Structure and Practices of the Video Relay Service Program; Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities, 14984-14986 [2016-06305]
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Federal Register / Vol. 81, No. 54 / Monday, March 21, 2016 / Rules and Regulations
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[FR Doc. 2016–06087 Filed 3–18–16; 8:45 am]
BILLING CODE 4165–16–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 64
[CG Docket Nos. 10–51 and 03–123; FCC
16–25]
Structure and Practices of the Video
Relay Service Program;
Telecommunications Relay Services
and Speech-to-Speech Services for
Individuals With Hearing and Speech
Disabilities
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
In this document, the
Commission modifies its four-year
compensation rate plan for Video Relay
Service (VRS), adopted in 2013, by
temporarily ‘‘freezing’’ the rate of
compensation paid from the Interstate
Telecommunications Relay Services
Fund (TRS Fund) to VRS providers
handling 500,000 or fewer monthly
minutes and directs the TRS Fund
administrator to pay compensation to
such providers at a rate of $5.29 per
VRS minute for a 16-month period.
DATES: Effective April 20, 2016.
FOR FURTHER INFORMATION CONTACT:
Robert Aldrich, Consumer and
Governmental Affairs Bureau, at 202–
418–0996 or email Robert.Aldrich@
fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Structure
and Practices of the Video Relay Service
Program and Telecommunications
Relay Services and Speech-to-Speech
Services for Individuals with Hearing
and Speech Disabilities, Report and
Order, document FCC 16–25, adopted
on March 1, 2016, and released on
March 3, 2016, in CG Docket Nos. 10–
51 and 03–123. The full text of
document FCC 16–25 will be available
for public inspection and copying via
ECFS, and during regular business
hours at the FCC Reference Information
Center, Portals II, 445 12th Street SW.,
Room CY–A257, Washington, DC 20554.
Document FCC 16–25 can also be
downloaded in Word or Portable
Document Format (PDF) at: https://
www.fcc.gov/general/disability-rightsoffice-headlines. To request materials in
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SUMMARY:
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Jkt 238001
accessible formats for people with
disabilities (Braille, large print,
electronic files, audio format), send an
email to fcc504@fcc.gov or call the
Consumer and Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (TTY).
Final Paperwork Reduction Act of 1995
Analysis
Document FCC 16–25 does not
contain new or modified information
collection requirements subject to the
Paperwork Reduction Act (PRA) of
1995, Public Law 104–13. In addition,
therefore, it does not contain any new
or modified information collection
burden for small business concerns with
fewer than 25 employees, pursuant to
the Small Business Paperwork Relief
Act of 2002, Public Law 107–198, see 44
U.S.C. 3506(c)(4).
Congressional Review Act
The Commission will not send a copy
of FCC 16–25 pursuant to the
Congressional Review Act, see 5 U.S.C.
801(a)(1)(A), because the Commission
adopted no rules therein, as defined in
5 U.S.C. 804(3). Rather, the Commission
modified the rates applicable to
compensation paid to VRS providers
from the TRS Fund.
Synopsis
1. In 2013, the Commission adopted a
Report and Order amending its
telecommunications relay service (TRS)
rules to improve the structure,
efficiency, and quality of the VRS
program, reduce the risk of waste, fraud,
and abuse, and ensure that the program
makes full use of advances in
commercially-available technology.
Structure and Practices of the Video
Relay Services Program,
Telecommunications Relay Services and
Speech-to-Speech Services for
Individuals with Hearing and Speech
Disabilities, CG Docket Nos. 10–51, 03–
123, Report and Order and Further
Notice of Proposed Rulemaking,
published at 78 FR 40407, July 5, 2013
(VRS Reform Order), and 78 FR 40582,
July 5, 2013 (VRS Reform FNPRM), aff’d
in part and vacated in part sub nom.
Sorenson Communications, Inc. v. FCC,
765 F.3d 37 (D.C. Cir. 2014) (Sorenson).
The VRS Reform Order established the
rates at which VRS providers are
compensated from the Interstate
Telecommunications Relay Service
Fund (TRS Fund) for a four-year period
beginning July 1, 2013, and adopted
structural reforms designed to establish
a more level playing field for all VRS
providers.
