Discussion
of Issues
Issue 1:
Should the Commission approve FTRI's proposed Fiscal
Year 2025/2026 budget as presented in Attachment A?
Recommendation:
No. Staff recommends the Commission modify FTRI’s
proposed budget expenses of $4,097,190 to decrease TRS provider expense by $409,796,
decrease Legal expense by $22,661, and increase VCP Speech Impaired expense by
$2,000. Staff recommends the Commission approve a total budget expense of $3,666,733
for Fiscal Year 2025/2026, effective upon issuance of the consummating order. Staff
recommends the Commission allow FTRI to transfer $897,011 from the Reserve
Account to offset staff’s projected revenue shortfall. (Williams, Fogleman,
Imig, Harper)
Staff Analysis:
Traditional
Telecommunications Relay Service
Traditional TRS cost as approved
in the T-Mobile contract is currently $2.58 per session minute. T-Mobile
initially forecasted 626,389 minutes of traditional TRS for Fiscal Year
2025/2026. T-Mobile performed additional analysis after its initial submission,
and submitted a revised forecast projecting 467,554 minutes of use.
Based on continued advancements
in technology and the expansion of consumer choice, it is anticipated that
declines in minutes of use will continue. It has been observed that traditional
TRS users are transitioning to the following services:
·
IP Relay
·
VRS
·
IP CTS
·
Wireless Service
Florida
Telecommunications Relay, Inc. Budget
Attachment
A reflects FTRI’s Fiscal Year 2025/2026 proposed budget filed with the
Commission, which was reviewed and adopted by FTRI’s Board of Directors. FTRI
proposed maintaining the current $.08 surcharge per access line, which would
result in total surcharge revenue of $1,938,584. FTRI projected $831,138 in
interest income during Fiscal Year 2025/2026 through investments in its
Investment Trust Money Market account and 3-month T-bills. As a result, FTRI’s
total operating revenue was estimated to be $2,769,722. FTRI’s proposed budget
projected total expenses of $4,097,190. Based on FTRI’s projected revenue and
expenses, it would need to transfer $1,327,468 from the Reserve Account to
offset the shortfall. FTRI has a Reserve Account of approximately $20 million.
As explained
above, T-Mobile initially forecasted 626,389 minutes of traditional TRS. FTRI’s
proposed TRS provider expense was developed using T-Mobile’s initial forecast at
$2.58 per minute, resulting in TRS provider expense of $1,616,085. T-Mobile’s
revised forecast was submitted after FTRI filed its proposed budget. Staff’s budget
adjustment for TRS provider expense is discussed in the analysis section of the
recommendation.
Analysis
The two primary factors
contributing to FTRI’s proposed budget shortfall are continued declines in
access lines, upon which the surcharge is assessed, and the increase in the TRS
per minute rate from $1.60 to $2.58. Proposed surcharge revenue is projected to
decline by $411,058 compared to last year’s approved budget as a result of
continued declines in access lines. Staff made an adjustment to FTRI’s proposed TRS
provider expense based on T-Mobile’s revised minutes of use forecast filed
after FTRI’s budget submission. Staff’s recommended TRS provider expense is
$1,206,289, calculated by applying T-Mobile’s revised forecast of 467,554
minutes at $2.58 per minute.
Staff developed
an estimate of FTRI’s expenses for Fiscal Year 2024/2025, 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 TRS provider
expenses for traditional TRS currently provided by T-Mobile. The Commission and
FTRI have historically used the TRS provider’s minutes of use forecast to
develop the budget for this category.
T-Mobile explained that its
initial modeling may have been impacted by a temporary spike in calls from
November 2024 through February 2025, associated with the healthcare open
enrollment period. After the four-month spike, T-Mobile has seen a steep
decline that will affect the forecast going forward. Staff compared historical
actual minutes of use to T-Mobile’s forecasts, and found T-Mobile’s revised
forecast to be reasonable. For comparison, the Commission-approved budget for
the current fiscal year forecasted 487,992 minutes of traditional TRS.
