jim lipinski enp – accenture federal services joel mccamley enp – 911 authority llp
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Jim Lipinski ENP – Accenture Federal Services Joel McCamley ENP – 911 Authority LLP. Designing Relevant Funding Models June 18, 2013. Our purpose today. Challenge you to think differently about funding Explain the importance of alignment Explore the problems with the models in current use - PowerPoint PPT PresentationTRANSCRIPT
Jim Lipinski ENP – Accenture Federal ServicesJoel McCamley ENP – 911 Authority LLP
Designing Relevant Funding ModelsJune 18, 2013
Our purpose today
Challenge you to think differently about funding
Explain the importance of alignmentExplore the problems with the models
in current useIllustrate the need to changeProvide guidelines and ideas to
address the problemStart the discussion on alternatives
and next steps
Funding 9-1-1 has always been a problem
When we think we have it right, something new comes upAdvent of wirelessPre-paid wirelessRaids on 9-1-1 fundsThe patchwork quilt of 9-1-1
jurisdictions
Now we have the added complexity of dealing with funding NG9-1-1
The number of potential “users” increases
The complexity of the systems increases
The pressure on the funding models increases
Our funding models couldn’t keep before and now it is even more
difficult
Look at what we have today:Most common current models
Per capita basisDevice purchase
or use basisPoint of saleBill and keepLandline
Wireless – localWireless – state Pre-paidVoIP streamsOthers
…and what it covers
SystemsCPECADMappingLoggingFurnitureNetwork/
telephony
Operating costsPersonnelMaintenance
agreements Service contractsCenter operationRadio, vehicles,
MDT, Command Posts etc.
Given this complexity, how do we ensure adequate funding for our NG-9-1-1
initiatives?Adequate to make the switch to NG9-
1-1Adequate to sustain NG9-1-1Adequate to grow NG9-1-1Adequate for what comes after NG9-
1-1
Move away from funding models that don’t align with your environment
1. Recognize that our current funding models are EOL
2. Stop tweaking what doesn’t work
3. Create new funding models that align with the current environment
FINISH BY
It is EOL because due to today’s trends, it doesn’t capture all the funds that it
should MobilityRapid technological transformationDeclining telecommunication costs
when adjusted for inflation
77% of those working in Arlington County, VA live elsewhere
Cape Cod has 215k year round residents but 665k in the summer
Many college dorms do not provide phones
I pay my USF to VT, but live most of the time in DC
We no longer make the majority of our calls at home
We don’t use our phones exclusively where we pay our phone bill
It doesn’t matter which funding variant (POS Prepaid excepted) is used, in the cases show to the left funds go to the billing jurisdiction
However, Service is usually provided by others
It fails to capture funds in the face of mobility
We have been chasing technology with our funding approach
From the moment new technology comes out until we figure out how to collect on it, we lose that money forever
To keep up, funding needs to be as nimble as technology, or fundamentally changed
It doesn’t keep up with change
The iPhone is not even six years old
Cost of phone service Has held steady as a
percentage of household income since the early 80s
But now includes Internet, more lines, entertainment, etc.
Choice holds down costs Skype vs. International
calls
Cost to run a 9-1-1 system
Costs keep going up
Demands and expectations keep going up
Basic economics work against the many of the current funding models
If the costs which are taxed hold steady, but the costs that the tax covers rise, the tax rate will need to rise as well. This is not sustainable long term
We need to stop tweaking what doesn’t work
Look at all the effort that went into prepaid
What do you do when everyone gets their prepaid phones over the internet?
How will roads be paid for when cars are electric?When/if the time comes, nothing can be done
with a gas tax to adequately fund roads, just as tweaking a hay tax wouldn’t pay for our roads today
Tweaking the existing model won’t work because it is fundamentally broken
It dates back to the 60s when every phone was a landline
It assumes point of billing = point of service
It assumes a telco is the only way to get phone service
To unlock the value of NG9-1-1 you will probably want to partner
You may rely on other jurisdictions to handle your overflow volume
You may end up collaborating with your day to day operations
How will that work with your funding model?
How do you sustain a partnerships if funds don’t follow calls?
Without the partnerships, many of the benefits of NG aren’t attainable
It doesn’t align with Next Generation capabilities Example: collaboration
To create a funding models that align with the current environment, look at
the world we live inIf we started from scratch, would we
build the same funding model we use today?
What would we come up with if reality guided funding model development
To understand what will be successful we need to look at the list of problems
It needs to work with mobility
It needs to work with new technology
It is based on economically sound revenue streams
It needs to support partnerships
Let’s add some long-held core principles
It has broad support by all or most stakeholders
The costs should be borne by those who benefit
Service should be consistent regardless of local limitations (basic level of service everywhere)
We don’t want to discourage the legitimate use of 9-1-1 by directly charging for a 9-1-1 call
And a few new ones
The funding model is transparent and accountable
It is sustainableIt incentivizes system improvement It draws attention to what works well
It works with mobility
It works with new technology
It is based on sound economics
It works with partnerships
It works in the face of change
It has broad support
It is supported by those who benefit
It provides consistent service
It doesn’t rely on charging for a 9-1-1 call
It is transparent & accountable
It is sustainable
It incentivizes improvement
It rewards what works well
An aligned funding model will have the following characteristics; these are our
RFP requirements
What has been done so far?
