Talk about being caught between a rock and a hard place. Before today's Federal Communications Commission Video Relay Service Reform Workshop (archived webcast, captions do not start until 04:25), I thought that competitive bidding was the way to go. Now, I'm not so sure.
At the Workshop an argument made against competitive bidding was that it would reduce innovation and quality of service. That makes sense, because to win a competitive bid, often you have to offer lower prices. And to offer lower cost, often means you can't spend that much on innovation. Likewise, you can't invest as much in the level of service you offer, because you have to hold down costs.
On the other hand - and this is me speaking now - the current system of paying per minute/hour has a built-in incentive for fraud. If a company's revenue is going to depend on the number of minutes/hours generated, obviously it is going to be in that company's best interest to have as many minutes or hours as possible. Reducing the rate paid is not the answer either, because you still have the problem of revenue being dependent on how many total minutes or hours you generate!
So what to do?? What should the FCC do? The Federal government has an obligation to protect the public from wastefulness, and at the same time you don't want to stifle competition and innovation. Does the answer lie in some kind of combination of the two? Competitive bidding but the winners would get payment in the form of a combination of a flat fee plus some kind of per minute or hourly rate? A guaranteed income plus the opportunity to earn more beyond the guarantee?