FCC Says States Diverted $285 Million, or 10%, of 911 Fee Revenue in 2017

Last year's survey said six states diverted nearly $129 million in 2016, or about 5 percent of total fees collected by the 46 states and two territories reporting that year (see 1802230012). New Jersey, New York, Rhode Island and West Virginia from this year's report were also cited in the 2017 report, but 2017 diverters Illinois and New Mexico didn't repeat in 2018. The FCC added Montana, Nevada and the U.S. Virgin Islands to the list. The survey covering 2015 showed a transfer rate closer to this year, at $220.3 million, or 8.4 percent. This year's diverters didn't comment Wednesday.

“When Americans pay 911 fees on their phone bills, they rightfully expect that money to fund 911-related services,” said FCC Chairman Ajit Pai. “Unfortunately, the FCC’s annual report shows that, once again, several states have siphoned 911 funding for unrelated purposes. This is outrageous and it undermines public safety.” Pai praised Commissioner Mike O’Rielly for shining a light. “Hopefully, drawing attention in this way to the unacceptable practice of 911 fee diversion will help end it,” said Pai.

O’Rielly is pleased all responded, but the lists of diverters “remains completely objectionable.” He said the "harmful behavior short-changes call centers and prevents necessary upgrades, thereby threatening the public’s safety at their most vulnerable time, or it deceives consumers by stealing their money for other spending purposes.” New York, New Jersey and Rhode Island are “repeat offenders” that “cannot be shamed,” he said. O'Rielly hopes Congress reiterates opposition to such transfers, "including by exploring further legislative means to prevent it.”

Too many states divert funds, Commissioner Jessica Rosenworcel tweeted. “This needs to stop.”

Mixed Report

Stakeholders we interviewed saw positive and negative in the survey.

Positive state and 911 center steps include complete reporting and cybersecurity and next-generation 911 efforts, said National Emergency Number Association CEO Brian Fontes. Downsides are that cyber and NG-911 efforts as well as audits aren't occurring everywhere, said. He's "disturbed" some emergency-communications money isn't spent for 911 or in some cases on other public safety pursuits, while some states putting the fees into their general treasuries makes tracking the money harder.

The worst offender was New York, diverting $170.9 million (90.4 percent), followed by New Jersey ($94.2 million or 77.3 percent) and Rhode Island ($11.4 million or 67.8 percent). West Virginia diverted nearly $4 million (6.6 percent). Nevada about $1.3 million (57.2 percent). Montana diverted $2 million and the U.S. Virgin Islands $1.2 million, but the FCC said it didn't know how many funds total they collected. The FCC sought comment on the report by Jan. 18, replies by Feb. 4 in docket 09-14.

One expert hopes many comment in detail to the regulator. This money shouldn't go to "lower-importance spending, general funds, to make up budget gaps in other non-emergency areas," emailed FCBA Homeland Security and Emergency Communications Committee co-Chair Mark Maier. It may be understandable, though, to move funds for "short term higher priority public safety requirements that are somehow related to emergency response where their 911 system is already functioning satisfactorily" and ready for NG-911 upgrading, added Maier, a Shulman Rogers government contracting and technology transactions lawyer. "If so, diversion should only be done pursuant to authorized state and federal approvals and not as an ongoing funding source."

NG-911 spending was nearly $200 million, less than 7 percent of total fees collected, with 35 states, Puerto Rico and the District of Columbia reporting such programs in 2017. Sixteen states said they deployed statewide emergency services IP networks (ESInets), 13 reported regional ESInets and 11 said they had local-level ESInets. Respondents reported 1,381 public safety answering points as text-capable by the end of 2017 and projected that another 1,103 PSAPs would be by year-end 2018. The District and 15 states spent funding on PSAP cybersecurity in 2017, but 30 states, Guam, Puerto Rico and the U.S. Virgin Islands reported they didn't.

While NG-911 expenditures are low, that most states have those programs is "a step in the right direction in realizing that we do need to deploy" it, Fontes said. He expects the number of states participating to rise further this year, noting California's recent request for proposals and Utah's RFP a few months ago. PSAP cybersecurity spending is "unfortunately" not universal, the NENA chief said: There’s "a lot of work to be done" at PSAPs.

Five states and Puerto Rico audited 911 fees in 2017. Almost every state collects 911 fees from in-state subscribers, but 22 states, D.C. and the Northern Mariana Islands reported that they lack auditing authority to verify collected fees accurately reflect the number of in-state subscribers.

All jurisdictions reporting "is a first and is very good news," said National Association of State 911 Administrators Executive Director Evelyn Bailey. Like others we spoke with, she was reviewing the 122-page study. Many emergency communications and telecom stakeholders had no comment, including other members of FCBA's relevant committee and groups including APCO, CTIA and USTelecom.