Dr. Z and You

The FCC issued a Notice of Inquiry (NOI) on June 28, 2010. As Dr. Z indicated previously, this NOI is a process in which the FCC will collect information regarding rates and how the VRS service is structured before they issue new rates and rules before the 2011 rate period. The NOI has a 30-day comment period and a 15-day reply to comment period.

4 VRS Providers (CSDVRS, Convo, Purple and Snap) have filed a motion with the FCC to extend the comment period from 30 days to 90 days and the reply to comment period from 15 days to 45 days. The NOI is a very detailed and exhaustive process, raising a lot of questions and Dr. Z is in agreement with the VRS providers that 30 days is too short a time to be able to come up with comments to the questions the FCC has raised. 90 days is a reasonable time period for everyone–VRS providers, organizations and consumers to be able to review the questions and comment on them.

We will see how the FCC responds to this motion.

Dr. Z (and the FCC) cares about your communication access.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Sorenson Communications has filed a petition for review of the FCC’s rates with the United States Court of Appeals for the 10th Circuit.

The 10th Circuit is located in Denver and the filing states that it is an appropriate choice because it is close to Sorenson’s Headquarters in Salt Lake City.

The filing is a one page document and does not have much information.

Dr. Z will keep you posted as developments warrant in this case.

Dr. Z cares about your communication access.

The FCC on July 9, 2010 has denied Sorenson’s Rate Stay Motion. The FCC lists its reasons for such denial in the order. You can read the document using this link.

Dr. Z (and the FCC) cares about your communication access.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Sorenson filed a “stay” with the FCC on June 30th. (link to “stay” request)

A stay is a procedural matter in which a party can ask the FCC to “hold” any action on any order it has issued.

The “stay” has to do with the FCC’s interim rate order they issued on June 28th. The text of the order is included in the Sorenson stay filing above.

In the stay, Sorenson offers some legal arguments as to why the FCC should not proceed with their interim rate order and continue with the rates they issued for 2007-2009.

Also, the stay request indicates that if the FCC does not act on it by July 9th, Sorenson will consider going to court on this matter.

Dr. Z (and the FCC) cares about your communication access.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Yesterday was a key day in the VRS industry with the FCC issuing three documents and 2 orders. The impact of these, when concluded will be felt for a long time.

The FCC issued a press release (link) and 2 orders: one in which they issued interim rates for 2010-2011 (link) and initiation of a Notice of Inquiry on the VRS Industry (link).

The press release explained the 2 orders, but what was interesting was there was a subheading on the press release indicating that the FCC Commissioners voted unanimously on the orders–”Commission Votes Unanimously on Immediate and Long-Term Approaches.” This indicates the FCC is together and united on the entire process related to VRS. This also indicates both the Republican and Democratic appointees on the Commission are in agreement on this.

On the rates, the FCC decided to make the rates interim–only for one year (2010-2011) instead of 3 years. They feel that the Notice of Inquiry will create a new baseline for the rates and prefer to have future rate setting decisions based on the results of the Notice of Inquiry. They indicated they used a temporary solution for coming up with the revised rates which were higher than the original rates submitted by NECA by using this formula: “averaging NECA’s proposed per-minute rates calculated as a measure of actual, historical provider costs, and the current rates, which were based on providers’ projected costs.” The FCC seems to feel that the current rate setting process does not reflect the true cost of providing VRS as there is a difference between what the VRS providers projected and what the actual costs the FCC paid have consistently been different for the last 4 years with the projected rates higher than the actual rates. So, for all purposes, this year’s rate is a temporary solution. The true and long term rates will come out of the Notice of Inquiry process.

The Notice of Inquiry is a big deal. Dr. Z considers this one of the most important undertakings the FCC will pursue in making communications accessible for deaf and hard of hearing people. It is a very comprehensive document–25 pages. It will ask for feedback on two basic topics: 1) Adjustments and Modifications to Improve the Video Relay Service Compensation Methodology and 2) Broader and Economic Issues Concerning Video Relay Service. In both areas, the FCC is asking a lot of questions that need to be answered by the public in the weeks to come. The Notice of Inquiry is a open process and everyone should feel free to submit comments and feedback. The FCC will take close to a year to complete this process and hopefully conclude this by July 1, 2011. Dr. Z takes the view that this is serious business—a look into VRS from all tangents in a way that has never been done before. It is obvious the FCC has been working on this for a long time and the final details next year will have a major impact on how VRS is delivered to us all.