2. Pursuant to the TRS rules, VRS
providers submit the number of minutes
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Fmt 4700
Sfmt 4700
of service they provide to the TRS Fund
administrator on a monthly basis and
are compensated for these minutes
based on rates set annually by the
Commission. The Commission currently
uses a three-tier compensation rate
structure that allows smaller providers
to receive more compensation per
minute, on average, than larger
providers. A tiered compensation rate
structure allows providers to earn a
higher compensation rate on the initial
minutes of service provided each
month. Pursuant to the three-tiered VRS
rate structure as modified in the VRS
Reform Order, the Tier I rate (the
highest rate) applies to a provider’s first
500,000 monthly VRS minutes, the Tier
II rate applies to a provider’s second
500,000 monthly minutes, and the Tier
III rate (the lowest rate) applies to
monthly minutes in excess of 1,000,000.
As a result, smaller providers receive
more compensation per minute, on
average, than larger providers.
3. In the VRS Reform Order, the
Commission recognized a need to better
align VRS compensation rates with the
allowable costs of this service, pending
a further determination as to VRS
compensation methodology. To that
end, and as an alternative to
immediately reducing rates to a level
based on average costs, the Commission
adopted a four-year schedule that
gradually adjusts the VRS compensation
rates downward every six months,
beginning July 1, 2013, and ending June
30, 2017. (In document FCC 16–25, the
term ‘‘average,’’ when used to describe
multiple providers’ costs, means an
average of provider costs weighted in
proportion to each provider’s total
minutes.) Subsequently, in a Further
Notice of Proposed Rulemaking released
November 3, 2015, the Commission
proposed to temporarily freeze the
compensation rates of providers
handling 500,000 or fewer monthly
minutes. Structure and Practices of the
Video Relay Services Program,
Telecommunications Relay Services and
Speech-to-Speech Services for
Individuals with Hearing and Speech
Disabilities, CG Docket Nos. 10–51, 03–
123, Further Notice of Proposed
Rulemaking, published at 80 FR 72029,
November 18, 2015, (VRS Rate Freeze
FNPRM).
4. The Commission adopts its
proposal to temporarily ‘‘freeze’’ the
compensation rates of providers
handling 500,000 or fewer monthly
minutes (the smallest VRS providers)
and directs the TRS Fund administrator
to pay compensation, subject to a
possible true-up, at a compensation rate
of $5.29 per VRS minute for the period
from July 1, 2015, to October 31, 2016.
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Federal Register / Vol. 81, No. 54 / Monday, March 21, 2016 / Rules and Regulations
This rate is applicable to a VRS provider
in any month for which the provider
submits 500,000 or fewer compensable
VRS minutes for compensation from the
TRS Fund.
5. The record of this proceeding
confirms that for each of the smallest
VRS providers, the per-minute costs
incurred or projected by the provider in
calendar years 2015 and 2016,
respectively, are higher than the
‘‘blended’’ compensation rate applicable
to that provider in that year under the
four-year schedule adopted in the VRS
Reform Order. (A provider’s ‘‘blended’’
compensation rate for a calendar year is
the average of the Tier I rates applicable
in the first and second halves of the
calendar year, weighted by the
provider’s projected minutes for each
half.) The individual cost information
filed by the smallest VRS providers,
which the Commission finds to be
credible, while updating the cost data
previously filed with Rolka Loube,
confirms Rolka Loube’s initial
assessment that the deficits incurred by
the smallest VRS providers may be
jeopardizing their continuation of
service. Further, the smallest VRS
providers credibly argue that available
financing arrangements will not permit
them to maintain operations indefinitely
in accordance with the Commission’s
minimum TRS standards while
continuing to operate at a loss.
Therefore, the Commission finds that,
absent rate relief, it is likely that the
smallest providers either (1) will be
unable to maintain their operations in
2016 or (2) will be unable to continue
to grow their operations significantly in
the direction of reaching optimum
levels of efficiency. As a result, the
Commission’s objective to offer such
providers ‘‘a reasonable opportunity to
. . . reach the optimum scale to
compete effectively’’ may be
undermined. See VRS Reform Order, 78
FR 40602, July 5, 2013.
6. As the Commission has previously
recognized, the presence of diverse
providers can spur improvements in the
availability, efficiency, and functional
equivalence of VRS. Further, public
interest considerations favor the grant of
interim relief. The record confirms that
certain service features offered by small
VRS providers may be uniquely helpful
in advancing the goal of functionally
equivalent service for certain subsets of
VRS consumers. Specialized features
offered by the smallest VRS providers
include Spanish language VRS and
emergency alert functions for schools
for the deaf.
