Is your 9-1-1 budget shrinking?

Chances are it is, whether you are aware of it or not.

By Jeff Robertson & Renee Wagner

Are you tired of looking at your 401K and seeing a decreasing balance? So am I. Like your investment accounts, 9-1-1 budgets across the country are not immune to the financial crisis gripping the country. This is a departure from past times of economic challenge in the U.S. when public safety, and in particular 9?1?1 funding, was immune to economic swings. The main reason that 9?1?1 did not experience the same volatility as other industries during tough economic times was because most people would cut back on expenses by reducing the cable TV bill, eating at home, and holding off on major purchases. Back then, no one would disconnect their home phone line, it was considered as essential as bread and milk. This is not the case today, but there is more to the story.

The tsunami of challenges facing 9?1?1 funding include (listed in importance to your budget):

1. Consumers’ telecommunication device preferences are changing and the public is demanding costly upgrades to their 9?1?1 system(s) to keep pace.
2. Standards and coordination for connecting to the nation's 9?1?1 network are becoming incompatible with the consumers’ voracious appetite for new telecom technologies.
3. Surcharge collections for 9-1-1 are increasingly collected at the State level. This in turn is increasing scrutiny and the need to be justified by a new political standard.
4. The publics’ lack of knowledge in 9-1-1 system funding.
5. State budgets are trying to operate at record deficit levels.

Consumers’ telecom preferences are changing

If you have a teenager in your house, try telling them that in order to use the phone they must leave the power cord in the wall and sit near the wall outlet. They will give you a strange look. And if you ask them to recite the phone numbers of their top three friends and family that they contact multiple times each day? You’ll get another crazy look from your teen.

Lets face it, it’s a different world than your parent’s rotary dial phone and our 9-1-1 funding system, legislation and technology is stuck in this bygone era. Our world has evolved into a place of VoIP phones, wireless devices, video phones, GPS, panic buttons, and vehicles that have the ability to contact 9-1-1. We are at the mercy of consumer preferences, and so our industry needs to adapt, educate and plan ahead to best serve the public.

How do these new technologies affect your budget?

Landline vs. wireless phone funding
How much do you collect for a landline phone? Typically on average across the U.S. you collect around 90￠ per phone per month after fees. Alternatively, with wireless phones, after fees and expenses 40￠ is the average contribution to your PSAP. Today people are disconnecting land line phones at record rates, not to mention fax machines that used to be connected to land lines. Also, remember the dial-up modem line you might have had at home? Gone. Reducing the average contribution to your PSAP from 90￠ to 40￠ is a 56% drop, if it’s a one-to-one disconnect. It is important to also take into account that wireless calls to 9-1-1 now represent more than 50% of all calls to 9-1-1. What does this mean for you? Increased demand and decreased resources.

Some states, such as Missouri, do not collect 9-1-1 fees for wireless phones. In Ohio, the funding is temporary and expires in 2009. Are officials expecting that emergencies in need of 9-1-1 calls will expire as well?

Prepaid wireless phones
The category of prepaid wireless phones is the fastest growing segment of consumer phones in the nation. Not only are consumers disconnecting their landline phones, they are disconnecting their traditional wireless phones for phones that are paid for up front. In many cases when callers dial 9-1-1 from these devices, they are difficult to locate and there are no records tied to them that indicate who owns them and where they live.

From a funding perspective, the biggest prepaid phone providers are aggressively fighting against using current 9-1-1 funding mechanisms in favor of pushing for retailers to take on the collection of funds.

On the other hand, millions of these prepaid devices are used to dial 9-1-1 today with no surcharges being received at all. This represents a 100% drop in funding if users replace either a landline phone or traditional wireless one with one of these prepaid devices. This is the biggest funding issue public safety faces today, representing well over a $100 million shortfall, and prepaid phone consumers continue to call 9-1-1 everyday and expect service.

VoIP (voice over Internet protocol) phones
VoIP phones used to be the “bad boys” of telecom. However, as they become more mainstream, the industry behind them has worked to voluntarily collect 9-1-1 surcharges and made advancements for locating callers. Most of the reputable carriers are remitting 9-1-1 surcharges and educating consumers on the nuances of VoIP phones. These carriers typically collect at the lower wireless rate, which is a 56% reduction from traditional landline phones.

Where did all the standards go?

Do you remember Bellcore? The company was created on January 1, 1984 as part of the 1982 Modification of Final Judgment that broke up the Bell System. Bellcore was a consortium established by the Regional Bell Operating Companies upon their separation from AT&T. Bellcore ensured that anything connecting to the nation’s telecom infrastructure was based on reliable standards that ensured everything worked together and met consumers’ expectations. This group had a lot of influence in determining how landline-based phones could be reliably located (E911), which has served us well for the last 25 years.

Most companies who offered telecommunication products and services had to adhere to these strict standards if they wanted their devices and services to connect “phone calls” in North America and around the world.

Today if you have an innovative idea and a little funding you can build a device that can connect to 9-1-1 without having to worry about details such as reliability in an emergency, power, which agency should respond, location, or how to deal with prank/false calls.

