Telecommunications: States' Collection and Use of Funds for Wireless Enhanced 911 Services
Released: 2006-03-10T00:00:00

Letter

Background

Nationwide implementation of E911 by local wireline telephone companies began in the 1970s; today, 99 percent of the population is covered by wireline 911 service. With wireline E911 service, emergency calls are automatically routed to the appropriate PSAP and the call taker receives the telephone number and street address of the caller. In 1996, FCC responded to the rising number of mobile telephone subscribers and the resulting increase in wireless 911 calls by adopting rules for wireless E911 that established a two-phase implementation approach for the wireless carriers and set deadlines for wireless carriers regarding their part in E911 deployment. FCC required that (1) by April 1998, or within 6 months of a request from a PSAP, wireless carriers be prepared to provide the PSAP with the wireless phone number of the caller and the location of the cell site receiving the 911 call (Phase I information); and (2) by October 2001, or within 6 months of receiving a request from a PSAP, wireless carriers be prepared to provide the PSAP with the geographic coordinates of the caller’s location with greater precision, generally within 50 to 300 meters (Phase II information).

As shown in figure 1, the wireless carriers, local exchange carriers (LECs), and PSAPs must have appropriate equipment and interconnections for wireless E911 calls to be sent to and received by PSAPs with the caller’s location information. For example, wireless carriers must finance the implementation of a caller location solution and test their equipment to verify its accuracy. Local exchange carriers are generally responsible for ensuring that all the necessary connections between wireless carriers, PSAPs, and databases have been installed and are operating correctly. The original E911 system was designed to carry only the caller's telephone number with the call, and the associated fixed address was obtained from an established database. Wireless E911, however, requires more data items, and the mobile caller's location must be obtained during the call and delivered to the PSAP separately using additional data delivery capabilities. In order to translate the latitude and longitude location information into a street address, PSAPs usually must acquire and install mapping software. PSAPs may also need to acquire new computers to receive and display this information. Getting PSAPs the technology needed to receive wireless E911 location information is primarily a state and local responsibility because PSAPs serve an emergency response function that has traditionally fallen under state or local jurisdiction. FCC has no authority to set deadlines for the PSAPs’ readiness.

The ENHANCE 911 Act of 2004 was enacted to coordinate 911 and E911 services at the federal, state, and local level; and to ensure that the taxes, fees, or charges imposed for enhancing 911 services are used only for the purposes for which the funds are collected. The act called for the creation of an E911 Implementation Coordination Office to improve E911 coordination and communication. This office will be operated jointly by the National Highway Traffic Safety Administration (NHTSA) and the National Telecommunications and Information Administration (NTIA), and will be housed at NHTSA. Although the office had not received an appropriation as of January 2006, a DOT official told us that NHTSA and NTIA are working together to delineate their respective responsibilities. The act also authorized matching federal grants for eligible state, local, and tribal entities for the deployment and operation of Phase II E911 services. The act requires applicants for a matching federal grant to certify that no portion of any designated state and local E911 funds are being obligated or expended for any purpose other than the purposes for which the funds are designated. The act authorized $250 million per year for matching grants for fiscal years 2005 through 2009. However, no funds were appropriated for these grants in 2005.

Significant Progress Has Been Made toward Nationwide Wireless E911 Implementation but Full Deployment is Years Away

Significant progress has been made in implementing wireless E911 services since our last report on this topic in November 2003. At that time, using data from NENA, we reported that nearly 65 percent of PSAPs nationwide had implemented Phase I wireless E911 services and 18 percent of PSAPs had implemented Phase II wireless E911 with at least one wireless carrier. Since that time, there has been a marked increase in both of these percentages. As of January 2006, NENA reports that nearly 80 percent of PSAPs nationwide had implemented Phase I wireless E911 services and 57 percent had implemented Phase II with at least one wireless carrier. At the county level, NENA reports that approximately 70 percent of counties nationwide have implemented Phase I wireless E911 services and 44 percent of the counties have implemented Phase II with at least one wireless carrier. According to NENA, many of the PSAPs that have implemented Phase I and Phase II are in areas that cover higher concentrations of people, and as a result, approximately 85 percent of the U.S. population is now covered by Phase I and nearly 69 percent by Phase II with at least one wireless carrier. See figure 2 for nationwide deployment of Phase I and II based on population coverage by state.