7. Based on these various
considerations, the Commission
concludes that it should temporarily
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halt the scheduled reduction in the VRS
compensation rates applicable to the
smallest VRS providers, consistent with
its objective in the VRS Reform Order to
permit smaller providers a reasonable
opportunity to grow and to attain
efficiencies comparable to those of
larger VRS providers. Accordingly, the
Commission adopts its proposal in the
VRS Rate Freeze FNPRM to apply a rate
of $5.29 per minute to compensation
claimed by the smallest VRS providers
for a limited period. This rate, which
was in effect prior to July 1, 2015, is
lower than the smallest VRS providers’
average projected allowable costs for
2015 but higher than their average
projected allowable costs for 2016. It is
also lower than any individual
provider’s allowable costs for 2015. The
Commission concludes that application
of a $5.29 per minute compensation rate
to the smallest VRS providers will
generally provide a reasonable level of
support for the operations of the
smallest VRS providers and will not risk
providing significant overcompensation
for such providers. In addition,
application of this rate to the smallest
VRS providers, in lieu of the previously
scheduled rates, will not impose a
heavy cost burden on the TRS Fund.
8. Regarding the period for which this
rate freeze should apply, the
Commission adopts the proposal in the
VRS Rate Freeze FNPRM for an adjusted
compensation rate of $5.29 per minute
to be effective for 16 months, beginning
retroactively on July 1, 2015, the
beginning of the current Fund Year, and
ending on October 31, 2016. This 16month rate freeze allows the smallest
VRS providers the opportunity to
achieve market share growth and
improvements in efficiency while
benefitting from further implementation
of structural reforms—such as the
establishment of the ACE platform,
which will address interoperability and
other matters and is scheduled for
launch this year.
9. While rates should not be frozen
indefinitely, the Commission agrees
with a number of commenting parties
that, in order to avoid subjecting the
smallest VRS providers to a sudden
drop in compensation upon the
expiration of the 16-month period, the
compensation rate for the smallest
providers should be adjusted downward
in the same increments previously
directed in the VRS Reform Order. In
other words, for the smallest VRS
providers the ‘‘glide path’’ originally
established in the VRS Reform Order
will resume after a 16-month freeze. The
resulting per-minute rates for the
smallest VRS providers for the period
from January 1, 2015, to the end of the
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14985
four-year period are: (1) January 2015–
October 2016, $5.29; (2) November
2016–April 2017, $5.06; (3) May–June
2017, $4.82.
10. In response to the VRS Rate Freeze
FNPRM, a number of commenters urge
the Commission to expand the proposed
scope of the rate freeze beyond the
smallest VRS providers. For example,
some parties argue that VRS providers
that are larger than the smallest
providers, but significantly smaller than
the largest provider, also have a need for
rate relief based on a comparison of
their costs with applicable
compensation rates. The information
provided to the Commission does not
indicate that any VRS providers other
than the smallest providers will have
allowable costs exceeding the average
compensation rate applicable to such
providers in 2015 and 2016. The
Commission recognizes that among the
three largest VRS providers, there are
substantial differences in per-minute
costs. However, as noted in the VRS
Rate Freeze FNPRM, the Commission
previously restructured the rate tiers—
and ‘‘froze’’ the Tier II rate at $4.82 for
the first three years of the transition
period—in order to allow the smaller of
these providers ‘‘ ‘a full opportunity to
improve efficiencies and achieve
scale.’ ’’ Again, these providers have not
shown that they will incur allowable
costs in excess of their revenues in 2015
and 2016. The Commission notes that
several parties attempt to renew claims
made in prior proceedings alleging that
the categories of allowable costs are too
narrow to permit recovery of all
reasonable VRS costs. Those claims
were considered and rejected in the VRS
Reform Order. See VRS Reform Order,
78 FR 40599, July 5, 2013. Further,
while a number of parties contend that
implementation of structural reforms
has imposed additional costs, no party
has submitted specific estimates or
documentation regarding such
implementation costs.
