May 10
11

Sorenson Responds to FCC About VRS Rate Cut Proposal

11 Comments

A visitor left a comment to my post regarding the recent FCC VRS rate cut proposal. What surprised me was that the comment was directly from Sorenson.

I checked the IP address, geolocated the IP, and am able to verify that the comment was indeed left from the Sorenson Communications Headquarters in Utah. I have not yet verified whether it was the actual person, but since the IP address confirms that it was posted from Sorenson, I see no reason to doubt whether he is other than who he says he is. The visitor states he is Michael D. Maddix, Director of Government and Regulatory Affairs. This is what he wanted to share with us:

The FCC’s Bureau of Consumer and Governmental Affairs recently issued a statement stating that the FCC supports VRS and that VRS is not threatened by the FCC’s Public Notice proposing rates for VRS. This statement from the FCC has also appeared on numerous websites.

Sorenson Communications is not at all surprised to hear that the FCC supports the mandate in the Americans with Disabilities Act (ADA) to provide functionally equivalent telecommunications for the deaf. But the FCC fails to mention that in addition to “functional equivalent telecommunications for the deaf,” the ADA also requires nationwide access and improvements in technology and efficiency. The FCC is completely incorrect to say that VRS as we know it today is not threatened by its April 30 VRS rate proposal.

Sorenson provides the vast majority of VRS to the deaf community. Sorenson has provided VRS access to more deaf individuals than any other provider and continues to be the frontrunner in providing access and support to deaf individuals who have never before used VRS service. Sorenson developed the first deaf-centric videophone offering the most functionally- equivalent communication service available. And Sorenson has done all of this efficiently, as we continue to develop next generation solutions that the deaf community has been greatly anticipating.

The rates that the FCC is endorsing will drive Sorenson, the leading provider of VRS, into bankruptcy. The FCC’s proposed compensation to Sorenson is $3.89 per minute. Sorenson’s true and audited costs are over $5 per minute. The FCC is incorrect in their assessment of what would happen if its proposal were adopted. Sorenson understands completely the impact the proposed rate would have on its business. It would be disastrous for consumers. If Sorenson is unable to sustain their business at $3.89 per minute, how can the FCC suggest that any other provider would be able to service Sorenson’s users at such a low rate?

Sorenson continues to strongly urge everyone who relies on VRS to communicate to tell the FCC the facts: The FCC’s proposed rate will force Sorenson into bankruptcy and will end VRS as we know it today. The FCC Chairman and Commissioners must be made to understand that any rate proposal that resembles the April 30 Public Notice, will be a death blow to VRS and to the ADA’s mandate to provide functionally equivalent telecommunications service, national access, technology improvements and efficiency for deaf telecommunication.

Michael D. Maddix
Director of Government and Regulatory Affairs
Sorenson Communications, Inc.

Since the comment was left for the purpose of responding to FCC, I’ll leave it for you guys to make of it what you will. I already have a couple of thoughts about Michael’s response, but I’ll wait and see what happens next, especially with FCC already responding across the internet, and now NAD weighting in.

Posted in Deafness Politics The Corporate Scene by Don. 11 Comments

11 Responses to "Sorenson Responds to FCC About VRS Rate Cut Proposal"

  • VRSEngineer says:
    May 11, 2010 at 12:59 pm
    Reply

    Don, you might enjoy reading the new (23 hour old) CSDVRS comment filing (stuck in the middle of all of the Sorenson instigated noise in ECFS). It directly pertains to the subject at hand.

    http://fjallfoss.fcc.gov/ecfs/comment/view?id=6015599520

    This isn’t the older CSDVRS 5 tier proposal presentation filing. This is the new CSDVRS take on return on investment.

  • Mary Pat says:
    May 11, 2010 at 1:54 pm
    Reply

    Quite frankly, the statement that it costs 5 dollars per minute to process a phone call is ridiculous. Sorenson is a closed company and does not have any of its financials public so how do we know that the money they are asking for actually goes directly to the phone calls not including bonuses that the supervisors get, the annual bonuses that the CEO gets, etc.

    I know some people that make thousands of dollars just installing VPs and quite frankly that money could be spent elsewhere. I understand that installations are important but 50 bucks per installation.

