[Federal Register Volume 77, Number 21 (Wednesday, February 1, 2012)]
[Proposed Rules]
[Pages 4948-4973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2058]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket Nos. 10-51 and 03-123; FCC 11-184]
Structure and Practices of the Video Relay Service Program;
Telecommunications Relay Services and Speech-to-Speech Services for
Individuals With Hearing and Speech Disabilities
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission continues the process of
reexamining the fundamentals of the Commission's Video Relay Service
(VRS) rules to ensure the VRS program fulfills the goals set for the
Commission in section 225 of the Communications Act (the Act).
Specifically, the Commission sets forth a series of options and
proposals to improve the structure and efficiency of the program, to
ensure that it is available to all eligible users and offers functional
equivalence--particularly given advances in commercially available
technology--and is as immune as possible from the waste, fraud, and
abuse that threaten the long-term viability of the program as it
currently operates.
DATES: Interested parties may file comments on or before March 2, 2012,
and reply comments on or before March 19, 2012.
ADDRESSES: You may submit comments, identified by CG Docket Nos. 10-51
and 03-123, by any of the following methods:
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the Commission's Electronic Comment
Filing System (ECFS), through the Commission's Web site http://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions
provided on the Web site for submitting comments. For ECFS filers, in
completing the transmittal screen, filers should include their full
name, U.S. Postal service mailing address, and CG Docket Nos. 10-51 and
03-123.
Paper filers: Parties who choose to file by paper must
file an original and four copies of each filing. Filings can be sent by
hand or messenger delivery, by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail (although the
Commission continues to experience delays in receiving U.S. Postal
Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters at
445 12th St. SW., Room TW-A325, Washington, DC 20554. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building.
Commercial Mail sent by overnight mail (other than U.S.
Postal Service Express Mail and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street SW., Washington, DC 20554.
In addition, parties must serve one copy of each pleading with the
Commission's duplicating contractor, Best Copy and Printing, Inc., 445
12th Street SW., Room CY-B402, Washington, DC 20554, or via email to
[email protected].
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Dana Wilson, Consumer and Governmental
Affairs Bureau, (202) 418-2247; email: [email protected].
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Further Notice of Proposed Rulemaking, FCC 11-184, adopted December 15,
2011, and released December 15, 2011, in CG Docket Nos. 10-51 and 03-
123, seeking comment on a series of options and proposals to improve
the structure and efficiency of the program, to ensure that it is
available to all eligible users and offers functional equivalence--
particularly given advances in commercially available technology--and
is as immune as possible from the waste, fraud, and abuse that threaten
the long-term viability of the program as it currently operates. The
full text of document FCC 11-184 and copies of any subsequently filed
documents in this matter will be available for public inspection and
copying during regular business hours at the FCC Reference Information
Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC
20554. Document FCC 11-184 and copies of subsequently filed documents
in this matter may also be purchased from the Commission's duplicating
contractor at Portals II, 445 12th Street SW., Room CY-B402,
Washington, DC 20554. Customers may contact the Commission's
duplicating contractor at its Web site, www.bcpiweb.com, or by calling
1-800-378-3160. FCC 11-184 can also be downloaded in Word or Portable
Document Format (PDF) at: http://www.fcc.gov/cgb/dro/trs.html#orders.
Pursuant to 47 CFR 1.415 and 1.419, interested parties may file
comments and reply comments on or before the dates indicated in the
DATES section of this document. Comments and reply comments must
include a short and concise summary of the substantive discussion and
questions raised in the document FCC 11-184. The Commission further
directs all interested parties to include the name of the filing party
and the date of the filing on each page of their comments and reply
comments. Comments and reply comments must otherwise comply with 47 CFR
1.48 and all other applicable sections of the Commission's rules.
Pursuant to 47 CFR 1.1200 et seq., this matter shall be
treated as a ``permit-but-disclose'' proceeding in accordance with the
Commission's ex parte rules. Persons making ex parte presentations must
file a copy of any written presentation or a memorandum summarizing any
oral presentation within two business days after the presentation
(unless a different deadline applicable to the Sunshine period
applies). Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must: (1) List all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made; and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter
[[Page 4949]]
may provide citations to such data or arguments in his or her prior
comments, memoranda, or other filings (specifying the relevant page
and/or paragraph numbers where such data or arguments can be found) in
lieu of summarizing them in the memorandum. Documents shown or given to
Commission staff during ex parte meetings are deemed to be written ex
parte presentations and must be filed consistent with Sec. 1.1206(b)
of the Commission's rules. In proceedings governed by Sec. 1.49(f) or
for which the Commission has made available a method of electronic
filing, written ex parte presentations and memoranda summarizing oral
ex parte presentations, and all attachments thereto, must be filed
through the electronic comment filing system available for that
proceeding, and must be filed in their native format (e.g., .doc, .xml,
.ppt, searchable .pdf). Participants in this proceeding should
familiarize themselves with the Commission's ex parte rules.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
Initial Paperwork Reduction Act of 1995
Document FCC 11-184 seeks comment on potential new information
collection requirements. If the Commission adopts any new information
collection requirement, the Commission will publish another notice in
the Federal Register inviting the public to comment on the
requirements, as required by the Paperwork Reduction Act of 1995,
Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, the Commission seeks
comment on how it might ``further reduce the information collection
burden for small business concerns with fewer than 25 employees.''
Synopsis
I. Introduction
1. Video relay service (VRS) allows persons with hearing or speech
disabilities or who are deaf-blind to use American Sign Language (ASL)
to communicate in near real time through a communications assistant
(CA), via video over a broadband Internet connection. In document FCC
11-184, the Commission continues the process of reexamining the
fundamentals of the Commission's VRS rules to ensure the VRS program
fulfills the goals set for the Commission in section 225 of the Act.
Specifically, the Commission sets forth a series of options and
proposals to improve the structure and efficiency of the program, to
ensure that it is available to all eligible users and offers functional
equivalence--particularly given advances in commercially available
technology--and is as immune as possible from the waste, fraud, and
abuse that threaten the long-term viability of the program as it
currently operates. The Commission solicits comment on these options
and proposals to ensure that this vital program is effective,
efficient, and sustainable for the future.
II. Structural Issues With the Current VRS Program
2. Our overarching goal in this proceeding is to improve the VRS
program so that it better promotes the goals Congress established in
section 225 of the Act. Specifically, the Commission seeks to ensure
that VRS is available to all eligible users, is provided efficiently,
offers functional equivalence, and is as immune as possible to the
waste, fraud, and abuse that threaten its long-term viability. The
Commission notes that this is largely consistent with the goals
outlined in the recent Consumer Groups' TRS Policy Statement, and that
the Commission seeks to reform VRS in accordance with these goals to
the extent possible. In developing the records of the VRS-related
proceedings discussed above, and in particular based on the submissions
to the VRS program structure and practices proceeding (CG Docket No.
10-51), the Commission has identified a number of structural issues
with the current program that have not only detracted from its
historical success in providing communications services to individuals
who are deaf, hard of hearing, deaf-blind, or have a speech disability,
but may also threaten its future success. These issues--which the
Commission seeks to address with the proposals set forth and the
questions raised in document FCC 11-184--include the following: (i)
Broadband affordability may be restricting the availability of VRS,
(ii) VRS access technology standards may be insufficiently developed,
frustrating the program's technology goals, and potentially resulting
in inappropriate lock in of VRS users, (iii) the current VRS
compensation mechanism is unpredictable and potentially inefficient,
(iv) the structure of the VRS industry is potentially suboptimal and
inconsistent with the goals of the Act, and (v) the current VRS
compensation mechanism has proven vulnerable to waste, fraud, and
abuse. The Commission discusses and seeks comment on each in turn
below.
A. Broadband Affordability May Be Restricting the Availability of VRS
3. The National Broadband Plan identified broadband affordability
as a major barrier to broadband adoption. Although the Commission
unfortunately lacks systematic data, the Commission has anecdotal and
other evidence to suggest that this broadband affordability barrier may
be particularly acute for the deaf and hard of hearing community, such
that some people who would benefit from VRS are unable to afford the
required broadband Internet access service. For example, as one
commenter observed, a disproportionate number of deaf American adults
are unemployed, receive Social Security, live in poverty, or have
household income below $20,000; broadband penetration among this
community is therefore likely to be lower than the national average of
approximately 65%. Thus, the Commission finds it reasonable to presume
that some of those deaf Americans who have low incomes live in areas
where broadband is available, yet they do not subscribe due to the
expense. Further, though there is no definitive estimate of the number
of Americans with hearing or speech disabilities who are fluent enough
in ASL to use VRS, there are likely to be such individuals who would
benefit from VRS but cannot afford the necessary broadband Internet
access service.
4. The Consumer Groups' TRS Policy Statement urges the Commission
to give consideration to regulatory initiatives that can ``meet the
broadband access needs of people with hearing and speech
disabilities.'' Indeed, any gap between the number of individuals who
subscribe to VRS and the number of individuals who would subscribe but
for the expense of broadband Internet access may represent a potential
failure of our statutory obligation to make TRS ``available * * * to
the extent possible,'' as the Commission believes VRS is effectively
unavailable to those who cannot afford broadband Internet access. Now
that the base of VRS users has grown significantly, the Commission is
concerned that the broadband-penetration ceiling may have become a
constraint on the availability of the program. The Commission seeks
information and data from commenters that would help us better analyze
whether there is a gap between potential VRS demand and actual VRS
[[Page 4950]]
subscribership attributable to the expense of broadband Internet
access.
B. VRS Access Technology Standards May Be Insufficiently Developed
5. Under the present VRS model, multiple providers offer
substantially similar services with no opportunity for price
competition, as end users receive the service at no cost. Despite this,
however, the program supports more than one provider to allow VRS users
choice between providers who compete on factors such as quality of
service, customer service, and technological development. This is
consistent with the goal expressed by the Consumer Groups to ensure
``intense competition among a number of qualified vendors in the
telecommunications relay services market to give the TRS user
population a range of choices in features and services * * * .''
6. Although the Commission has adopted general rules to facilitate
this non-price competition, such as requiring that VRS providers ensure
interoperability with competing providers and that the technologies
used to access VRS services be portable between providers, the record
indicates that these rules, in practice, have met with limited success
in two particular areas: Ensuring that VRS providers have a real
opportunity to compete for other providers' VRS users, and facilitating
VRS users' access to off-the-shelf VRS access technology. The
Commission questions whether it makes sense to spend Fund resources
supporting multiple providers to ensure that such choice is available
in principle if most VRS users cannot in practice take advantage of
such choice (e.g., because of a lack of interoperability and/or
portability of VRS access technology), and explore below new approaches
to making consumer choice and effective competition a reality.
1. VRS Users May Be ``Locked In''
7. The Commission has adopted interoperability and portability
rules to facilitate competition among providers. Every VRS provider is
required to provide its users with the capability to register with that
VRS provider as a ``default provider.'' Such registration is required:
(1) To allow the VRS provider to take steps to associate the VRS user's
telephone number with their IP address to allow for the routing and
completion of calls; (2) to facilitate the provision of 911 service;
and (3) to facilitate the implementation of appropriate network
security measures. On the other hand, our interoperability and
portability rules are intended to (i) allow VRS users to make and
receive calls through any VRS provider, and to choose a different
default provider, without changing the VRS access technology they use
to place calls, and (ii) ensure that VRS users can make point-to-point
calls to all other VRS users, irrespective of the default provider of
the calling and called party.
8. Under the Commission's Internet-based TRS Numbering Order,
published at 73 FR 41286, July 18, 2008 and 73 FR 41307, July 18, 2008;
and Second Internet-based TRS Numbering Order, published at 73 FR
79683, December 30, 2008 (together, the Internet-based TRS Numbering
Orders), providers must ensure that videophone equipment that they
distribute retain certain, but not all, features when a user ports his
number to a new default provider. Specifically, a default provider that
furnishes videophone equipment to a consumer need not ensure that the
videophone equipment's ``enhanced features'' (e.g., address book, speed
dial list) can be used when the consumer ports the number to and uses
the videophone equipment with the new provider. Further, those enhanced
features are, in most cases, impossible to port to new equipment
obtained from the new default provider. Indeed, notwithstanding some
level of industry effort, there is no set of common technical standards
that will ensure such enhanced feature functionality remains after a
customer ports to a new provider. Consequently, the Commission is
concerned that VRS users may be effectively ``locked in'' to their
existing providers by their wish to continue to use these non-
standardized enhanced features. Indeed, many VRS users appear to be
reluctant to switch to a new default provider because alternative
default providers find it difficult to support many of the enhanced
features of users' existing videophones, posing an unacceptably high
switching cost. The Commission notes that the Consumer Groups' TRS
Policy Statement emphasizes the importance of ``[t]otal
interoperability * * * for equipment software and services from all
vendors (for any forms of TRS) with no loss of core functionality.'' As
consumers note, full interoperability, including the ability to make
point to point calls, ``ensures greater protection for TRS users'
safety, life, health, and property.''
9. The Commission seeks comment on the effectiveness of our current
interoperability and portability requirements, and the role that
existing VRS access technology standards--or the lack thereof--may play
in frustrating the effectiveness of those requirements. Consumers
further seek ``a conducive climate for healthy market competition'' in
all forms of TRS.'' The Commission is concerned that VRS users may not
be able to enjoy the benefits of non-price competition between multiple
providers if, in fact, switching costs are so high that there is little
prospect that consumers will actually switch default providers. Is the
rationale for structuring the VRS program to afford competitive
alternatives to VRS users drawn into question in the absence of
technical standards that will reduce or eliminate such switching costs,
including non-monetary costs such as those associated with the loss of
enhanced features? If it is not possible to reduce switching costs to a
level that does not frustrate the effectiveness of our current
interoperability and portability requirements, should the Commission
simply bid contracts for one or a limited number of VRS providers to
offer VRS service, as smaller providers may have little hope of gaining
market share by winning customers from larger providers? The Commission
notes that such contracts would likely result in efficiency gains for
the Fund by inducing price competition for the contract and/or
eliminating the need to perpetually support sub-scale providers at
higher rates. The Commission seeks comment on the impact such an
approach would have on users. Given that the vast majority of users
currently choose to obtain service from one provider, would it be
correct to conclude that the impact would be minimal, or would the loss
of additional competition--even by providers with small market shares--
risk harmful consequences in terms of loss of innovation and consumer
choice? If yes, the Commission asks commenters to provide specific
details supporting this conclusion.
2. VRS Users May Not Have Appropriate Access to Off-the-Shelf
Technology
10. When VRS was first launched a decade ago, videotelephony was a
specialized, niche market requiring customized hardware and software,
as well as frequently unavailable broadband Internet access service. It
has now become a mainstream, mass-market offering. Indeed, currently
available commercial video technology can provide closer functional
equivalence, may be less costly, and is likely to improve at a faster
pace than the custom devices supplied exclusively by VRS providers, so
that the installed base of VRS access technology may be (or may soon
become) inferior to ``off-the-shelf'' offerings.
11. As described in greater detail in Appendix B of document FCC
11-184, in 2006 the industry migrated to a
[[Page 4951]]
standard for transmitting real-time voice and video over packet-based
networks called H.323, but has failed to make progress on the
standardization needed to transition to the Session Initiation Protocol
(SIP) family of standards, which has subsequently become the default
for mass market Internet-based voice and video devices. In addition, as
discussed in paragraph 8 above, there are no standards in place to
facilitate transferring videophone equipment's enhanced features (e.g.,
address book, speed dial list) when the consumer ports their number to
and uses the videophone equipment with a new provider.
12. The Commission notes that the Consumer Groups' TRS Policy
Statement emphasizes the need for the Commission to support
technological innovation that will contribute to the quality and
efficiency of TRS. In particular, the Consumer Groups request that we
engage in ``[a]n ongoing effort * * * to `raise the bar' in
technological design and operations efficiency.'' The Commission seeks
comment on whether the lack of progress on standards development in the
VRS industry is serving as a barrier to the introduction of potentially
superior, and less expensive, off-the-shelf technology into the VRS
market. What other barriers limit introduction of off-the-shelf
technology into the VRS market? Are there other mechanisms that can be
used to encourage the introduction of off-the-shelf technology in the
VRS market? How would advances for off-the-shelf technology be impacted
if the Commission were to bid contracts for one or a limited number of
VRS providers to offer VRS service?
