Today, via Twitter, ZVRS announced that they will be acquiring Purple Communications.
— Purple (@purplecomm) February 15, 2017
In their press release posted on ZVRS website, they announced that ZVRS acquisition of Purple Communication will “create a strong competitive force in the industry, bringing healthy market competition to create better products and services for consumers”. Sherri Turpin, Chief Executive Officer of ZVRS is “Thrilled to be acquiring Purple Communications to better serve our customers with innovation products and services, expand outreach programs, and strengthen our commitment to the Deaf Community”.
Robert Rae, President and CEO of Purple Communications believes this “acquisition will enhance the customer experience for both ZVRS and Purple”.
If the FCC approve of this acquisition, this will now reduce the amount of VRS companies in the VRS market in the United States: Convo, Sorenson, ZVRS, Federal Video Relay Service, and Global VRS.
This move might come as a surprise to many in the Deaf Community, however, there are many reasons why ZVRS and Purple Communications decided to merge together.
Now with only four highly visible VRS companies, Convo Relay, Sorenson, ZVRS and Global VRS, the market just got more competitive. The logic behind this is the FCC Tier System for how VRS companies get paid by the FCC. Last year, the FCC overhauled their mandates with VRS companies and also decided to reduce from $5.29 per minute to $4.06 per minute. One of the issues with the FCC is that the smaller VRS providers, “has fallen short of achieving the cost reductions necessary to break even under the VRS Reform Order compensation rates”.
This rate drop compelled Convo, CAAG/Star and ASL/Global to jointly file an Emergency Petition seeking an immediate freeze of the rates because they all reported to be operating at a loss and their operating loss will be compounded by the further reduction of Tier I rates.
They won their appeal, however, the rate is now $4.89 per minute and it will only be that rate until June 30, 2017.
One of the changes that the FCC required of VRS companies is that they make themselves available the the Deaf Community 24 hours a day, seven days a week. This poses somewhat of a problem for smaller VRS companies since making sure you have enough staff especially ASL interpreters at their call centers is no small task. Not only that, ASL interpreters are required to answer at least 80 percent of their calls within 120 seconds.
According to a Wired article written last year , staffing ASL interpreters is one of the toughest challenges that all VRS companies deal with. ASL interpreters who want to work for VRS companies have to go through a rigorous screening process. Jarrod Musano who is the CEO of Convo Relay is quoted as saying that one out of ten interpreters will actually be hired by Convo. Grant Beckmann, Vice President of Engineering at Sorenson Communications, also stressed the demand for ASL interpreters saying that their training takes about “six to eight years”.
Is this acquisition unfair?
This acquisition might seem unfair since Purple and ZVRS are one of the top three VRS companies in the United States. (Sorenson is the third) Smaller VRS companies such as Convo, CAAG and Global VRS might feel by the merging these two companies is like Verizon merging with AT&T. For these smaller VRS companies, they are likely not going to approve of this acquisition and most likely will start the legal process in the courts as well as with the FCC.
We followed up with GlobalVRS, Convo Relay and Sorenson about this and so far only GlobalVRS has responded, both Convo Relay and Sorenson has declined to comment.
GlobalVRS Statement: GlobalVRS is concerned that the Z-Purple acquisition is one more step toward Deaf/HH community ending up with only one single VRS provider. The FCC needs to take action and adjust the rates it pays the service providers with a method that accounts for the differences of each providers’ scope, volume, and size. Otherwise, the Deaf community is in danger of having no consumer choice of VRS services. GlobalVRS will continue to serve its callers and address the FCC on this and related community concerns.