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While progress is being made in wireless E911 implementation, the estimates from state contacts indicate that no clear picture is emerging on when Phase II will be fully deployed nationwide. As noted earlier, FCC has no authority to set deadlines for PSAPs to implement wireless E911 services. As a result, there is no federal requirement for full wireless E911 implementation and states may or may not have set their own deadlines for implementation. In our survey of state E911 contacts, we asked respondents to provide us with an estimate of when they believed their state would have wireless Phase II service fully in place with at least one wireless carrier per PSAP. We found that state E911 contacts offered a wide range of estimated Phase II completion dates. As shown in figure 3, 10 of 44 state contacts who responded to our survey indicated that Phase II was already in place throughout their state. Eight state contacts noted that they would have Phase II in place for all of their PSAPs with at least one wireless carrier within a year. Thirteen state contacts provided a range of 1 to 5 years for Phase II to be implemented, with three state contacts responding that it would take more than 5 years. Furthermore, five state contacts noted that their state might never be 100 percent complete for Phase II service. For example, one state contact noted that four rural counties opted not to apply for state funding to implement wireless E911 and two of these counties have only decided to implement wireline E911. Contacts in five states had no basis to judge when Phase II would be in place in their states.

Most States Collect Funds for Wireless E911 Implementation, Although Collection and Disbursement Practices Vary

Based on our survey results and NENA data, we found most states obtain E911 funds through state-mandated surcharges collected by wireless carriers from the carriers’ wireless subscribers. States have the discretion to determine how these funds will be managed and distributed. Some states allocate funds using a formula based approach, while others distribute the funds based on PSAP requests. According to our survey results, 35 states had established written criteria on the allowable uses of E911 funds. Examples of allowable uses for the funds included the purchase of equipment upgrades, software packages, and training of personnel.

Most States Collect Surcharges for Wireless E911 Implementation

At present, state and local governments determine how to pay for PSAP wireless E911 upgrades. We found, based on our survey results and NENA data, that 48 states and the District of Columbia collect surcharges to cover the costs of implementing wireless E911 (see fig. 4). For these states, funds are collected by wireless carriers from their subscribers. The other two states do not impose surcharges on wireless subscribers, but still have a wireless E911 funding mechanism in place. Specifically, the state E911 contact for Missouri told us that the state uses funds from the local general revenue, local 911 taxes, and wireline funds for E911 implementation; and the Vermont state E911 contact said the state uses funds from the state’s Universal Service Fund, which supports various telecommunications programs. For states that impose surcharges, the surcharge amount is usually established in state law. Responses to our survey indicated that the per-subscriber surcharges varied from state to state and ranged from $0.20 to $3.00 per month. We also found the surcharge amount could vary within a state. For example, one state has a maximum monthly surcharge amount of $1.50, and although most of the counties collect the maximum amount, several counties collect less than the maximum.

Based on the responses to our survey, several states indicated that insufficient funding collected for wireless E911 was impeding the state’s ability to implement this service. We heard from one state that relies on funds collected from both the wireline and wireless surcharges to fund E911 that due to Hurricane Katrina, the state expected to see a drop in wireline funding over the next 2 to 3 years. A county official from that state said that because many residents and businesses impacted by the storm have not reestablished telephone service, the state is not receiving telephone fees from those residents. Another state reported that one of the biggest issues in implementing wireless E911 is the inability to collect funds from seasonal populations in many of the state’s resort areas. Small towns in the state experience a large influx of tourists during various times of the year. However, because the state collects funds based on the billing address of the subscriber, counties in the state are limited in their ability to cover the costs of E911 services that out-of-state tourists expect while visiting local resort areas.

