May 10
9
VRS Rate Cuts NOT the death of VRS
I was going to let this go past without writing a post on this, but I’ve been getting quite a lot of calls on the concern about VRS rate cuts being the end of VRS. So I figured I’d write a post on it.
As many of you already know, I am employed by PurpleVRS as a tier 2 tech support dude. So I’m in an unique position to be able to tell you whether the rate cut has a significant impact on the VRS industry.
In layman’s terms: VRS will not die or go bankrupt. Purple will be fine. The other VRS providers will be fine. The only difference is that greed is now no longer an option.
For those of you who don’t really care about details, feel free to relax, skip the rest of this post, and continue with your day. 
Now for the details.
Sorenson has stated to the FCC:
“The FCC should not adopt either of NECA’s proposals for basing rates on providers’ historical costs. Both of these proposals would result in bankruptcy, chaos, and devastation for the deaf. One of these proposals prescribes rates so low that they would immediately drive all VRS providers out of business, forcing deaf consumers to revert to the laborious process of typing their relayed communications, and both of the historic-cost proposals would drive Sorenson out of business, stranding tens of thousands of deaf consumers and making it uneconomic for them to be served by any other provider. The Commission lacks authority under the ADA to adopt any VRS rate that would wreak such devastation.”
Allow me to address Sorenson’s comments. “Bankruptcy, chaos, and devastation for the deaf”? Come on, give me a break. Don’t be so melodramatic. At the very worse, this will cause Sorenson to scale back on their operations a little bit, but not by much. But that’s only for Sorenson. Bankruptcy for the deaf? I’m deaf, and I can tell you that the VRS rate cut won’t make ME or any other deaf people go bankrupt. Chaos? Nah, there’ll always be VRS providers, so I don’t see any chaos happening to me or deaf people elsewhere. Devastation? Same thing as chaos. Once again, this is just melodrama.
“Immediately drive all VRS providers out of business, forcing deaf consumers to revert to the laborious process of typing their relayed communications”—how can Sorenson claim to speak for the other VRS providers? NO, IT DOES NOT MEAN THE END OF VRS PROVIDERS! This will not drive them into bankruptcy. While I cannot speak for PurpleVRS, and I am not allowed to reference anything I learn from inside PurpleVRS, I can definitely tell you that the impressions I’ve gotten here is that Purple is not concerned about the VRS rate cuts. Purple is fine with it. That alone tells me that the claims from Sorenson that it will potentially drive VRS providers into bankruptcy are completely false.
As to whether it would cause Sorenson to go bankrupt—I doubt this would happen. But would this affect Sorenson considerably? Possibly. But not for the reasons you expect. Sorenson promised their investors 11% interest gain from their investments—but thanks to the VRS rate cuts, this would be impossible if they continue operations as is. So they have a choice: either back down from the 11% interest gain promise and cost the investors money, or cut back on operations, lay off their employees, just so their investors will continue to make money. If the management of Sorenson chooses to side with the investors over the employees, then that’s their choice. But the employees should not hold FCC responsible for this, they should hold their management accountable for this. For more information, someone has already made a vlog on this:
The links Jon in the above vlog refers to are:
- http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-10-761A1.pdf
- http://www.reuters.com/article/idUSN1115548520100114
ZVRS proposed a different tiered system. This is what they proposed:
- Tier 1: $7.55 for 0 to 100,000 minutes
- Tier 2: $6.75 for 100,000 minutes to 1 million minutes
- Tier 3: $6.20 for 1 million to 2 million minutes
- Tier 4: $5.70 for 2 million to 3 million minutes
- Tier 5: $5.25 for 3 million minutes and above
I can see why they proposed this. This ensures evenly decreasing rates from the lowest to the highest, rather, than FCC’s low to high to low (three tiered) system. But I disagree with this logic—this would discourage growth, and result in too many small VRS providers.
FCC’s proposed 3 tier system motivates small VRS providers to grow to the second tier, but also discourages them from growing too large—ensuring that no monopoly will occur, similar to what currently exists with Sorenson controlling the majority of the market.
The VRS rate cuts will most definitely have a significant impact on the VRS industry. To date, Sorenson has had a monopoly on the VRS industry. This rate change results in a more level playing field for VRS providers—this will reduce Sorenson’s monopoly, while increasing other VRS providers’ ability to gain market share. So I am in full support of the FCC VRS rate cut and tiered system as introduced by FCC.
I recently filed a comment with the FCC stating this:
“I am in full support of the VRS Pay Rate cut. Don’t let Sorenson and the others change your mind.
This will level the playing field, eliminate the greed factor, and ensure the VRS providers can compete honestly and fairly.”
Most of the data I obtained are from the vlog above, and also from http://www.edsalert.com/
As always, comments are welcome.