Dr. Z will in the next few weeks go through the Notice of Inquiry section by section to give you all an opportunity to understand what the FCC is looking at and to allow you to submit comments to the FCC.

Dr. Z (and the FCC) cares about your communication access.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Dr. Z has had town hall meetings since April–he is now into his 20th city and will continue until the end of this month. After every town hall, there is always an open question and answer session and almost always there are at least 15 questions being asked by audiences all over America. As one can expect, they fall into a pattern and Dr. Z will tell you what is on the minds of many deaf and hard of hearing Americans these days.

1. Is the proposed rate going to cause VRS to end as we know it?

2. Will the bankruptcy of Sorenson cause our VP-200′s to be inoperable?

3. Can the Z4 do what the VP-200 does?

Answers that Dr. Z gives (in abbreviated form–Dr: Z gives a much longer answer at those town halls):

1. Is the proposed rate going to cause VRS to end as we know it?

Answer: The answer is a resounding NO! NO! NO! The FCC has gone on public record that it is here to insure that the VRS service is here to stay. It is a mandated service by the ADA. We all should not worry (nor take TUMS) about the possibility of this happening.

2. Will the bankruptcy of Sorenson cause our VP-200′s to be inoperable?

Answer: This is a possibility. It depends on the level of bankruptcy protection Sorenson seeks. Not all bankruptcies are Chapter 7 where the entity goes completely out of business. Many bankruptcies are Chapter 11 and 13, like what General Motors went through. It went into bankruptcy for a while and now it is out of bankruptcy and it never stopped making cars. In any event, should the VP-200 not work–there is a simple solution–we all have computers and all it takes for you to get VP service is to simply press a button to download the Z4. Then you would not need a VP-200! (The Z4 works on both PC’s and Macs.) Press HERE to register for the Z4 (It is free.)

3. Can the Z4 do what the VP-200 does?

Answer: In a horse race, the Z4 would outrace, outhustle and outperform a VP-200. There is no way the features on a VP-200 can do what a Z4 can do. Dr. Z challenges anyone out there to show what a VP-200 does that the Z4 cannot do. The most common challenge was the signaler for incoming calls. The Z4 has the Z-Alert which is the modern way of responding to calls through your pager or mobile phone.

In future blogs, Dr. Z will post more answers to those questions asked by everyone out there. Dr. Z wants to thank the hundreds of people who have attended his Town Halls. This gives everyone an opportunity to get facts straight.

Dr. Z cares about your communication access.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Dr. Z got home from a road trip a few days ago and in his pile of mail, he saw a 4-color mailing from the VRSCA. It was addressed to him and another went to his wife.

It starts with “The Future of Video Relay Service is In Jeopardy”…is this a VRSCA or a Sorenson message? Who pays for the printing and mailing of these 4-colored postcards? They must have gone to tens of thousands of VRS consumers out there. The VRSCA has publicily said they are “neutral.” But with this mailing and a vlog by one of their people, it is obvious they are delivering the Sorenson message in another way. Is this neutral?

It does seem strange (and unethical) to Dr. Z for a company to set up an organization to promote its ideals and claim that that organization is “neutral.” After all, Dr. Z is assuming that Sorenson is paying for the mailing since we know from conversations with people that VRSCA is paid for by Sorenson. They pay for VRSCA booths at trade shows. They pay for VRSCA people to travel to such trade shows.

The mailing was received after the May 21st reply to comments deadline by the FCC. I am not sure if the FCC would take those reply cards into consideration.

Let us respect the FCC. The VRSCA mailing accuses the FCC of “seems unreasonable and poorly thought out.” The FCC was going through a process in determining the rates and as we know, it has not yet reached a decision. This issue will all boil down to the facts at hand, not emotion.

Dr. Z cares about your communication access and how public monies are being spent.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

(UPDATE) It has been brought to my attention that VRSCA is indeed funded by Sorenson. Go to this link.

