay Service (VRS), IP
CTS,
and Wireless Service,
FTRI’s Tablet Pilot may benefit FTRI’s clients’ current needs. The TASA statute
provides that the specialized telecommunications devices and the relay service
should utilize “state-of-the-art” technologies and encourages the incorporation
of new beneficial technologies as they are developed. However,
the question is whether tablets fall within that category in the context of
TASA, which also provides in relevant part:
‘Specialized telecommunications device’
means a TDD, a volume control handset, a ring signaling device, or any other
customer premises telecommunications
equipment specifically designed or used to provide basic access to telecommunications services for a hearing impaired,
speech impaired, or dual sensory impaired person.
Furthermore,
TDD is defined as:
‘Telecommunications device for the
deaf’ or ‘TDD’ means a mechanism which
is connected to a standard telephone line, operated by means of a keyboard,
and used to transmit or receive signals through telephone lines.
The Tablet
Pilot equipment is basically a computer tablet. Consumers can use such tablets
for browsing the web, reading and sending email, viewing and taking photos,
watching videos, listening to music, playing games, and reading e-books.
Software can be purchased for other productivity functions, such as drafting
documents, creating spreadsheets, developing presentations, and editing
photographs. While additional applications may be available that provide
assistance to the deaf and hard of hearing community, staff believes that a
tablet is not a specialized telecommunications device specifically designed or
used to provide basic access to telecommunications service for a hearing
impaired, speech impaired, or dual sensory impaired person. Thus, such computer
tablets are not supported by TASA. Furthermore, the statutory definition for
TDD equipment is even more restrictive, requiring that equipment be connected
by a standard telephone line, which is not an option for either tablet proposed
in the pilot project.
FTRI
acknowledges that it intends to make the Tablet Pilot permanent once
legislation is passed to authorize the use of such equipment. If the TASA
statute is not updated before the end of the first-year project, FTRI has
indicated that it may request second-year funding from the Commission. Staff
contends that such a change in legislation is necessary for either a permanent
or a pilot program. Simply limiting the number of tablets and scope of
participants as FTRI proposes does not address the statutory barriers.
Further, even if the statute
explicitly allowed for the use of such equipment as proposed in the Tablet
Pilot, there remains a potential fairness/subsidization issue as to paying for
such devices. Although access line revenues to support the relay program
continue to decline as consumers move away from landlines in favor of other
technologies, the current TASA statute allows for a surcharge to be applied
only to basic telecommunications access lines.
Thus, basic telecommunications service customers would be paying for computer
tablets under FTRI’s proposed program, rather than just basic access to
telecommunications services as TASA is currently designed.
Other Funding
Sources
Although
staff understands the potential benefits of the Tablet Pilot, staff recommends
that the Tablet Pilot be denied based on the current statute. However, staff
believes nothing prevents FTRI from pursuing external funding for this or
similar projects. Section 427.705(5)(c), F.S., provides for FTRI to apply for, contract for, receive, and expend for the
purposes of this part any appropriation, grant, gift, or donation from the
Federal Government or any other public or private source. Staff
encourages FTRI to pursue such options, particularly in the absence of
statutory changes granting authority to distribute advanced equipment.
Potential funding and/or partner organizations may include: Florida Office of
Broadband, Florida Alliance for Assistive Technology (FAAST), Florida Department
of Education - Division of Vocational Rehabilitation (DVR), federal grants, and
grants from corporate foundations.
Conclusion
Staff
recommends the Commission deny FTRI’s proposed Tablet Pilot based on the
absence of statutory authority.
However,
if the Commission chooses to approve the Tablet Pilot, staff recommends FTRI’s Tablet Pilot expense should not be
subject to supplemental funding requests during Fiscal Year 2023/2024. In addition, the Commission should require FTRI to provide a status report with its
quarterly financial filings providing information on the number of
participants, dollars spent per client, vendor expense, and any additional
pertinent information.
Issue 2:
Should the Commission approve FTRI's proposed budget
as presented in Attachment A for Fiscal Year 2023/2024?
Recommendation:
No. Staff recommends the Commission modify FTRI’s
proposed budget expenses of $3,734,638 to increase relay service expense by
$159,924, decrease TDD equipment expense by $196,000, decrease Volume Control
Phone (VCP) Speech Impaired equipment expense by $25,600, and approve a total
budget expense of $3,672,962 for Fiscal Year 2023/2024, effective upon issuance
of the consummating order. (Williams, Fogleman, Imig, Harper)
Staff Analysis:
Traditional
Telecommunications Relay Service
The
traditional TRS cost to FTRI as approved in the T-Mobile contract is currently
$1.60 per session minute. T-Mobile’s projections indicate that traditional TRS minutes
of use during Fiscal Year 2023/2024 will decrease by 23 percent from the
current fiscal year. It has been observed that traditional relay users are
transitioning to the following services:
·
IP Relay
·
VRS
·
IP CTS
·
Wireless Service
CapTel
Service
The CapTel
cost to FTRI as approved in the T-Mobile contract is currently $1.67 per
session minute. CapTel service uses a specialized telephone that provides
captioning of the incoming call for a deaf or hard of hearing person. T-Mobile’s
projections show that CapTel minutes of use during Fiscal Year 2023/2024 will
decline by 35 percent from the current fiscal year. CapTel users are also transitioning
to other forms of advanced services as listed above.
