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see such a system. I would like to add that a statewide message relay service which handles both intra- and interstate calls is currently in operation in Connecticut. The service has been provided since 1974 by a nonprofit corporation and funded through a combination of private and State funding. When a funding crisis occurred in 1987, Governor O'Neil requested that the Connecticut Commission on the Deaf and Hearing Impaired work with SNET, the Connecticut Department of Public Utility Control and the State's Consumer Counsel to find a way to provide and fund adequately a full time message relay service in Connecticut. it took considerable effort and commitment, but we were successful. We had to resolve for Connecticut each of the issues identified by Chairman Markey, and we would be pleased to answer questions that members of the subcommittee may have concerning Connecticut's experience.

In the Communications Act of 1934, Congress established universal service as a national communications goal. It mandated the Federal Communications Commission (FCC) to make communications service available "so far as possible, to all of the people of the United States." USTA and its members have worked cooperatively with the FCC in its efforts to further the Nation's commitment to universal telecommunications service and we support efforts to extend this commitment to members of the speech and hearing-impaired community. Many of our members are already participating in the provision and establishment of relay systems within their service areas. Such systems are not readily available from many systems. Without such systems, the ability of speech or hearing-impaired persons to use the telecommunications network is limited to communication with other persons who have specialized equipment.

The economic and social costs which result from of the isolation of the millions of Americans who are speech or hearing impaired are substantial. Imagine being unable to call a doctor because it is the middle of the night and there is no one to speak or hear for you. Imagine being unable to communicate on the telephone with your child's teacher, unless someone else is available to speak or hear for you. Imagine being unable to take a job that requires you to communicate using the telephone? A message relay service allows someone who is speech or hearing impaired to make that call themselves and expands their employment opportunities. As we consider what universal telecommunications service in the year 2000 should include and as we debate the nature of the telecommunications infrastructure that will be needed in the year 2000, we should include the nationwide availability of message relay service among our priorities.

In addition to Connecticut, statewide message relay systems are now in operation or in the process of being established in a number of States, including California and New York. Less extensive systems are in place in many States. Some of these systems, including Connecticut's handle both intra and interstate calls. While a nationally available interstate system would be more complex because of its size, we are aware of no technical reason why an interstate system cannot be implemented.

The impediments to the implementation of an interstate system, or additional intrastate systems for that matter, lie, not in its technical feasibility, but in the complex policy issues that must be resolved. Principally, these are: How will it be funded and what is the appropriate level of funding; Who will provide the service; Who will oversee the provision of service?

It is our experience in Connecticut, that if there is a commitment to find a resolution, all of the appropriate parties are involved, and a thorough analysis of alternatives is undertaken, these policy decisions can be made and a system implemented that provides the necessary service without creating an unmanageable financial burden for those who use the service, the provider(s) of the service, or consumers of telecommunications services in general. Clearly, resolution of these issues becomes more complicated where the system is national in scope and the number of parties involved and the costs are substantially increased. However, we believe that with the appropriate legislation and a national commitment similar to the commitment to universal service, a national interstate message relay service can be implemented.

As we indicated above, determining the most appropriate funding mechanism and selecting the best way to provide the service and maintain the appropriate oversight are difficult decisions. We do not have the solutions to these questions at this time. Further, we are not convinced that a record has been developed that contains the necessary information and analysis. Based on our experience, we strongly urge that the House adopt legislation that establishes nationwide message relay service as a national goal and also that they direct the FCC, in concert with the States, to imple ment it. To accomplish this we recommend that the legislation be adopted that meets the following guidelines:

-Expands the FCC's mandate to implement universal service to include the nationwide availability of intra- and interstate message relay service for the speech and hearing impaired.

-Provides a meaningful role for the States in the initial planning and implementation of the service.

-Recognizes that many States have taken the lead in supporting the establishment of message relay service within their boundaries and permits States to choose to retain jurisdiction over the provision of instate message relay service, provided Federal standards are met, and in this way permits the integration of existing relay systems into the anticipated national relay scheme.

- Assures that costs incurred by carriers to provide message relay service are recognized as costs of providing telecommunications service and are fully recoverable from customers.

-Constrains as little as possible the options available for cost recovery.

The difficult balancing of costs and obligations needed to maximize the public benefit to be obtained from the provision of message relay service requires that the FCC play a central role in the implementation and oversight of the service. Congress has placed with the FCC the authority and responsibility to implement measures designed to support the goal of universal service. It is appropriate that the Congress look to the FCC to play a central role in determining the most efficient and effective means of assuring universal access to message relay service for the speech and hearing impaired.

