States Must Stop Raiding 9-1-1 Fees

It is unconscionable that some states divert fees collected for legitimate and needed 9-1-1 communications capabilities to unrelated purposes, threatening the public's safety for short-term budget relief.  After almost fifteen years of working on the problem, we are no closer to resolving it.[1]  I suggest that the appropriate policymakers must implement new measures to end this practice once and for all.  This may require uncomfortable conversations with states or taking forceful actions, as suggested below, but the current mechanism of shame and hope isn't working.

On a daily basis, we ask our nation's public safety officials to risk their lives on behalf of their fellow Americans.  They run into burning buildings, stand in the line of fire, provide our loved ones' emergency care and do countless other acts of bravery.  The thanks some of these heroes get for their efforts is the siphoning off of needed resources intended to ensure their localized 9-1-1 systems are as modern as possible.  The inability or unwillingness to tackle this issue is equivalent to tying public safety officials' hands behind their backs during a major crisis and praying that things will work out.  It isn't right and it isn't smart.

Today, the collection of 9-1-1 fees and surcharges is a hodgepodge of differing methods and levels by various states, tribal lands and U.S. territories.  As the National Emergency Number Association's (NENA) latest chart indicates, there is little consistency in the amounts that entities charge, and this doesn't include any additional surcharges imposed by some individual counties localities.  Specifically, NENA's data shows that consumers of communications services are paying a fee up to $1.75 per service per month to providers, who then are periodically required to remit the 9-1-1 fees to some state agency or organization.  Moreover, according to the FCC's recent report on the issue, states and territories collected over $2.6 billion in 2015 for 9-1-1 services under this fee structure.

Despite the intended purpose of 9-1-1 fees, some states have diverted these resources to non-related or, worse yet, non-public safety purposes.  In fact, the Commission's report highlights that eight states and one territory diverted almost $220.3 million from 9-1-1 functions.[2]  These states (i.e., Illinois, Iowa, New Hampshire, New Jersey, New York, Rhode Island, Washington, West Virginia,) and Puerto Rico were found to have diverted approximately 8.4 percent of the total nationwide collections.  Upon closer inspection, however, the actual story is much worse for residents in those states and surrounding areas. Consider that the diversion rates in New York, Rhode Island and New Jersey were 42 percent, 68.4 percent and 89.9 percent, respectively.  Far from being de minimis amounts, these substantial redistributions undermine the ability of local public safety emergency call centers to modernize, such as adopting and migrating to Next Generation 9-1-1 systems (NG911).

Some people argue that this is not a real problem because diverting states generally maintain reserve balances to pay operating costs as needed or that the entire issue will be take care of itself naturally once the economy improves.  Both of these lines of thinking are easily dismissed.  Even if a state is just diverting current collections because it maintains underlying balances in an existing account, the diversion generally prevents new investment in costlier, future networks as states don't want to deplete their accounts in total.  In other words, just paying to maintain older, outdated networks does not allow for growth, advancement or new technologies.  But we all know that significant investment – not just maintenance – is going to be necessary to develop and implement NG911 and Federal assistance in the form of grants under the Spectrum Act is rightfully precluded from going to diverting states.  

And this is not just one instance of bad behavior.  Consider how many of this year's eight states are repeat offenders.  No fewer than four were in the Commission's first report on the topic in 2009 and others have been in the club before.  Moreover, new states are seeking to join or rejoin the party, seeing few barriers or repercussions from anyone but public outcry.  Take for instance, the latest effort by Montana's Governor, to repurpose $12.2 million of 9-1-1 reserves into its general fund to cover budget deficits.  Thankfully, that effort seems stymied, but it's only a matter of time before the next "innovative" state tries the same.

Potential Remedies

I understand why some see this as a vexing problem to solve.  It involves tax policy, jurisdictional lines, federalism, public safety, and consumers.  But if we are going to get serious about really resolving the problem, we need to get past these impediments.  Here are three non-mutually exclusive ideas for the Commission to increase the pressure and force states to end this despicable practice: 

• Interstate Services Prohibition – The Commission maintains sole jurisdiction over interstate communications services and, as such, we retain the right to bar diverting states from imposing 9-1-1 fees on the interstate calls.  That means a good percentage of wireless services, landline voice services and all VoIP services, at least in my opinion, would be off limits for such states, while ensuring no greater burdens on affected industry.  In fact, the NET 911 Improvement Act of 2008 specifically protects a state's authority to collect 9-1-1 fees on VoIP and wireless services, unless funds are diverted by a state.[3]  By prohibiting interstate services from being included as revenue sources, the pot of money diverting states would have to pickpocket would be minimized, sending a strong signal that the Commission is no longer going to sit on the sidelines with regards to this matter.  Moreover, we should not burden interstate services with activities that are at odds with federal policy.  This would be similar to universal service where states may assess fees on intrastate services, but only to the extent that doing so would not be inconsistent with the Commission's rules.
• Prohibit Collection and Remittance by Providers – The Commission has previously prevented communications providers from including misrepresentations or inaccurate information in requisite consumer bills.  And it prohibits providers from collecting universal service fees in excess of what is required for the universal service fund.  For diverting states, the collection of funds above what will be spent directly on 9-1-1 services is by definition misleading to consumers.  The Commission can prevent any providers from collecting such funds or requiring them to remit the funds to diverting states.  As part of this effort, the Commission could also define what are inappropriate uses of 9-1-1 funds and ensure providers are held harmless in the process.
• Commission Advisory Committees – The ability to serve on Commission Advisory Committees is a privilege, not a right.  As such, the Commission can and should exclude any person from a diverting state from participating on an advisory committee, and this can be done without losing valuable advice.  There are plenty of people able and willing to serve on our committees without including those from diverting states.  This idea was raised, but never fully considered, as part of a recent Commission Task Force.

In addition to Commission options, Congress has full ability to correct diverting states' practices either by directly applying existing law or by exerting necessary leverage via its extensive grants and funding regimes.

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If diverting 9-1-1 fees were a practice instituted by a private company, the Commission (and states) would have already thrown the enforcement book at them for gross negligence and misrepresentation.  Yet, we somehow have permitted states to divert necessary 9-1-1 resources or collect more than is necessary as if it were an acceptable practice.  It's time for that to end.