C. The Current VRS Compensation Mechanism Is Unpredictable and
Potentially Inefficient
13. As discussed above, the per-minute rate for compensating VRS
providers has fluctuated significantly over time, resulting in
uncertainty and controversy. Indeed, providers have frequently
complained about uncertainty in the rate setting process due to the
frequency with which rates have been recalculated and disagreements
regarding the nature of the costs for which compensation may be
provided. They explain that such uncertainty has impeded their ability
to make long-term plans. The current rate setting mechanism has also
negatively affected the telecommunications carriers that are required
to contribute to the TRS Fund. The Commission would like to create
stability and long-term predictability in the compensation mechanism,
to the benefit of the providers, contributing carriers, and all
consumers.
14. In addition to the problems related to the rate fluctuations
described above, several features of the VRS program make it difficult
to manage costs and reimbursements. First, although there are many VRS
users and multiple VRS providers, the users neither receive nor send
price signals because the service is provided at no charge to them.
Thus, there is no opportunity for the market to set prices, enable
price competition, determine industry structure, or influence demand.
Second, the TRS Fund is effectively the sole purchaser of VRS services
but, unlike a normal market participant, the Fund cannot ``choose'' the
volume (i.e., number of VRS minutes) to purchase, and so has no control
over total expenditures once rates are set. Third, costs incurred by
VRS providers are not necessarily aligned with the reimbursements the
Fund provides on a per-minute basis. That is, many of a VRS providers'
costs do not vary directly with the number of minutes of service
provided (e.g., equipment, call center infrastructure, CA supervision,
marketing/outreach, general and administrative (G&A) expenses).
Further, to the extent that that providers' other sources of revenue
are de minimis and all VRS provider's costs are explicitly or
implicitly supported by the Fund, there is frequent controversy over
whether activities such as those related to customer acquisition and
retention, equipment subsidies, and financing (e.g., interest payments)
are legitimate or not. For these reasons--as well as those related to
waste, fraud, and abuse described below--the Commission is concerned
with the efficiency of the current per-minute compensation scheme. The
Commission seeks comment on this assessment of the efficiency of our
per-minute compensation mechanism, and whether there are other factors
that we should consider in restructuring the VRS compensation mechanism
to improve its predictability and efficiency.
D. The Current Structure of the VRS Industry Is Inefficient
15. At present, there are twelve companies eligible for
reimbursement from the Fund for VRS. In addition, until recent rule
changes, approximately fifty additional ``white label'' companies
marketed or offered VRS under their own names and received compensation
from the Fund indirectly. At present, however, a single provider is
handling the vast majority of VRS minutes. As a result, while this
provider enjoys significant economies of scale, the remaining providers
are able to cover their costs only because of the Commission's adoption
of a tiered rate structure, which compensates providers with fewer
minutes of use at a higher rate per minute. As a result, as Table 1
shows, a disproportionate amount of the monthly compensation for VRS is
paid at the subscale Tier I and Tier II rates. Indeed, if all minutes
handled were compensated at the Tier III ``at scale'' rate, the Fund
would immediately save over $2 million per month--a reduction in the
size of the Fund of approximately 5%.
Table 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Minutes Compensation Reimbursement Reimbursement $/minute
Tier Tier structure compensated rate (millions) % Minutes % (ratio)
--------------------------------------------------------------------------------------------------------------------------------------------------------
I............................ <= 50,000 minutes................ 315,157 $6.24 $2 4.19 3.56 1.18
II........................... 50,001-500,000 minutes........... 1,491,340 6.23 9.3 19.77 16.84 1.17
III.......................... > 500,000 minutes................ 7,047,330 5.07 35.7 76.04 79.6 0.96
---------------------------------------------------------------------------------------
Totals.......................... 8,853,827 n/a 47 100 100 n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------
16. Recognizing that the industry structure going forward may be
influenced by factors including the desire and ability of existing VRS
users to switch providers, the number of new VRS users who enter the
market, and the rate structure (e.g., the willingness of the Fund to
support subscale players for a definite or indefinite period of time
and the absolute level(s) of compensation), the Commission seeks
comment on whether the current market
[[Page 4952]]
structure--namely, a single large provider with numerous subscale
providers--represents an appropriate balance between consumer choice
and efficiency.
E. The Current VRS Compensation Mechanism Has Proven Vulnerable to
Waste, Fraud, and Abuse
17. The compensation of VRS providers on a per-minute basis creates
an inherent incentive for providers to seek ways to generate minutes of
use solely for the purpose of generating ``compensable minutes,''
rather than to provide legitimate services to VRS users. Illegitimate
minutes are difficult to detect on an ex post basis, particularly when
comingled with legitimate minutes or submitted by eligible providers on
behalf of non-eligible ``white label'' providers. The U.S. Department
of Justice, working in cooperation with the FCC's Office of Inspector
General (OIG), has actively pursued individuals alleged to have
manufactured and billed the TRS Fund for illegitimate minutes of use,
and the Commission has adopted rules to bolster the certification
process and discourage fraud and abuse. Even the best auditing
mechanisms are imperfect, however, and so it is preferable to change
the structural incentives of providers to discourage such abuse in the
first place and increase our ability to detect it if it does occur
along with strong oversight and auditing.
III. Proposed Reforms To the VRS Program To Address Structural Issues
18. The Commission sets forth below detailed proposals to address
the structural issues identified in section II, above. The Commission
seeks comment on these proposals, and emphasizes the importance of
comments being detailed, specific, and supported by data wherever
appropriate.
A. Ensuring That VRS is ``Available''
19. To the extent that the record shows that there is unaddressed
demand for VRS, the Commission proposes to (i) promote residential
broadband adoption via a pilot program to provide discounted broadband
Internet access to low-income deaf, hard of hearing, deaf-blind, and
speech disabled Americans who use ASL as their primary form of
communication, and (ii) provide an incentive payment to providers for
adding new-to-category customers.
1. Promoting Residential Broadband Adoption by Low-Income Americans
With Disabilities
20. Commenters in this docket have advocated for the creation of a
program to subsidize or otherwise make available broadband Internet
access to Americans who are unable to access VRS because they cannot
afford broadband Internet access. Such a program would be consistent
with the recommendations of the National Broadband Plan, the
Commission's broader efforts to meet the 21st century communications
needs of low-income consumers, and the Act.
21. The Commission therefore seeks comment on establishing a ``TRS
Broadband Pilot Program'' (TRSBPP) to utilize the TRS Fund to provide
discounted broadband Internet access to low-income deaf, hard of
hearing, deaf-blind, and speech disabled Americans who use ASL as their
primary form of communication. The Commission aims to ensure that any
such program is both effective, by expanding the potential base of VRS
users to include those who could not otherwise afford broadband, and
efficient in its structure and operation. A detailed proposal to
implement a TRSBPP is set forth in Appendix A of document FCC 11-184.
The Commission seeks comment on our legal authority to implement such a
program in section VI.
2. Providing Incentives to Providers for Adding New-To-Category
Customers
22. A VRS provider's legitimate marketing and outreach costs are
currently compensable from the Fund as part of the per-minute rate.
Providers argue that marketing and outreach is a critical component of
the service they provide. However, the appropriateness of certain
marketing and outreach costs claimed by providers has been the source
of controversy, as have provider marketing practices. Moreover, under
the existing per-minute compensation system, providers have had a
greater incentive to target existing VRS users than to focus outreach
either on ``new-to-category users,'' i.e., potential VRS users that are
not yet registered with any provider as a VRS user or members of the
general public.
23. The Consumer Groups' TRS Policy Statement asks the Commission
to address deficiencies in outreach and research and development. They
express the concern that countless Americans on fixed incomes may not
be aware of resources for accessing TRS, or the capabilities and
features that TRS has to offer. They also note that ``[r]elay services
are equal access programs that are just as useful and critically
important for those with or without hearing and speech disabilities,''
and advocate for TRS promotional activities to acquaint the public and
private sectors, including employers, educational institutions, and
businesses, about TRS to ``build familiarity and acceptance of TRS
nationwide.'' Accordingly, the Commission seeks comment on ways to
ensure that providers are making potential users aware of VRS in a
manner consistent with the goals of section 225 of the Act. In
particular, the Commission seeks comment on ways to provide incentives
for providers to (i) Be more efficient in their marketing and outreach
efforts, (ii) ensure that VRS is available to more potential users by
focusing their efforts on new-to-category users instead of existing VRS
users, (iii) determine whether such efforts are effective in reaching
potential users, and (iv) ensure that their outreach efforts build
familiarity about VRS within the general public. The Commission also
seeks comment on how governmental and non-governmental entities, such
as the FCC, the United States Department of Health and Human Services,
state and local governments, and nonprofit organizations, can help make
potential users aware of VRS.
24. One proposal would be to cease reimbursing providers for
marketing and outreach based on their individual expenses for these
activities, and instead implement a one-time, fixed incentive payment
to VRS providers from the TRS Fund for each new-to-category VRS user
they sign up, starting some time after the effective date of a final
order in this proceeding. Such a system would align compensation with
actual results and encourage VRS providers to focus their marketing and
outreach efforts primarily on finding and signing-up new-to-category
customers instead of merely trying to persuade existing VRS users to
switch providers, which--while a valid commercial goal--is not a
reasonable and legitimate expense for the Fund. By providing a fixed
payment for each successful user sign-up, it would encourage providers
to find the most efficient means of recruiting new users and focus Fund
expenditures on fulfilling the goals set forth in section 225 of the
Act. Further, to the extent that the marginal cost of adding a new
customer is rising, for example, because providers are approaching the
broadband-penetration ceiling, a fixed incentive payment could better
compensate providers for the cost of adding a new-to-category customer.
The Commission seeks comment on whether
[[Page 4953]]
such an incentive payment will better align Fund expenses and
providers' incentives with the goals of efficiency and availability by
replacing the un-measurable effects of ``marketing and outreach'' with
a concrete, transparent, and success-based mechanism.
25. If a new-to-category incentive payment were to be adopted, how
could the Commission ensure that the payment is made only for signing
up VRS users that were not previously registered for iTRS, or were not
previously able to access VRS because, for example, they could not
afford broadband Internet access? One proposal would be to define, for
purposes of marketing and outreach compensation, the terms ``VRS user''
and ``new-to-category VRS user.'' For example, a ``VRS user'' could be
defined as ``as an individual that has registered with a VRS provider
as described in Sec. 64.611 of the Commission's rules.'' This
definition is consistent with our definition of ``Registered Internet-
based TRS User,'' but distinguishes ``VRS users'' from the larger
universe of Registered Internet-based TRS Users to reflect the changes
the Commission proposes to make to the VRS program in document FCC 11-
184. ``New-to-category VRS user'' could be defined as ``a VRS user that
has never previously registered with any provider of Internet-based
TRS.'' The Commission seeks comment on whether these definitions would
appropriately limit new-to-category incentive payments, or whether
different and/or additional definitions would better achieve the stated
purpose of the new-to-category incentive payment. Should these
definitions explicitly state that VRS users and new-to-category VRS
users must be ``deaf, hard of hearing, deaf-blind, or [have] a speech
disability?'' Should the new-to-category incentive payment be limited
to one-per-household or one-per residence? Should other factors be
considered? For example, should there be a minimum age requirement for
VRS users, so as to ensure that infants or small children are not
registered prior to their being able to actually use the service?
Should incentive payments be limited to one-per-household or one-per-
residence as is contemplated for the TRSBPP? The Commission seeks
comment on whether a consumer's decision to obtain services supported
by the TRSBPP, if adopted, should affect eligibility for the Lifeline
or Link Up programs, or vice versa.
26. If a new-to-category incentive payment were to be adopted, how
should providers prove eligibility for payments from the TRS Fund? What
type of information should providers obtain to ensure that an
individual that claims to be or appears to be a new-to-category VRS
user is actually a new-to-category VRS user. Given that hearing
individuals should not be Registered Internet-based TRS users, should
proof that new-to-category VRS users are ``deaf, hard of hearing, deaf-
blind, or [have] a speech disability'' be required? What method or
methods should a provider use to verify or validate the information
provided by a potential new-to-category VRS user? Should the Commission
establish a standard certification form? Should providers establish a
validation or verification process? Should the Commission establish
guidelines or detailed rules governing what constitutes an acceptable
verification or validation process? Should there be only one acceptable
process, or should providers be entitled to use one of several methods
to validate or verify information provided to support categorization as
a new-to-category VRS user?
27. If a new-to-category incentive payment is adopted, how should
the Commission calculate the amount of such payment? One methodology
would be to use as a basis the average or median cost per gross
addition (CPGA) of certified VRS providers over the most recent one
year period. The Commission therefore requests that all commenting
parties submit their CPGA for their most recent fiscal year, including
a description of how the CPGA was calculated and the cost, revenue, and
subscriber data used to calculate the figure. Another methodology would
be to set the incentive payment as the sum of the reasonable costs of
adding a new customer, which would include marketing, equipment, setup,
and other reasonable costs. To the extent commenters support such a
methodology, the Commission requests that they submit a proposed list
of costs and fully justified estimates for those costs. To the extent
commenters wish to propose another method for setting the incentive
payment, they should provide a detailed explanation and justification
for their proposed dollar amount per new-to-category user. The
Commission invites comment on all aspects of this new-to-category
incentive payment proposal.
28. If a new-to-category incentive payment is adopted, what impact
would such adoption have on the Fund contribution factor? Would the
reduction in reimbursements for individual provider marketing and
outreach expenses offset claims for incentive payments? Is it necessary
to ensure that there is not a sudden increase in the Fund contribution
factor? One proposal would be to cap the number of incentive payments
at a fixed number per year. For example, if incentive payments were
limited to 50,000 per year, and there is a pool of 200,000 potential
new-to-category VRS users who could register, it would spread the cost
over at least four years. The Commission seeks comment on whether an
annual cap on the number of payments is appropriate and, if so, at what
level the cap should be set. The Commission also seeks comment on
whether the duration of the incentive payment should be limited. Should
the incentive payment continue to be available in perpetuity, or is it
sufficient to make the payment available only during the transition
period discussed in section IV.B.15?
29. The Commission seeks comment on whether a new-to-category
incentive payment program could help address the market structure issue
addressed in section II.D above. Could those certified VRS providers
that are currently subscale increase their growth prospects if the new-
to-category incentive payment is limited to providers that have less
than the number of users the Commission estimate is necessary to
achieve minimum efficient scale? As the Commission explains in greater
detail below, we believe that having all providers of VRS operating at
minimum efficient scale will improve the efficiency of the VRS program
by ensuring that the Fund does not indefinitely subsidize providers
that have less efficient cost structures. The Commission proposes that
new users would not be prohibited from registering with providers that
already have more than the number of users it takes to achieve scale--
but such providers would not be eligible for the incentive payment
because they already have achieved minimum efficient scale and
presumably have less need for an additional financial incentive to
promote awareness of their brand (as well as greater financial
resources for marketing and outreach). The Commission seeks comment on
this proposal.
30. The Commission seeks comment on whether there are additional
specific steps the Commission should take to incent providers to
refocus their efforts away from merely churning users between providers
and toward finding and adding new-to-category VRS users who have not
been able to benefit from VRS to date. The Commission also seeks
comment on steps that it should take to reduce the increasing incidence
of relay hang-ups by businesses and others who not acquainted with TRS,
as well as
[[Page 4954]]
general measures needed to familiarize the general public about the
existence and purpose of TRS. Finally, the Commission seeks comment on
whether there are specific actions the Commission should take to
supplement provider outreach efforts to expand the availability of VRS
to more users and build acceptance of VRS in the greater community.
31. If a new-to-category incentive payment is adopted, what impact
would such adoption have on research and development relating to VRS
and, more broadly, TRS? Would providers have sufficient incentive and
means to invest in research and development on VRS access technology,
improving their call platforms, and/or other aspects of the provision
of VRS? Would the introduction of standards for iTRS access technology
facilitate research and development by VRS providers? Would such
standards incent equipment manufacturers that have not traditionally
invested in VRS and other TRS technologies to do so going forward? What
other steps could the Commission take to promote research and
development in VRS and other forms of TRS?
