DE 98-182
              Sprint Communications Company, L.P.
Petition to Increase Price for Telecommunications Relay Service
 Order Approving Increase in Price for Telecommunications Relay
                    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
               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.
                    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
               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.
               The OCA did not present a position at the hearing.
          D.   Staff
               Staff did not present a position at the hearing.
               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.
               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.
               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
               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