II. Background

A. The DDTP

The DDTP has assisted the deaf, hard-of-hearing, and disabled communities to gain access to the public switched telephone network since 1979. The program began with mandated distribution of TeleTypewriters (TTYs) to deaf and hard-of-hearing Californians. In 1983, the program expanded to include statewide, 24-hour dual party relay services, and in 1984, the program began to provide telephone equipment other than TTYs to people with functional difficulty using the telephone. Public Utilities Code §§ 2881, 2881.1 and 2881.2 set forth program requirements, and a series of Commission decisions establish the administrative and financial structure of the program.

During the mid-1990s the Commission began opening telephone markets to competition. In order to ensure that the DDTP was competitively neutral, and for the sake of efficiency, the Commission began a process of centralizing many of the DDTP's functions: customer database, customer call center, warehouse, equipment procurement, inventory and distribution, field advisory staff, and customer walk-in centers. Previously, the large telephone companies handled many of these functions. With centralization, a combination of DDTP staff and outside vendors contracted through a competitive bidding process will provide all DDTP services. The centralization process is currently underway.

The DDTP delivers three types of services:

1. distribution of telecommunications devices for the deaf (TDDs) at no cost to certified deaf and hearing-impaired telephone subscribers, to schools and organizations representing the deaf or hearing-impaired, and to state agencies with significant public contact;

2. the California Relay Service (CRS), which improves the communication potential for deaf and hearing- impaired by providing them direct access to California's public switched telephone network; and

3. The provision of other specialized telecommunications equipment to consumers with hearing, vision, mobility, speech and cognitive disabilities.

Under the program, deaf and hard-of-hearing callers use TTYs, the CRS, amplification devices, devices that provide a visual or vibrating alert that a telephone is ringing, and other equipment. Disabled Californians may obtain a range of products and services including large numeral telephones, headsets and special handsets, as well as Speech-to-Speech relay services for those with difficulty speaking.

An amalgam of entities provides DDTP services. Approximately 70 employees in Oakland perform DDTP functions including financial, social service and administrative oversight, outreach, and staffing of statewide walk-in centers. While DDTP is a Commission-sponsored program, the DDTP staff members are contract staff and not civil service employees.

Sprint Corporation (Sprint) and MCI WorldCom (WorldCom) have contracts to provide CRS functions. These operations are supported by between 300 and 400 Sprint/WorldCom employees who serve as relay and Speech-to-Speech operators. The DDTP has a contract with an outside vendor to staff a central call center employing 50 people. The DDTP also contracts with a vendor to handle equipment distribution; that operation involves 10 employees. Thus, between 400 and 500 people staff the program in one way or another.

Two advisory committees and the DDTPAC advise the DDTP. The California Relay Service Advisory Committee (CRSAC) advises the DDTPAC on the operations of the CRS. The Equipment Program Advisory Committee (EPAC) advises the DDTPAC on the needs for program equipment.

The membership of each DDTP Committee is set forth in separate charters approved by the Commission.⁴ The DDTPAC has ten members, all with a vote: four representatives of telecommunications carriers, one Commission representative, one representative of the hard-of-hearing community, one representative of the disabled community, one representative of the late deafened adult community, one representative of the deaf community at large, and one representative of a statewide deaf organization.

The CRSAC has a total of eleven members, seven voting and four non-voting. The seven voting members consist of one hard-of-hearing representative, two deaf representatives, one late deafened adult representative, one speech disabled representative one representative of the hearing community who is well versed in use of the Relay Service, and one CRS provider representative. The four non-voting members are one Commission staff person and three telephone company representatives.

The EPAC consists of ten members, eight voting and two non-voting. The eight voting members consist of three telephone company representatives, one hard-of-hearing community representative, two disabled community representatives, one deaf community representative, and one representative of the senior citizen community. The two non-voting members consist of one Relay Service provider and one Commission staff person.

All California telephone subscribers fund the DDTP through a small surcharge appearing on individual telephone bills. The surcharge is authorized in Pub. Util. Code § 2881(d) and (g); the Commission adjusts the surcharge annually to accommodate the anticipated DDTP budget.⁵ Telephone companies collect the surcharge from their customers and remit the money to a public trust fund called the Deaf Equipment Acquisition Fund (DEAF) Trust. Currently, the funds are held in trust under contract with the Bank of America. Under SB 669, telephone companies will remit surcharge revenues to the Commission, which will turn over the revenues to the State Controller. The funds will reside in the State Treasury rather than in a bank trust fund.

Currently, the Commission approves the DDTP's annual budget. We anticipate that under SB 669, the Commission will secure DDTP funding as a component of its own annual budget request under the State Budget Act.

B. SB 669

SB 669 effects changes in the handling of funds for several programs that serve consumers of telecommunications services in California. The only program we address here is the DDTP. We expect to commence another rulemaking in 2001 to implement the remaining provisions of the legislation.

SB 669 makes four significant changes to the Public Utilities Code affecting the DDTP. First, SB 669 codifies the preexisting governance structure for the DDTP. As noted above, the DDTP receives support and advice from the DDTPAC, which consists of voting representatives from the deaf and disabled community, the Commission, and various telecommunications providers. SB 669 codifies this committee structure and designates the DDTPAC as

an advisory board to advise the commission regarding the development, implementation, and administration of programs to provide specified telecommunications services and equipment to persons in this state who are deaf or disabled, as provided for in [Public Utilities Code] Sections 2881, 2881.1, and 2881.2.⁶

Second, SB 669 places operational responsibility for the program with the DDTP, requiring it to "carry out the programs pursuant to the commission's direction, control, and approval."⁷

Third, SB 669 requires the Commission to ensure that the DDTPAC achieves "appropriate representation by the consumers of telecommunications services for the deaf and disabled."⁸ This provision is consistent with the Commission's prior strategy of empowering the deaf and disabled community by ensuring its representation on an oversight board that has both advisory and operational responsibilities.

Fourth, SB 669 moves the DDTP funds to the State Treasury and provides that they may only be expended upon appropriation in the annual State Budget Act.

Our focus in this proceeding has been on three key areas:

· Ensuring that the DDTPAC adequately represents the various deaf and disabled communities that benefit from the program,

· Retaining and enhancing the extent to which the DDTP is consumer-focused, nimble, and innovative, and

· Implementing the transfer of funds to the State Treasury in a way that will not interrupt program services. The DDTP relies on a large number of small vendors, including sign language interpreters, real time captioners,⁹ voicers,¹⁰ and small companies that devise specialized equipment for the deaf and disabled. These vendors cannot afford long payment delays. We are concerned that unless they are paid promptly, they will cease working for the program, thereby affecting the DDTP's ability to serve consumers.