The role of the FCC should include responsibility for establishing the national relay system contemplated by the act and for defining a framework for efficient, cost-effective operation. While funding is clearly a concern, so is the manner in which the service should be provided. Should each carrier establish and operate a message relay center? Would it be preferable to establish a jointly planned or integrated system? These are issues that require the development of a full record to be optimally resolved. The FCC has already spent considerable effort investigating the manner in which message relay service optimally should be provided an on July 27, of this year issued a Further Notice of Proposed Rulemaking (FNPRM) to establish an interstate relay system. In that notice, the FCC identified specific alternatives and requested comments from interested parties. This process should be specifically authorized in the legislation. Both H.R. 2273 and S.B. 933 require that carriers provide the service and provide for the FCC to establish standards for service. By not providing for involvement by the FCC in the planning and design of a plan for providing the service, both bills leave the role of the FCC in the process rather vague.

The placement of the responsibility on individual carriers to provide message relay service to their customers is a concern for all USTA member companies. For some of these companies, the cost of compliance could drive up prices for all of their services to unreasonable levels. This would not be in the public interest. As an alternative, the FCC could be authorized to provide for the establishment of a nationwide relay system to which access could be provided through systematic connection to national or regional operators. Also, carriers could be allowed to develop an independent or cooperative organization which would accept responsibility for relay operation. This would foster the development of efficient, coordinated service and help to control costs.

The States have an interest in the manner in which message relay service is to be provided and funded. It is conceivable that the most efficient manner of providing the service is to establish a system that provides message relay service for both interstate and intrastate calls.

Congressional approval of a joint program between the FCC and the States would ensure that the system is comprehensive, uniform, and smoothly integrated among interstate and intrastate systems. It would also permit the experience of the States in establishing intrastate systems to be utilized. The FCC should have the authority to explore this option in concert with the States. The legislation could specifically provide that a Federal-State Joint Board be established to recommend minimum standards of service, define cost requirements and recovery mechanisms, and set necessary guidelines for relay service implementation. In the alternative, the legislation could be drafted so as to encourage the States to participate in the creation of a nationwide network.

In addition, this legislation will not be implemented in a vacuum. In the absence of a national program, many States have encouraged the development of message relay service within their States. In many cases, including Connecticut, the service is not provided by a common carrier. These efforts should not be preempted. While SB 933 would permit States to retain jurisdiction over intrastate service if the FCC

certifies that Federal standards have been met, the language should be amended to clarify that the direct provider of the service need not be a common carrier.

Determining the appropriate mechanisms to fund the service is the most difficult issue to resolve. It was the “show-stopper" in Connecticut for some time before a resolution was reached. Congress should not constrain the options available to the FCC for cost recovery, but provide simply that cost recovery should balance economic pricing with any identified need that requires special cost recovery alternatives.

In addition, the problem addressed by the legislation is a broad societal concern. Therefore, while common carriers may be charged with providing the required service, the costs of doing so must be recognized as legitimate costs of doing business and therefore recoverable from customers. The Senate specifically states that this is its intention in its Report language and we request that the House do the same.

In Connecticut we found that it was unrealistic to expect that the users of the service would be able to cover its costs. Private contributions and government funding were not sufficient to meet the need. The issue was resolved by SNET accepting responsibility for covering the costs of the service as art of its franchise obligations, in return for inclusion of those costs in the expenses associated with local service. This was possible in Connecticut because the existence of the local franchise has been reaffirmed by the legislature. We would be remiss, however, if we did not point out that this might not have been possible in Connecticut if the franchise structure did not exist and that we are concerned that changing national and State policies may erode our continued ability to fund such programs through rates.

In conclusion, USTA and SNET support Congressional action to assure that message relay service is available to all Americans who need it, so that they may have full access to the public switched network. There are many difficult policy issues involved in the implementation of nationally available message relay service however, and we strongly recommend that the FCC be given the authority and the responsibility to resolve these issues, with participation by the States.

We appreciate the opportunity to share our comments and our experience with the subcommittee and look forward to a continuing partnership with Congress and the FCC in our efforts to assure that the full benefits of telecommunications service are available to all Americans.

Mr. MARKEY. Thank you very, very much for your testimony as well. And what we would like to do is to enlist our panelists here today in the effort to resolve some of these questions that have arisen during the course of your testimony here this morning.

And I think we can begin the effort and perhaps get through it this morning, but what I would like to do is just to ask each of you if you would make yourself available to the subcommittee, because we would like to just as quickly as possible, with some intensive efforts, to try and work out something that makes some sense and get the results that all parties are looking to, and I think rather than debate over what is common interest that is shared on how we solve the problem, let's do it from a technical aspect if possible.

Let's turn to you, first, Dr. Jordan, with regard to some of these questions of technically how the FCC should handle the key issues, where interstate and intrastate levels of the FCC should now be a party to solve some of the questions. Do you have any guidance for us, Dr. Jordan, on this?

Mr. JORDAN. I would defer to Ms. Strauss on that.

Ms. STRAUSS. OK. I have a few answers to that. First, probably it is most important for the FCC in developing any guidelines to contact the people that are going to be using the relay system. In other words, it is one of the items that we have requested—and we had originally actually requested it to be in the bill, and now it is in the Senate report, is to require the FCC to develop a formal Federal advisory committee.

