Bills put E-911 funds in jeopardy

Published 9:36 pm Friday, March 18, 2011

Two similar bills under review during Alabama’s legislative session have the Marengo County Commission and commissions all over the state of Alabama concerned over the future of local E-911 services.

Senate Bill 101, sponsored by Del Marsh (R-Anniston), and House Bill 114, sponsored by Greg Canfield (R-Vestavia Hills), includes language that would allow providers of wireless telephone services to sidestep an Alabama court ruling requiring the state’s 9-1-1 fee to be collected from all consumers of wireless telephone service by lowering the existing fee and setting up a special fee system for those companies that provide pre-paid service without contracts.

“It’s a bill that has been introduced by larger wireless service providers,” Roger Wilson, chairman of the Alabama Wireless Board said.

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According to the Alabama County Commissioners Association, “The case is now pending before the Alabama Supreme Court and the providers are attempting to change Alabama law before the Supreme Court rules that they owe the fee – including repayment for periods when the providers have ignored the law and not remitted the fee to Alabama’s 9-1-1 districts.”

A release from the ACCA also said “At the same time, those companies supporting the legislation are protecting a provision of the law that ensures that the companies are paid 20 percent of the current tax proceeds paid by Alabama consumers as reimbursement for their costs of doing business.”

This year, the ACCA said, the wireless companies will receive more than $4.5 million in payments from Alabama taxpayers.

Currently in all Alabama counties, customers pay 70 cents for E-911 services as a surcharge on their monthly land line or cell phone bills. Those fees divided to send 80 percent to E-911 services and 20 percent to wireless providers to enable them to cover the cost of providing up-to-date 911 technology.

The bill will allow cell phone companies to drop the rate to 65 cents, a savings of $30 per year. On the surface, the monthly drop of a nickel does not seem like a lot. However, according to the ACCA, the numbers add up quickly.

“(The bill) reduces the current fee on those wireless customers who purchase their service through an on going contract and monthly billing system,” a release from the ACCA said. “This change will reduce the operating income of the 911 districts by more than $2 million per year at a time when most rural 911 districts are struggling to keep answering the calls for help.”

“If it passed, there would be about $2.78 million lost to the E-911 districts across the state,” Wilson said.

According to Birmingham attorney James Sasser, who has represented the Alabama Wireless Board for more than a decade, one of the key points of contention between the sides revolves around what he considers a faulty premise on the part of Senate Bill 101’s supporters.

“The problem with this particular bill is the numbers from AT&T and Verizon – who are the current backers of the bill – are skewed,” Sasser said. “There just are not that many wireless customers in Alabama. According to Sasser, the bill’s supporters purport that Alabama currently has 4.3 million wireless customers. The Alabama Wireless Board’s numbers indicate a total far lower.

“Currently there are about 3.5 million wireless connections in Alabama,” Sasser said. “That is paid and prepaid.”

While the bill would cut a nickel per wireless connection per month from the current E-911 fee, supporters say that cost would be offset by the point-of-sale charge that would be added to prepaid cell phone transactions. That proposal is based on the notion that there are currently more than 300,000 prepaid cell phone customers in the state who are not subject to the E-911 fee.

“They sell the bill saying we are going to bring all these prepaid customers who are not paying in to offset the loss,” Sasser said. “There just are not that many wireless customers in Alabama. And there are not that many prepaid (customers) who are not already paying.”

Furthermore, the bill would charge prepaid customers 70 cents each time they purchased a wireless service card rather than a one-time monthly fee. Additionally, Sasser points out that the new legislation offers no provision for allowing the wireless board to audit the service companies to ensure they are sufficiently providing up-to-date E-911 capabilities, a process that is supposed to be funded by the 20 percent of E-911 fees retained by wireless companies.

Even with the handful of supposed flaws in the bill, the biggest opposition to it stems from the amount of money it would take away from E-911 services statewide. The bill would likely have its greatest impact on rural areas in which many E-911 districts are already struggling.

“It could hurt us financially,” Marengo County E-911 director Jennifer Robertson said. “We don’t want it to happen.”

One of the ACCA’s biggest complaints, the group said, is the bill “sets a separate and unequal process for collecting a flat fee on customers who purchase wireless service on a pre-paid basis. The fee would be 65 cents on each purchase of such service regardless of the amount of service time purchased by the customer.”

Wilson pointed out that the bill would set up a transaction fee at the retail level for consumers who utilize prepaid wireless service. The bill is also expected to place a larger share of the burden on customers who spend less than $20 per month on pre-paid service.