B. Addressing VRS User Lock In and Access to Advanced Technology
1. Defining VRS Access Technologies
32. The Commission in the First Numbering Order used the defined
term ``CPE'' to describe ``TRS customer premises equipment,'' or the
technology used to access Internet-based TRS. Because the use of this
term has created some confusion among providers as new access
technologies have been brought to market, and to distinguish the
equipment, software and other technologies used to access VRS from
``customer premises equipment'' as that term is defined in section 3 of
the Act, the Commission proposes to amend Sec. Sec. 64.605 and 64.611
of its rules by replacing the term ``CPE'' where it appears with the
term ``iTRS access technology.'' The Commission proposes to define
``iTRS access technology'' as ``any equipment, software, or other
technology issued, leased, or provided by an Internet-based TRS
provider that can be used to make or receive an Internet-based TRS
call.'' Thus, any software, hardware, or other technology issued,
leased, or otherwise provided to VRS or IP Relay users by Internet-
based TRS providers, including ``provider distributed equipment'' and
``provider based software,'' whether used alone or in conjunction with
``off-the-shelf software and hardware,'' would qualify as ``iTRS access
technology.'' Given the differential treatment of VRS and IP Relay
proposed in document FCC 11-184, the Commission further proposes to
refer separately to iTRS access technology as ``VRS access technology''
and ``IP Relay access technology'' where appropriate. The Commission
seeks comment on this proposal.
2. Establishing Standards for iTRS Access Technology
33. Prior to the Commission's establishment of its Part 68 rules in
1975, terminal equipment was manufactured almost exclusively by Western
Electric, which was part of the Bell System of companies that included
the monopoly local exchange and long distance providers in most parts
of the country. This ensured that no harmful terminal equipment was
connected to the public switched telephone network, but also created a
monopoly in the development and manufacture of terminal equipment. The
Part 68 rules are premised on a compromise whereby providers are
required to allow terminal equipment manufactured by anyone to be
connected to their networks, provided that the terminal equipment has
been shown to meet the technical criteria for preventing network harm
that are established in the Part 68 rules. The Commission's Part 68
rules have facilitated a vibrant, competitive market for terminal
equipment, reducing prices and resulting in a proliferation of new
equipment and capabilities available to consumers.
34. The Commission seeks comment on whether the effectiveness of
our interoperability requirements and functional equivalence could be
improved by the creation of VRS access technology standards that are
conceptually similar to the Part 68 standards for traditional CPE.
Development of such standards may help to resolve the issue of VRS user
lock in described in section II.B.1 by giving VRS users assurance that
they will be able to continue to use their existing VRS access
technology even if they choose to register with a new VRS provider, and
that they will not lose access to enhanced features that have proven to
be of particular importance to end users. The Commission also expects
that a properly developed set of standards, and a properly developed,
consensus driven process for maintaining and updating those standards,
is consistent with, and could serve as a step towards, the
accessibility of interoperable video conferencing services under the
CVAA, and ultimately could result in widespread use of off-the-shelf
technology both for VRS and for point-to-point calls.
35. Appendix B of document FCC 11-184 sets forth a detailed
proposal for developing and maintaining VRS access technology standards
based primarily on SIP. The Commission seeks comment on this proposal.
The process described in that appendix is intended to develop an open,
competitive VRS market, and is designed to facilitate interoperability,
portability, affordability, supportability and compatibility goals that
the Commission has long pursued and consumers have requested.
Establishing VRS access technology standards may give providers a fair
chance to compete and grow and could resolve the problem of users being
locked in to their existing providers because of iTRS access technology
constraints.
36. To ensure all VRS access technologies that VRS providers issue,
lease, or otherwise provide to VRS users are compliant with any
standards that we establish in this proceeding, we propose to adopt, or
to incorporate by reference into our rules, any such standards. Non-
compliance would then constitute an enforceable violation of Commission
rules. The Commission seeks comment on this proposal. What effect would
such a proposal have on existing VRS access technology currently in
use? Should VRS providers that issued, leased, or otherwise provided
VRS access technology to VRS users be required to ensure that such
legacy VRS access technology is fully compliant with any standards
adopted or, alternatively, removed from use within some discrete period
of time (e.g., 12-18 months)? The Commission notes that the burden of
making the existing base compliant may be reduced to the extent that
legacy devices are reaching the end of their natural lives. If the
Commission's interoperability and portability rules are not effectively
enforced with respect to the existing base of VRS users and new-to-
category users, will this prevent smaller providers from growing, and
hence prevent a more efficient industry structure from being attained?
In practice, no provider has an incentive to make its customers more
contestable, even if this benefits VRS users, and so the Commission
seeks comment on how to ensure that any standards adopted are actually
implemented. For example, should VRS minutes generated using equipment
that does not meet any standards adopted be non-compensable?
37. The Commission notes that the Commission has previously sought
comment on whether to ``mandate specific Internet protocols that VRS
providers must use to receive and place VRS calls.'' The Commission's
intent in document FCC 11-184 is not to lock
[[Page 4955]]
providers into a particular set of protocols, which could have the
effect of discouraging or impairing the development of improved
technology. Rather, our goal is to establish functional requirements,
guidelines, and operations procedures for VRS that will encourage the
use of existing and new technologies, and allow the industry to expand
and evolve in a way that the lack of standards to date has inhibited,
in particular by facilitating the use of off-the-shelf equipment and
preventing the use of equipment and lock in as a tool for limiting
consumers' choice of providers.
38. Given the focus of document FCC 11-184 on the VRS program, the
Commission does not propose to establish standards for iTRS access
technology used to access IP Relay or other forms of iTRS at this time.
The Commission expects, however, that to the extent such standards are
warranted, the establishment of standards for the VRS program may serve
as a model for other Internet-based TRS programs.
3. Off-the-Shelf iTRS Access Technology
39. Commenters responding to the VRS Technology Public Notice,
published at 76 FR 11462, March 2, 2011, generally state that off-the-
shelf VRS access technology hardware (i.e., commercially available
computing and communications equipment such as laptops, mobile phones,
and tablet computers with broadband Internet access and a front facing
camera such as the Apple iPad2) is becoming increasingly available and
popular among both VRS providers and VRS users--a dramatic change since
VRS was first introduced. Commenters also note the benefits of
developing VRS applications that run on off-the-shelf hardware,
including that it is based on common commercial protocols and that
``competing VRS providers can all design for any open platforms.''
Conversely, commenters have argued that proprietary videophones
developed by providers are a source of VRS user lock in. The Commission
therefore seeks comment on whether the effort to develop and maintain
VRS access technology standards discussed in the preceding section
would be furthered by phasing in a requirement that all VRS access
technology hardware used to make compensable VRS calls be ``off-the-
shelf.'' Would limiting providers to making modifications to or
developing software for existing commercial platforms help or hinder
the effort to ensure portability and interoperability? Is such a rule
consistent with the Commission's obligation to ``encourage * * * the
use of existing technology and * * * not discourage or impair the
development of improved technology?'' How should ``off-the-shelf'' be
defined for the purpose of such a rule? Should special purpose
videophones be treated differently than other hardware, such as
laptops, tablets, or smartphones? What other factors must be considered
if VRS providers are allowed to provide users only off-the-shelf VRS
access technology hardware?
4. Funding iTRS Access Technology
40. The Commission has consistently held that costs attributable to
the user's relay hardware and software, including installation,
maintenance, and testing, are not compensable from the Fund. As the
Commission has explained, ``compensable expenses must be the providers'
expenses in making the service available and not the customer's costs
of receiving the equipment. Compensable expenses, therefore, do not
include expenses for customer premises equipment--whether for the
equipment itself, equipment distribution, or installation of the
equipment or necessary software.''
41. The Commission also recognizes, however, that providers
continue to provide VRS access technology to VRS users free of charge,
and that in many cases these providers' primary or only source of
revenue may be the TRS Fund. The TRS Fund is likely, therefore,
implicitly or indirectly funding iTRS access technology costs. But
because this funding is implicit or indirect, the Commission has no
data on how many units of hardware or software are being distributed by
providers, how many users are receiving iTRS access technology from
providers, how much money is being spent on manufacturing, installation
and maintenance, or other data that could help the Commission ensure
that the TRS program is being run in as efficient a manner as possible,
and in a manner that fully meets the needs of VRS users.
42. The Commission does not seek to alter our prior decision that
equipment costs are not ``costs caused by interstate telecommunications
relay service.'' The Commission seeks comment, however, on whether the
``availability'' mandate in section 225(d)(3) of the Act, discussed in
greater detail in section VI below, provides the Commission authority
to collect contributions to the TRS Fund to support iTRS access
technology for VRS users and to disburse the relevant support. Would
providing explicit compensation for iTRS access technology help further
the goal of ensuring that TRS is ``available, to the extent possible
and in the most efficient manner?'' Would the Commission be in a better
position to collect data on costs associated with iTRS access
technology if an explicit funding mechanism were in place? Should iTRS
access technology funding be limited to low income consumers, as is
contemplated in the discussion of the TRSBPP above, or would it be more
appropriate to allow iTRS access technology costs to be covered by the
TRS Fund for all VRS users? If the TRS Fund is used to support iTRS
access technology, should the Commission require that ownership of
supported technology be passed to VRS users to help reduce the
possibility of user lock in? What other legal and policy issues are
relevant to the discussion of whether VRS access technology costs
should be explicitly (rather than implicitly) compensable from the TRS
Fund?
43. To the extent that the Commission finds it has the authority to
provide compensation for iTRS access technology, the Commission does
not, given the focus of document FCC 11-184 on the VRS program, propose
to provide explicit compensation for iTRS access technology used to
access IP Relay or other forms of iTRS at this time. The Commission
expects, however, that to the extent a VRS access technology funding
program proved successful, the VRS program may serve as a model for
other Internet-based TRS programs.
C. Instituting a More Efficient Compensation Mechanism and Reducing
Incentives for Waste, Fraud, and Abuse
44. The Commission long has questioned whether a per-minute
compensation methodology is appropriate for VRS, due in no small part
to the significant difficulty of determining a ``reasonable'' per-
minute compensation rate for VRS, given issues concerning CA staffing,
labor costs, and engineering costs particular to VRS. Although there
has been significant effort directed to determining what categories of
provider costs should be compensable from the Fund, the Commission has
not recently examined the fundamental question of whether a tiered,
per-minute compensation model is best suited to VRS.
45. Based on information VRS providers have submitted to the
Commission, the Commission believes that a tiered, per-minute
compensation model may not be the most appropriate for VRS because it
does not align compensation with costs (leading to structural
inefficiency and lack of transparency), it provides a structural
incentive to increase the number of VRS
[[Page 4956]]
minutes billed to the Fund (leading to fraud), and it sustains numerous
subscale players (leading to waste). The Commission recognizes that any
compensation mechanism will have its benefits and its drawbacks, but in
seeking a better alternative to the current model, the Commission notes
the following with respect to the current compensation mechanism:
46. First, although the major cost item for each provider that
varies with the number of VRS minutes is the direct CA cost, if the
average number of VRS minutes per user is constant--as the Commission
believes it is based on both discussions with providers and examination
of historic usage data from the Fund administrator--then the CA cost is
also effectively constant per user. That is, if the CA cost/minute is
constant and the average minutes/user is also constant, then by
definition the product of the two (i.e., CA cost/minute * minutes/user
= CA cost/user) is also constant when averaged over a period of time
and customer base of reasonable size.
47. Second, the Commission notes that there are no other
significant cost items that scale on a per minute basis. Indeed, all
the other items (e.g., iTRS access technology, installation, customer
care, G&A, call center infrastructure, etc.) are either fixed or scale
directly or indirectly with the number of users served.
48. Third, because a substantial fraction of the costs of providing
VRS are not directly variable with either the number of users or
equivalently the number of minutes handled, a providers' cost structure
exhibits a scale curve, as illustrated in Figure 1. The minimum
efficient scale (V*) is the point on the scale curve at which the
volume of a firm's output is high enough to take substantial advantage
of economies of scale so that the average costs are minimized. Put more
simply, minimum efficient scale is the point at which the per-unit cost
begins to ``flatten'' as the volume of output increases. The Commission
implicitly acknowledged the existence of such a scale curve when
adopting a tiered rate methodology by compensating providers with fewer
overall minutes of use at a higher per-minute rate. The Commission
notes, however, that the current scheme provides no limit on the
duration of support for subscale providers, resulting in an industry
structure in which the Fund compensates numerous providers at the
lowest volume, highest cost Tier I rates ($6.24 per minute) and very
few firms at the higher volume, lowest cost Tier III rates ($5.07 per
minute).
49. The Commission seeks comment on these observations regarding
the current compensation mechanism, in particular on the shape of the
scale curve and the point at which minimum efficient scale is reached.
The Commission also seeks comment on whether a more reasonable and
transparent mechanism for compensating providers would be: (a) Based on
a per user payment instead of a per minute payment, so that the
compensation rate is better aligned with the costs of providing
service, and so is easier to determine and more efficient; and (b)
based on a predictable transition from the current tiered rates to a
single at-scale rate. The Commission discusses (a) in the remainder of
this section and (b) in section III.D.
[GRAPHIC] [TIFF OMITTED] TP01FE12.000
50. The Commission seeks comment on whether a per-user compensation
mechanism would better align the compensation methodology with the
providers' cost structure, and so be more efficient, easier to set, and
more transparent. In addition, would such a mechanism eliminate
providers' incentives to stimulate minutes of use, a common and
difficult to detect form of VRS fraud? Would such a mechanism incent
VRS providers to add new users rather than promote additional minutes
of use, thus better aligning the incentives of VRS providers with the
goal of ensuring that TRS is available ``to the extent possible and in
the most efficient manner?'' What pitfalls regarding potential fraud
would come with a per-user approach? Will shifting provider incentives
from generating minutes of use to adding users result in the providers
fraudulently adding or reporting users to generate additional
compensation? Would it be easier to detect the existence of fraudulent
users than fraudulent minutes of use (particularly ex post facto), thus
rendering the program easier to monitor and audit? What safeguards
could be
[[Page 4957]]
established to ensure that providers register only individuals that
meet the requirements established in the statute and by our
regulations? Would a per-user compensation mechanism render the program
more transparent by allowing the Commission and the public to better
understand the actual number of users of VRS and the cost per user--
neither of which are known today despite the size of the program? Would
the rate setting process be simplified, more predictable, and more
transparent? Would a per-user mechanism, taken in combination with the
transition plan described in sections III.D and IV.B.15, provide more
certainty to VRS providers and investors, and better governance for the
Commission? To provide a solid basis for discussion, a detailed
explanation of a per-user compensation mechanism is set forth in
Appendix C of document FCC 11-184. The Commission seeks comment on the
per-user compensation mechanism described in Appendix C of document FCC
11-184. Would a per-user approach eliminate the need to provide funding
for marketing to new-to-category customers?
51. Active Users. While a per-user compensation system would
eliminate incentives to manufacture minutes of use, it would create
incentives to enroll more users--even those who do not actually utilize
the service and therefore do not generate costs for the VRS provider.
It may also create incentives to enroll the same users with multiple
providers. The Commission seeks comment on how these incentives can be
lessened or eliminated. Should providers be compensated only for
``active users''--those registered VRS users that meet a minimum usage
requirement? One proposal for defining active users is set forth in
Appendix C of document FCC 11-184. The Commission recognizes that if it
adopts a minimum usage requirement for VRS users, it will require VRS
providers to continue tracking the monthly use of its service by users.
The Commission seeks comment on what steps it can take to ensure that
VRS providers do not use this information to encourage or entice users
to meet the minimum usage requirement for being considered an active
user.
52. Enterprise Users. The record indicates that there are an
increasing number of individuals who use VRS in the course of their
employment, and that those users may have higher average monthly usage
than those who do not use VRS in the course of their employment. The
Commission recognizes, for example, that a single deaf or hard of
hearing individual may use VRS both as an ``enterprise user'' (i.e., in
the course of their employment) and for their own personal use, just as
hearing individuals frequently have a phone provided by their employer
for use at work, and separate phones for their personal use. The
Commission therefore seeks comment on whether a VRS provider should
receive additional compensation for ``enterprise users'' under a per-
user compensation system.