States Employ Different Methods for Managing and Disbursing Funds

States and local governments have the authority to determine how they will manage and disburse their E911 funds. Of the 31 states that answered our question pertaining to the management of E911 funds, 23 indicated that the funds are managed at the state level, 6 said funds are managed locally, and 2 others indicated that the funds are managed by a mix of state and local entities. We found that various state-level entities can have authority to manage the funds collected for wireless E911 implementation, including the public utility commission, the treasury office, and state-level boards. In one state, for example, a state-level board comprised of members from municipal organizations, PSAPs, state and local law enforcement agencies, local exchange service providers, and the wireless carriers industry established the criteria and guidelines for administering the funds. Of the seven states indicating that the local government manages the funds, one state said that the governing boards of 54 local 911 jurisdictions (51 counties and 3 cities) have the ultimate authority over the expenditure of wireless E911 funds.

Methods of disbursement also varied. Some states use formulas based on various criteria to determine the amount of funds distributed to different localities. For example, a number of states allocate the funds to localities based on criteria such as the volume of 911 calls made in the jurisdiction or the number of wireless subscribers. Other states allocate funds based on PSAP requests. One state reported that it reimburses county governments and providers for the costs they have incurred to implement wireless E911 services. Alternatively, the PSAPs in another state must first request funding from the state, which a state-level office must then approve.

Most States Have Written Criteria on the Allowable Use of E911 Funds

As part of our survey, we asked the state E911 contacts if their states had established written criteria on the allowable uses of funds collected for the purposes of wireless E911 implementation. Of the 38 state contacts who responded to this question, 35 reported that their state had established written criteria, while the other 3 indicated that written criteria had not been established. Examples of allowable uses of funding include the purchase of equipment upgrades or software, personnel costs directly attributable to the delivery of 911 service, and costs related to the maintenance of Phase I and II services. For example, according to one state, its law permits wireless E911 funds to cover the salaries, benefits, and uniforms of 911 service employees such as call takers, dispatchers, and supervisors. We also asked the state E911 contacts if the state had any kind of oversight procedures to control the use of E911 funds. Of the 38 state contacts who responded to this question, 33 reported that their state had established oversight procedures to control the use of E911 funds, 3 others indicated no oversight procedures had been established, and 2 contacts did not know. According to our survey results, audits were the most common approach used to oversee the use of E911 funds. For example, one state reported that the wireless E911 fund and the state’s wireless E911 services board is audited annually by the state’s Auditor of Public Accounts and that the reports are available to the public online.

A Few States Reported Using Wireless E911 Funds for Unrelated Purposes

Based on the responses of the 44 state E911 contacts who completed our survey, four states that collected funds for the purposes of wireless E911 implementation made those funds available or used them for purposes unrelated to E911 during 2005. For the six states and the District of Columbia that did not respond to our survey, we do not know whether they used any of their E911 funds for unrelated purposes. Four other states were unsure if their wireless E911 funds have been used for unrelated purposes because the funds are collected and maintained at the local level. See figure 5 for a complete breakout by state of their use of E911 funds during 2005, along with their progress in implementing E911 in their counties.

For the four states that reported E911 funds were made available or used for purposes not related to E911 during 2005, the state contacts reported that the E911 funds were transferred to their state’s general fund. For example, the E911 contact for North Carolina reported that E911 funds were transferred to the general fund to help balance the state budget. According to the E911 contact for Virginia, funds were transferred to both the general fund and to the state police, which responds to emergency calls in some areas of the state. One of these four states, Rhode Island, has implemented Phase II services in all of its counties and Virginia has implemented Phase II for 83 percent of its counties. For the remaining two states, Illinois has implemented Phase II in 47 percent of its counties and North Carolina for 71 percent of its counties.

One state responded to our survey that, while E911 funds have not been made available for other purposes, approximately $72 million in state wireline and wireless E911 fees collected have not been appropriated to the state 911 program. In other words, the funds remain in dedicated E911 accounts, but are “frozen” and are not being used to deploy or maintain E911 services. We heard from four other states that because funds for wireless E911 are collected and managed by local jurisdictions without any state involvement, the state is unsure if wireless E911 funds have been used for purposes other than wireless E911 implementation. For example, one state E911 contact told us that the state currently has no mechanism to monitor the use of wireless E911 funds at the local level. However, this contact further said that if a federal grant program for wireless E911 is funded, the state could establish a mechanism to validate that local jurisdictions were using wireless E911 funds only for allowable purposes.