CSDVRS has filed a letter and met with the FCC in an attempt to refute Sorenson’s assertions in their recent filings and ex parte meetings with the FCC. Sorenson has met with the FCC a number of times very recently with several lawyers, one from a high-powered law firm (Skadden, Arps) and 2 from their usual law firm (Lawler, Metzger) and their in-house counsel.

CSDVRS asserts that the tiered structure has worked very well in the past few years, countering Sorenson’s argument that multiple tiers are “inequitable.” CSDVRS also disputes Sorenson’s assertion that servicing debt is a standard function of doing business, only because they are using this debt to reward their investors, and not to offer better services to deaf and hard of hearing people, among other things.

You can read CSDVRS‘s letter at the following link, along with their ex-parte filing at this link.

The following lists the links to Sorenson‘s ex parte filings and other filings for the recent week or so:

link Ex Parte #1 (6/9/10)
link Ex Parte #2 from Sorenson’s Investor (Madison Dearborn Partners) (6/8/10)
link Ex Parte #3 (6/4/10)
link Ex Parte #4 (6/4/10)
link Application for Review (6/4/10)
link Ex Parte #5 (6/3/10)
link Ex Parte #6 (6/2/10)
link Ex Parte #7 (5/26/10)

Dr. Z is choosing not to comment on the ex parte filings by Sorenson. They are quite self-explanatory.

Dr. Z cares about your communication access and how public monies are being spent.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Dr. Z posted an editorial (#47) yesterday indicating Sorenson has yet to disclose its books to the FCC, based on recent ex parte filings. However, it has come to Dr. Z’s attention, by a RSS feed from the FCC website today that Sorenson has filed several documents in an ex parte filing and among these, they are disclosing their financial information to the FCC. (link to ex-parte) The timing of this ex parte filing happened just after Dr. Z put up the other editorial (#47) on this matter and this is intended to clarify things.

Dr. Z reserves judgement as to whether the disclosed information is what the FCC needs to validate their filing on costs to NECA.

One of the more interesting documents in the filing is documentation by Moelis and Company, a restructuring and investment banking firm retained by Sorenson. It indicates, among other things, that if the rate were to stay at $3.89, it does create a situation where Sorenson may need to declare bankruptcy. But it seems to assume that they will continue to distribute the equipment free of charge, which is an option they choose to make even it creates a condition for bankruptcy.

Dr. Z wants to set the record straight immediately so that everyone has access to facts in a timely fashion.

Dr. Z cares about your communication access and how public monies are being spent.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.

Dr. Z has been purposefully quiet the past few days. He wanted to see how things looked after the dust settled.

While it looks like things are quiet, there’s a lot of things happening behind the scenes. The FCC is hard at work reviewing the submitted costs to determine rates which must be done by June 30th. It appears most likely that the FCC will issue interim rates for just one year and go through a review process to put in place a process that will be used as the basis for determining rates in the future. This calls for more transparency in the process. The VRS providers need to show their books to justify the costs they are submitting. Now the costs being submitted have to be signed off by the CEO, CFO or a senior executive attesting to the truthfulness of such costs, otherwise they can face charges of perjury.

To people on the outside, we are in no position to say the rates are right or wrong–we do not know what the costs being submitted look like. Only the FCC (and NECA) have access to these and have the right to ask for more information.

Sorenson, in ex parte filings with the FCC recently, are posturing themselves to decide what information they can share and what they don’t need to share. Why do they need to do that? Public monies are involved and there is accountability and transparency when it comes to public money. They claim competitive information can be gleaned from this. Numbers alone do not reveal much when it comes to competition. One can speculate from numbers how things are being spent, but this does not make or break the success of a product or service.

Product excellence, product quality, product marketing are things that form the basis for the success of a product or service–not numbers alone. There is basis for confidentiality for product or service plans, but not necessarily just numbers. The VRS companies do not need to submit product plans or information to the FCC, nor is there reason to do so, except in matters of interoperability.

Open Up Your Books, You Folks! What is There to Hide?

Amen.

Dr. Z cares about your communication access and how public monies are being spent.

Disclosure: Dr. Z is a contractor working with CSDVRS on several projects.