53. An option for establishing a system to compensate VRS providers
for enterprise users is set forth in Appendix C of document FCC 11-184.
The Commission seeks comment on the benefits of establishing a separate
enterprise user compensation rate in general, and on the option in
Appendix C of document FCC 11-184 in particular. Would the proposal in
Appendix C of document FCC 11-184 help reduce barriers to employment
for VRS users--as is requested by the Consumer Groups--because VRS
providers would have an economic incentive to work with businesses to
ensure that the workplace has functionally equivalent communications
with which those employees can perform their assigned duties? Would
establishing a separate compensation rate for enterprise users help
ensure that VRS providers are appropriately compensated for the
reasonable costs of providing VRS? To what extent would this option
impact the obligations of employers under Title I of the ADA to provide
reasonable accommodation to qualified individuals with disabilities who
are employees or applicants for employment, unless to do so would cause
undue hardship?
54. The Commission notes that under the existing compensation
mechanism, VRS calls made by or to a VRS provider's employee, or the
employee of a provider's subcontractor, are a provider business expense
and are not eligible for compensation from the TRS Fund on a per-minute
basis. The Commission proposes that the same logic applies under a per-
user compensation mechanism, and that the cost of calls made to and by
employees of VRS providers and their affiliates, or subcontractors of
VRS providers and their affiliates should be treated as a cost of
providing service which is recovered through the compensation provided
for service rendered to non-affiliated VRS users. The Commission
therefore seeks comment on what safeguards should be put in place to
ensure that VRS providers are not compensated at the enterprise rate
for providing service to individuals who work for VRS providers or
their affiliates and subcontractors of VRS providers and their
affiliates. For example, should employees of VRS providers and their
affiliates be required to use a separate 10-digit number at work to
denote VRS calls made in the course of their employment? Should the
definition of Enterprise VRS Employer include an exclusion of these
entities? Should the Enterprise VRS Employers of each Enterprise User
be listed in the iTRS database? Should rules associated with call
detail records be modified so that Enterprise Users and Enterprise VRS
Employers are readily identifiable? How should self-employed VRS users
be treated for the purpose of an enterprise rate?
D. Transitioning the Industry Structure To Ensure Economies of Scale
55. Each of the structural reforms discussed above is worth
exploring on its own merit. A major additional benefit of these
reforms, if adopted, would be to create an opportunity to transition
away from the current inefficient industry structure by giving all
providers an opportunity to achieve minimum efficient scale.
Specifically, the proposed TRSBPP could make VRS available to a
significant pool of new-to-category potential VRS users, and the
implementation of iTRS access technology standards could reduce
switching transaction costs and make the existing base of VRS users
more contestable than is currently the case (i.e., more easily able to
switch from their current provider to a new provider). At the end of a
successful transition period, an industry structure could consist of
multiple, at-scale providers serving a larger number of users than at
present, with each provider being compensated at the same at scale per-
user rate set by the Commission (see Figure 2). The ultimate result
could be a program in which providers' incentives are aligned with the
statute's goals of efficiency, functional equivalence, choice, and
maximizing access to VRS, the Fund could be paying an effective rate
per user that may better reflect the actual costs of providing VRS than
is currently the case, and which could eliminate the current tiered
rates, which provide seemingly indefinite support for subscale
providers and introduce extra complexity into the management of the
program.
[[Page 4958]]
[GRAPHIC] [TIFF OMITTED] TP01FE12.001
56. The Commission notes, however, that implementation of these
reforms, if adopted, would need to be phased in over time, as some of
the reforms would need to be conducted sequentially. For example,
appropriate VRS access technology standards must be in place before
providers can be expected to compete effectively for existing users.
Further, providers that are currently subscale will not be able to
achieve scale overnight, and some providers may have chosen to adopt
capital structures requiring a level of profitability that may not be
reflected in a reformed program, for example, because of increased
competition or better alignment of rates with the actual costs of
providing service. The Commission therefore seeks comment in section IV
on how the reforms in this section, if adopted, could be implemented so
as to minimize the risk of inappropriate disruptions that could result
from the transition to an at-scale per-user rate.
57. The Commission notes that the transitions discussed in this
section will be accompanied by risk. An appropriately implemented
structural reform program and transition process potentially would give
each provider a real opportunity to achieve minimum efficient scale
during the transition period and may result in an end state for the
program that is better for VRS users and VRS providers, as well as
being more sustainable and efficient for the Fund. If, however, some
providers are not able to manage their businesses, gain scale, or
support their existing capital structures during a transition period,
they will likely have to change their current business plans. This
would be a reasonable result, and fully consistent with our settled
policy, affirmed by the courts, that our duty is ``to protect
competition, not competitors.'' The Commission seeks to enhance
competition in the provision of VRS services because it appears to be
an effective way of furthering the goals of section 225 of the Act, but
will not act to preserve any particular competitor. The Commission does
not believe that any provider has an inherent entitlement to receive
compensation from the Fund, and so do not regard as a goal the
protection of VRS providers who are high cost and/or uncompetitive.
IV. Implementing Structural Reforms
58. In this section, the Commission seeks comment on how to
implement the structural reforms discussed in section IV above, to the
extent they are adopted. The Commission also seeks comment on whether
any additional amendments or new rules are necessary to implement any
reforms that are adopted.
A. VRS User Database
59. The Commission seeks comment on whether the Commission should
establish a VRS User Database to facilitate four primary functions
required to implement the reforms proposed in document FCC 11-184: (i)
Ensuring that each VRS user has at least one default provider, (ii)
allowing for the identification of new-to-category users, (iii)
supporting the operation of the TRS Broadband Pilot Program discussed
in section III.A.1 and Appendix A of document FCC 11-184, and (iv)
ensuring efficient program administration. A proposal for establishing
a VRS User Database is set forth in Appendix D of document FCC 11-184.
B. Rules Governing the VRS program
60. Implementation of the reforms discussed in document FCC 11-184
will require that the rules governing the operation of the VRS program
be amended. The Commission seeks comment on the need to modify existing
rules or add new rules consistent with the proposals set forth in
document FCC 11-184.
1. Restructuring Section 64.604
61. Section 64.604 of the Commission's rules has become somewhat
unwieldy since it was adopted in 2000. Initially focused on TRS
mandatory minimum standards, the section now includes subsections that
govern, inter alia, the administration of the TRS Fund and procedures
for making complaints against providers. The Commission seeks comment
on whether, regardless of any substantive changes that are made in
response to document FCC 11-184, Sec. 64.604 of its rules should be
broken into separate sections, each of which addresses a particular
regulatory issue. To this end, the Commission seeks comment on whether
it should adopt service-specific rules (e.g., VRS, speech-to-speech,
captioned telephone relay service), transmission-specific rules (i.e.,
PSTN-based TRS vs. iTRS), or some other structure.
2. Improving Functional Equivalence in the Workplace
62. The Commission notes that in the employment context, the
employer, rather than the employee, generally holds the contractual
right to control certain aspects of the communications services and
products used on the job. For example, employers generally procure
telephone service and telephone numbers for their employees, and it is
the employer that pays the phone bill (directly or indirectly),
interacts with the providing carrier, and has the contractual right to
port or reassign numbers through their carrier partner. This generally
is not the case in the context of VRS.
63. As discussed in section III.C and in Appendix C of document FCC
11-184, the Commission seeks comment on whether to provide additional
compensation to VRS providers for providing service to VRS users in the
course of their employment if a per user compensation mechanism is
adopted. The Commission further seeks comment on whether, if such a
proposal is adopted, it can be implemented such that VRS service is
provided in the workplace in a manner that is functionally equivalent
to the way
[[Page 4959]]
telecommunications services are provided to hearing employees.
64. Specifically, the Commission seeks comment on whether
enterprises that have deaf employees could be treated as ``VRS Users''
for the purposes of our VRS program, except to the extent necessary to
ensure that VRS providers appropriately receive and process calls,
including emergency calls, from individual employees. Thus, for
example, a business that contracts with a VRS provider to make VRS
available to all of its deaf employees would be considered a ``user''
as that term is used in connection with the registration and number
portability obligations set forth in Sec. 64.611 of the Commission's
rules, but each individual employee would be considered a user for the
purposes of the emergency access obligations set forth in Sec. 64.605
of its rules. The Commission seeks comment on what changes to its
rules, if any, would be necessary to implement such a proposal,
particularly in the context of the more general proposals and requests
for comment set forth in the remainder of this section IV.B.
3. Removing the Need for Free Dial Around
65. Under our existing interoperability rules, Internet-based TRS
users must be able to ``dial around'' to competing providers.
Specifically, Sec. 64.611(a)(2) of the Commission's rules obligates
default VRS providers, to ``route and deliver all of that user's
inbound and outbound calls unless the user chooses to place a call
with, or receives a call from, an alternate provider.'' If providers
are compensated on a per-user basis, however, they will not be
compensated for calls placed through them by another VRS provider's
registered user. If VRS users were permitted to dial-around their
default provider under a per-user compensation mechanism, providers
would have a perverse incentive to encourage their VRS users to dial
around so as to avoid incurring the costs of processing their VRS
calls. Dial around may also encourage VRS providers that seek to
provide less than full service to free ride on other providers.
66. The Commission recognizes, however, that some consumers might
value the ability to dial around to different providers for various
reasons. For example, the availability of dial around could facilitate
competition among providers to answer calls more quickly. In that case,
some consumers might value the dial around feature because it allows
them to direct their call to an alternate provider that they believe
might be even more responsive than their default provider in particular
instances.
67. Given these competing considerations, the Commission seeks
comment on whether to modify or eliminate the dial around requirement
if the Commission adopts a per-user compensation mechanism. Would it be
appropriate to mandate dial around functionality only for the purpose
of accessing emergency services? Could providers continue to offer dial
around capability on a commercial basis (e.g., on a charge per call
basis)?
68. The Commission notes that eliminating the dial around
requirement for VRS will make the way VRS service is provided more
consistent with the way that most communications services are provided
today. For example, a subscriber to an interconnected VoIP service
cannot make free calls via a second interconnected VoIP service to
which she does not subscribe. However, the Commission recognizes that
the availability of dial around currently serves as an incentive for
VRS providers to meet or exceed ``speed of answer'' requirements
because a customer who does not get their call answered quickly enough
can redirect the call--and the per-minute compensation associated with
the call--to another VRS provider. The Commission therefore seeks
comment below on whether we need to revise this standard and whether
there are other modifications that must be made to the Commission's
mandatory minimum standards so that they better reflect the actual
minimum standards that are reasonable for VRS users to expect.
69. The Commission seeks comment on whether it should require VRS
providers to accept 911 calls from users who are not their registered
users should the proposal to require VRS users to sign a contract with
a specific provider be adopted. The Commission has anecdotal evidence
that some VRS providers require users to register with them before
completing the user's 911 call. Such a requirement would be similar to
the requirement that wireless providers complete 911 calls even if the
caller's contract for service has lapsed.
4. One Free Provider Per VRS User
70. Under the existing per-minute compensation mechanism,
registering with multiple VRS providers is not necessarily problematic
from an efficiency perspective, as the total reimbursements paid from
the TRS Fund for each VRS user's minutes of use will be roughly the
same, regardless of which providers process the calls. As described in
Appendix C of document FCC 11-184, however, a per-user rate should
cover an at scale provider's reasonable, annual costs to provide VRS
service. Thus, under a per-user mechanism, allowing VRS users to
register with multiple providers could result in significant increases
in reimbursements paid from the Fund. Allowing individuals to register
with multiple providers also makes it difficult to assess how many VRS
users there are, and what the usage patterns of VRS users are, as well
as facilitating fraud and/or abuse of the Fund by allowing providers to
obtain compensation from the Fund without necessarily providing all
aspects of service that might be expected from a committed, at scale
VRS provider. The Commission seeks comment on limiting VRS users to
registering with a single VRS provider for the purposes of making and
receiving calls that are reimbursable from the Fund. Would this be an
effective means of ensuring that VRS is provided in an efficient
manner, while at the same time making VRS available to all potential
users?
71. If so, what mechanisms should a provider use to ensure that a
user that it registers is not already registered with another provider?
Would the existence of the VRS User Database (VRSURD) be sufficient to
ensure that multiple registrations do not occur? Are there specific
requirements that should be placed on users that choose to register to
use this service? What type of information should providers obtain to
ensure that an individual is not already registered with another
provider? What method or methods should a provider use to verify or
validate the information provided by a potential VRS user? Should the
Commission establish a standard certification form? Should providers
establish a validation or verification process? Should the Commission
establish guidelines or detailed rules governing what constitutes an
acceptable verification or validation process? Should there be only one
acceptable process, or should providers be entitled to use one of
several methods to validate or verify information provided to ensure
that a VRS user is registered with only one VRS provider? What
information will be required beyond that which providers generally
collect today?
72. The Commission seeks comment on the impact that a ``one free
provider per VRS user'' rule would have on consumers. Some VRS users
have recommended that ``consumers not be restricted to one service
provider for both fixed and mobile services,'' arguing that ``consumers
may have different service providers preferences depending on the type
of service and that
[[Page 4960]]
consumers should be able to choose between different providers.'' Were
the Commission to adopt a rule allowing dual registration (i.e., for
fixed and mobile services) would we be able to achieve the efficiencies
sought after in this proceeding? How would this approach be
implemented? The Commission notes that data provided by some providers
suggests that when a VRS user utilizes both fixed and mobile services,
that user's mobile minutes tend to replace, rather than supplement,
that user's fixed minutes. If this is the case, would VRS providers be
incented to offer high quality service on multiple platforms (e.g.,
mobile and fixed) to attract more customers? In this manner could ``a
one free provider per VRS user'' rule encourage competition and
innovation between VRS providers, especially given the lack of price
competition? Could providers offer users a single ten digit number that
would allow inbound calls to be received on all platforms that a user
possesses? Could providers offer additional paid services (i.e.,
services that are not needed to achieve functional equivalency) on a
commercial basis, as some currently do for remote interpreting
services? Would ``one free provider per VRS user'' be consistent with
the mandate of section 225 of the Act?
73. Consistent with section IV.B.1 and Appendix C of document FCC
11-184, should an Enterprise VRS User's Enterprise VRS Employer be
considered the ``user'' for the purposes of this restriction?
5. Contracts
74. The Commission seeks comment on whether to allow VRS providers
to require VRS users who are either (i) new-to-category VRS users
(i.e., have not previously signed up for VRS) or (ii) switching from
another VRS provider to enter into a service contract starting one year
after the adoption of a per-user compensation mechanism. The Commission
also seeks comment on whether VRS providers should be allowed to
require Enterprise VRS Employers to enter into a service contract
starting one year after the adoption of a per-user compensation
mechanism. Some providers use service contracts in other communications
markets, and the Commission seeks comment on the possible harms and
benefits of allowing them in the context of a per-user compensation
mechanism in the VRS industry. For example, are there costs
attributable to VRS user registration, start-up, or connection such
that service contracts could make the program more cost efficient and
administrable by restricting VRS users and Enterprise VRS Employers'
ability to change their default providers with great frequency? Would
explicitly allowing contracts lessen the incentive for providers to
frustrate interoperability and portability by allowing providers to
recoup the costs of providing iTRS access technology, customer setup,
enrollment, and other upfront costs? Would service contracts increase
the stability of providers' revenues and reduce the amount of customer
churn, lessening the incentives of providers to spend excessive funds
on marketing and winback activities? Would limiting VRS providers to
requiring contracts from new-to-category, switching VRS users, and
Enterprise VRS Employers for some period of time help prevent VRS
providers from contractually locking in their existing user bases, thus
ensuring that the existing installed base of users is contestable
(i.e., users can easily switch from one provider to another) during the
transition period described in section IV.C? What harms may arise due
to service contracts? For example, would a VRS providers have an
incentive to provide subpar service to save costs and increase profits
once it gains new subscribers because they could be locked in for a
period of time? Would revising our speed of answer and other mandatory
minimum standards be sufficient to offset this possible harm? Should
the Commission require VRS providers to offer a trial period? If so,
what period of time for a trial period would be appropriate?