Sometimes standards can hinder innovation; it’s a balancing act between unbridled innovation and standards. Right now we need more standards before more innovation breaks the 9-1-1 system as we know it. For the past ten years I served as CEO of a technology company serving the public safety industry. During my tenure, I would never have thought of asking for more standards! But the technology landscape is dramatically different today.

Say hello to State budget politics

Across the country, the script goes something like this:

Obviously, this is a fictional example, but given the current state of affairs, can you blame them?

If this 9-1-1 fund has never been explained to politicians, if a plan has been developed with no input from the public, or an explanation has not been provided as to how these funds support citizens (more importantly voters) in an emergency, why wouldn’t politicians “raid” these funds? This holds especially true when there will be very little backlash from voters who also don’t know how funding works. When faced with choosing between an increase in state taxes, reductions in schoolteacher salaries or a “raid” of 9-1-1 fund no-one knows about the politician will take the path of least resistance: use of the publicly unknown 9-1-1 fund.

This is happening in a number of states. New York, California, Arizona, and many others, have already had funds that were originally, legally earmarked for 9-1-1, transferred to the state’s “general fund” to deal with a state budget shortfall.

You mean to tell me the police department doesn’t fund 9-1-1?

If you run a PSAP today, try this little exercise the next time you are giving a tour of the 9-1-1 center to your local service club or Chamber of Commerce. When you are done the tour ask them, “How do you think this 9-1-1 center is funded?” Brace yourself, the answers will be scary. Most people think funding comes from police or fire department budgets, property tax assessments or magically from state or federal governments. Many don’t know that they pay for it themselves, in the form of a line item on the bottom of their monthly phone bills.

Lets just borrow more funds, I’ll deal with the debt when I get re-elected

Borrowing from funds legally earmarked for 9-1-1 points to a far greater issue in state budget planning. I won’t go into detail exploring the reasons this happens, and the implications of these actions. Living beyond our means is a nationwide issue, and one that has caused a lot of the economic turmoil we are experiencing today. We can all learn a lesson on this one, including politicians.

Ok enough doom and gloom, what are we going to do?

There are a lot of differing opinions on what to do in the future. Based on my lengthy tenure in public safety, I recommend:

1. A phone, is a phone, is a phone – If you can use a device to contact 9-1-1, a surcharge should be collected and the fee should be fair and not vary based on the type of device. A single statewide fee should apply to all devices in that region. Laws need to be modified to address this reality. If states (preferred) cannot enact legislation to handle collecting and allocating funding, the federal government should mandate it.
   
   Think about it this way: f your state collects a “tire tax,” this fee is not different for all season radials versus summer tires. There is one fee for two different technologies with the same purpose. The same thing should hold true for telecom devices: simple, fair and uniform.
   
2. Funds collected for 9-1-1 must be used for 9-1-1 – There should be a legal mandate that funds collected from the public under the premise of supporting 9-1-1 service should be used exclusively for this purpose. It is unethical to tell the public that they are paying for something, and then “raid” these funds to pay for something else. Each state should conduct a formal audit of how these funds are collected and used. This will encourage transparency and accountability and will ensure funding allocated for 9-1-1 is used specifically for emergency service delivery.
   
   The federal government tried this but the federal legislation stated that any state government that raids funds earmarked for 9-1-1 would not be eligible for federal 9-1-1 grants. The federal grants total only $45 million for the entire country and require matching funds by state governments. For example, today a state government can benefit from a $100 million windfall through “raiding” of 9-1-1 funds. The only consequence for this “raid” is ineligibility to receive a small piece of the $45 million grant that must serve all 50 states . This consequence is not a significant deterrent.
   
3. Set next generation 9-1-1 device standards - These standards must come from an organization with strong accountability and credibility. Non-profit organizations are well-meaning, but they oftentimes do not have the power to ensure the standards are adhered to. They also have a tough challenge balancing the needs of their various member stakeholders. I recommend that the FCC, as the country's primary regulator for telecommunication devices, issue standards with input from all the stakeholders for the purpose of ensuring the 9-1-1 network in the United States.
   
   The FCC already regulates wireless phones and wireline, why not extend this to handle 9-1-1 requirements?
   
4. Enhanced planning at a state level – If you are a local government official trying to make your center run, you probably feel that between keeping the lights on and holding staff accountable, you have enough on your plate. You may feel like the last thing you need is “help” from a state agency. I hate to say it, but if you want to continue funding your PSAP, state help is coming, Telecom devices are no longer constrained to just your county or city, they move and must serve a much more geographically diverse population than traditional landline phones.
   
   PSAPs need to inter-operate and network together, and now there is a valid financial and technological reason to do so. However, this will not happen if we continue our patchwork of over 6,100 PSAPs, each with different funding, different technology and a various proprietary systems. State governments need to establish plans outlining funding for the next generation of interconnected centers that can support a wide array of digital IP-based devices, many of which may not have even been developed.
   
   States with strong leadership at the state level have proven to be better at planning for the future, funding, dealing with technology and serving the public. Unfortunately, some states are falling victim to weak leadership with poor records of service and no strategy outlining how they will handle the future demands before us.