And this committee would be made up of deaf, and speech-impaired, and hard of hearing people, that would offer guidance to the FCC in developing its regulations.

Without such participation, there is no way that the FCC would have knowledge of the unique and specialized needs of relay users. It is clear that the FCC does have jurisdiction and authority to issue regulations over both intra and interstate systems.

However, let me just back up. In addition to having the hearingimpaired population on the Federal advisory committee, it is essential that there be participation from industry as well, so that the FCC does have the full balance of interest represented.

In addition, many of the States have done a fine job at providing relay systems. Like I said, there are severe restrictions imposed by many of the States, but to begin input from the various States that have established systems, in particular New York, California, and Alabama, that have the most comprehensive systems, and are really just missing the intrastate component, their input to the FCC as well would be helpful.

And we would not be adverse to what was mentioned earlier, some sort of joint Federal/State board, where State PUC Commissioners, and the FCC, would gather together to determine the proper guidelines.

The only problem with that board is that it does not by Federal statute now include hearing-impaired people on it, and as I said, that is critical that there be a voice from them.

Mr. MARKEY. As I understand it, California has an advisory board which they put in place and trying to think through the issues, and do you like that composition?

Ms. STRAUSS. Yes. Most of the States that do have systems do have advisory boards, and they have found that those are essential. The only thing that we do ask though is that whatever board the FCC establish that it be on a formal basis, and that it not be an ad hoc type of committee.

That it have ongoing—that there be ongoing consultation, both in the development of the regulation before they are issued and in the continuing operation of the relay system.

Mr. MARKEY. Ms. Schwartz, if we could have your comments on this and how you would define what the State role would be, and what role that the advisory board would be assigned.

Ms. SCHWARTZ. Well, Mr. Chairman, I certainly concur that it is very, very important to have as the primary inputters so to speak the representatives of the hearing-impaired and speech-impaired community, and we have done that as I said in my formal comments in New York, and continue to do that.

The National Association of Regulatory Utility Commissioners, on whose communications committee I serve, has adopted a resolution of severing the establishment of a joint board, and I would not depart from that, except to say that sometimes the more formal the establishment of the administrative recognizism, the longer it takes to get things done.

And it would appear to me that possibly the area of problem solving that would remain before us is, as you suggested, Mr. Chairman, limited to technical questions that could be solved in a less formal environment. That would be my hope, because my greatest fear is that the beneficiaries of this interstate system, a natural system, be held hostage to the bureaucratic maneuverings that sometimes occur from legitimate differences of opinion, of course. Mr. MARKEY. We have seen that. Ms. SCHWARTZ. Yes, you have seen that from time to time.

So, that would be my only fear. I think we could do something informally. May I comment, Mr. Chairman, on the funding issue very briefly while I have the floor?

Mr. MARKEY. Sure. Please.

Ms. SCHWARTZ. Mr. Tutton's testimony was very interesting, but it left out one important fact, and that is the numbers. I always like to know what the numbers are when people tell me that they have a funding problem.

I haven't the faintest clue as to what the price tag, or the cost for the interstate-

Mr. MARKEY. Do you have a ball park figure?
Ms. SCHWARTZ. I beg your pardon?
Mr. MARKEY. Do you have an estimate, or a ball park figure?

Ms. SCHWARTZ. No, I don't, and I would respectfully request that the chairman request that number, because if we are going to debate who is going to pay it, and how it is going to be paid, and whether there will be a surcharge on this set of customers, or that set of customers, we have to know what we are talking about.

Mr. MARKEY. Mr. Tutton, do you have a number, a ball park number? Is it Yellowstone Park, or make it as broad as you have to, but-

Mr. TUTTON. Well, the number that I would quote was the number that the Federal Communications Commission used in their request for comments on various proposals for funding; and the number that they used as I recall was $300 million to provide the service, both on an intra and interstate basis nationwide.

When some analysis was done to pull that number apart, since our discussions are now on interstate service, it is my understanding it is between $30 and $50 million on an annual basis.

Now, if that figure was spread over all of the users in America, that would amount to about 3 cents per month per customer in the broad base funding notion that I suggested as something that ought to be considered.

Mr. MARKEY. Well, who has the goal of raising whatever number we might finally come up with? Do you think that Mr. Tutton's formula makes some sense as to how we would

Ms. SCHWARTZ. I think that the interstate costs should be recovered in interstate jurisdictions, and that is my preliminary position on that matter, but I do think it is very important that the FCC, as I said in my testimony, not be permitted to mandate recovery in essentially subscriber lines and surcharging the intrastate jurisdiction. Three hundred million dollars is not a heck of a lot of money. I should think that the interstate charges could recover that almost without talking about it.

I don't mean to be facetious, but-

Mr. MARKEY. Dr. Jordan, did you ever think that we would be talking about $300 million for the deaf, and people saying that is not a lot of money to us?

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