75. If the Commission was to adopt a per-user compensation
mechanism and allow VRS providers to require service contracts, what
would be an appropriate service term? Is a one-year term appropriate,
or should terms be longer or shorter? What protections would need to be
put in place for consumers? Should consumers be permitted to be
released from a contract if the provider breaches its obligations to
provide service in accordance with the Commission's TRS mandatory
minimum standards? Conversely, if consumers are being provided free or
discounted VRS access technology as part of their service contract,
should providers be allowed to impose an early termination fee (ETF) if
consumers wish to exit the contract before its expiration? Are there
other costs that providers intend to recover over the course of a
contract that might justify the use of an ETF? Would such fees be
consistent with the requirements of section 225 of the Act, including
that TRS users pay rates no greater than the rates paid for
functionally equivalent voice services? If so, should a VRS provider be
allowed to ``buy out'' a VRS user's or Enterprise VRS Employer's ETF
with a competing provider in order to allow that user to switch without
incurring a pecuniary transaction cost? Are there other terms that
should be permitted or required that would address up-front costs?
Likewise, are there other contract terms that should be required for or
prohibited in such contracts?
6. Mandatory Minimum Standards (Performance Rules)
76. In view of the purpose of TRS, Congress specifically mandated
in section 225 of the Act that relay services offer access to the
telephone system that is ``functionally equivalent'' to voice telephone
services. The ``functional equivalence'' standard serves as a benchmark
for determining the services and features TRS providers must offer to
consumers, and is reflected in the TRS mandatory minimum standards
contained in the Commission's rules. TRS mandatory minimum standards
are defined in the Commission's Part 64.604 rules in terms of
``operational standards,'' ``technical standards'' and ``functional
standards.'' These standards ensure that TRS users have the ability to
access the telephone system in a manner that approximates, as closely
as possible, the experience of a voice telephone user.
a. Operational Standards
77. The Commission seeks comment on whether the options set forth
in document FCC 11-184 necessitate modifications to its TRS operational
standards, or the establishment of separate operational standards for
VRS. How would the adoption of a new-to-category incentive payment
impact our rules governing data collection from TRS providers and
information filed with the Administrator? Would the data for registered
new VRS users be quantified by the certified VRS provider and submitted
or quantified by the TRS Fund Administrator? If a per-user compensation
system is adopted, how and by whom would the data for ``Active Users''
be quantified? Do provider incentives under a per-user compensation
system change such that the Commission will need to take extra
precautions to ensure that providers will not be motivated to
discourage high volume users from contracting with them or from making
VRS calls? How can the Commission ward off such incentives, to ensure
the continued provision of high quality service to all users,
regardless of the quantity of calls they make? Should specific training
requirements or qualifications be
[[Page 4961]]
established for VRS CAs different from or beyond those general
requirements set forth in Sec. 64.604(a)(1) of the Commission's rules
to ensure that providers maintain a certain level of CA qualifications
for all calls handled? If specific qualifications are imposed on VRS
CAs, what affect would this have on the current pool of VRS CAs who may
or may not meet those qualifications? What effect, if any, would
different qualifications have on the ability of VRS providers to comply
with the speed of answer requirement? Is there any need to modify the
confidentiality and conversation content standards set forth in Sec.
64.604(a)(2) of the Commission's rules to protect consumers from
compromises in call quality? Should obligations with respect to the
types of calls VRS providers must process be modified if a per-user
compensation mechanism is adopted? Are there other operational
standards that should be adopted or modified to ensure high quality VRS
for all users?
b. Technical Standards
78. As discussed in section III.B.2 and Appendix B of document FCC
11-184, the Commission seeks comment on establishing detailed iTRS
access technology standards. The Commission seeks comment on whether
those proposals, or the other proposals set forth in document FCC 11-
184, necessitate modifications to our TRS technical standards, or the
establishment of separate technical standards for VRS. For example, as
discussed in section IV.B.3 above, should the speed of answer
requirements set forth in Sec. 64.604(b)(2) of the Commission's rules
be modified? If adopted, would standards consistent with those set
forth in Appendix D of document FCC 11-184 render the need for rules on
equal access to interexchange carriers and caller ID treatment
unnecessary?
c. Functional Standards
79. The Commission seeks comment on whether the proposals set forth
in document FCC 11-184, if adopted, necessitate modifications to its
TRS functional standards, or the establishment of separate functional
standards for VRS. For example, should VRS providers maintain the same
types of consumer complaint logs as other providers of TRS?
80. The Commission's TRS functional standards rules contain a
number of subsections that govern unrelated aspects of the TRS program.
Consistent with section IV.B.1 above, the Commission seeks comment on
restructuring our rules into separate logical sections and, in the
following paragraphs, seeks comment on the substance of these rules.
7. Public Access to Information
81. In the 2010 VRS Reform NOI, the Commission noted that it has
been difficult to assess the effectiveness of funded outreach programs.
Outreach to the hearing community continues to be necessary; we are
aware, for example, that some businesses refuse to accept relay calls,
perhaps due to a failure to understand the nature of TRS. The
Commission does not, however, believe that its existing practice of
relying on VRS providers to conduct effective outreach has been
effective. The Commission seeks comment on whether the Commission
should establish an independent outreach program to educate the general
public about TRS, including VRS. Should such a program be conducted
specifically by the FCC, a specialized contractor, consumer
organizations, state and local governments, or some other entity or
combination of entities? The Commission notes that it recently
authorized the expenditure of $500,000 annually from the Fund to allow
entities that have significant experience with and expertise in working
with the deaf-blind community to conduct outreach to deaf-blind
individuals to make them aware of the availability of specialized CPE
to low-income individuals who are deaf-blind. Would this effort serve
as a model for VRS?
8. Jurisdictional Separation of Costs
82. The Commission does not propose to modify our rules that govern
jurisdictional separation of costs or cost recovery, but nonetheless
seek comment on whether modifications to these rules are necessary.
9. Telecommunications Relay Services Fund
a. Contributions and Contribution Computations
83. If the Commission should choose to adopt any of the options set
forth in document FCC 11-184, including implementing a TRSBPP or
reimbursing expenses for iTRS access technology through the TRS Fund,
what modifications, if any, should be made to its rules governing
contributions and contribution computations?
b. Data Collection
84. If the Commission should choose to adopt any of the options set
forth in document FCC 11-184, what modifications, if any, should be
made to its rules governing data collection from TRS providers and
information filed with the Administrator? For example, is the general
grant of authority to the Administrator to request information
reasonably ``necessary to determine TRS Fund revenue requirements and
payments'' sufficient? Should the Commission explicitly require
providers to submit additional detailed information, such as
information regarding their financial status (e.g., a cash flow to debt
ratio)?
c. Payments to TRS Providers
85. If the Commission should choose to adopt any of the options set
forth in document FCC 11-184, including adoption of a per-user
compensation mechanism, implementing a TRSBPP or reimbursing expenses
for iTRS access technology through the TRS Fund, what modifications, if
any, should be made to its rules governing payments to TRS providers,
eligibility for payments from the TRS Fund, and notice of participation
in the TRS Fund?
d. Administrator Reporting, Monitoring, and Filing Requirements;
Performance Review; Treatment of TRS Customer Information
86. Many of the possible changes set forth in this item contemplate
a role for the Administrator. If the Commission should choose to adopt
any of the options set forth in document FCC 11-184, what
modifications, if any, should be made to its rules governing the
obligations of the Administrator, Commission review of the
Administrator's performance, and treatment of TRS customer information?
e. Enforcement
87. If the Commission should choose to adopt any of the options set
forth in document FCC 11-184, what modifications to its rules, if any,
are necessary to ensure that they are enforceable?
10. Consumer Complaints
88. If the Commission should choose to adopt any of the options set
forth in document FCC 11-184, what modifications, if any, should be
made to its informal and formal complaint procedures?
11. Registration Process
89. The Commission seeks comment on whether the options set forth
in document FCC 11-184 necessitate modifications to its iTRS
registration rules. In particular, the Commission seeks comment on what
modifications, if any, would be necessary to implement the proposals
regarding VRS in the workplace discussed in section IV.B.2
[[Page 4962]]
above. What additional verification standards would be needed?
12. Emergency Calling Requirements
90. The Commission seeks comment on whether the options set forth
in document FCC 11-184 necessitate modifications to its emergency
calling requirements. In particular, the Commission seeks comment on
what changes, if any, are necessary to accommodate the elimination of
dial around discussed in section IV.B.3, above, a one provider per-user
system as discussed in section IV.B.4 above, or the treatment of VRS in
the workplace discussed in section IV.B.2 above.
13. Preventing Discrimination
91. Section 225 of the Act requires the Commission to ensure that
relay services ``are available, to the extent possible and in the most
efficient manner, to hearing-impaired and speech-impaired individuals
in the United States.'' Section 225(d)(1) of the Act charges the
Commission with the obligation of adopting regulations that, among
other things, ``prohibit relay operators from failing to fulfill the
obligations of common carriers by refusing calls or limiting the length
of calls that use telecommunications relay services.'' Pursuant to
these statutorily mandated responsibilities and other Commission
requirements, the Commission has issued a number of orders finding that
specific types and forms of discrimination and fraudulent practices are
unlawful and prohibited by the Act and our rules. As discussed in
Section III.E above, however, some VRS providers' still have engaged in
unlawful practices.
92. Under a per-user compensation mechanism, the Commission
recognizes that VRS providers may continue to engage in unlawful
practices. Under the per-minute compensation reimbursement method,
these unlawful practices have generally occurred through discrimination
(e.g., favoring high-volume users over low-volume users), often
resulting in waste, fraud, and abuse of the TRS Fund (e.g., seeking
payment for non-compensatory minutes through discriminatory practices
and outright fraud). By way of example, anecdotal evidence suggests
that the per-minute compensation scheme provides unintended incentives
to VRS providers to give call priority to high-volume users by placing
them first in line for connections and to favor such users by providing
them with newer and better VRS access technology before low-volume
users. Under a per-user compensation framework, providers likewise may
have the incentive to discriminate against high-volume users in favor
of low-volume users because providers would be compensated at the same
level for all users, regardless of their call volume. Similarly, some
providers may utilize a variety of practices geared toward ensuring
that low-volume users make the minimum number of calls required to
qualify as an ``active user'' for purposes of compensation from the
Fund. Both call discrimination and practices aimed at acquiring and
maintaining low-volume ``active users'' that would not otherwise
utilize VRS could result in waste, fraud, and abuse of the TRS Fund and
threaten the long-term sustainability of the VRS program.
93. It has become increasingly apparent that our ``piece meal''
approach to detect and outlaw discriminatory and fraudulent practices
has not always worked. As the Commission noted in Section III.E, in
many cases, ``when directed not to engage in certain calling
activities,'' for example, ``some providers have merely shifted to
other arrangements that are not specifically prohibited and have
engaged in attempts to make non-compliant calls in ways that have made
them more difficult to detect.'' To the extent that VRS providers
discriminate in the manner in which they handle calls (e.g., the type
of call or caller), except as provided for in the Commission's rules,
they create inefficiencies in the VRS call processing system. Likewise,
when a VRS provider engages in fraudulent practices by encouraging or
causing VRS calls to be made that would not otherwise be made, or VRS
users to be enrolled that would not otherwise be enrolled, except for a
provider's desire to drive up its compensation from the TRS Fund, the
VRS system is made inefficient. These types of unlawful practices
artificially tie up CAs and limit the ability of legitimate callers to
use VRS contrary to section 225 of the Act.
94. Further, unlawful VRS provider practices not only allow
dishonest providers to obtain a competitive advantage over providers
that operate in compliance with the Act and the Commission's rules, but
undermine the key goals of Congress in enacting section 225 of the Act.
VRS provider practices that result in waste, fraud, and abuse threaten
the sustainability of the TRS Fund and are directly linked to the
efficiency and effectiveness of the TRS Fund support mechanisms upon
which VRS providers rely for compensation. As the Commission has
previously found, fraudulent diversion of funds robs the TRS Fund for
illicit gain and ``abuses a highly valued Federal program that, for the
past twenty years, has been critical to ensuring that people with
hearing and speech disabilities have the same opportunities to
communicate over distances--with family, friends, colleagues, and
others--as everyone else.'' Moreover, such practices unlawfully shift
improper costs to consumers of other telecommunications services,
including local and long distance voice subscribers, interconnected
VoIP, and others.
95. Accordingly, in furtherance of the Commission's express
authority under section 225(b)(1) and section 225(d)(1)(E) of the Act
and the goals underlying the provision and regulation of TRS, it
proposes to adopt regulations prohibiting VRS providers from engaging
in practices that result in waste, fraud, and abuse of the TRS Fund,
including discriminatory practices (e.g., screening for or refusing to
register individuals who are likely to be high volume users,
discrimination based on length of calls or call volume, and favoring
some users with free or low-cost iTRS access technology based on call
volume), and seek comment on this proposal. The Commission concludes
that such regulations should apply to all VRS providers as reasonably
ancillary to the effective performance of its responsibilities under
the Act, including its mandate to ensure that relay services ``are
available, to the extent possible and in the most efficient manner, to
hearing-impaired and speech-impaired individuals in the United
States.'' The Commission seeks comment on this conclusion, and
generally on the Commission's authority to adopt such regulations as
proposed.
14. Preventing Slamming
96. As discussed above and in the VRS Call Practices R&O and
Certification FNPRM, the current VRS per-minute compensation structure
has been vulnerable to unforeseen and difficult-to-detect waste, fraud,
and abuse. The Commission recognizes that a per-user compensation
structure could lead to other abuses by providers in order to increase
the number of their active users and generate revenue. For example,
under a per-user compensation scheme, VRS providers would have an
incentive to engage in ``slamming'' and misleading marketing practices
because reimbursement would be based on the number of registered users
rather than on the total minutes of use.
97. The Commission has previously sought comment on the need for
VRS specific rules against slamming to protect relay consumers against
[[Page 4963]]
unauthorized default provider changes. The Commission incorporates by
reference comments previously filed on this issue and seek to refresh
the record on this issue. To protect VRS users from unwanted changes in
their default provider, the Commission seeks further comment on whether
it should adopt rules governing a user's change in VRS providers. The
Commission seeks comment on the types of safeguards that should be put
in place to protect users from unauthorized changes in their VRS
default provider. The Commission also seeks comment on what type(s) of
authorization providers must obtain prior to switching a subscriber's
default provider and how verification of any such authorization should
be obtained and maintained by the receiving provider. Additionally, the
Commission seeks comment on whether and how providers may use
information obtained when receiving notification of a user's service
change to another provider, whether for marketing, win-back, or other
purposes.
15. Audits.
98. Section 64.604(c)(5)(iii)(C) of the Commission's rules states
that the TRS Fund Administrator ``and the Commission shall have the
authority to examine, verify and audit data received from TRS providers
as necessary to assure the accuracy and integrity of fund payments.''
The Commission seeks comment on whether the TRS Fund Administrator or
the Commission requires additional authority to conduct audits under
the rules its propose in document FCC 11-184.
C. Implementing the Transition From per-Minute to per-User Compensation
99. As discussed in section III.D, implementation of the reforms
discussed in document FCC 11-184, if adopted, would need to be phased
in according to a well-developed and transparent plan. In this section,
the Commission seeks comment on how to conduct such a transition.
1. Phases
100. A transition from a per-minute to a per-user compensation
mechanism can be conceptualized as consisting of three phases. The
first phase would be the ``implementation phase,'' during which all
conditions necessary to prepare for the switch from per-minute to per-
user compensation would be met, including measures to make the existing
base of customers more contestable and bring new VRS users into the
program. The implementation phase would begin immediately after the
adoption of a final order in this proceeding, and terminate with the
initiation of per-user compensation at an initial per user rate. The
second phase would be the ``growth phase'' during which smaller
providers would have the opportunity to achieve scale by adding users
and all providers would transition from their initial per-user rate set
during the implementation phase to a unitary at-scale ``base rate''
discussed in Appendix C of document FCC 11-184 (if those rates are
different). The third and final phase would be the ``scale phase,''
during which all providers are compensated at a per-user compensation
mechanism selected by the Commission to reflect the cost of providing
VRS service at scale. The Commission seeks comment on whether these
three phases are the appropriate logical structure for a transition
from per-minute to per-user compensation. The Commission also seeks
comment, in the following sections, on how each of the phases of a
transition should be conducted.
a. Implementation Phase
101. As described above, the ``implementation phase'' would be the
time period during which all conditions necessary to prepare for the
switch from per-minute to per-user compensation would be met. The
implementation phase would begin upon the adoption of a final order in
this proceeding, and terminate with the initiation of per-user
compensation. The Commission seeks comment in this section on how an
implementation phase should be conducted.
