In 1987 the Maryland General Assembly passed and Gov. William Donald Schaefer signed legislation to create a statewide telephone-relay service that would permit communication between persons who use telecommunications devises for the deaf (TDDs) and persons who communicate by telephone. The TDDs function similarly to a computerized typewriter with an audio speaker and receiver.

The plan was to have a special communication center (or centers) as a go-between for deaf and hearing persons. TDD users would contact the center via their phone and TDD, and type the requested number to the center attendant. The attendants then would place the requested calls to parties who did not have TDDs. (The appropriate charges would go the the initiating caller's account.) The process would also work in reverse so that telephone customers could place voiced calls via the center to TDD users.

The legislation provided for the telephone-relay service to be funded with state general funds and established through the Maryland Department of Human Resources. But the governor, in his effort to control the budget, last year withheld the $500,000 in state monies appropriated for the system.

Instead, C&P and Armstrong telephone companies will have to fund the service, which is mandated to be in operation no later than July of 1993 under the provisions of the Americans with Disabilities Act of July of 1990. It is up to Maryland, though, to decide the most appropriate funding mechanism for such a service.

The state Public Service Commission has recommended that the program to be funded through a monthly surcharge of up to 45 cents per access line. This charge becomes a "line item" charge, which shows up on each monthly bill as a separate charge, as opposed to an included item as part of the regular service. The Maryland Association of the Deaf believes that a small increase in the base-rate for all telephone users would be both more cost-effective and more equitable.

First, other states that have adopted a base-rate method to pay for the service have found the method to be cost-effective. This method is used to recover the costs for the service through the regular monthly rates. All of those states had conducted open hearing on the issue prior to the determination. In those states where surcharges were chosen, there were no hearings held, with the surcharges being pushed through by legislation without prior cost studies.

Second, surcharges are also subject to arbitrary increases. As one researcher who conducted a study analyzing the various funding mechanisms put it, surcharges create the "potential for promoting a runaway spending mentality without regard to cost containment" and concluded that integrating the cost of telephone-relay service into a telephone company's normal operating expenses promoted "financial stability, cost-effectiveness and equal access to the telecommunications network."

C&P Telephone says that using a base-rate mechanism would cost $113,000 more than using surcharge mechanism, or about 2.3 percent of its budget, but this is a relatively insignificant difference on which to base its determination of an appropriate funding mechanism.

In a 1990 proceeding, the Delaware Public Service Commission ruled that "{T}he use of a surcharge seriously violates fundamental principles of traditional rate making, because it enables a utility to treat as a distinct and separate item the expenses involved in the provision of a particular service."

Let us hope the Maryland legislature was listening to the opinion of its neighboring state and will at least study the funding issue. To help its hearing, the Maryland Association of the Deaf is planning a rally at the Annapolis courthouse Feb. 20 at noon.

How to fund the telephone relay service should not be determined solely to suit the telephone company's financial interests. -- Robert J. Mather is a Maryland citizen who uses a TDD.