There have been several studies that looked at funding2007 – Next Gen Partners2007 – iCERT2012 – Vermont Legislature
All reached the conclusion that we need to redo funding and there were many common recommendations
NENA Next Gen Partners Funding Report 2007
Completed in 2007 - Major Findings NG9-1-1 envisions a system with shared costs amongst all
participants in the NG9-1-1 system
Relying on the current patchwork 9-1-1 funding model is not sufficient to maintain the current 9-1-1 system, let alone provide for the essential evolution to NG9-1-1
Maintaining the status quo, for the 9-1-1 system architecture or the methods that fund it, is simply not an option
NENA Next Gen Partners Funding Report Cont…
7 Principles for Funding1. Funds collected must be used for their intended purpose - No
raiding for non-9-1-1/emergency communications purposes2. Funding from all access methods – Any communications device in
which the public has an expectation to receive emergency services3. Technology and competitively neutral4. Equitable allocation of revenues5. Constantly evolving system focused on improving level of service6. Efficient, accountable operations7. Coordination, cooperation and collaboration amongst all industry
players and government entities
NENA Next Gen Partners Funding Report Cont…
6 Models Identified1. Fixed amount surcharge on all calling services2. Surcharge on access infrastructure provider
(AIP)3. Universal Statewide Communications Surcharge
(ex. VA)4. Universal Federal Communications Surcharge5. User (incident) fee6. General Fund Tax Revenue (federal, state and
local)
iCERT Report on the Health of the 911 System
Completed in 2007 - Major Findings 9-1-1 is a Public Good and Innovation Should Be Promoted
Citizens expect uniform and reliable 9-1-1 service across jurisdictional boundaries, across communication devices, and across different communication services
Incumbent 9-1-1 service providers (“9-1-1 SPs”) are unlikely to champion an upgrade absent regulatory change
iCERT Report on the Health of the 911 System
Four stages of 9-1-1 funding
2. Remittance Stage: service provider remits
collected amounts to relevant local or state agency
3. Allocation Stage: agency to which funds are remitted
distributes funds to other 9-1-1-
related agencies and/or cost recovery to
service
Local State Service Provider
(cost recovery)
1. Collection Stage: 9-1-1 funds collected by service provider;
common inputs collected include end-
user surcharges on wireline, wireless,
and/or VoIP access lines
4. Usage Stage: agencies make purchases with
9-1-1 funds; funds may be
supplemented with
providers CPE general revenue funds and/or
grants (including federal monies)
iCERT Report on the Health of the 911 System
Five Policy Recommendations for 9-1-1 Funding1. 9-1-1 Services Must Be Better Aligned With the Expectations and
Demands of Consumers and Citizens
2. Responsible Policymakers Must Have a Viable Funding Strategy for Achieving Next Generation 9-1-1
3. The Public Good Nature of 9-1-1 Today Suggests That 9-1-1 Funding Models Should Be Augmented by Financing That Facilitate Capital Expenditures
4. Greater Oversight Should Be Used to Monitor Fund Collection, Deter 9-1-1 Funding Raids and Ensure that 9-1-1 Purchases Reflect Sound Judgment
5. 9-1-1 Surcharges Should Be Assessed in a Principled Manner That Promotes Competition
An innovative model was presented in a report to the Vermont Legislature, but
has not been implemented9-1-1 agencies publish a per call rateCarriers are charged for delivering
calls to 9-1-1Carriers recover the charges by
spreading them across their subscriber base
Funds follow the callCarriers are compensated for their
service
http://www.leg.state.vt.us/reports/2012ExternalReports/274190.pdf
Our purpose is not to push a specific model, rather illustrate the urgency to
develop a new approachEverything points to continuing
difficulties if funding models are not aligned with the current environment
We’re not going to fix this problem in this room today
It is time to turn up the heat on this conversation
We need to put everything on the table
Leadership is needed
The way forward:
Begin the conversation at your levelNENA/NASNA Committee on funding
modelsInvolve all stakeholdersEspecially the carriersDevelop model legislationCreate a legislation agenda
References for the 9-1-1 Funding Discussion
Federal Communications Commission, Communications Security, Reliability and Interoperability Council, Working Group 4B. (2011, March). Transition to Next Generation 9- 1- 1 Final Report. Washington, DC: Author. http://transition.fcc.gov/pshs/docs/csric/CSRIC- WG4B- Final- Report.pdf
NENA NG Partner Program. (2010, March). Next Generation 9- 1- 1Transition Policy Implementation Handbook. Arlington, VA: National Emergency Number Association. http://www.nena.org/?NGPPPolicyTransHndbk
NENA NG Partner Program. (2007, March). Funding 9- 1- 1 Into the Next Generation: An Overview of NG9- 1- 1 Funding Model Options for Consideration. Arlington, VA: National Emergency Number Association. http://www.nena.org/?NGPP_911FundingRpt
9- 1- 1 Office. (2009, February). NG9- 1- 1 Transition Plan. Washington, DC: Department of Transportation. http://www.its.dot.gov/ng911/pdf/NG911_Transition_PlanFinal.pdf
Weiser, P., Hatfield, D., & Bernthal, B. (2008). “The Future of 9- 1- 1: New Technologies and the Need for Reform” Journal of Telecommunications and High Technology Law. Vol. 6, No 2, pp. 213- 292. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1146803
Questions/Discussion
Thank you
[email protected]@911authority.com