11. In summary, while some parties
contend that the compensation rates for
currently profitable providers should be
frozen, allegedly to prevent reductions
in the quality of VRS, the Commission
does not perceive any immediate risk
that any of the larger VRS providers
have been or will be unable to continue
to provide service that meets the
Commission’s minimum TRS standards
in 2015 and 2016. The Commission
notes, however, that there is an open
rulemaking on a number of broader VRS
ratemaking proposals and issues. See
VRS Reform FNPRM, 78 FR 40582, July
5, 2013. Some of the comments filed in
response to the VRS Rate Freeze FNPRM
address those matters, as well as raising
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Federal Register / Vol. 81, No. 54 / Monday, March 21, 2016 / Rules and Regulations
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new issues regarding quality of service
and the viability of future competition
in the VRS market. To the extent
relevant, the Commission may address
these comments when it completes
action on the broader VRS rulemaking
proposals.
12. In summary, the Commission
directs the TRS Fund administrator,
Rolka Loube, to compensate the smallest
VRS providers at a rate of $5.29 per
minute, applicable from July 1, 2015,
through October 31, 2016. More
specifically, from the effective date of
this Report and Order through October
31, 2016, the Commission directs the
administrator to pay compensation to
the smallest VRS providers at a rate of
$5.29 per minute. Second, the
Commission directs the administrator to
pay each of the smallest VRS providers
a one-time lump sum reflecting the
difference between the compensation
they would have received if they had
been paid at a rate of $5.29 per minute
and the compensation they actually
received at the lower applicable rates,
for all compensable calls completed
during the period between July 1, 2015,
and the effective date of document FCC
16–25. In addition, to avoid subjecting
the smallest VRS providers to a sudden
drop in compensation upon the
expiration of the 16-month period, the
Commission directs the administrator to
pay compensation to the smallest VRS
providers at a rate of $5.06 per minute
from November 1, 2016, through April
30, 2017, and at a rate of $4.82 per
minute from May 1, 2017, through June
30, 2017.
Final Regulatory Flexibility Act
Certification
13. As required by the Regulatory
Flexibility Act (RFA), the Commission
has prepared the Final Regulatory
Flexibility Certification (FRFC) as to the
policies and rules adopted in document
FCC 16–25. The Commission will send
a copy of document FCC 16–25,
including the FRFC, to the Chief
Counsel for Advocacy of the Small
Business Administration (SBA). (See 5
U.S.C. 603(a).)
14. After consideration of the
comments received in response to the
VRS Rate Freeze FNPRM, the
Commission modifies in part the fouryear compensation rate plan for video
relay service (VRS) adopted in the 2013
VRS Reform Order. Although the
Commission believes that the four-year
schedule of VRS compensation rate
reductions continues to be justified in
order to gradually move compensation
rates close to a level close to average
allowable provider costs, the
Commission modifies the schedule as
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applied to the smallest VRS providers,
i.e., those providing 500,000 or fewer
compensable minutes of use of VRS per
month. Spreading rate reductions over a
four-year period was largely intended to
provide a reasonable opportunity for the
smallest providers to reach minimum
efficient scale while benefitting from the
VRS Reform Order initiatives, which
were intended to address many of the
issues that have made it difficult for
small providers to operate efficiently.
15. The smallest providers have
achieved significant reductions in their
per-minute costs but have yet to
approach the size or efficiency levels of
their larger rivals. Further, some small
providers offer service features that may
be helpful in advancing the goal of
functionally equivalent service for
certain subsets of VRS consumers, such
as Spanish language speakers and deafowned businesses. Therefore, the
Commission adopts the temporary,
limited compensation rate ‘‘freeze’’
proposed in the VRS Rate Freeze
FNPRM. Specifically, from the effective
date of document FCC 16–25 through
October 31, 2016, the Commission
directs the TRS Fund administrator to
pay compensation to the three smallest
VRS providers at a rate of $5.29 per
minute. In addition, the Commission
directs the administrator to pay each of
the smallest VRS providers a one-time
lump sum reflecting the difference
between the compensation they would
have received if they had been paid at
a rate of $5.29 per minute and the
compensation they actually received at
the lower applicable rates, for all
compensable calls completed during the
period between July 1, 2015, and the
effective date of document FCC 16–25.
In addition, to avoid subjecting the
smallest VRS providers to a sudden
drop in compensation upon the
expiration of the 16-month period, the
Commission directs the administrator to
pay compensation to the smallest VRS
providers at a rate of $5.06 per minute
from November 1, 2016, through April
30, 2017, and at a rate of $4.82 per
minute from May 1, 2017, through June
30, 2017.
