CONTACT: Dianne Dienstein June 13, 1997 CPUC - 73

415-703-2423 (Res. T-16031)

CPUC ACTS TO IMPROVE PHONE RELAY SERVICE FOR THE DEAF

The California Public Utilities Commission (CPUC) has augmented the 1997 Deaf and Disabled Telecommunications Program (DDTP) budget by $2.9 million to stimulate competition in providing relay service, and for the first time assure deaf and disabled phone customers choice of providers. The California Relay Service uses intermediaries with teletype devices to connect deaf and disabled phone customers with hearing customers.

Commissioner Henry M. Duque convinced a majority of his fellow Commissioners to augment the DDTP budget: "MCI is the company quickest to charge others with abusing monopoly power. Here is a market where it is the single service provider to a population with special needs, and instead of using technology to serve those who rely on it most, MCI appears to be abusing its customers and exploiting its market power."

In 1996, MCI was selected as the primary provider of relay service through a competitive bidding process. MCI’s main relay service center is in Riverbank, California. While other companies could have entered this market under the same contract terms that MCI did, none chose to do so. Soon after MCI began to provide relay service, customers complained about operator typing, spelling and grammar, users’ inability to use various types of calling cards or their carrier of choice, and incorrect billing. The number of complaints about MCI’s relay service soared to five times that of the previous provider, Sprint.

Both the Trust which administers the DDTP, and Commissioner Duque, who has been the Commission’s liaison with the DDTP, met with MCI in an effort to

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CPUC ACTS TO IMPROVE PHONE RELAY SERVICE FOR THE DEAF 2

work together to eliminate the service problems. However, over the past six months, and despite the Commission’s direction to correct problems, problems continued. The DDTP Trust concluded that the only way to provide relief to relay customers was to attract other phone companies into this market to compete with MCI and to give relay users the same kind of choice among providers that other phone customers enjoy, and spur MCI to improve service. The Trust sought Commission augmentation of the DDTP budget so that the reimbursement rate for relay service providers could be raised from the current 70 cents/conversation minute to not more than 89 cents - the next lowest rate bid during the competitive bidding for the contract MCI currently has.

On June 11, 1997, the day the Commission approved augmentation of the DDTP budget, Sprint publicly announced its intention to provide relay service no later than September of this year. The Commission hopes other providers will also enter this market, and stated its intention to work with them to facilitate this.

In an effort to assure better service, relay service providers must report monthly to the CPUC on the number and types of complaints they receive, and use customer surveys to assess service quality. Also, providers who do not meet the contractual requirements will be subject to daily liquidated damages of $2,000 plus 10% of the daily gross incremental revenue from the 19 cent/conversation minute difference between the current reimbursement rate and the new rate; liquidated damages will increase for each consecutive day of violations.

Pursuant to legislation, there are three programs for the deaf, hearing impaired, and disabled in California: Telecommunications Devices for the Deaf (TDDs) distribution; the California Relay Service; and Supplemental Telecommunications Equipment for persons who are disabled. The programs are funded by a consolidated budget which is set annually by the Commission. o