DE 98-182
Sprint Communications Company, L.P.
Petition to Increase Price for Telecommunications Relay Service
Order Approving Increase in Price for Telecommunications Relay
Service
O R D E R N O. 23,178
March 30, 1999
APPEARANCES: Jennifer A. Duane, Esq. For Sprint
Communications, L.P.; Curtis L. Groves, Esq. For MCI WorldCom;
William Homeyer for the Office of Consumer Advocate; Kathryn M.
Bailey for the Staff of the New Hampshire Public Utilities
Commission.
I. PROCEDURAL HISTORY
On October 13, 1998, Sprint Communications Company,
L.P.(Sprint) filed with the New Hampshire Public Utilities
Commission (Commission) a petition to increase the price per
minute for Telecommunications Relay Service (TRS) by 10 cents, or
15.2%, and to increase its outreach cost $1,000 per month, an
increase of 16%. In 1998, Sprint billed an average of
approximately 50,000 total session minutes per month at 66 cents
per minute. The filing requests authority to provide service
for 76 cents per session minute. The proposed increase equates
to approximately 1 cent per access line per month for basic
exchange service.
On September 10, 1991, the Commission awarded Sprint
the franchise to provide TRS in Re: Dual Party Relay
Service-Telecommunications Relay Service, 76 NHPUC 593 (1991).
While most other states contract for TRS and issue a Request for
Proposal (RFP) periodically to obtain the best service for the
best price, the Commission's lack of contracting authority for
utility service required that it award a franchise to provide TRS
in New Hampshire. The Commission also established the New
Hampshire Telecommunications Relay Service Advisory Board
(Advisory Board), composed of representatives from various
organizations, to advise the Commission on necessary improvements
to the New Hampshire TRS, on the resolution of complaints where
necessary, and on technological developments in other TRS
centers. See 76 NHPUC 593, 597 (1991).
On June 2, 1998, the Federal Communications Commission
(FCC) granted the Commission's application to recertify Sprint's
TRS program pursuant to Title IV of the Americans with
Disabilities Act of 1990, as amended, 47 U.S.C. Section 225(f)(2)
and section 64.605(b) of the FCC's rules, 47 C.F.R. section
64.605(b). The terms of Sprint's service have not been revised
since the franchise was awarded in 1991. The franchise award has
remained in effect, and numerous improvements have been made over
the years without an increase in price.
On August 16, 1994, the Commission reduced the monthly
TRS surcharge from ten cents per access line to two cents per
access line in order to reduce an over-recovery. Re Relay New
Hampshire, 79 NH PUC 451 (1994). On September 5, 1995, the
Commission approved the recommendation of the Advisory Board to
include both voice carry over (VCO)-to-VCO service and
VCO-to-text telephone service. Re Relay New Hampshire 80 NH PUC
566 (1995). In addition, Sprint agreed to provide intrastate
directory assistance through NH TRS, waive the implementation
fee, the monthly recurring fee, and the charge to relay users
when requesting phone numbers within the state from the Relay New
Hampshire service. On August 5, 1996, the Commission approved
Sprint's proposal to modify the full-time outreach program
associated with TRS, introduce the Relay Ambassador program, and
offer enhanced services that included every TRS feature Sprint
offered nationwide, such as Real Time Relay Features, customer
data base (making available a number of other services), and
single line answering machine message retrieval service. Re
Sprint, 81 NH PUC 592 (1996).
On February 17, 1998, by Order No. 22,850 in Docket DE
98-007, the Commission increased the amount collected in basic
exchange rates for TRS to 8 cents per access line per month, as
the balance in the fund had been utilized, pursuant to an act of
the Legislature, to establish a telecommunications equipment
distribution program. The Commission directed Staff to analyze
this charge again in December 1998 to insure that an
over-collection did not recur. As a result of the proposed TRS
price increase in this proceeding, Staff recommended the 8 cent
charge per access line remain in effect pending the outcome of
Sprint's petition. Staff further advised the Commission that
basic exchange rates would not need to be increased to
accommodate the requested 10 cent per minute increase.
On January 28, 1999, the Commission issued an Order of
Notice regarding Sprint's filing in this docket. According to
the Order of Notice, the filing raised, inter alia, issues
related to whether, at 76 cents per minute Sprint is providing
the highest level TRS possible, or whether another provider could
offer better service for the same price or the same service for a
better price. The Commission gave other potential TRS providers
and the public an opportunity to comment on whether the
Commission should consider undertaking a proceeding to reissue an
RFP for a franchise to provide TRS in New Hampshire, or, in the
alternative, authorize a 10 cent per minute increase to the
existing arrangement. The Commission also sought comments from
the public who use TRS on the quality of service provided by
Sprint as well as their experience using other providers. A
hearing was held on February 19, 1999.