16. In document FCC 16–25, the
Commission adopts its proposal to
temporarily ‘‘freeze’’ the compensation
rates applicable to the smallest VRS
providers and determines, as it
concluded in the Initial Regulatory
Flexibility Analysis, that this measure
will not impose any additional
compliance requirements on small
businesses and would temporarily ease
the impact of existing VRS regulations
on small entities by temporarily
increasing the VRS compensation rate
for small entities above the rate
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Sfmt 4700
currently in effect. Therefore, the
Commission certifies that the rule
amendments in document FCC 16–25
will not have a significant economic
impact on a substantial number of small
entities.
Ordering Clause
Pursuant to the authority contained in
sections 4(i), 201(b), and 225 of the
Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 201(b), 225,
document FCC 16–25 is adopted.
Federal Communications Commission.
Gloria J. Miles,
Federal Register Liaison Officer, Office of the
Secretary.
[FR Doc. 2016–06305 Filed 3–18–16; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 648
[Docket No. 160202070–6070–01]
RIN 0648–XE427
Fisheries of the Northeastern United
States; Northeast Multispecies
Fishery; Adjustment of Georges Bank
and Southern New England/MidAtlantic Yellowtail Flounder Annual
Catch Limits
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; adjustment of
annual catch limits.
AGENCY:
This action transfers unused
quota of Georges Bank and Southern
New England/Mid-Atlantic yellowtail
flounder from the Atlantic scallop
fishery to the Northeast multispecies
fishery for the remainder of the 2015
fishing year. This quota transfer is
justified when the scallop fishery is not
expected to catch the entire allocation of
either stock of yellowtail flounder. The
quota transfer is intended to provide
additional harvest opportunities for
groundfish vessels to help achieve the
optimum yield for these stocks while
ensuring sufficient amounts of
yellowtail flounder are available for the
scallop fishery.
DATES: Effective April 18, 2016, through
April 30, 2016.
FOR FURTHER INFORMATION CONTACT: Aja
Szumylo, Fishery Policy Analyst, 978–
281–9195.
SUPPLEMENTARY INFORMATION: NMFS is
required to estimate the total amount of
SUMMARY:
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Agencies
[Federal Register Volume 81, Number 54 (Monday, March 21, 2016)]
[Rules and Regulations]
[Pages 14984-14986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06305]
=======================================================================
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket Nos. 10-51 and 03-123; FCC 16-25]
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: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission modifies its four-year
compensation rate plan for Video Relay Service (VRS), adopted in 2013,
by temporarily ``freezing'' the rate of compensation paid from the
Interstate Telecommunications Relay Services Fund (TRS Fund) to VRS
providers handling 500,000 or fewer monthly minutes and directs the TRS
Fund administrator to pay compensation to such providers at a rate of
$5.29 per VRS minute for a 16-month period.
DATES: Effective April 20, 2016.
FOR FURTHER INFORMATION CONTACT: Robert Aldrich, Consumer and
Governmental Affairs Bureau, at 202-418-0996 or email
Robert.Aldrich@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's
Structure and Practices of the Video Relay Service Program and
Telecommunications Relay Services and Speech-to-Speech Services for
Individuals with Hearing and Speech Disabilities, Report and Order,
document FCC 16-25, adopted on March 1, 2016, and released on March 3,
2016, in CG Docket Nos. 10-51 and 03-123. The full text of document FCC
16-25 will be available for public inspection and copying via ECFS, and
during regular business hours at the FCC Reference Information Center,
Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554.
Document FCC 16-25 can also be downloaded in Word or Portable Document
Format (PDF) at: https://www.fcc.gov/general/disability-rights-office-headlines. To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an email to fcc504@fcc.gov or call the Consumer and Governmental
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).
Final Paperwork Reduction Act of 1995 Analysis
Document FCC 16-25 does not contain new or modified information
collection requirements subject to the Paperwork Reduction Act (PRA) of
1995, Public Law 104-13. In addition, therefore, it does not contain
any new or modified information collection burden for small business
concerns with fewer than 25 employees, pursuant to the Small Business
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C.
3506(c)(4).
Congressional Review Act
The Commission will not send a copy of FCC 16-25 pursuant to the
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the
Commission adopted no rules therein, as defined in 5 U.S.C. 804(3).