    There are a lot of people that boast a high salary from working with Sorenson and it makes me wonder, if they are paying people so well, then is this a red flag? Interpreters have quit public school systems because VRS pay better than school systems and most of them only have to work part time. Are these spendings validated or are they just being frivolous?

  • Valhallian says:
    May 11, 2010 at 3:34 pm
    Reply

    Michael, no offense intended, but I would absolute love to see VRS, as I know it, come to an absolute end. The VRS, as I know it, is where privileges have been totally abused, people have been grossly overpaid, and providers treating it as a cash now. That kind of VRS, as I know it, needs to come to an end.

    Does that mean it is the overall end of VRS? nope! The VRS I would like to see is where everything is fair, there no abuse of privileges or money, and it has a set profit cap.

    I was going to ask you some questions but I get the feeling you are not going to answer them, nor will you provide the information I’d like to see. But here goes.

    1) Who did the audit?
    2) Out of that over $5 that you say the audit shows, how much of that actually goes to the executives and LLC members as part of their profit share?
    3) Will you show us all the audited information?
    4) What was the profit margin that Sorenson made?
    5) How much have they actually paid their LLC members from the profits?
    6) How much do the Sorenson executives make?
    7) How much does the hearing employee make compared to the deaf employee?
    8) If the rates do go down, what gets cut first? the LLC members profit or the quality of the service itself?

    I am quite sure I can come up with more questions, but I won’t waste my time as it is my opinion that you are not going to answer these questions.

    Now if Sorenson VRS was a service that is paid for by consumers and not by the government, that I would have absolutely no qualms about what you do and how you do it.

    From what I have seen in the past, Sorenson VRS has wanted to not provide interoperability, they did not want to share ten digit numbers, they did not even want to do an audit with KPMG a while back, the list goes on and on. They are not a transparent company.

    Providing communication access to deaf and hard of hearing people should NOT be looked at as a cash cow, especially when the government is paying for it. If the VRS rates were reduced, perhaps community interpreting would not be crippled as much as it would actually be able to compete with the VI’s in terms of pay, but exorbitant VRS rates do not allow for that. Community interpreting, as I see it, has suffered tremendously, largely as a result of Sorenson VRS’s tactics.

    If I had it my way, the FCC should actually set forth financial guidelines on what executives, staff, and interpreters are paid, set forth guidelines on what can be spent. Allow for monthly independent audits and then after the end of each month, then pay out the rates as per the guidelines, and then after the end of each quarter, pay out the capped profit that they are entitled to. Quite simple.

    That would end VRS as we know it and set forth a better VRS that the majority of the deaf population all would like to see.

  • Spencer says:
    May 11, 2010 at 7:26 pm
    Reply

    I’m not sure what you mean by Sorenson’s tactics, Vahallian, but from what I can deduce, I think you’re misinfomed. Sorenson, in fact, pays their interpreters LESS than Purple and ZVRS do. They have not raised the pay rate of interpreter (thus, as you say, crippled communtiy interpreters). Other companies pay their interpreters more–much more–than Sorenson. Why do people keep pointing fingers at Sorenson when other companies are doing the same, or “worse”?

  • Valhallian says:
    May 11, 2010 at 8:29 pm
    Reply

    Well Spencer, if that is the case, then they have obviously decided to cut back on what they spend on interpreters cuz there was a time when they paid them way more so I am not sure where you get your information from.

    There was also a time when they actually went into cities where other existing call centers were, including for those that you have named. How would they lure them away if they were paying less than them? They also force their interpreters to sign no compete contracts as well. Not sure if other VRS providers do that as well. Other VRS providers also have more deaf people involved at the executive levels as well.

    Spencer, I can sense that you have a good head on your shoulders and what I am about to tell you is probably going to be quite time consuming on your part if I were to tell you to actually read the petitions and the like that they have actually submitted to the FCC. It will be quite time consuming if you haven’t ever read any of their petitions. I can almost assure you, if you do not work for them and have a good reading comprehension level, you will not be pleased with what you are reading there.