Staff
recommends using T-Mobile’s revised forecast of 467,554 minutes to calculate
the TRS provider expense. At the contracted rate of $2.58 per minute, the resulting
TRS provider expense is $1,206,289. This represents a reduction of $409,796
from FTRI’s proposed budget.
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 requested
$475,309 for Fiscal Year 2025/2026. FTRI’s proposed budget represents a $10,155
increase in expense from the current Commission-approved budget. The proposed
increase is consistent with FTRI’s strategy to replace legacy equipment with
more advanced devices.
FTRI
requested, and the Commission approved, a pilot program for the XLC8 GLT Deluxe
in its Fiscal Year 2024/2025 budget. The XLC8 GLT Deluxe replaces the legacy XLC8,
which is a device associated with traditional CapTel service. The XLC8 GLT Deluxe
includes a large captioning screen that only works with landlines and allows
the customer to view larger captions on the screen via an installed
application. The unit cost is $565 new and $45 refurbished. FTRI noted that the
pilot program caption call equipment was met with positive demand from clients.
As a result, FTRI is proposing to transition the XLC8 GLT Deluxe from a pilot
program to fully supported equipment. FTRI has proposed $113,000 for Fiscal
Year 2025/2026.
This year,
FTRI is also requesting approval of a pilot program for Volume Control Phone
(VCP) Speech Impaired equipment. The pilot was proposed by FTRI in its Fiscal
year 2023/2024 proposed budget, but was not approved by the Commission because
the proposed devices required a wireless internet connection. FTRI’s current
budget request is for specially designed tablets that require landline-based
technology to function.
The unit
cost is $1,380 new and $95 refurbished. FTRI is requesting budget approval to
purchase up to 20 new devices. FTRI explained that the actual number needed cannot
be determined because it has not advertised this equipment and has not
displayed it at outreach events. FTRI requested $25,600 in its initial proposed
budget, but corrected the amount in response to a staff inquiry to reflect
$27,600 (20 devices at $1,380). FTRI also stated that it has already issued one
unit to a client in 2025. Staff believes FTRI should have consulted with staff
prior to distributing this equipment given that the 2023/2024 VCP Speech
Impaired pilot proposal was denied.
FTRI
explained that refurbished devices are used devices that were previously
purchased by FTRI and have been returned. FTRI stated that it aims to purchase
new devices to distribute to clients and distribute refurbished devices only if
new devices are out of stock. Staff recommends that the Commission direct FTRI
to distribute refurbished equipment in stock prior to ordering new equipment as
a cost saving measure.
The requested
increased expense associated with the XLC8 GLT Deluxe and VCP Speech Impaired
equipment is being offset by decreases in other equipment categories with declining
demand. Requested expense for VCP Hearing Impaired equipment and In-Line
Amplifier equipment are both lower than the current fiscal year approved budget
expense.
Staff
notes that the Legislature passed a bill during the 2025 Session that revises
TASA, allowing for the distribution of more modern equipment, but at the time
of writing that bill has not been sent to the Governor for signature. FTRI
stated that if CS/CS/SB 344 becomes law, its planned expenditures for the XLC8
GLT Deluxe and VCP Speech Impaired devices will not need to be modified.
However, FTRI noted that it may seek a budget amendment to address potential
costs related to purchasing and distributing wireless equipment.
Staff
recommends approval of $477,309 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 $188,565 for distribution and training, which reflects a $73,435
decrease 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 $145,940, which is
$54,060 lower than the current Commission-approved budget.
Staff
recommends approval of FTRI’s proposed budget for Category III expenses of
$188,565.
Category
IV – Outreach
Outreach
efforts are designed to promote FTRI’s equipment distribution services and to
raise awareness about TRS. FTRI’s proposed Fiscal Year 2025/2026 Outreach
budget increases this expense by $54,975.
Factors
contributing to the increase in Outreach Expense include the hiring of a second
Outreach Specialist, associated travel expenses, and advertising vendor price increases.
FTRI employs various forms of communication in its outreach strategy. FTRI
plans to expand outreach efforts, including continued advertising in newspapers
using free-standing insert ads (flyers), social media, and television.