II. POSITIONS OF THE PARTIES AND STAFF
A. Sprint
Sprint presented the testimony of Andrew Brenneman, a
representative from Sprint's Sales Office, and John Moore, Sprint
Relay New Hampshire Account Manager. Mr. Brenneman stated that
Sprint has worked closely and effectively with various consumer
groups throughout the state such as the TRS Advisory Board, the
New Hampshire Association for the Deaf (NHAD), and Self Help for
the Hard of Hearing - New Hampshire (SHHH-NH). According to
Sprint, thirty percent (30%) of the calls received through Relay
New Hampshire are initiated by hearing people, making New
Hampshire the state with the highest percentage of calls
initiated by hearing people in all of the 23 states in which
Sprint provides relay service. Sprint is currently the nation's
largest relay service provider, with 23 contracts, plus the
Federal Relay Service and 11 call centers nationwide. Sprint
currently has 16 account managers in various states that are deaf
and hard of hearing. In addition, there are some deaf and
hard-of-hearing managers and supervisors, working at relay
centers.
Mr. Brenneman stated that another major component for
measuring service quality is the average speed of answer. In
1998, the average speed of answer was 2.6 seconds for all Relay
New Hampshire calls due, in part, to Geotel, intelligent call
routing, which provides much faster routing of calls, a benefit
that has been provided virtually free to New Hampshire consumers.
In addition, Relay New Hampshire has benefited from more than 300
technological enhancements that Sprint has added to its TRS
platform over the past eight years.
The reasons for the proposed price adjustment according
to Mr. Brenneman, include: technological enhancements; new and
more complex software supporting the TRS platform; enhancements
which enable a more cost-effective overall TRS operation,
providing better service and faster response to occasional
outages or service degradations; the costs of retaining
experienced staff; maintaining functional equivalency; the cost
to maintain current team support, including billing, operations,
engineering and other expense items; superior product platform;
and Account Manager cost, lease and office support. Using the
Consumer Price Index (CPI) as a measurement tool in evaluating
the need to increase the existing price for TRS, Mr. Brenneman
stated that since the inception of Relay New Hampshire in 1991,
the average annual increase in the CPI has been between two to
three percent resulting in an overall cost increase of twenty
percent. Sprint has not had an increase in its rate which was
established as 66 cents per session minute for the current
monthly volume in 1991. The National Exchange Carrier
Association (NECA), which administers the TRS Interstate Fund by
closely monitoring payments into the fund by the
telecommunications providers and fund disbursements to relay
services, shows a current reimbursement rate that equates to
eighty-four cents ($0.84) per session minute. Sprint's proposed
rate increase represents a 15 percent adjustment. Using the CPI
and applying it to Sprint's 1991 rate would result in a rate of
seventy-nine cents ($0.79) per session minute. Sprint maintains
that it is able to keep the rate below that cost due to
technological innovation in their TRS systems. Sprint's 11 call
centers around the country allow them to reduce costs by
utilizing advanced technology to route traffic to the next
available agent within Sprint's system allowing consumers to be
served faster and at lower cost. Sprint also committed to
maintaining this rate, at a minimum, for a period of three years,
barring the imposition of pending federal and state mandates that
may require Sprint to increase its relay rate to comply with
those obligations.
Mr. Brenneman did state, however, that if the
Commission decided to issue an RFP, Sprint could not commit to a
bid price of 76 cents per minute because of the need to review
the business case and to consider the cost for the RFP process,
which could involve a substantial cost and extensive use of time,
money and resources.
B. MCI WorldCom
MCI WorldCom suggested that the Commission take the
opportunity to issue an RFP and allow competitive bidding for the
TRS service in New Hampshire. MCI WorldCom believes that the
Commission should reexamine the question of whether or not the
State of New Hampshire and the deaf community are receiving the
best possible combination of relay service and price, and that a
competitive bidding process would ensure the optimal price and
service combination.
MCI WorldCom averred that it provides a high quality
relay service in many states, including Massachusetts. MCI
WorldCom would not say what rate they could bid on, nor whether
they would bid, without seeing the specifications contained in a
Request for Proposal.
In response to customer comments regarding service in
other states, namely Massachusetts and California, MCI WorldCom
stated there was a controversy involving the provision of service
out of the Massachusetts Relay Center, which was settled in April
of 1998 setting forth a testing plan for MCI's relay service.