(i) VRS Provider Compensation During Implementation Phase
102. The Commission seeks comment on how VRS providers should be
compensated during the implementation phase. As discussed in greater
detail in the following paragraphs, the Commission and the
Administrator will need to gather data from VRS providers before an
initial per-user rate can be established. The Commission therefore
seeks comment on what the per-minute rate should be during the
implementation phase. The Commission stated in the 2011 VRS Rate Order
that the interim rates currently in effect would ``be in effect on an
interim basis until the Commission completes its examination of VRS
rates and compensation as part of the 2010 VRS NOI proceeding'' because
``extending the current interim rates and compensation structure
temporarily provided the best means to ensure stability and certainty
for VRS while the Commission continues to evaluate the issues and the
substantial record developed in response to the 2010 VRS NOI
proceeding.'' Should the Commission extend the current interim rates
during the implementation period to provide continued certainty during
the implementation phase?
(ii) Actions To Be Conducted During the Implementation Phase
103. The Commission seeks comment on what actions need to be taken
during the implementation phase and the timing of such actions. If the
Commission adopts a per-user mechanism, it propose to require that each
of the following occur during the implementation phase:
The VRSURD be established and operational;
The TRSBPP be established and operational;
iTRS access technology standards be adopted and
implemented;
``One provider per user'' be implemented (i.e., VRS users
must select a single VRS provider); and
The initial per-user rate (or rates) be calculated and
published.
The Commission describes in greater detail and seeks comment on
these conditions in the following paragraphs.
104. VRSURD. As discussed in section IV.A and Appendix D of
document FCC 11-184, a VRSURD would be essential to (i) ensure that
each VRS user has at least one default provider, (ii) allow for the
identification of new-to-category users, (iii) support the operation of
the TRS Broadband Pilot Program discussed in section III.A.1 and
Appendix A of document FCC 11-184, and (iv) ensure efficient program
administration. In order to establish a VRSURD, the neutral database
administrator must be selected, construct the database, work with
industry to populate the database, test the functionality of the
database, and be prepared to support the functionality described in
Appendix D of document FCC 11-184 before the Commission can effectively
implement a ``one provider per user'' rule. The data that will be
submitted to the VRSURD also will be critical to establishing a per-
user rate.
105. The Commission notes that the Commission completed the
comparable task of establishing the iTRS numbering directory in six
months. The Commission seeks comment on whether this is a reasonable
timeframe for the establishment of the VRSURD. Are there issues that
would make the process of establishing a VRSURD take more--or less--
time than was needed to establish the iTRS numbering directory? If so,
what are those issues, and what impact would they have on the timing?
106. TRSBPP. As discussed in section III.A.1 and Appendix A of
document
[[Page 4964]]
FCC 11-184, the Commission proposes, to the extent there is unaddressed
demand for VRS, to promote residential broadband adoption via a pilot
program to provide discounted broadband Internet access to low-income
Americans who are deaf, hard of hearing, deaf-blind, or speech
disabled. The Commission notes that implementation of a TRSBPP would
require that a VRSURD be established and that the Administrator, VRS
providers, and broadband providers all take steps to establish and
implement appropriate procedures. The Commission seeks comment on how
much time should be allowed for the TRSBPP to be implemented. The
Commission also seeks comment on whether it would be necessary to have
the TRSBPP operational before the end of the implementation period, or
whether that program, to the extent adopted, could be implemented at a
later time.
107. iTRS access technology standards. Appropriate VRS access
technology standards must be in place before VRS providers can be
expected to compete effectively for VRS users. The Commission seeks
comment on how much time the Commission should allocate for each of the
actions described in Appendix D of document FCC 11-184, including the
adoption of iTRS access technology standards, the time necessary for
any standards transition phases for the installed base of VRS access
technology and/or for new VRS users, the establishment of a conformance
and interoperability testing regime, and the establishment of an
ongoing standards governance process. To what extent must the steps
described in Appendix D of document FCC 11-184be completed during an
implementation phase? Could certain steps be completed during the
growth phase?
108. One provider per user. As discussed in section IV.B.4, users
must select a single default provider under a per-user compensation
system. At what point during the implementation phase would it be
appropriate to implement such a requirement? How long should VRS users
be given to make a provider selection? What should happen if VRS users
fail to select a default provider during the time allotted? How long
before the end of the implementation period should the selection period
end to ensure that the Commission and the Administrator have accurate
counts of each VRS providers' user base on which to rely when
establishing per-user rates?
109. Calculation of initial per-user rate(s). As discussed above,
the Commission contemplates that the implementation phase would
terminate with the initiation of per-user compensation. The Commission
seeks comment on how the initial per-user compensation rate for each
VRS provider should be calculated. Should all VRS providers be
compensated at the same initial rate, or is it more appropriate to set
a separate initial per-user rate for each provider? Should providers
immediately be paid at the ``target base rates'' established as
discussed in Appendix C of document FCC 11-184? Should each VRS
provider be compensated at an initial per-user rate that keeps them
revenue neutral (i.e., each provider would continue to receive the same
amount of revenue immediately before and immediately after the switch
to a per user rate)?
110. To the extent initial revenue neutrality is a goal, would the
first year of the implementation phase be the appropriate reference
period for determining the appropriate revenue level, or would some
other time period be more appropriate? How would the appropriate level
be established? When should a VRS provider's number of users be
determined? Would it be appropriate to use the VRS user count
immediately after VRS users are required to select a single default
provider, or should a ``settling in'' period be allowed to pass first
to allow for customers to switch providers? How long should such a
settling in period be? The Commission notes that to the extent that
providers are kept revenue neutral between the end of the per minute
mechanism and the start of the per user mechanism, they may have an
incentive to depress their initial user count to inflate the
corresponding initial per user rate. The Commission seeks comment on
ways to prevent this.
111. What other factors should be taken into account when
establishing an initial per-user rate? For example, should there be a
maximum per-user compensation rate established so as to ensure that VRS
providers with very few users at the end of the implementation period
are not paid an ``excessive'' per-user rate? Should a VRS provider's
capital structure be taken into account when establishing their initial
per-user rate? To what extent should the Commission be concerned that
an initial per-user rate might increase the likelihood of a VRS
provider being unable to sustain its current capital structure? How
disruptive would such financial restructuring be to the service
experienced by VRS users? How, if at all, would such a proceeding
affect the TRS Fund in the long term?
112. Other possible conditions. The Commission seeks comment on
what, if any, additional conditions should be met during the
implementation phase. For example, should the new-to-category incentive
payment, if adopted, be available during the entirety of the
implementation phase, or should that incentive payment be made
available only after the TRSBPP has been implemented? This would help
to ensure that a new-to-category incentive is not paid for registering
individuals who already are aware of the VRS program but did not
register solely due to the cost of a broadband Internet connection.
113. Duration. Should the total duration of the implementation
period be limited in time, or only by the achievement of the necessary
conditions? If limiting the total duration of the implementation period
is appropriate, what should the deadline be? Should there be interim
deadlines established for meeting any of the conditions set pursuant to
the discussion in the paragraphs above? What should those deadlines be?
For the sake of clarity, commenters responding to these questions
should reference the date that a final order is adopted in this
proceeding (e.g., ``the deadline for such action should be one year
from the adoption of a final order'').
114. What should be the result if any deadlines established
pursuant to the discussion in the preceding paragraph are not met?
Would it be appropriate to implement one of the default alternatives
discussed in section V?
b. Growth Phase
115. The ``growth phase'' of a transition from per-minute to per-
user compensation would be that time during which small providers would
have the opportunity to achieve scale by adding users and transition
from their initial per-user rate to the unitary, at-scale ``target base
rate'' discussed in Appendix C of document FCC 11-184 (if those rates
are different). The growth phase would terminate once all VRS providers
are being compensated at the target base rate.
116. The growth phase would be defined primarily by three factors:
the initial per-user rate for each VRS provider, the target base rate,
and the transition from the initial per-user rate(s) to the target base
rate. As we seek comment above on how to establish the initial per-user
rate(s) and below on setting the target base rate, we focus our inquiry
in this section on the transition path.
117. As illustrated in Figure 3 below, two questions must be
answered once initial per-user rates and the target base rate are
established. First, how long
[[Page 4965]]
should the growth period be? That is, how much time should elapse
between tinitial and tfinal? Second, what should
the per-user rate be during the growth period? Or, put another way,
what should be the shape of the rate curve between tinitial
and tfinal? The Commission seeks comment on these questions.
[GRAPHIC] [TIFF OMITTED] TP01FE12.002
118. Duration of growth period. The Commission seeks comment on the
appropriate duration of the growth period. How should the Commission
balance the need to give providers a fair chance to adapt their cost
structures to the new reimbursement scheme (e.g., by attaining scale
economies and/or adjusting their financing commitments) against the
knowledge that every year of paying rates above the target base rate,
R*, could be considered an unnecessary expenditure of Fund resources?
What other factors should be taken into account when determining the
appropriate duration of the growth period?
119. Shape of the rate curve. The Commission seeks comment on the
appropriate per-user rate over the course of the growth period. One
approach, illustrated in Figure 4, would be to simply compensate each
VRS provider at the initial per-user rate established during the
transition period. As discussed above, such rates could be unique to
each provider (e.g., RA and RB as shown in Figure
4) or common to all providers (e.g., the target base rate, R*, or
another unitary rate).
[GRAPHIC] [TIFF OMITTED] TP01FE12.003
120. An alternative approach, illustrated in Figure 5, would be to
reduce each provider's per-user compensation rate during the course of
the growth period until the target base rate is reached. Figure 5
illustrates a simple version of this approach, with each VRS provider's
per-user compensation being reduced to the target base rate in two
steps, the first at t1 and the second at tfinal.
[[Page 4966]]
[GRAPHIC] [TIFF OMITTED] TP01FE12.004
121. Note that, regardless of the shape of the rate curve,
providers will benefit from the certainty of a pre-determined
trajectory during the duration of the growth period, which will allow
them to make operational and financing plans with minimal regulatory
risk. The Commission seeks comment on the rates that should be paid
during the growth period. Should there be a single rate during the
growth period, or should the rate be reduced in steps over time? If the
rate should be reduced, what should the duration of each step be, and
how should the amount of the reduction be calculated? Commenters should
provide detailed explanations of and justifications for their
recommendations, to include any financial data necessary to support the
use of a particular rate curve. If the Commission transitions to a per
user rate following document FCC 11-184, it expects to set
tinitial, tfinal, R*, and the trajectory as soon
as possible as part of the initial rate setting process to provide
multi-year certainty for providers. Further discussion of the target
base rate can be found in Appendix C of document FCC 11-184.
122. New entrants. To the extent newly certified VRS providers are
authorized to be compensated by the Fund and begin to provide service
during the transition period (``new entrants''), how should those
entrants be compensated? Should they be compensated at the target base
rate, the weighted average rate being paid to existing providers at the
time of entry, or some other rate?
c. Scale Phase
123. The third and final phase of a transition from a per-minute to
a per-user compensation mechanism would be the ``scale phase,'' during
which all providers are compensated at the same per user rate selected
by the Commission. Thus, the scale phase would be the ``steady state''
that exists after compensation has transitioned to a per-user mechanism
and all providers are being compensated at the efficient target base
rate. The Commission seeks comment on the appropriate way to determine
the annual per-user compensation rate during the scale phase.
124. If the Commission adopts a per-user mechanism, it proposes to
adopt for the scale phase a price cap mechanism consistent with that
adopted by the Commission for IP Relay in the 2007 Rate Order, 73 FR
3197. January 18, 2008. Under that plan, the compensation rate is set
for a period of three years, ``during which time the rates would be
adjusted upward annually for inflation (according to a pre-defined
inflation factor) and downward to account for efficiency gains
(according to a factor also set at the outset of price caps).''
125. Specifically, the Commission proposes to adopt the general
model established for IP Relay in the 2007 Rate Order, with the
exception of how the base rate is calculated. As described in the 2007
Rate Order:
As a general matter, the price cap plan applies three factors to
a base rate--an Inflation Factor, an Efficiency (or ``X'') Factor,
and Exogenous Costs. The basic formula takes a base rate and
multiplies it by a factor that reflects an increase due to
inflation, offset by a decrease due to efficiencies. The Inflation
Factor will be the Gross Domestic Product--Price Index (GDP-PI). The
Efficiency Factor will be set as a figure equal to the Inflation
Factor, less 0.5 percent (or 0.005) to account for productivity
gains. As a result the rate for a particular year will equal the
rate for the previous year, reduced by 0.5 percent (i.e.,
RateYear Y = RateYear Y-1 (1-0.005)). Reducing
the rate by this amount will encourage VRS providers to become more
efficient in providing the service.
The Commission will also adjust the rate, as necessary, due to
exogenous costs, i.e., those costs beyond the control of the IP
Relay providers that are not reflected in the inflation adjustment.
Therefore, to the extent the Commission adopts new service
requirements, it will determine whether the costs of meeting the new
requirements warrant an upward exogenous adjustment.
126. A number of providers asserted at that time that a price cap
approach would have at least three benefits: (1) It would create
incentives for providers to lower costs; (2) the three year time frame
gives providers ``predictability about revenue to allocate money to
programs that will reduce costs in the future;'' and (3) it simplifies
the rate setting process, saving time and money. One provider also
emphasized that under price caps, providers would focus on increasing
efficiencies to accommodate decreasing rates. The Commission notes that
many of the same providers supported the establishment of a cost
recovery methodology for VRS at that time, and believe that the
benefits attributed to the adoption of a price cap methodology in that
context will adhere equally in the VRS context.
127. The Commission seeks comment on this proposal. Should the
specifics of this methodology be modified for VRS? For example, should
the Commission adopt a different Inflation Factor or Efficiency Factor?
Should the standards for an exogenous cost adjustment be modified? Is a
three year time frame appropriate for VRS? What other factors might be
appropriate for inclusion in such a methodology?
2. Contracts
128. In section IV.B.5 above, the Commission seeks comment on
whether to allow VRS providers to require VRS users who are either (i)
new-to-category VRS users (i.e., have not previously
[[Page 4967]]
signed up for VRS) or (ii) switching from another VRS provider to enter
into a service contract after the adoption of a per-user compensation
mechanism. If the Commission was to adopt such a proposal, during what
phase of the transition described above would it be appropriate to
allow providers to require VRS users to enter into contracts?
V. Alternatives To Structural Reform
129. The Commission seeks comment on the rate methodology the
Commission should adopt should (i) the Commission choose not to adopt
the per-user rate methodology proposed in document FCC 11-184 or (ii)
should the transition to a per-user methodology be terminated before it
is completed. The Commission notes that each of the reform proposals
described in this NPRM--increasing VRS availability (via broadband
subsidies, new to category incentives, and enterprise VRS), ensuring
the interoperability and portability of VRS access technologies via
standards, compensating VRS providers at a single at-scale rate, and
moving to a per-user compensation scheme--is worth pursuing in itself
to improve the program, although as they are mutually reinforcing it
explores implementing them all, sequenced appropriately.
130. The Commission notes that the Commission in the 2010 TRS Rate
Methodology Order, 75 FR 49491, August 13, 2010, adopted interim VRS
rates representing the average of the tiered rates established in 2007,
which were based on providers' projected costs, and the Administrator's
2010 proposed rates, which, in turn, were based on providers' actual,
historical costs. These interim rates reflect a balance between the
goal of ensuring that VRS providers recover from the Fund only the
reasonable costs caused by their provision of VRS and the goal of
ensuring quality and sufficient service during the pendency of this
proceeding. In anticipation of the proposals set forth in document FCC
11-184, CGB waived the May 1, 2011 Fund Administrator filing
requirement for VRS payment formulas and revenue requirements for the
2011-12 TRS Fund year, and subsequently concluded that it would be more
efficient and less disruptive to extend the existing interim rates
while concluding the evaluation of the issues and the substantial
record developed in response to this proceeding.
