New FCC Rate Regime Prioritizes Cost Reductions Over Quality of Service for Deaf and Hard-of-Hearing
SALT LAKE CITY, UT--(Marketwired - Jul 8, 2013) - Sorenson Communications today announced that it will stop providing IP Relay service at 4 p.m. MDT on July 31, 2013. In a letter to the Federal Communications Commission (FCC), the provider of industry-leading communications products and services for the deaf and hard-of-hearing stated that its decision to end its IP Relay service is the result of compensation rates that are too low to sustain quality service. A July 1 FCC Order reduced the rate paid to IP Relay service providers by 21 percent this year and by an additional six percent each of the following two years. Sorenson is the third IP Relay provider to stop providing service in the past three months.
IP Relay is one method by which individuals who are deaf or hard-of-hearing can communicate via the telephone with people who are hearing. The Americans with Disabilities Act mandates the provision of "functionally equivalent" telecommunication services for people who are deaf and hard-of-hearing. These services are provided by independent companies and paid for by a fund supported by telecommunications carriers and overseen by the FCC.
"We are disappointed to have to take this step, but after reviewing our options, we have concluded it is better to exit the IP Relay business than to dramatically reduce the level of service we provide to our customers," says Sorenson Communications President and CEO Pat Nola. "Customers choose Sorenson because we bring smart innovations and superior service to the marketplace. We simply can't maintain that standard under the FCC's new rates."
Customers can keep their SIPRelay® number by porting it to a different IP Relay provider. Sorenson will assist customers to port their numbers through Aug. 31, 2013. Remaining IP Relay providers are listed on the FCC website (http://www.fcc.gov/encyclopedia/trs-providers). There are presently two other providers of IP Relay service.
The FCC's July 1 order affects only Sorenson's SIPRelay service. Other Sorenson services, including SVRS® or IPCTS service offered by CaptionCall, a wholly-owned subsidiary of Sorenson Communications, are not impacted and will continue service as usual.
Sorenson has provided IP Relay service for more than eight years, and in 2013, served more than a quarter of the market. In its letter to the FCC, Sorenson warned that the FCC's insistence on using an outmoded approach to ratemaking that doesn't account for the financial realities of relay service providers threatens the provision of essential services to Americans who are deaf or hard-of-hearing.
"Sorenson regrets that it must take this action. However, the IP Relay rates set by the FCC in its order of July 1, 2013 leave Sorenson no alternative. Sorenson has repeatedly pointed out that the Telecommunication Relay Service (TRS) rate-of-return methodology, which is based only on "allowable costs," a subset of actual costs which allows for no margin on expenses in a labor-intensive industry, consistently generates rates that are unsustainable. Rates set based on those levels will not yield functionally-equivalent telecommunications relay services," says Nola.