MCI is tested through 200 test calls each month, placed by
independent parties hired by Bell Atlantic. MCI is tested on
typing speed, typing accuracy, answer times are measured,
answering machine protocol, and whether their Communications
Assistants ask callers whether they are familiar with relay. MCI
indicated that over the last four months, they have met the
standards in their entirety, paying only a portion of the
penalties in the previous four months.
C. OFFICE OF CONSUMER ADVOCATE
The OCA did not present a position at the hearing.
D. Staff
Staff did not present a position at the hearing.
E. OTHER PROVIDER COMMENTS
Hamilton Telecommunications, which had submitted a
proposal in 1991 when the service was first established, notified
the Commission that it had decided not to submit comments or
pursue the New Hampshire TRS franchise at this time. However, it
desired to be considered as a potential bidder if, and when, a
request for proposal was issued in the future.
AT&T, which had also submitted a proposal in 1991 when
the service was first established, recommended that the franchise
for the TRS service should be made available to competitive bids
from as wide a range of companies as possible. AT&T suggested
that consideration of proposals in a competitive process may
offer the possibility of a lower price than suggested by Sprint
and consideration of additional concepts of service, new ideas
and products.
III. PUBLIC COMMENTS
Public statements were made by William Case, Joan Case,
Michael Ritter, President of NHAD, David Steele, President of
the Black Deaf Advocates, a Boston based organization, Michael
St. Pierre, Chairperson of the TRS Advisory Board, a member of
the Governor's Commission on Disability and past chairman of the
TRS Consumer Council, Carol Magglin, Nancy Perron, past chairman
of the TRS Consumer Council, Donald Varley, President of SHHH-NH,
and past chairman of the TRS Advisory Board, and Mary McGuire,
all in favor of retaining Sprint as the provider of TRS Service
in New Hampshire, and concerned about switching over to another
provider, especially MCI, describing negative experiences in
Massachusetts and California.
In written and oral comments, Mr. Varley stated that
Sprint Relay New Hampshire "has shown excellent performance in
providing quality relay services for the deaf people" in eight
years since the service began. He cautioned the Commission about
situations in other states when relay services became intolerable
due to a change of operations from Sprint to other vendors.
In support of Sprint, Mr. St. Pierre stated that New
Hampshire was often the first state to receive technological
advances in TRS in the country. He also advised that bidding
processes can be good and bad and recommended that cost should
not be the biggest issue.
Mr. Ritter commented, in writing and orally, that
Sprint has become a "living partner" combining superior
technology, on the cutting edge of technological revolution, with
a strong commitment to customer service. He, too, cautioned
against changing providers and having to rebuild the system all
over again, especially when it functions so well.
IV. COMMISSION ANALYSIS
The purpose of this proceeding is to determine whether
Sprint is providing the highest level TRS possible at the
proposed cost, or whether another provider could offer better
service for the same price or the same service for a better
price, and whether the Commission should issue an RFP for a
franchise to provide TRS in New Hampshire, or approve Sprint's
proposed increase. Based on Sprint's presentation and comments
by the public, we are convinced that the choice of Sprint to be
New Hampshire's TRS provider in 1991 continues to be the right
decision. By all measures of performance, Sprint appears to be
providing the highest possible level of service without an
increase in cost for over eight years. The proposed increased is
in line with industry benchmarks and increases in the CPI. From
both a service and cost standpoint, we see no reason to change
TRS providers at this time.
We are not persuaded that a bid process will result in
lower costs or better service. We see no need to risk this
important means of communication for the mere possibility that
costs may be lower or service better. In addition, transition
from one service provider to another can result in significant
disruptions to the community of TRS users who rely so heavily on
this service. Finally, the proposed increase in the TRS rate and
Outreach costs will not result in an increase in basic exchange
rates.
We commend Sprint for its efforts over the past eight
years, for their technological and service improvements, for
their customer relations and for their commitment to providing
functional equivalency with the traditional telephone user
community. Nonetheless, we will continue to monitor service to
determine whether a re-examination of the franchise is reasonable
and ask the Advisory Board to monitor service as well and advise
us accordingly.
Based upon the foregoing, it is hereby
ORDERED, that Sprint's request for an increase in its
current reimbursement rate from sixty-six cents ($0.66) per
session minute to seventy-six cents ($0.76) per session minute is
hereby approved; and it is
FURTHER ORDERED, that Sprint's request for an increase
in its outreach cost from $6,250 per month to $7,250 per month is
hereby approved; and it is
FURTHER ORDERED, that the amount collected in basic
exchange rates be unchanged at 8 cents per month and the amount
collected in seasonal rates, during the off season, if
applicable, remain unchanged at 4 cents per month.
By order of the Public Utilities Commission of New
Hampshire this thirtieth day of March, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary