Public Safety Entities Concerned Over FCC’s 911 Fee Diversion NPRM

Courtesy ~ TR Daily

A number of public safety entities have expressed concern about an FCC notice of proposed rulemaking adopted last month that proposes rules to tackle the diversion of 911 fees by states and local jurisdictions for other purposes (TR Daily, Feb. 17).

Public safety groups and state and local entities say some of the FCC’s proposals are vague and are not flexible enough to permit 911 fees to be used for the range of components necessary to deliver 911 services.  They also say that a diversion by a small number of jurisdictions should not risk the eligibility of an entire state for NG-911 grant funds and that the FCC should consider more than just 911 fee diversion and instead the broader question of all underfunding for 911 services. Some public safety entities also expressed concern about heavy-handed federal regulations of state and locality 911 activities.

The Don’t Break Up the T-Band Act of 2020, which was enacted in December as part of omnibus appropriations legislation, directed the Commission to adopt rules defining what 911 fee uses by states and jurisdictions constitute diversion (TR Daily, Jan. 4).

The NPRM, which was adopted in PS dockets 20-291 and 09-14, proposes to (1) “define the types of 911 fee expenditures by states and jurisdictions that are acceptable under the criteria[] in the new legislation;” (2) “allow states and jurisdictions to petition the Commission for a determination that a 911 fee expenditure not previously designated as acceptable by the Commission could be treated as acceptable;” (3) “prohibit any state or jurisdiction identified by the Commission as a fee diverter from serving on any advisory committee established by the Commission;” and (4) “require any state or jurisdiction that receives a federal 911 grant to provide the Commission with the information it requires to prepare its annual 911 fee report to Congress,” a news release noted.

The legislation also directed the FCC to establish an “interagency strike force,” which will study how the federal government can tackle 911 fee diversion most expeditiously and to report to Congress within 270 days. The Public Safety and Homeland Security Bureau solicited nominations for membership on the strike force.

In its comments, the National Public Safety Telecommunications Council said it “opposes diversion of 911 fees. However, addressing fee diversion is a complex issue that entails both legal and practical issues. For example, the Commission may need to consider whether Federal rules defining how state funds can be used encompasses any state’s rights issues. The NPRM proposes specific purposes and functions that would be allowable and that would NOT be allowable for the use of 911 fees and charges. From NPSTC’s perspective, the enabling legislation and statutes in each state that address allowable expenditures also would need to be considered. Also, as a practical matter, the way in which the Commission ultimately defines allowable and nonallowable expenditures could certainly impact the ability of a state and its localities to answer and respond to 911 calls for help.

“Also, in adopting rules, it is important to recognize that the priorities and needs may change over time. At its recent meeting, the last one under its current charter, the Communications, Security and Interoperability Council (CSRIC) adopted a working group report that advises the FCC to address cybersecurity vulnerabilities in the 911 system by, among other things, explicitly allowing 911 fees collected by states and localities to be used for cybersecurity [TR Daily, March 10]. Overall, cybersecurity concerns have grown to be a much higher priority over just the last few years.”

NPSTC added that it “recommends that the foundation of any rules adopted have the underlying goal of assisting jurisdictions to have sufficient resources that enable reliable and modern 911 public safety answering points and associated public safety communications capabilities needed to respond to 911 requests for assistance, to the extent possible. Properly serving the public requires sufficient funding  for the requisite staffing, equipment, capabilities and reliability. Admittedly, this is somewhat broader than fee diversion alone. Simply addressing 911 fee diversion alone does not of itself encourage resource sufficiency for 911 and related public safety communications facilities.”

“The Commission seeks comment on how to effectively gather information on the impact of any underfunding of 9-1-1 services. The law requires the Commission, for submission to the strike force and in future annual reports, to include ‘any information regarding the impact of any underfunding of 9-1-1 services.’ This language demonstrates Congress’s intent to understand how any underfunding, not just underfunding as a result of diversion, is impacting 9-1-1 service across the country,” said the Association of Public-Safety Communications Officials-International. “Therefore, to satisfy Congress’s intent, the Commission should take a broad approach to investigating and analyzing the extent to which 9-1-1 is underfunded and the impacts of underfunding on emergency response.”

APCO continued, “Sufficient funding is needed to keep agencies fully staffed and trained, keep equipment and technology up to date and secure, and help public safety telecommunicators best meet the public’s expectations when carrying out their life-saving missions. Using the strike force and annual reports to better understand the relationship between funding for 9-1-1 and emergency response will produce helpful information for public safety agencies and serve the Commission’s and Congress’s goal of discouraging fee diversion while looking at the bigger picture of the extent of underfunding regardless of the source.”

APCO noted that the FCC “seeks comment on its proposed lists of acceptable and not acceptable purposes and functions for the obligation or expenditure of 9-1-1 fees or charges. While important, evaluating whether expenditures fit a particular definition of acceptable purposes and functions and labeling states as diverters if their expenditure was not included in a pre-approved list does not necessarily align with the broader goal of ensuring the adequacy of funding for 9-1-1 … .”

The National Association of State 911 Administrators said that while it opposes the diversion of 911 fees for other purposes, it urged “the Commission to approach its rulemaking and any subsequent consequences to 911 fee diversion in a manner that does not jeopardize the very 911 system it seeks to protect.”

For example, in response to a proposal to clarify that states and taxing jurisdictions are responsible for the diversion of 911 funds by localities that receive fees from states, NASNA said, “In some states, service providers remit fees directly to political subdivisions, such as counties, for 911 use. Due to limits either by their own statutes or constitutions, states have limited authority over the local use of those funds. Additionally, the resources that would be required by states to monitor and enforce adherence would have no visibility over how these funds are spent at the local level. If a state has responsibility for diversion of 911 fees under these rules, the Commission should consider reporting requirements for political subdivisions in states where they do not exist today or at least provide states a transition period to implement such reporting requirements.”

Regarding the NPRM’s proposal for acceptable purposes that 911 fees can be used for, NASNA suggested that it fails to consider broader use of 911 fees by some states. 

“In particular, the NPRM is vague and contradictory on acceptable uses related to communications infrastructure that connects PSAPs (or otherwise ensures the reliable reception and processing of emergency calls and their dispatch to first responders),” the filing said. “NASNA also notes the proposed appears to be vague as to the use of 911 funding to support the high-level administration of a 911 Program such as State 911 Administrative offices, Treasury fund processing, and collection actions for the non-payment of 911 fees.”

NENA reiterated that “the Commission must take care to avoid punishing state 9-1-1 offices for the behaviors of their legislatures or governors’ offices. We suggest further that the Commission avoid punishing these 9-1-1 offices for the actions of local entities over which those states may have no control. The Commission requests comment on including in its definition of diversion ‘distribution of 9-1-1 fees to a political subdivision that obligates or expends such fees for a purpose or function other than those designated by the Commission.’ NENA worries that the administrative burden of local surveillance and potential lack of state-level capacity for diversion enforcement has the potential to add to the already significant burden on state-level 9- 1-1 officials, whose responsibilities are already occupied with the baseline requirements of running a state 9-1-1 program and managing their state’s part in the nationwide transition to NG9-1-1. NENA is also concerned that states may lack the logistical capability to prevent this diversion of funds, especially in a timely manner.”

“The nature of state and local budget cycles means that these taxing jurisdictions often cannot change policy at the drop of a hat; offering timely and clear guidance on exactly what constitutes fee diversion (and whether that has changed recently) is essential to ensure states have a chance to do the right thing,” NENA added.

NENA also said that “it is absolutely essential that if a state is found to be guilty of diversion—especially for the first time, and especially in the midst of federal Next Generation 9-1-1 grant funding—that state be given notice of the Commission’s finding and opportunity to remedy. Lack of notice and remedy could be catastrophic for a state in the midst of a federally subsidized NG9-1-1 transition.”

A joint filing by 15 local and regional 911 authorities from Colorado said, “A small minority of jurisdictions outside of Colorado divert 911 fees, and that should be addressed. Have the ‘strike force’ work on stopping the fee diversion. The ‘strike force’ should not be used to make decisions on behalf of local government. The ‘strike force’ could look at what the states have in place and deem them acceptable, giving the ‘strike force’ more resources to concentrate on the problem and not trying to fix something that is not broken in most states, territories, and local jurisdictions.

“In Colorado, there are processes in place that prevent the state and local governments from diverting 911 fees,” the filing added. “We strongly encourage the FCC to include in proposed rule §9.24 some time limit in which the FCC will respond to petitions for clarification. Because Colorado is a strong local control state, meaning most 911 operations are carried out by local governments and not the State of Colorado, we strongly encourage the FCC to clarify that the rules will not deem the entire State of Colorado and all local 911 entities fee diverters if only a small number of individual 911 entities are found by the FCC to be diverting 911 fees. We also strongly endorse the concept of adding a pathway to compliance into the new rules. This would include the concept of a phase-in period of no less than one year for the new rules to allow states and local governments to come into compliance voluntarily.”

The Colorado Public Utilities Commission said that although “Colorado has never been designated as a diverter of 911 surcharge funds, the ability of state and local jurisdictions to comply with the rules proposed in this NPRM requires clearly defined rules that provide unambiguous guidelines. CoPUC recognizes that Congress has provided the FCC with a short time frame to finalize these rules, but we urge the FCC to ensure that in the rush to meet Congressional deadlines the FCC does not create rules that leave states struggling to interpret these new requirements. We also strongly encourage the FCC to think more about the process by which states or local jurisdiction may come into compliance with FCC rules regarding the use of 911 surcharge funds, since the goal of any rules should be to encourage and ensure compliance.”

Specifically, the FCC’s rules (1) “must provide clearer guidance on what it means by “PSAP operations”; (2) “should be clear that the costs of administering 911 programs, both at the state and local level, are an acceptable expense;” (3) “should also make clear whether emergency notification systems and expenses for 911-related membership organizations are acceptable expenses;” (4) “need to be clearer regarding what radio equipment or infrastructure is allowed and what is not, as the examples provided in the proposed rules are contradictory;” (5) “should provide a timeframe within which petitions for declaratory rulings will be addressed;” and (6) “should make clear that entire states will not be declared in violation of the FCC’s rules for spending decisions made by individual local jurisdictions within those states,” the CoPUC said.

In joint comments, nine local Michigan 911 entities said they “are supportive of the definitions proposed by the Commission regarding ‘911 fee or charge’ as well as the proposed definitional extension to include fees or charges designated for the support of ‘public safety,’ ‘emergency services,’ or similar purposes if the purposes of allowable uses of such fees or charges include the support or implementation of 911 services.[]  However, the definitional limitations proposed in paragraphs 24 through 25 of the NPRM are not acceptable. The limitations fail to recognize the interdependencies of the 911 dispatch system, as well as being inconsistent with prior Commission precedent.” They also urged the FCC to “find that the public safety radio system represents an appropriate use of 911 funding.”

The entities also asked the Commission to “impose mandatory timelines for consideration of a Petition for Determination” and said it agreed with NPSTC “on the need to specifically recognize the use of 911 funds for PSAP cybersecurity expenditures, and the need to closely review the full impact of proposed limitations on diverting state’s ability to participate on advisory committees. While some limitations may be appropriate, such sanctions must be narrow and targeted to resolving the issue, and not punishing and compromising public safety.” 

The Oklahoma 9-1-1 Management Authority said that one of its concerns regarding PSAPs in the state  “is a lack of priorities for 9-1-1 funding and a lack of a strategic technology plan. These two factors play a much more important role than diversion in the State. Oklahoma has a current bill in front of the legislation that will mandate the Authority to create a list of approved expenditures for 9-1-1 fees in the State. However, we will need to take an approach to help local PSAPs understand the technology needs and help prioritize them as well as create an authorized list of expenditures.”

The authority added that it “agrees that oversite is needed and also agrees in Federal standards to ensure 9-1-1 fee diversion does not occur. However, we believe the rules set at the Federal level need to be broad and allow for flexibility within the State and region to narrow the requirements as needed to fit the local need.”

The Pennsylvania Emergency Management Agency (PEMA) expressed support to tackle fee diversion, and said the Commission should consider frameworks used by states and municipalities. It said that “Pennsylvania has developed its legislation, fee rate, and eligibility requirements to meet Pennsylvania’s specific circumstances and needs to support 911 service.”

“PEMA commends the Commission’s approach of suggesting a broad framework of acceptable purposes and functions for the obligation or expenditure of 911 fees. The framework, if defined properly, would provide states and political subdivisions the flexibility to use 911 funds to suit their particular needs and circumstances while staying within the defined framework of acceptable uses and mitigating fee diversion,” the filing said. “However, it is not apparent the proposed rules provide a comprehensive framework of call delivery, processing, and dispatch functions related to PSAP operations or provide flexibility for the adoption of future technologies and capabilities such as NG911. The framework should consider needs of a NG911 environment such as networking, cybersecurity, geospatial information systems, and other NG911 related costs.”

The New York State Division of Homeland Security and Emergency Services (DHSES) said that creating rules for fees or charges other than those designated for 911 services would exceed the FCC’s statutory authority.

“The Commission seeks comment on extending the definition of ‘911 fee or charge’ to include fees or charges designated for the support of ‘public safety,’ ‘emergency services,’ or similar purposes if the purposes or allowable uses of such fees or charges include the support or implementation of 911 services. The Commission should revise its rule to define ‘911 fee or charge’ as those fees or charges specifically designated for the support of 911 services, whereby bringing it into alignment with statute,” it said. 

“The Commission seeks comment on its proposal defining acceptable purposes and functions for ‘multi-purpose’ fees or charges. The Commission should revise its proposal to reflect that multi-purpose fees and charges fall outside the scope of its authority. The Commission should remove accounting rules for multi-purpose fees or charges from its proposed rule,” the filing added.

The DHSES also said that the FCC has failed to meet “its obligation under the statute or the Administrative Procedure Act” to consult with public safety organizations and states. “The notice of proposed rulemaking makes no clear reference to any of the required consultation, thereby preventing input and consideration by the regulated parties. Further, the Commission has not yet reached out to impacted states, including New York, for consultation on this proceeding,” it added.

Several industry entities expressed support for the rulemaking.

“We applaud the Commission for its quick action in implementing the statute and taking further steps to end 911 fee diversion,” NCTA said. “As the Commission has noted, the diversion of fees collected to fund 911 service is a significant and ongoing problem, with more than $1 billion diverted between 2012 and 2018. This misdirection of 911 fees is unacceptable given the reliance people place on the 911 system and the urgent nature of these calls.”

CTIA encouraged the FCC “to further clarify the nature and scope of acceptable obligations or expenditures of 9-1-1 fees on 9-1-1-related services and functions. The Commission should also expand the proposed declaratory ruling process to enable other stakeholders, including communications providers and public safety organizations, to request FCC guidance over whether certain measures constitute 9-1-1 fee diversion. Finally, the FCC should confirm that communications providers’ collection of multipurpose fees identified as a single line item on consumers’ bills does not constitute 9-1-1 fee diversion, so long as the fees are collected into sequestered accounts and providers have the flexibility to disclose the purpose of the combined fees to consumers.”

T-Mobile US, Inc., said it “has long encouraged the Commission to adopt clear guidance defining what constitutes 911 fee diversion. Such comprehensive direction would spell out clear and transparent factors of what does and does not constitute diversion, thereby encouraging states to adopt best practices for spending 911 funds appropriately. Thus, T-Mobile is pleased that the Commission has proposed to adopt a definition of ‘911 fee or charge’ that would establish clear boundaries around what 911 fees may be used for. As the Commission moves forward to adopt a definition, T-Mobile encourages it to seek additional information on the practices of various states, counties, and municipalities to ensure that its definition of ‘fee diversion’ captures all instances where 911 fees are not being used for 911 costs.”

The carrier also encouraged “the Commission to consider and support alternative means of funding 911 services that do not rely on consumer surcharges.” —Paul Kirby, paul.kirby@wolterskluwer.com

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