131. The Commission proposes that if a per-minute rate methodology
is retained, the Commission adopt, consistent with the recommendations
of the Administrator for the 2010-2011 fund year, a per-minute rate
based on weighted average actual per-minute provider costs for the most
recently completed fund year. The Commission in the 2010 TRS Rate
Methodology Order found that the Administrator's ``proposed rates based
on actual costs [were] reasonable and supported by record evidence,''
and that it was suitable that ``the Commission exercise its discretion
to use them as a basis for setting an interim rate for the 2010-2011
Fund year.'' Although the Commission has, during this interim period,
allowed providers to recover their costs at rates well above those
based on actual cost data so as to avoid ``a significant and sudden cut
to providers' compensation,'' in the event that broader structural
reform is not possible at this time, the Commission finds it reasonable
to move to a rate based entirely on providers' actual costs. The
Commission seeks comment on this proposal.
132. The Commission further proposes to eliminate the current tier
structure and utilize a single rate based on the weighted average of
providers' actual costs. The rationale for adopting the tiers in the
2007 TRS Rate Methodology Order was that providers with a relatively
small number of minutes generally have higher costs. The Commission
expects data from providers will show that this remains the case today.
Consistent with its analysis above, however, the tiered rate structure
supports an unnecessarily inefficient market structure, and apparently
provides insufficient incentive for VRS providers to achieve minimal
efficient scale. Further, its findings in the 2010 TRS Rate Methodology
Order continue to hold true: ``[t]o the extent that one provider
commands a substantial share of the VRS market, the Commission finds
that [the Administrator's] use of weighted averages is appropriate, and
properly balances, on one side, the greater relative costs incurred by
smaller providers with, on the other, not penalizing providers
operating at lower costs for their greater efficiency. The Commission
therefore concludes that [the Administrator's] methodology, and use of
actual cost information submitted by the providers and certified under
penalty of perjury to be true and correct, [was] reasonable.'' The
Commission seeks comment on this proposal to eliminate the current tier
structure and utilize a single rate based on the weighted average of
providers' actual costs.
133. The Commission seeks comment on what steps the Commission and
the Administrator should take to implement these proposals, should the
Commission choose to adopt them. For example, by when should the
Administrator require VRS providers to file the requisite cost data? To
what extent should the Administrator, or providers, obtain independent
audits of the data to be submitted? Should the Commission accept late
filed data, or simply calculate the rate based on data submitted by the
deadline established by the Commission or the Administrator? What other
steps must the Commission or the Administrator take to ensure that a
per-minute rate based on providers' actual costs can be established in
an expeditious fashion? Finally, the Commission seeks comment on
whether there are other viable alternatives to adopting a per user or
per minute rate methodology. The Commission proposes that ignoring the
last ten years of experience with the TRS program, both good and bad,
and the technological progress that has occurred over the same period,
and simply continuing with the program as currently structured (perhaps
with relatively minor tinkering around the margins) is simply not a
viable option for the Commission in its duty to manage responsibly the
contributions of millions of Americans to a program that disburses over
half a billion dollars a year. The Commission therefore discourages
commenters from assuming a Panglossian stance with respect to a status
quo that is increasingly failing to meet the needs and expectations of
its stakeholders including, especially, actual and potential VRS users.
VI. Legal Authority
134. The Commission seeks comment on our legal authority to adopt
each of the options and proposals discussed in document FCC 11-184. As
noted above, section 225 of the Act requires the Commission ``to make
available to all individuals in the United States a rapid, efficient
nationwide communication service, and to increase the utility of the
telephone system of the Nation,'' and directs that ``the Commission
shall ensure that interstate and intrastate telecommunications relay
services are available, to the extent possible and in the most
efficient manner, to hearing-impaired and speech-impaired individuals
in the United States.'' Section 225 of the Act further requires that
the Commission, among other things, ``establish functional
requirements, guidelines, and operations procedures for
telecommunications relay services,'' ``establish minimum standards that
shall be met in carrying out [the
[[Page 4968]]
provision of TRS],'' and ``require that users of telecommunications
relay services pay rates no greater than the rates paid for
functionally equivalent voice communication services.'' Does section
225 of the Act, standing alone, provide sufficient authority for the
options and proposals contemplated in document FCC 11-184? Do the
Commission's grants of authority in the Act, including those in
sections 1, 2, 4(i), 255, and 303(r), and section 706 of the
Telecommunications Act of 1996, provide additional authority? Does
section 254 of the Act, which sets forth the goal that ``consumers in
all regions of the nation, including low-income consumers, * * * should
have access to telecommunications and information services,'' provide
additional legal authority for proposals in this item targeted towards
low-income consumers?
135. The Commission seeks additional comment on our authority to
establish the TRSBPP. Specifically, the Commission seeks comment on our
authority to collect contributions to the TRS Fund to support broadband
Internet access for low income VRS users and to disburse the relevant
support. Section 225 of the Act provides that the Commission ``shall
ensure that interstate and intrastate telecommunications relay services
are available, to the extent possible and in the most efficient manner,
to hearing-impaired and speech-impaired individuals in the United
States.'' The Commission seeks comment on whether VRS is not
``available'' to a potential user who is unable to afford broadband
Internet access. Does section 225(b)(1) of the Act, standing alone,
provide authority for the Commission to assess contributions and
disburse support for broadband Internet access?
136. Section 225 of the Act does not explicitly describe how the
Commission must ensure that TRS is available. The subsection that most
nearly describes how TRS providers should be compensated is section
225(d)(3) of the Act, which addresses recovery of costs in the context
of jurisdictional separations. Section 225(d)(3)(A) of the Act requires
the Commission to ``prescribe regulations governing the jurisdictional
separation of costs for the services provided pursuant to this
section,'' which the Commission construe to mean that it should specify
how providers distinguish between interstate and intrastate costs.
Subsection (B) further provides that the Commission's regulations
``shall generally provide that costs caused by interstate
telecommunications relay services shall be recovered from all
subscribers for every interstate service.'' The statute does not
address how those costs are to be recovered from subscribers, nor how
payments are to be disbursed to providers. In the absence of such
guidance, the Commission chose to establish a shared funding
mechanism--the TRS Fund--over other possible funding mechanisms.
137. Does section 225(d)(3)(B) of the Act limit the Commission's
ability to disburse support only for ``costs caused by interstate
telecommunications relay services,'' or does the Commission have
authority to disburse additional funds to the extent necessary to
ensure that the mandate of section 225(b)(1) of the Act--to make TRS
``available''--is met? Would section 225(d)(3)(B) of the Act authorize
the Commission to require contributions to the TRS Fund to support
broadband Internet access if the Commission finds that broadband
Internet access is necessary to meet its section 225(b)(1) of the Act
mandate? Are there other considerations?
138. Does section 706(b) of the Telecommunications Act of 1996
provide additional support for the TRSBPP? The Commission found in the
Seventh Broadband Progress Report that broadband is not ``being
deployed to all Americans in a reasonable and timely fashion.'' Section
706(b) of the Telecommunications Act of 1996 directs the Commission, in
light of that determination, to ``take immediate action to accelerate
the deployment'' of broadband. Does this directive provide the
Commission with additional authorization to utilize the TRS Fund to
promote broadband availability in conjunction with the goal of
promoting the availability of TRS?
139. The Commission notes another, more recent legislative
development on this issue. Congress in the CVAA authorized the
Commission to provide up to $10 million support annually from the Fund
for programs for ``the distribution of specialized customer premises
equipment designed to make telecommunications service, Internet access
service, and advanced communications, including interexchange services
and advanced telecommunications and information services, accessible by
low-income individuals who are deaf-blind.'' Does this explicit
authorization to utilize the TRS Fund to pay for equipment used to make
non-TRS services available to Americans with disabilities limit the
Commission's authority to utilize the TRS Fund to effectuate the
availability mandate in section 225(b)(1) or other mandates in the Act?
140. The CVAA also directs the Chairman to create an Emergency
Access Advisory Committee ``[f]or the purpose of achieving equal access
to emergency services by individuals with disabilities.'' The Committee
is charged, among other things, with making recommendations about
``what actions are necessary as a part of the migration to a national
Internet protocol-enabled network * * * that will ensure access to
emergency services by individuals with disabilities,'' and ``for the
possible phase out of the use of current-generation TTY technology to
the extent that this technology is replaced with more effective and
efficiency technologies and methods to enable access to emergency
services by individuals with disabilities.'' The Commission has
authority to implement the recommendations of the Committee, and to
promulgate ``any other regulations * * * as are necessary to achieve
reliable, interoperable communication that ensures access by
individuals with disabilities to an Internet protocol-enabled emergency
network, where achievable and technically feasible.'' Ensuring that
individuals with hearing and speech disabilities who use ASL have
access to VRS would, by definition, ensure that those people would have
access to an ``Internet protocol-enabled emergency network,'' as (i)
VRS providers must afford their users access to 911 service and (ii)
VRS requires that the user obtain a high speed internet connection to
access the service. Ensuring access to VRS also would facilitate the
phase out of TTY technology to the extent that the cost of broadband
Internet access is preventing current TTY users from transitioning to
VRS or other forms of Internet-based TRS. The Commission seeks comment
on whether these provisions provide the Commission with authority, to
the extent recommendations of the Committee are consistent, to create
the TRSBPP. The Commission seeks comment also on any other sources of
authority that would enable the Commission to require contributions to
the TRS Fund and disburse funds from the TRS Fund for the purpose of
supporting broadband Internet access for low-income individuals who are
deaf, hard of hearing, have a speech disability, or are deaf-blind and
use ASL as their primary form of communication.
141. The Commission also seeks comment on its authority to collect
contributions to the TRS Fund to provide reimbursements for relay
hardware and software used by the consumer, including installation,
maintenance costs, and testing. Does the ``availability'' mandate in
section
[[Page 4969]]
225(b)(1) of the Act discussed in the preceding paragraphs provide
authority for such reimbursements? Does Section 706(b) of the
Telecommunications Act of 1996 or the CVAA provide additional
authority?
VII. Other Issues
142. The Commission seeks comment on other issues related to the
issues addressed in document FCC 11-184.
A. Data Security and Privacy
143. The Commission notes that the privacy-based limitations on the
government's access to customer information in Title II of Electronic
Communications Privacy Act (ECPA), section 222 of the Act, and its
implementing rules and the privacy provisions of the Cable Act, may be
implicated by the collection of the data discussed in document FCC 11-
184. The Commission seeks comment on whether any of these pre-existing
regulatory or statutory requirements create any concerns with respect
to its ability to adopt the proposals discussed in document FCC 11-184,
including the storage by a database administrator of customer data
discussed in Appendix D of document FCC 11-184. The Commission seeks
comment on how best to address these concerns. Would it be appropriate
or necessary to require VRS users to consent to certain disclosures as
a condition of receiving service in order to ensure that the VRS
program is operated efficiently and the Commission and the Fund
Administrator can fulfill their auditing and management functions
effectively? What would be the appropriate extent of such a consent
requirement, and what other regulatory privacy protections, if any,
would be necessary if such a requirement were adopted?
B. Request for Data
144. The Commission requests that providers and other interested
parties provide such data as is necessary to support their comments in
response to document FCC 11-184. The Commission notes that it may find
factual information supported by affidavit or certification to be more
persuasive than information that is not so supported. In that regard,
the Commission further notes that any submissions containing knowing or
willful misrepresentations, whether or not supported by affidavit or
certification, are punishable by fine or imprisonment.
C. Support of Certification Applications and Annual Reports by
Certification Under Penalty of Perjury
145. In the 2011 VRS Certification Order, the Commission adopted
interim rules requiring that providers certify, under penalty of
perjury, that their certification applications and annual compliance
filings required under Sec. 64.606(g) of the Commission's rules are
truthful, accurate, and complete. The Commission found good cause to
adopt these interim rules to ensure that providers seeking
certification and providers holding certifications may be held
accountable for their submissions as they seek to secure or retain
certification under the rules adopted in the 2011 VRS Certification
Order. The Commission concluded that interim rules requiring
certification by a Chief Executive Officer, Chief Financial Officer, or
other senior executive of an iTRS provider, under penalty of perjury,
to the truthfulness, accuracy, and completeness of certification
applications and annual compliance filings were a necessary and
critical component of its efforts to curtail fraud and abuse. In
particular, the Commission found that these interim rules would help to
ensure that it has true and complete information, thereby ensuring that
only qualified providers are eligible for compensation from the Fund.
146. Specifically, the Commission adopted the following interim
rules:
The chief executive officer (CEO), chief financial officer (CFO), or
other senior executive of an applicant for Internet-based TRS
certification under this section with first hand knowledge of the
accuracy and completeness of the information provided, when
submitting an application for certification under paragraph (a)(2)
of this section, must certify as follows: I swear under penalty of
perjury that I am -------- (name and title), -------- an officer of
the above-named applicant, and that I have examined the foregoing
submissions, and that all information required under the
Commission's rules and orders has been provided and all statements
of fact, as well as all documentation contained in this submission,
are true, accurate, and complete.
The chief executive officer (CEO), chief financial officer (CFO), or
other senior executive of an Internet-based TRS provider under this
section with first hand knowledge of the accuracy and completeness
of the information provided, when submitting an annual report under
paragraph (g) of this section, must, with each such submission,
certify as follows: I swear under penalty of perjury that I am ----
---- (name and title), -------- an officer of the above-named
reporting entity, and that I have examined the foregoing
submissions, and that all information required under the
Commission's rules and orders has been provided and all statements
of fact, as well as all documentation contained in this submission,
are true, accurate, and complete.
147. The Commission tentatively concludes that it should adopt
these rules permanently, and seeks comment on this tentative
conclusion. The Commission also seeks comment on whether there are any
additional elements that should be covered by these proposed
certifications, and, in general, whether there are any additional
safeguards that it should adopt as rules to ensure the veracity and
completeness of provider submissions, and to help ensure that providers
comply with the Commission's TRS rules and policies.
VIII. Initial Regulatory Flexibility Analysis
148. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared this present Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in document FCC 11-184.
Written public comments are requested on this IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments to document FCC 11-184. The Commission will send a copy of
document FCC 11-184, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA).
A. Need for, and Objectives of, the Proposed Rules
149. In document FCC 11-184, the Commission seeks comment on a
series of proposals to improve the structure and efficiency of the VRS
program, to ensure that it is available to all eligible users and
offers functional equivalence--particularly given advances in
commercially available technology--and is as immune as possible from
the waste, fraud, and abuse that threaten the long-term viability of
the program as it currently operates.
150. Among these proposals, the Commission proposes to establish a
``TRS Broadband Pilot Program'' (TRSBPP) to utilize the TRS Fund to
provide discounted broadband Internet access to low-income deaf, hard
of hearing, deaf-blind, and speech disabled Americans who use ASL as
their primary form of communication, and providing incentives to
providers for adding new-to-category customers. The Commission proposes
such a subsidy to meet the objective of increasing utilization of VRS
by eligible
[[Page 4970]]
individuals who cannot currently afford broadband.
151. The Commission seeks comment on whether the TRSBPP should
support fixed services, mobile services, or both. Fixed connections--
whether wireline or wireless--that are advertised as capable of
delivering 256 kbps, generally deliver such speeds to their customers,
and can be shared by all members of a residential unit. The Commission
proposes that broadband providers will provide discounts to eligible
households or residences and receive reimbursement from the TRS Fund
for the provision of such discounts. The Commission proposes to
establish the discount amount for the TRSBPP at a level that will make
broadband Internet access service capable of supporting VRS at no cost,
or very low cost, to consumers. The Commission seeks comment on how to
set the amount of the discount that should be provided to qualifying
households or residences. Given the Commission's experience in
administering the Lifeline and Link Up programs, it proposes to adopt
the Lifeline and Link Up certification and verification rules that are
ultimately adopted in the Lifeline and Link Up Modernization NPRM
proceeding, modified as necessary to reflect the differences between
possible future changes in the Lifeline program and the proposed
TRSBPP.