Florida
Telecommunications Relay, Inc. Budget
Attachment
A reflects FTRI’s Fiscal Year 2023/2024 proposed budget, which was reviewed and
adopted by FTRI’s Board of Directors prior to filing with the Commission. FTRI
submitted its budget on March 30, 2023, projecting total expenses of $3,734,638.
FTRI presented two options for the TRS surcharge. FTRI proposed the Commission
establish a surcharge of $0.07 per line, which would result in total surcharge
revenue of $2,413,410. As an option, FTRI proposed a $0.09 TRS surcharge that
would generate total surcharge revenue of $3,102,955.
In
addition, FTRI is expected to generate significantly more interest income than
in previous years through investments in an Investment Trust Money Market
account and 3-month T-bills. Interest income is projected to be $682,040 during
Fiscal Year 2023/2024, resulting in total operating revenue of $3,095,450 at
the $0.07 surcharge and $3,784,995 at the $0.09 surcharge. Staff will address
both surcharge options in Issue 3 of the recommendation.
T-Mobile’s
forecasted Fiscal Year 2023/2024 traditional TRS minutes of use are 651,963,
while its forecasted CapTel minutes of use are 153,345. FTRI’s proposed TRS and
CapTel service provider expense for Fiscal Year 2023/2024 is $1,139,303. For comparison,
the Commission-approved budget for the current fiscal year reflected traditional
TRS minutes of 851,208 and CapTel minutes of 237,981, with a total TRS and
CapTel service provider expense of $1,759,361.
Analysis
Staff
developed an estimate of FTRI’s final expenses for Fiscal Year 2022/2023, which
is presented in Attachment B. Staff used actual data from the first three
quarters and took an average of those three quarters to estimate the fourth.
Staff’s estimates were then used as one element in evaluating FTRI’s proposed
budget, along with analyzing past Commission-approved FTRI budgets to identify
and evaluate ongoing cost reduction measures.
Below is
staff’s review of selected items from FTRI’s proposed budget expense by
category.
Category
I – Relay Services
Category I captures Dual Party
Relay (DPR) provider expenses for traditional TRS and CapTel service currently
provided by T-Mobile. In Fiscal Year 2022/2023, basic TRS and CapTel minutes of
use decreased from the prior fiscal year. Based on continued advancements in
technology, along with the expansion of consumer choice, it appears that
minutes of use for these services will continue to decline.
The relay
service expenses are calculated using the minutes of use as projected by T-Mobile
and relay service contract rates. The proposed budget presented $1,139,303 in
relay service expense. However, staff determined that this total expense was
calculated using the previous contract rates of $1.35 for TRS and $1.69 for
CapTel. The correct contract rates are $1.60 for TRS and $1.67 for CapTel,
which when applied to the forecasted minutes of use increases relay service
expense by $159,924, resulting in total expense of $1,299,227.
Category
II – Equipment & Repairs
Category
II expenses reflect the purchase of equipment to be distributed to clients and
the repairs that FTRI must make to keep the equipment in working order. FTRI
has requested $623,058 for Fiscal Year 2023/2024. FTRI’s proposed budget
represents a $246,353 increase in expense from the current Commission-approved
budget. The proposed increase in equipment and repairs expense is largely
associated with its proposed Tablet Pilot. The Tablet Pilot is comprised of a $196,000
increase in TDD equipment expense and a $25,600 increase in VCP Speech Impaired
equipment expense. Implementation of the proposed Tablet Pilot would represent
90 percent of the increase in expense for Category II. As discussed in Issue 1,
staff recommends not approving the additional equipment expense related to the
Tablet Pilot based the absence of statutory authority.
Staff
recommends approval of $401,458 for equipment and repairs expense.
Category III – Equipment Distribution
& Training
Category
III reflects the cost of distributing equipment throughout the state and the
training of consumers in the use of that equipment. FTRI’s proposed budget
requests $315,766 for distribution and training, which reflects a $95,046
increase from the current Commission-approved budget.
Expenses
related to Regional Distribution Centers (RDCs) are the largest component of
Category III expenses. FTRI’s proposed budget for RDCs is $249,291, which is
$46,845 higher than the current Commission-approved budget. Staff supports FTRI’s
efforts to expand the quantity of RDCs and provide adequate funding to increase
RDC contributions to FTRI’s equipment distribution efforts.
Staff
believes FTRI’s proposed budget for Category III expense is reasonable for
budgeting purposes and provides FTRI flexibility while continuing to negotiate
fees with the RDCs.
Category
IV – Outreach
Outreach
efforts are designed to promote FTRI’s equipment distribution services and to
raise awareness about Florida relay service. FTRI’s proposed Fiscal Year 2023/2024
Outreach budget increases expense by $26,783.
