FCC releases order addressing diversion of 911 fees

State and local entities that use revenues from 911 fees for purposes that do not directly support 911 will be identified and risk losing access to federal 911 funding, according to the FCC’s report and order addressing the issue of 911 fee diversion that was required by Congress.

Released yesterday, the order fulfills an FCC obligation to establish rules that are designed to discourage a longtime issue within some states of assessing and collecting 911 fees from subscribers’ phone bills and then not using the money for 911—a practice known as fee diversion, or “raiding,” within the public-safety community. Congress mandated that the FCC approve the rules and create a new 911 Strike Force within six months of the passage of the Don’t Break Up the T-Band Act in appropriations legislation that was signed into law in late December 2020.

With some modifications and clarifications, the FCC order reiterates the agency’s 911-fee-diversion proposal issued earlier this year and its 911 fee reports that have been compiled annually for more than a decade. The notice that provided examples of non-acceptable uses of revenue from 911 fees, such as transfers into the general fund, the deployment of non-public-safety networks, and public-safety initiatives that do not have a direct impact on the ability of a public-safety answering point (PSAP) to deliver 911 services.

At the request of commenters, the FCC also added the following language to clarify some examples of acceptable expenditures of 911 fee revenue:

“PSAP operating costs, including lease, purchase, maintenance, replacement, and upgrade of customer premises equipment (CPE) (hardware and software), computer aided dispatch (CAD) equipment (hardware and software), and the PSAP building/facility and including NG911, cybersecurity, pre-arrival instructions, and emergency notification systems (ENS),” the FCC order states. “PSAP operating costs include technological innovation that supports 911.”

But not all potential uses of 911 fee revenues are clear cut as being acceptable or not acceptable. One notable example is public-safety radio systems, a topic that generated disagreement among commenters in the FCC proceeding.

“In light of the divided record on using 911 fees for public safety radio systems, we provide additional guidance on when such use of 911 fees will be deemed to have purposes or functions that ‘directly support providing 911 services’ and so qualifies as ‘acceptable’ for purposes of avoiding section 902 consequences,” the FCC order states. “We also seek recommendations from the 911 Strike Force on developing additional specific examples in these regards.”

One of the biggest concerns expressed by some commenters has been that an FCC finding that a particular state is a 911 fee diverter would disqualify it from receiving federal 911 funding.

Many have argued that such language has been largely a symbolic in the past, because the federal government typically has not provided any meaningful money to 911, which historically has been funded at the state and local levels. However, with Congress considering legislative language that would provide $15 billion for the deployment of next-generation 911 (NG911) technology, the matter potentially is much more relevant today.

To this end, each state will be held responsible for the actions of the local jurisdictions using 911 fee revenue, according to the FCC order.

“We find that it is consistent with the intent of section 902 to hold states responsible for fee diversion by localities within their boundaries,” the FCC order states. “Absent such a policy, states or taxing jurisdictions could have an incentive to avoid oversight or accountability for expenditures by political subdivisions.

“In response to concerns that defining diversion in this way could result in the denial of grant funding for states or local jurisdictions on the basis of the actions of localities over which they have no control, we note that decisions with respect to grant eligibility will be made by the agencies managing the grant program, not the Commission.  If states and localities seek flexibility under these circumstances with respect to eligibility for grant funding, they must request it from the agencies managing the grant program.”

Both the Association of Public-Safety Communications Officials (APCO) and the National Emergency Number Association (NENA) applauded the FCC order.

“The Commission’s new rules provide much-needed clarity on what does and does not constitute 911 fee diversion, which is essential as the stakes for diversion are raised with the potential federal NG911 transition funding,” Dan Henry, NENA’s regulatory counsel and director of government affairs, said in a prepared statement.

“To the extent that edge cases remain in certain states’ fee models, the 911 community will have to be proactive in seeking determinations from the Commission. As always, we deeply appreciate the [FCC’s] Public Safety Bureau’s hard work in this and other 911 proceedings.”

APCO Executive Director and CEO Derek Poarch also expressed support for the order, particularly language that calls for examination of impacts that underfunding 911 can have.

“APCO appreciates the Commission’s further action to address 911 fee diversion, particularly the decision, as APCO suggested, to gather information annually about the extent and impact of underfunding 911,” Poarch said in prepared statement. “APCO looks forward to supporting the Commission’s ongoing efforts, including through participation as a member of the 911 Fee Diversion Strike Force.”