Rather, the Commission modified the rates applicable to compensation
paid to VRS providers from the TRS Fund.
Synopsis
1. In 2013, the Commission adopted a Report and Order amending its
telecommunications relay service (TRS) rules to improve the structure,
efficiency, and quality of the VRS program, reduce the risk of waste,
fraud, and abuse, and ensure that the program makes full use of
advances in commercially-available technology. Structure and Practices
of the Video Relay Services Program, Telecommunications Relay Services
and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities, CG Docket Nos. 10-51, 03-123, Report and Order and
Further Notice of Proposed Rulemaking, published at 78 FR 40407, July
5, 2013 (VRS Reform Order), and 78 FR 40582, July 5, 2013 (VRS Reform
FNPRM), aff'd in part and vacated in part sub nom. Sorenson
Communications, Inc. v. FCC, 765 F.3d 37 (D.C. Cir. 2014) (Sorenson).
The VRS Reform Order established the rates at which VRS providers are
compensated from the Interstate Telecommunications Relay Service Fund
(TRS Fund) for a four-year period beginning July 1, 2013, and adopted
structural reforms designed to establish a more level playing field for
all VRS providers.
2. Pursuant to the TRS rules, VRS providers submit the number of
minutes of service they provide to the TRS Fund administrator on a
monthly basis and are compensated for these minutes based on rates set
annually by the Commission. The Commission currently uses a three-tier
compensation rate structure that allows smaller providers to receive
more compensation per minute, on average, than larger providers. A
tiered compensation rate structure allows providers to earn a higher
compensation rate on the initial minutes of service provided each
month. Pursuant to the three-tiered VRS rate structure as modified in
the VRS Reform Order, the Tier I rate (the highest rate) applies to a
provider's first 500,000 monthly VRS minutes, the Tier II rate applies
to a provider's second 500,000 monthly minutes, and the Tier III rate
(the lowest rate) applies to monthly minutes in excess of 1,000,000. As
a result, smaller providers receive more compensation per minute, on
average, than larger providers.
3. In the VRS Reform Order, the Commission recognized a need to
better align VRS compensation rates with the allowable costs of this
service, pending a further determination as to VRS compensation
methodology. To that end, and as an alternative to immediately reducing
rates to a level based on average costs, the Commission adopted a four-
year schedule that gradually adjusts the VRS compensation rates
downward every six months, beginning July 1, 2013, and ending June 30,
2017. (In document FCC 16-25, the term ``average,'' when used to
describe multiple providers' costs, means an average of provider costs
weighted in proportion to each provider's total minutes.) Subsequently,
in a Further Notice of Proposed Rulemaking released November 3, 2015,
the Commission proposed to temporarily freeze the compensation rates of
providers handling 500,000 or fewer monthly minutes. Structure and
Practices of the Video Relay Services Program, Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities, CG Docket Nos. 10-51, 03-123, Further Notice of
Proposed Rulemaking, published at 80 FR 72029, November 18, 2015, (VRS
Rate Freeze FNPRM).
4. The Commission adopts its proposal to temporarily ``freeze'' the
compensation rates of providers handling 500,000 or fewer monthly
minutes (the smallest VRS providers) and directs the TRS Fund
administrator to pay compensation, subject to a possible true-up, at a
compensation rate of $5.29 per VRS minute for the period from July 1,
2015, to October 31, 2016.
[[Page 14985]]
This rate is applicable to a VRS provider in any month for which the
provider submits 500,000 or fewer compensable VRS minutes for
compensation from the TRS Fund.
5. The record of this proceeding confirms that for each of the
smallest VRS providers, the per-minute costs incurred or projected by
the provider in calendar years 2015 and 2016, respectively, are higher
than the ``blended'' compensation rate applicable to that provider in
that year under the four-year schedule adopted in the VRS Reform Order.