    I have read them for years dating back to when they first started. It was actually what I read in those documents that has caused me to lose respect for them, and quite frankly, it would not bug me one iota if they do go bankrupt. It is my opinion that they are only in this for one reason only, and that is the almighty dollar, and nothing else. This is also where you would really learn more about their tactics over history as well and understand exactly what I mean by their tactics.

    For example, when they blocked all other VPs except their own, it was utter chaos the way I saw it and they fought hard against interoperability. Finally, when they realized that they were going to lose that battle, and again, as I saw it, they had the gall to make an announcement that they support it, because they knew that the FCC was going to open up interoperability shortly afterwards to try to save face. This list of tactics goes on and on and I have absolutely no respect for them whatsoever, it went out the door a long time ago and I seriously doubt that they will ever regain my respect again.

  • Joseph says:
    May 11, 2010 at 9:33 pm
    Reply

    After the FCC announced the recently statement in regarding the VRS rate cut, the VRS will not collapse but I do not understand why VRS are misleading that it will take VRS away. That is unpropfessional. We need honest and accurate information.

    I think it’s the best for all VRS companies to back off and do not promote about FCC because it will scare deaf customers away, I would rather a deaf neutral organization target for VRS/TRS so that way there won’t be any biased or hiding information that all we do not know.

    Sorenson claimed $3.89 a minute would wipe them out or file for chapter 11. That is their problem because they have been trying to take over the VRS world. So much misleading and try to take over the VRS market, at least 70%.

    I want to see every VRS to be equal and provide the service that everyone should have. I am tired of fraud, misleading, unprofessional service and liars. I want honest, top quailty VRS that we should get. Is there any one? Maybe one or two.

    I do support VRS but they need to it properly. I hope FCC will be more tougher on VRS and make sure that VRS is doing right job. I do not need to hear Viable part 2. I had enough. All my tax money has been abused.

  • Valhallian says:
    May 11, 2010 at 10:02 pm
    Reply

    Spencer, it had been quite some time since I checked the FCC website and I can see that its quite changed since the last time I used it a couple years ago. Anyway yo show my point about the interoperability issue that I brought up. You can see their comment going against interoperability on the below link. And this was dated on May 2, 2005.

    http://fjallfoss.fcc.gov/ecfs/document/view?id=6517593215

    Now I went to the sorenson website to look for their press releases and I now see that they do not archive their press releases back that far. However, I was able to find another copy of their press release elsewhere and it can be seen at the link below. While it does not have an exact date on it, but it was posted at this link on February 20, 2006.

    http://www.alldeaf.com/relay-services/24937-sorenson-allow-other-vrs-usage.html

    Now, the FCC does not archive their press releases back that far either, but at the below link, it shows the FCC mandating interoperability in a report that released on May 10, 2006.

    http://tap.gallaudet.edu/Policy/FCC/VRSInterop.asp

    What interesting is that it appears that Sorenson made a 180 degree turnaround with their press release compared to their FCC comment and this was done less than 3 months before the FCC order mandating interoperability. I very highly suspect that they knew that the order was coming ahead of time and tried to save face and unfortunately succeeded in many places. But it didn’t work for me.

    There are quite a few more occasions where they have made me lose even more respect for them but I only took the time to show the above example so you can get the gist of their history. It is my opinion that they put the almighty dollar way way way ahead of their supposed support of deaf needs.

  • Jason Thomas says:
    May 17, 2010 at 6:20 pm
    Reply

    I don’t see why people find it so crazy Sorenson wouldn’t want to spend hundreds of dollars on a VideoPhone- only to have their competitors reap all of the benefits from it. It’s true, the goal is to provide equivalent communication to deaf users- and Sorenson has a policy of providing a video phone to anyone who would ask for it because of this.

    It would be like the FCC ordering T-Mobile to give away cell phones for free to their customers, and then allow their customers to turn around and connect up with service from AT&T without paying T-Mobile a dollar. Sorenson is restricted by the ‘allowed’ costs, but they truly want to provide every deaf individual with a functioning phone, and fought to keep it free because of that. Sorenson was afraid, and still is, of paying all of the up-front costs, and not being able to make it up with service.