Staff
recommends approval of FTRI’s proposed budget for Category IV expenses.
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 $1,182,950 for Fiscal Year 2025/2026, which represents a $124,495
increase in Category V expense from the current Commission-approved budget.
Factors contributing to the increase include legal, computer consultation, and
employee compensation expenses.
FTRI’s
Fiscal Year 2024/2025 Commission approved budget for Legal expense was $20,000.
Subsequently, after consultation with Commission staff, FTRI hired a lobbyist for
the 2025 legislative session in support of CS/CS/SB 344. As a result, FTRI’s
Fiscal Year 2024/2025 estimated Legal expense is $49,061. Fiscal Year 2025/2026
proposed Legal expense is $56,652, which includes the lobbying services, along
with projected increases in billable hours for RDC contract negotiations,
vendor contracts, and personnel expense.
The current
lobbying agreement/contract ends on July 31, 2025. FTRI acknowledged that if relay
reform legislation passes, there is no need to extend the lobbying contract. FTRI
explained that forty percent of the Legal expense is associated with lobbying.
This equates to $22,661 based on FTRI’s $56,652 budget request. Staff does not
believe there is a need to approve lobbying expenses for Fiscal Year 2025/2026,
but notes that FTRI continues to have flexibility to move funds within budget
categories if needed, as was done to hire lobbyists for the recent Legislative
Session.
Computer
Consultation expense shows a $24,113 increase over FTRI’s Fiscal Year 2024/2025
estimate. The increase is associated with redesigning its website, technical
support, network administration, and desktop troubleshooting. FTRI stated that
the last significant redesign of its website was in 2016. FTRI also stated that
the website is currently not designed to render consistently across all
browsers, incompatible with most mobile device browsers, and does not satisfy
basic accessibility requirements. Staff believes these expenses are reasonable.
Staff recommends
reducing Legal expense by $22,661 associated with lobbying services, and approval
of $1,160,289 for FTRI’s Category V expenses.
Revenue
Shortfall
If staff’s
recommended adjustments are approved, FTRI’s Fiscal Year 2025/2026 budget will
have a shortfall of $897,011. Without staff’s adjustments, FRTI’s proposed budget
presents a shortfall of $1,327,468. As the Commission has approved in recent
years, staff believes it is appropriate to draw upon the Reserve Account to
cover the shortfall. FTRI’s Reserve Account is approximately $20 million.
Conclusion
Staff
recommends the Commission modify FTRI’s proposed budget expenses of $4,097,190
to decrease TRS provider expense by $409,796, decrease Legal expense by
$22,661, and increase VCP Speech Impaired expense by $2,000. Staff recommends
the Commission approve a total budget expense of $3,666,733 for Fiscal Year
2025/2026, effective upon issuance of the consummating order. Staff recommends
the Commission allow FTRI to transfer $897,011 from the Reserve Account to
offset staff’s projected revenue shortfall. (Williams, Fogleman, Imig, Harper)
Issue 2:
Should the Commission maintain the current
Telecommunications Relay Service (TRS) surcharge of $0.08 per line, per month
for Fiscal Year 2025/2026?
Recommendation:
Yes. Staff recommends the Commission maintain the
current TRS surcharge of $0.08 per line, per month for Fiscal Year 2025/2026. Staff
recommends the Commission order all local exchange companies to continue
billing the $0.08 TRS surcharge for Fiscal Year 2025/2026. (Williams, Fogleman,
Imig, Harper)
Staff Analysis:
FTRI
has not requested a change in the TRS surcharge. Staff believes the current TRS
surcharge of $0.08 per line, per month is reasonable given the size of the Reserve
Account identified in Issue 1.
Conclusion
Staff
recommends the Commission maintain the current TRS surcharge of $0.08 per line,
per month for Fiscal Year 2025/2026. Staff recommends the Commission order all
local exchange companies to continue billing the $0.08 TRS surcharge for Fiscal
Year 2025/2026.
Issue 3:
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.
