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Purple Communications and FCC Reach Interim Agreement
Mar 09, 2010 (05:03 PM EST)
Framework for Global Settlement Achieved - Funds Released
ROCKLIN, Calif., March 9 /PRNewswire-FirstCall/ -- Purple Communications™, Inc. (OTC: PRPL) ("Purple"), a leading provider of text and video relay and on-site interpreting services for the Deaf and Hard of Hearing announced that it has reached an interim agreement with the Federal Communications Commission (FCC) regarding payment demands made by the FCC in connection with the FCC's February 25, 2010 Declaratory Ruling.
The Declaratory Ruling sets forth guidelines for interpreting and applying the FCC's rules and regulations regarding text and video relay services. The Declaratory Ruling excludes certain types of video relay calls from compensation by the TRS Fund, both prospectively and retroactively. In anticipation of, and contemporaneous with, the Declaratory Ruling, the FCC made immediate payment demands on Purple for reimbursement to the TRS Fund and notified Purple that it would withhold reimbursements to Purple from the TRS Fund. With its current and future revenue stream suspended, Purple appealed the Declaratory Ruling to both the FCC and to the U.S. Court of Appeals for the District of Columbia. Purple's appeal to the DC Circuit sought an immediate stay of the Declaratory Ruling.
Purple now has reached an interim agreement with the FCC that will enable Purple to continue operating while it continues to work with the FCC to negotiate a broader global settlement. In reaching this interim agreement, Purple agreed to accept and not challenge the Declaratory Ruling and, to assume a debt to the TRS Fund in an amount as much as $20 million. The broader global settlement is expected within 180-days which will include, among other things, a structured repayment plan. Upon execution of the interim agreement, the FCC released funds owing to Purple and Purple withdrew its litigation against the FCC.
"Although we believed that the new Declaratory Ruling included new definitions and guidelines around compensability of TRS services, particularly regarding use of VRS services by Deaf and Hard of Hearing employees, it was our determination that it was in our best interest that we agree not to challenge the Declaratory Ruling so we could keep our operations and services intact for our customers," said Dan Luis, CEO of Purple. "We at the company were inspired by the support we received and have every intention of continuing to fulfill our mission of serving the deaf community by providing high-quality and innovative services, while working with consumers, other providers, and the FCC to shape the dialogue of our industry."
"I would like to thank our loyal employees, contractors, and customers for their tremendous outpouring of support for Purple over this last week," added Ronald E. Obray, Purple's vice chairman. "The support shown for Purple this last week demonstrates the important role smaller providers like Purple play in ensuring that a competitive environment exists for consumers. Every phone call a consumer makes is like a vote; and when they choose a smaller provider for their phone call, they are voting for choice and competition instead of a market controlled by a single provider."
Purple Communications is a leading provider of onsite interpreting services, video relay and text relay services, and video remote interpreting, offering a wide array of options designed to meet the varied communication needs of its customers. The Company's vision is to enable free-flowing communication between people, inclusive of differences in abilities, languages, or locations. For more information on the Company or its services, visit www.purple.us, by Internet relay by visiting www.ip-relay.com, or by video phone by connecting to purple.tv.
SOURCE Purple Communications