FTRI
employs various forms of communication in its outreach strategy. FTRI plans to
continue advertising in newspapers using free-standing insert ads (flyers) in
markets where effective. However, FTRI acknowledges that it has witnessed rapid
changes in the newspaper industry. In response, FTRI will utilize other print
tools such as direct mail post cards and coupon book advertisements. FTRI also
plans to continue expanding its digital marketing campaign, including increased
use of banner ads on websites, as well as targeted email and social media
campaigns.
The
Commission has encouraged FTRI to research and consider more technologically
advanced and cost-effective forms of outreach. For example, the Commission
encouraged FTRI to consider adding an online chat function to help with
customer inquiries. FTRI implemented the chat function, termed “FTRI Chat”, in
its proposed Fiscal Year 2022/2023 budget. Staff believes FTRI’s proposed
budget for Category IV expense is reasonable.
Category
V – General & Administrative
Category V
reflects expenses associated with FTRI’s operations, such as office and
furnishings, employee compensation, contracted services (auditors, attorney and
computer consultants), computers, and other operating expenses. FTRI is
proposing $1,094,079 for Fiscal Year 2023/2024, which represents a $24,770 increase
in Category V expense from the current Commission-approved budget. Staff
believes FTRI’s Category V expenses are reasonable.
Conclusion
Staff recommends the Commission modify FTRI’s proposed budget
expenses of $3,734,638 to increase relay service expense by $159,924, decrease
TDD equipment expense by $196,000, decrease VCP Speech Impaired equipment
expense by $25,600, and approve a total budget expense of $3,672,962 for Fiscal
Year 2023/2024, effective upon issuance of the consummating order.
Issue 3:
What TRS surcharge should the Commission approve for
Fiscal Year 2023/2024?
Recommendation:
Staff recommends the Commission approve FTRI’s optional
proposal to reduce the TRS surcharge to $0.09. Staff recommends the Commission order
all local exchange companies to bill the $0.09 TRS surcharge for Fiscal Year
2023/2024, effective September 1, 2023. (Williams, Fogleman, Imig, Harper)
Staff Analysis:
Based
on current industry trends, FTRI estimates that access lines will decrease at
the rate of approximately eight percent from the current fiscal year as more
consumers transition from landline phones. Holding the TRS surcharge constant,
a decrease in access lines results in a decrease in revenues to support FTRI’s
activities. FTRI’s proposal to reduce the TRS surcharge from $0.10 to $0.07 per
access line places further downward pressure on revenues. FTRI’s justification
for reducing the surcharge by this amount is to reduce the reserve account.
FTRI also filed an optional proposal to reduce the TRS surcharge to $0.09 per
access line for the Commission’s consideration.
If
approved, a surcharge of $0.09 is expected to generate $3,102,955 in surcharge revenue,
resulting in total operating revenue of $3,784,995 when combined with interest
income. This represents a $112,033 surplus for Fiscal Year 2023/2024.
Staff estimates that FTRI’s revenue less expenses at the current fiscal
year-end will result in a surplus of $520,074, which will be added to the
operating account for 2023/2024.
Staff
notes that reducing the surcharge to $0.07 would generate surcharge revenue of
$2,413,410, resulting in total operating revenue of $3,095,450 when combined
with interest income. This would result in a budget shortfall of $577,513. By
comparison, a $0.08 surcharge would result in a budget shortfall of $232,740. In
previous years, the Commission has allowed FTRI to draw from the reserve
account to cover shortfalls in the approved budget.
FTRI
maintains a reserve account with a current balance of approximately $23 million.
The reserve account represents funds that were originally set aside in
anticipation that the Federal Communications Commission (FCC) might delegate
intrastate costs associated with Video Relay Service (VRS) and Internet
Protocol Caption Telephone Service (IP-CTS) to states. FTRI explained that
based on its review and understanding, there is no indication that the FCC will
delegate VRS and IP-CTS authority to states in the foreseeable future. Given
the overall size of the surplus account, and the expected surplus from the
current fiscal year, staff believes a reduction in the surcharge is reasonable.
Staff
supports the $0.09 option because it balances the budget more precisely assuming
the Commission approves staff’s recommended expense adjustments in Issue 2.
Further, maintaining the reserve account at or near current levels provides
financial flexibility and support if FTRI obtains authority in the future to
distribute more advanced equipment.
Conclusion
Staff
recommends the Commission approve FTRI’s optional proposal to reduce the TRS surcharge
to $0.09. Staff recommends the Commission order all local exchange companies to
bill the $0.09 TRS surcharge for Fiscal Year 2023/2024, effective September 1,
2023.
Issue 4:
Should this docket be closed?
Recommendation:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, this docket should be closed upon the issuance of a
consummating order. (Imig, Harper)
Staff Analysis:
At the conclusion of the protest period, if no
protest is filed this docket should be closed upon the issuance of a
consummating order.