Agency Comments

We provided FCC with a draft of this report for their review and comment. In response, FCC provided technical comments that we incorporated where appropriate.

We are sending copies of this report to interested congressional committees and the Chairman, FCC. We will make copies available to others upon request. The report is available at no charge on GAO’s Web site at http://www.gao.gov. Contact points for our offices of Congressional Relations and Public Affairs may be found on the last page of this report.

If you or your staff have any questions concerning this report, please contact me on (202) 512-2834 or goldsteinm@gao.gov. Key contributors to this report were John Finedore, Assistant Director; Kimberly Berry, Andy Clinton, Stuart Kaufman, Sally Moino, Josh Ormond, Jay Smale, and Mindi Weisenbloom.

Scope and Methodology

The ENHANCE 911 Act of 2004 required us to review the imposition and use of taxes, fees, or other charges by states or localities that are designated to improve emergency communications services, including “enhanced 911” (E911). As such, we are reporting on (1) the progress made in implementing wireless E911 services throughout the country, (2) the states and localities that have established taxes, fees, or charges for wireless E911 implementation, and (3) the states or localities that have used funds collected for the purposes of wireless E911 for unrelated purposes.

To obtain general information on wireless E911 implementation, we interviewed officials from the National Emergency Number Association (NENA), the National Association of State 9-1-1 Administrators, and the Federal Communications Commission (FCC). We also met with officials from the Department of Transportation to learn the status of the E911 Implementation Coordination Office. To obtain information pertaining to the collection, management, and use of wireless E911 funds at the state and local level, we developed and administered a Web-based survey to state- level E911 contacts. The state E911 contacts are listed on FCC’s Web site as the point of contact for emergency communications in their states and were provided by the governor of each state in response to a request from FCC. From September 21, 2005, through September 28, 2005, we conducted a series of “pretests” with state E911 contacts to help further refine our questions, clarify any ambiguous portions of the survey, and identify any potentially biased questions. Upon completion of the pretests and development of the final survey questions and format, we sent an announcement of the upcoming survey to the state E911 contacts (including the District of Columbia) on October 4, 2005. They were notified that the survey was available online on October 6, 2005. We sent follow-up e-mail messages to non-respondents as of October 30, 2005, and then attempted several times to contact those who had not completed the survey. The survey was available online until January 20, 2006. Of the population of 51 state E911 contacts who were asked to participate in our survey, we received 44 completed questionnaires for an overall response rate of 86 percent. Although the individual listed as the Wyoming state E911 contact was unable to answer the questionnaire, a representative at the county level completed it. We did not receive completed questionnaires from Alaska, Colorado, the District of Columbia, Nevada, New York, Oklahoma, and South Dakota. We administered the survey between October 2005 and January 2006. To view selected results of the survey, go to http://www.gao.gov/cgi-bin/getrpt?GAO-06-400sp.

The practical difficulties of conducting surveys may introduce errors commonly referred to as “nonsampling error.” For example, differences in how a particular question is interpreted or the sources of information available to respondents may introduce error. To minimize nonsampling error, we worked with a social science survey specialist to develop the questionnaire and conducted three pretests. In addition, steps were taken during the data analysis to minimize error further, such as performing computer analyses to identify inconsistencies and completing a review of data analysis by an independent reviewer.

We contacted state budget officials for the four states that reported using funds collected for the purpose of E911 implementation for unrelated purposes to verify the information we received in response to our survey. Other than this, we did not independently verify the survey results. To provide information on the progress made in deploying wireless E911, in addition to the survey, we used NENA data current as of January 2006. To assess the reliability of NENA’s data regarding the number of public safety answering points receiving Phase II data, we interviewed knowledgeable officials from NENA about their data collection methods and reviewed any existing documentation relating to the data sources. We determined that the data were sufficiently reliable for the purposes of this report.

We conducted our review between February 2005 and January 2006 in accordance with generally accepted government auditing standards.