152. In addition, the Commission proposes to concretely define iTRS
access technology, which will help ensure that the rules governing VRS
can be applied equally to any medium used to access VRS. The goal of
establishing standards for iTRS access technology is to meet the
Commission's policy objectives of facilitating an open, competitive
market for VRS by supporting interoperability, portability,
affordability, supportability and compatibility of VRS equipment.
Specifically, the Commission proposes: (1) Defining ``iTRS access
technology'' as ``any equipment, software, or other technology issued,
leased, or provided by an Internet-based TRS provider that can be used
to make or receive an Internet-based TRS call''; (2) establishing
standards for iTRS access technology; and (3) supporting the use of
off-the-shelf iTRS access technology. The Commission intends to apply
its definitions and standards in a manner that will allow for the use
of VRS through off-the shelf technology because this will give VRS
users enhanced choice and accessibility to utilize VRS. Accordingly,
the Commission seeks comment on the proposal.
153. In addition, the Commission seeks comment on the extent to
which the statute supports the use of the Fund to support iTRS access
technology research and development costs. Research and development
would help to achieve the goals of establishing standards and
furthering technological advancements that both meet the needs of VRS
users, and provide compatibility with mainstream, off-the-shelf
equipment. If research and development are supported by the Fund, then
the Commission's goals of providing greater access to VRS will be
better achieved.
154. Next, the Commission explores the option of instituting a more
efficient compensation mechanism that reduces incentives for waste,
fraud, and abuse by shifting from a per-minute to a per-user
compensation mechanism with a specific plan for transitioning the
industry structure to ensure economies of scale. Per-minute
compensation has provided an incentive for the manufacturing of
illegitimate minutes by some providers in order to increase
reimbursements. Shifting to a per-user compensation mechanism will
remove the incentive to increase VRS traffic through illegitimate
means. The Commission states, ``[t] he ultimate result could be a
program in which providers' incentives are aligned with the statute's
goals of efficiency, functional equivalence, choice, and maximizing
access to VRS, the Fund could be paying an effective rate per user that
may better reflect the actual costs of providing VRS than is currently
the case, and which could eliminate the current tiered rates, which
provide seemingly indefinite support for subscale providers and
introduce extra complexity into the management of the program.''
155. The Commission specifically proposes a greater per-user
reimbursement rate to VRS providers for their registered enterprise
users vs. residential users. This proposal is intended to serve two
objectives: (1) To account for the potentially greater volume of calls
an enterprise user may make, and (2) to provide an incentive to
providers to market and support their services to deaf individuals in
the workplace. Accordingly, the Commission seeks comment on this
separate proposal.
156. The transition phase for restructuring VRS as described above
is intended to account for current subscale providers who may need time
to attempt to achieve scale. By subscale, the Commission refers to
providers whose cost of delivering VRS may be higher than costs other
providers may incur because of their small market share. The Commission
notes that any transition will be accompanied by risk. However, if
adopted, an appropriately implemented structural reform program and
transition process will give each provider a real opportunity to
achieve minimum efficient scale during the transition period and result
in an end state for the program that is better for VRS users, as well
as being more sustainable for the Fund. To that end, the Commission
seeks comment on whether to allow VRS providers to require VRS users
who are either (i) new-to-category VRS users (i.e., have not previously
signed up for VRS) or (ii) switching from another VRS provider, to
enter into a service contract after the adoption of a per-user
compensation mechanism in order to support the growth of smaller
providers under the new structure.
157. The rules addressed in this section raise questions about
related new reporting requirements that will be addressed in section 0.
Even though the Commission record is not yet ample enough for it to
propose specific rules, the Commission raises questions about record-
keeping, reporting and info-gathering, e.g., info-gathering pursuant to
the PRA, and seek comments on these issues, because comments received
on those areas may guide us toward a more efficient administration of
its proposed use of a per-user mechanism; its proposed expanded use of
R&D; and its proposed changes in the definition of iTRS. Comments on
proposed changes in the Commission's record-keeping, reporting and
information gathering actions are directly related to these major
proposed structural changes in VRS rules because proposed changes in
these recordkeeping and informational areas will in all likelihood
facilitate an improved monitoring of all costs imposed on impacted
small entities by all of its proposed general structural reforms. For
example, the Commission may, to facilitate improved monitoring of the
costs of its overall structural reforms, decide to require service
providers of all kinds, including broadband-based services providers,
to provide certain specific types of reports on their activities and
may require them to hire accountants to prepare independent audits of
their activities and operations in this context. The specific questions
the Commission raise with regard to record-keeping, reporting, and
info-gathering, and the comments it seeks on these issues, are
discussed in greater detail in Section 0, the Section 0 of this IRFA
where an expanded treatment of such issues is required.
B. Legal Basis
158. The legal basis for any action that may be taken pursuant to
document
[[Page 4971]]
FCC 11-184 is contained in sections 1, 2, 4(i), 225, 255, 303(r), and
706 of the Communications Act of 1934, as Amended, 47 U.S.C. 151, 152,
154(i), 225, 254, 255, 303(r), and 1302(b).
C. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules May Apply
159. Small Businesses. Nationwide, there are a total of
approximately 29.6 million small businesses, according to the SBA.
Entities that provide VRS could generally be referred to as, ``Wired
Telecommunications Carriers'' or ``All Other Telecommunications.''
160. Wired Telecommunications Carriers. The Census Bureau defines
this category as follows: ``This industry comprises establishments
primarily engaged in operating and/or providing access to transmission
facilities and infrastructure that they own and/or lease for the
transmission of voice, data, text, sound, and video using wired
telecommunications networks. Transmission facilities may be based on a
single technology or a combination of technologies. Establishments in
this industry use the wired telecommunications network facilities that
they operate to provide a variety of services, such as wired telephony
services, including VoIP services; wired (cable) audio and video
programming distribution; and wired broadband Internet services. By
exception, establishments providing satellite television distribution
services using facilities and infrastructure that they operate are
included in this industry.''
161. In this category, the SBA deems a wired telecommunications
carrier to be small if it has 1,500 or fewer employees. Census data for
2007 shows 3,188 firms in this category of these 3,188 firms, only 44
had 1,000 or more employees. While the Commission could not find
precise Census data on the number of firms with in the group with 1,500
or fewer employees, it is clear that at least 3,144 firms with fewer
than 1,000 employees would be in that group. On this basis, the
Commission estimates that a substantial majority of the providers of
interconnected VoIP, non-interconnected VoIP, or both in this category,
are small.
162. All Other Telecommunications. Under the 2007 U.S. Census
definition of firms included in the category ``All Other
Telecommunications (NAICS Code 517919)'' comprises ``establishments
primarily engaged in providing specialized telecommunications services,
such as satellite tracking, communications telemetry, and radar station
operation. This industry also includes establishments primarily engaged
in providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems. Establishments providing Internet services or
voice over Internet protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry.''
163. In this category, the SBA deems a provider of ``all other
telecommunications'' services to be small if it has $25 million or less
in average annual receipts. For this category of service providers,
Census data for 2007 shows that there were 2,383 such firms that
operated that year. Of those 2,383 firms, 2,346 (approximately 98%) had
$25 million or less in average annual receipts and, thus, would be
deemed small under the applicable SBA size standard. On this basis,
Commission estimates that approximately 98% or more of the providers of
interconnected VoIP, non-interconnected VoIP, or both in this category
are small.
164. Wireless Telecommunications Carriers (except Satellite). Since
2007, the Census Bureau has placed wireless firms within this new,
broad, economic census category. Prior to that time, such firms were
within the now-superseded categories of ``Paging'' and ``Cellular and
Other Wireless Telecommunications.'' Under the present and prior
categories, the SBA has deemed a wireless business to be small if it
has 1,500 or fewer employees. For the category of Wireless
Telecommunications Carriers (except Satellite), Census data for 2007
shows that there were 1,383 firms that operated that year. Of those
1,383, 1,368 had fewer than 100 employees, and 15 firms had more than
100 employees. Thus under this category and the associated small
business size standard, the majority of firms can be considered small.
Similarly, according to Commission data, 413 carriers reported that
they were engaged in the provision of wireless telephony, including
cellular service, Personal Communications Service (``PCS''), and
Specialized Mobile Radio (``SMR'') Telephony services. Of these, an
estimated 261 have 1,500 or fewer employees and 152 have more than
1,500 employees. Consequently, the Commission estimates that
approximately half or more of these firms can be considered small.
Thus, using available data, we estimate that the majority of wireless
firms can be considered small.
165. The Commission notes that under the standards listed above
some current VRS providers and potential future VRS providers would be
considered small businesses. There are currently ten eligible VRS
providers, five of which may be considered small businesses. In
addition, there are several pending applications from entities seeking
to become certified to provide VRS that may be considered small
businesses. Although the Commission does not estimate a significant
adverse economic impact on such entities, it nevertheless seeks comment
on the potential impact of the rules and policies proposed in document
FCC 11-184 due to the fact that some affected entities would likely be
considered small businesses.
D. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
166. Certain rule changes proposed in this proceeding would, if
adopted, modify rules governing data collection obtained from TRS
providers and might also modify the filing of information with the
Administrator. For example, the Commission may decide that it is
sufficient to grant to the Administrator a general authority to request
information, or it may decide to require providers to submit additional
detailed information, such as information regarding their financial
status, e.g., a cash-flow-to-debt ratio. Proposed rule changes may also
modify records of calls so that Enterprise Users and Enterprise VRS
Employers can be readily identified based on their call history. Such
changes my also authorize the Administrator to require VRS providers to
file the requisite cost data, and may require the Administrator and/or
providers to obtain independent audits of the data to be submitted.
Additional rule changes may result in a Commission decision to accept
late-filed data, or in the alternative to calculate the VRS rate based
on data submitted by the deadline established by the Commission or the
Administrator.
167. Section 64.604(c)(5)(iii)(C) of the Commission's rules
requires TRS providers to ``provide the administrator with true and
adequate data necessary to determine TRS Fund Sec.
64.604(c)(5)(iii)(C) of its rules requires TRS providers to ``provide
the administrator with true and adequate data necessary to determine
TRS Fund revenue requirements and payments.'' The Commission has
proposed to place the primary responsibility for managing the TRSBPP
enrollment, certification, and eligibility verification processes on
VRS providers. This may result in a Commission decision to require VRS
providers to collect and maintain user
[[Page 4972]]
enrollment, initial certification, and verification of eligibility for
TRSBPP support documentation for submission upon request to the TRS
Fund Administrator or the Commission. The Commission may also determine
that the TRS Fund Administrator should be empowered to collect
additional data under the proposals in document FCC 11-184. For
example, the Commission may decide that broadband providers that
receive disbursements from the TRS Fund should be required to report
certain information.
168. The Commission is also considering record keeping requirements
regarding individuals seeking TRSBBP support. One possibility would be
to adopt the existing Federal Lifeline program eligibility criteria. As
discussed in the Lifeline and Link Up Reform and Modernization NPRM,
Lifeline discounts are available to eligible consumers in households
that qualify as ``low-income,'' but there is no uniform national
definition of households for all programs.
169. The Commission will provide an analysis of the costs
associated with any new record keeping or reporting requirements it
adopts based in part on the record in this proceeding. The costs of
compliance with new rules adopted in this proceeding will be fully
reimbursed by the TRS Fund as the costs of compliance with the current
VRS are reimbursable from the TRS Fund.
170. Current VRS providers and newly certified VRS providers that
may fall into the small business categories listed in section C above
will be subject to the costs imposed by any rules adopted as a result
of this proceeding. If the Commission adopts any new information
collection requirements, the Commission will publish another notice in
the Federal Register inviting the public to comment on the requirement,
as mandated by the Paperwork Reduction Act of 1995. In addition,
pursuant to the Small Business Paperwork Relief Act of 2002, the
Commission seeks specific comment from the public on how it might
``further reduce the information collection burden for small business
concerns with fewer than 25 employees.''
E. Steps Taken To Minimize Significant Economic Impact on Small
Entities and Significant Alternatives Considered
171. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its approach, which
may include the following four alternatives (among others): ``(1) the
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and reporting requirements under the rule for such small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
such small entities.''
172. In general, alternatives to proposed rules are discussed only
when those rules pose a significant adverse economic impact on small
entities. In this context, however, the proposed rules generally confer
benefits as explained below. Therefore, the Commission limits its
discussion of an alternative to paragraph number twenty-four below.
173. The purpose of the proposed TRSBPP is to provide discounted
broadband Internet access to low-income deaf, hard of hearing, deaf-
blind, and speech disabled Americans who use ASL as their primary form
of communication. Such a program would be consistent with the
recommendations of the National Broadband Plan, the Commission's
broader effort to meet the 21st century communications needs of low-
income consumers, and the Act. In addition, the TRSBPP will help to
ensure that Fund resources are not spent on merely transferring
existing users back and forth between providers, and instead are used
to expand the availability of VRS to more users. This in turn would
confer a benefit on small entities operating as VRS providers in that
it would increase the current user base, thereby offering greater
business opportunities for VRS providers.
174. As noted above, the Commission seeks comment on new iTRS
definitions and standards that will facilitate the use of VRS through
mainstream equipment and provide better functionality for VRS users.
The Commission believes that setting such uniform definitions and
standards for VRS technology will stabilize the VRS market and allow
for the greatest number of potential users to avail themselves of VRS.
The more users who are registered, the more financial gain for VRS
providers. In addition, with established definitions and standards, a
level playing field for all providers will be possible. Finally uniform
application of VRS rules to all forms of VRS equipment will provide
predictability for VRS providers. Therefore, the Commission believes
that such measures to provide definitions and standards will benefit
all industry participants including small businesses.
175. Moreover, if the Commission adopts rules based on the record
received in response to its proposal to support research and
development through the Fund, the Commission believes that all
entities, small and large, will benefit from such funding. The
Commission seeks comment on this position.
176. The Commission considers an alternative to structural reform
by proposing the possibility of adopting per-minute rates based on a
criterion not discussed above, i.e., weighted average actual per-minute
provider costs for the most recently completed fund year, and by
eliminating the current tier structure. Although the Commission
believes this alternative would neither achieve the policy goals set
forth above, nor minimize the adverse economic impact on small
entities, the Commission nevertheless seeks comment on this alternative
proposal.
177. Applications to become a certified VRS provider are
voluntarily submitted. If a small entity, as defined by the SBA,
applies for certification by showing that it can comply with all of the
Commission's rules, including the proposed new rules in document FCC
11-184, its expenses will be reimbursed from the Fund once it becomes a
certified provider, regardless of whether the Commission adopts the
proposed structural reforms to the VRS program. The Interstate TRS Fund
is sized each year based on the foreseeable costs associated with
providing service in compliance with the Commission rules. A
contribution factor based on this proposed Fund size is then used to
determine the amount each entity responsible for paying into the Fund
must contribute. The Commission believes that its proposals will not
impose an adverse financial burden on entities, including small
businesses, because entities that are able to provide VRS in compliance
with these proposed structural reforms will continue to be promptly
reimbursed from the Interstate TRS Fund for all costs associated with
compliance with the Commission's proposed reforms. Although all
participating VRS providers will be compensated from the Fund for the
costs of providing service, the Commission seeks comment on whether
there may still be some adverse financial impact on a substantial
number of small entities resulting from restructuring VRS.
178. Each of the proposed rules, with the exception of the
alternative discussed above in paragraph twenty-four, confers a benefit
rather than imposes a significant adverse economic impact on regulated
small businesses.
[[Page 4973]]
Therefore, the need for consideration of alternatives is very limited.
However, the Commission asks for comment on the reimbursement of all
costs incurred via compliance with new structural reforms in case there
are costs of such compliance that may not have been considered fully or
may not be compensable from the Fund under the proposed structural
reforms.
F. Federal Rules That May Duplicate, Overlap, or Conflict With Proposed
Rules
179. None.
IX. Ordering Clauses
Pursuant to sections 1, 2, 4(i), 4(j), 225, 251, 254 and 303(r) of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
154(j), 225, 251, 254, 303(r), document FCC 11-184 is adopted.
The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of document FCC 11-184,
including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-2058 Filed 1-31-12; 8:45 am]
BILLING CODE 6712-01-P