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How Politicians Are Using 911 Emergency Services to Scam Millions of Consumers

Raiding 911 funds is an easy way for politicians to scoop up loose cash -- far easier than taxing the rich.
 
 
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The Great Blizzard of 2010 dumped record levels of snow throughout the Northeast. On day one of the snowstorm, New York's 911 service got nearly 50,000 calls and, at its peak, had a backlog of 1,300 calls that almost brought the service to its knees. Sadly, the combination of 911 failures and the inability of EMS ambulances to get through the snowdrifts likely contributed to a number of needless deaths.

Many elected officials, most especially New York mayor Mike Bloomberg, were put on the proverbial hot seat over their failure to meet unprecedented volumes of emergency calls. After an initial phase of finger pointing and mea culpas, politicians made their customary promises to make sure such a crisis would not happen again. Fortunately, while this was a record year for snowstorms, none was as devastating as the initial December 2010 blizzard.

More troubling for long-term civil society, none of these officials, let alone the less-then-attentive commercial news media, identified the deeper problems besetting 911 services. Hundreds of millions of dollars are collected annually by states and localities to support 911 services and much of it is diverted to plug state budget holes and meet a host of other demands. Most disturbing, 911 services are technologically bankrupt, held together by duct-tape and workarounds.

911 monies are a direct surcharge on customer phone bills, whether landline, wireless and Internet service. Though it varies by the state, this charge adds $0.25 to $1.50 a month to phone bills per line, with only a few states not having a separate 911 charge. Worse, in most states, 911 services are not put up for bid, so the existing phone companies get the lion's share of monies paid for 911 services.

Politicians need to be held accountable for the ripoff of the nation's 911 services; otherwise, when the next public emergency arises (dare we say a September 11th-type attack) or citizens face serious troubles, calls for help will go unanswered.

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In 2010, the Congressional Research Office (CRO) released a devastating report, "Emergency Communications: The Future of 911." Its opening sentences point to the underlying crisis besetting the nation's emergency service system:

Today's 911 system is built on an infrastructure of analog technology that does not support many of the features that most Americans expect to be part of an emergency response. Efforts to splice newer, digital technologies onto this aging infrastructure have created points of failure where a call can be dropped or misdirected, sometimes with tragic consequences.

Not mincing its words, CRO adds: "Systems for 911, unable to accommodate the latest advances in telecommunications technology, are increasingly out-dated, costly to maintain, and in danger of failure."

America's antiquated 911 services are unlikely to see improvement in the near term. With states across the country facing dire financial crises, monies are being diverted from every income source in an attempt to balance budgets without raising taxes, especially the taxes of the rich and super-rich.

The raiding of 911 monies parallels the equally scandalous ripoff of state lottery monies. New York State, for example, got into this traditional organized crime racket in the early 1960s and, to get the necessary legislation passed, promised the public that lottery monies would go to education. The flimflam men who run state governments played the old substitution con on the citizenry: previously allocated funding to education was replaced by, but did not supplement, lottery monies. Writing in 1998, then-state controller H. Carl McCall was honest enough to admit to the scam:

[A] new lottery advertising campaign perpetuates the myth that schools receive additional resources from the lottery. The truth is that the Legislature and Governor decide how much state aid will go to local schools and the amount from the lottery is just a small part of that total. Lottery money has never supplemented state aid; it doesn't today and it likely never will.

Sadly, few have fessed up to how the states' raiding of 911 monies has hobbled the nation's emergency services.

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The federal government has long attempted to stop states' from raiding their 911 cookie jars. In 1999, Congress passed "The Wireless Communications and Public Safety Act" (known as E911) that directed the FCC to "encourage and support efforts by states to deploy comprehensive end-to-end emergency communications infrastructure and programs." It proved less then effective.

In the wake of September 11th, Congress passed "the 2004 ENHANCE 911 Act" that offered federal grants to encourage states to allocate 911 collected fees to 911-related expenditures. Unfortunately, under the Republican-controlled Congress, the Act was not funded.