    Why are people pushing this view that Sorenson is after the almighty dollar, when competitors like Purple were literally caught with their hands in the cookie jar stealing millions of dollars from the American public, and the small pool of public money spent on deaf individuals?

    The FCC’s rate cuts are basically pushing for deaf users to pay for their service- they don’t want free Video Phones, they don’t want free service for the deaf. They want a hiatus on research and development. They refuse to cover anything except the bare minimum costs for interpreters, and the infrastructure supporting them.

  • Michael Smith says:
    May 21, 2010 at 9:45 pm
    Reply

    Check this out…
    http://sorensonvrs.blogspot.com/2010/05/protect-future-of-vrs-just-stop-it.html
    Protecting the future of VRS

    Friday, May 21, 2010
    Protect the future of VRS? Just Stop it!

    Are you confused? Has Sorenson scared you yet? Do you feel like you may loose your ability to make VRS calls or Point2Point calls?

    NOT!

    In fact, it is all just another lie from Sorenson Communications. Have they done this before – YES!

    The fact is – VRS WILL NEVER GO AWAY! This is purely a scare tactic to ensure Sorenson can meet it’s debt interest and PAYMENTS to its shareholders. The fact is they have a ton of interest to pay and they are trying to push this onto the FCC as a problem. They do this to continue their MONOPOLY! You don’t get it? They don’t want competitors!

    I suggest everyone make a VRS call through the following providers with their VP200 to ensure VRS continues to stay and to stop this rediculous scare:

    Purple.tv
    zvrs.tv
    Hovrs.tv
    attvrs.tv
    sprintvrs.tv
    i711.tv

    I further suggest you find a VRS provider that truly has innovated and provided new products with its cost structure not equaling 100′s of millions of dollars each year in their pocket but given back to you as a consumer…..I will ask one question to providers….

    Who can provide a 10 digit number that works point 2 point and vrs regardless of the device I use?
    Posted by Michael Smith at 9:21 PM

  • jon says:
    June 11, 2010 at 1:17 pm
    Reply

    Don,

    After doing some research, yes it does cost Sorenson more than $4.90 per minute to provide Service HOWEVER.. WHAT SORENSON IS NOT TELLING PEOPLE.

    1) Sorenson has admitted that they have to pay $130 million dollars a year in interest to pay the investors on the debt of $1.545 billion dollars. (http://fjallfoss.fcc.gov/ecfs/document/view?id=7020492013)

    2) How did they get into that much debt? Simple, the company owners, GTCR Golden Rauner bought Sorenson Communications from James Sorenson for the amount of 585 million dollars (Financed everything.. http://www.totalsecuritization.com/article.aspx?articleID=1277704)

    3) Sorenson has continually refinanced this original loan every now and then and ADDED couple million dollars for Dividends pay out to the owners. the last transaction was back in January when they Refinanced the loan for $735 Million dollars and paid themselves $178.9 Million dollars in cash with the balance to pay off the older debt. (http://www.facebook.com/photo.php?pid=1303832&id=1276702067&ref=mf keep in mind, the original article was posted in Wall Street Journal!) According to my entire research, I have reached that The owners has refinanced their loans often enough to raise over $600 MILLION dollars in dividend alone in the past few years.

    4) You have to remember something.. FCC has never allowed any equipment costs, installation expenses to be part of the “allowable costs”, it comes from Sorenson’s profit. Sorenson (under the old owner) originally distributed the devices under the Sorenson Foundation . Why? to ensure total manipulation of the Deaf consumers into using their products and BLOCKING the other competition’s vrs ability. In other words, they KNEW they would reap the HUGE profit from the Deaf community controlling the VP products! Since FCC has never allowed that expense. It clearly shows how much money Sorenson VRS really MAKES!

    5) I have MANY friends who work for SorensonVRS as an interpreter, they all say the same thing. The call centers likes to use non certified interpreters. and using this slogan “time is money, Keep working.. ensure you are on a call or get OFF line and accept new calls immediately” .

    Don….. use your judgment and decide what you think is right!

  • Don Cullen says:
    June 22, 2010 at 1:01 pm
    Reply

    Thanks for the feedback everyone, very interesting information! You all have provided me with plenty of food for thought!

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