In 2008, Congress passed "The New and Emerging Technologies 911 Improvement Act," requiring the FCC to conduct an annual audit of state 911 services. The FCC's 2009 report is an eyeopener. States collect 911 monies from three principals sources: 1) from legacy wireline telephone services; 2) from surcharges on wireless calls (in 47 states); and 3) Voice-over-Internet Protocol (VoIP) surcharges (in 15 states).

States allocated these monies in different ways, some on a state basis, others through county or locality allocations, and others still through a hybrid method. According to the FCC, most states use 911 fees to fund 911 and "related" services. They are distributed to 911 call centers to provide both landline and wireless services throughout a given state based on proportion of total population, and to meet the state agency's operating costs. Often gone unmentioned, phone company service providers siphon off a chunk of the money for administrating the service.

A recent 911 Association study reveals different schemes employed by states to fudge their 911 books. One involves simply diverting funds to meet other obligations, most often to make up shortfalls in a state's general fund; between 2001 and 2004 such diversions totaled more than $400 million. Another simply redefines 911 services so as to use monies from 911 and EMS to fund, for example, courthouse pay raises.

New Jersey and New York illustrate how the raiding game is played out. The FCC audit indicates that in 2008, New Jersey collected $130 million for charges to support 911 services. According to a revealing report by Daniel Walsh, "only about 20 percent of New Jersey's 911 fees have gone toward 911 services." Monies went to a diverse assortment of state agencies, including: Dept. Health and Senior Services - Disease Surveillance; State Police Emergency Ops Center and Multipurpose Bldg. + Troop C Headquarters; Dept. Law and Public Safety - Office of Homeland Security and Preparedness; State Police - CAD System, Forensic Lab, Vehicle Purchases, Central Monitoring Station, Radio Upgrade, Emergency Ops Center (Operating), and Remaining Operating Budget; Dept. of Military and Veteran's Affairs - National Guard and Support Services; and Dept. of Treasury - Statewide 911 Emergency Telephone System, E911 Grants, and OETS. One can only speculate that in our new American "security" state, these are valid emergency services.

New York reported that in 2007, it collected $ 82.1 million in 911 fees; a comparable amount was likely collected in 2008. By one estimate, only 19 cents of the $1.20 the state collects from each cell-phone subscriber each month goes to emergency calling services. More than $200 million collected ostensibly for 911 upgrades is being diverted to plug state budget holes. This money is used for all-important public safety concerns as buying state police uniforms.

Some states don't have a clue about the monies. In the FCC audit, South Dakota reveals: "It is difficult at this time to determine if the South Dakota governing bodies collecting [911] surcharge monies used the fund as allowed in statute. Audit results from the various entities (governing bodies) are not yet available which precludes us from providing this information."

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President Obama and other politicians have bemoaned the state of the nation's infrastructure. Obama has championed high-speed national broadband network, especially serving the woefully underserved rural America.

The president failed to identify the nation's 911 services as an infrastructure service that needs attention. The Congressional Research Office warned that the nation's 911 services are antiquated, analog systems in a digital age. The National Highway Traffic Safety Administration (NHTSA) proposed the Next Generation 911 Initiative to help define the system architecture and develop a transition plan to establish a digital, Internet Protocol (IP)-based foundation for the delivery of multimedia 911 services.

Republican and Democratic governors and legislatures across the country are plundering state coffers for cash to fill gaping budgetary shortfalls. Raiding 911 monies is an easy way to scoop up loose cash, far easier then taxing the rich. Sitting in their bricked-walled statehouses, what do these pols care about the plight of emergency accident victims scattered helplessly throughout their states? And for Copps' warning, when does a pol really honestly explain anything?

David Rosen can be reached at drosennyc@verizion.com. Bruce Kushnick is a telecommunications industry analyst who serves as the broadband and telecommunications expert for the Nieman Watchdog. He can be reached at bruce@newnetworks.com.
 
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