(A provider's ``blended'' compensation rate for a calendar year is the
average of the Tier I rates applicable in the first and second halves
of the calendar year, weighted by the provider's projected minutes for
each half.) The individual cost information filed by the smallest VRS
providers, which the Commission finds to be credible, while updating
the cost data previously filed with Rolka Loube, confirms Rolka Loube's
initial assessment that the deficits incurred by the smallest VRS
providers may be jeopardizing their continuation of service. Further,
the smallest VRS providers credibly argue that available financing
arrangements will not permit them to maintain operations indefinitely
in accordance with the Commission's minimum TRS standards while
continuing to operate at a loss. Therefore, the Commission finds that,
absent rate relief, it is likely that the smallest providers either (1)
will be unable to maintain their operations in 2016 or (2) will be
unable to continue to grow their operations significantly in the
direction of reaching optimum levels of efficiency. As a result, the
Commission's objective to offer such providers ``a reasonable
opportunity to . . . reach the optimum scale to compete effectively''
may be undermined. See VRS Reform Order, 78 FR 40602, July 5, 2013.
6. As the Commission has previously recognized, the presence of
diverse providers can spur improvements in the availability,
efficiency, and functional equivalence of VRS. Further, public interest
considerations favor the grant of interim relief. The record confirms
that certain service features offered by small VRS providers may be
uniquely helpful in advancing the goal of functionally equivalent
service for certain subsets of VRS consumers. Specialized features
offered by the smallest VRS providers include Spanish language VRS and
emergency alert functions for schools for the deaf.
7. Based on these various considerations, the Commission concludes
that it should temporarily halt the scheduled reduction in the VRS
compensation rates applicable to the smallest VRS providers, consistent
with its objective in the VRS Reform Order to permit smaller providers
a reasonable opportunity to grow and to attain efficiencies comparable
to those of larger VRS providers. Accordingly, the Commission adopts
its proposal in the VRS Rate Freeze FNPRM to apply a rate of $5.29 per
minute to compensation claimed by the smallest VRS providers for a
limited period. This rate, which was in effect prior to July 1, 2015,
is lower than the smallest VRS providers' average projected allowable
costs for 2015 but higher than their average projected allowable costs
for 2016. It is also lower than any individual provider's allowable
costs for 2015. The Commission concludes that application of a $5.29
per minute compensation rate to the smallest VRS providers will
generally provide a reasonable level of support for the operations of
the smallest VRS providers and will not risk providing significant
overcompensation for such providers. In addition, application of this
rate to the smallest VRS providers, in lieu of the previously scheduled
rates, will not impose a heavy cost burden on the TRS Fund.
8. Regarding the period for which this rate freeze should apply,
the Commission adopts the proposal in the VRS Rate Freeze FNPRM for an
adjusted compensation rate of $5.29 per minute to be effective for 16
months, beginning retroactively on July 1, 2015, the beginning of the
current Fund Year, and ending on October 31, 2016. This 16-month rate
freeze allows the smallest VRS providers the opportunity to achieve
market share growth and improvements in efficiency while benefitting
from further implementation of structural reforms--such as the
establishment of the ACE platform, which will address interoperability
and other matters and is scheduled for launch this year.
9. While rates should not be frozen indefinitely, the Commission
agrees with a number of commenting parties that, in order to avoid
subjecting the smallest VRS providers to a sudden drop in compensation
upon the expiration of the 16-month period, the compensation rate for
the smallest providers should be adjusted downward in the same
increments previously directed in the VRS Reform Order. In other words,
for the smallest VRS providers the ``glide path'' originally
established in the VRS Reform Order will resume after a 16-month
freeze. The resulting per-minute rates for the smallest VRS providers
for the period from January 1, 2015, to the end of the four-year period
are: (1) January 2015-October 2016, $5.29; (2) November 2016-April
2017, $5.06; (3) May-June 2017, $4.82.
10. In response to the VRS Rate Freeze FNPRM, a number of
commenters urge the Commission to expand the proposed scope of the rate
freeze beyond the smallest VRS providers. For example, some parties
argue that VRS providers that are larger than the smallest providers,
but significantly smaller than the largest provider, also have a need
for rate relief based on a comparison of their costs with applicable
compensation rates. The information provided to the Commission does not
indicate that any VRS providers other than the smallest providers will
have allowable costs exceeding the average compensation rate applicable
to such providers in 2015 and 2016. The Commission recognizes that
among the three largest VRS providers, there are substantial
differences in per-minute costs. However, as noted in the VRS Rate
Freeze FNPRM, the Commission previously restructured the rate tiers--
and ``froze'' the Tier II rate at $4.82 for the first three years of
the transition period--in order to allow the smaller of these providers
`` `a full opportunity to improve efficiencies and achieve scale.' ''
Again, these providers have not shown that they will incur allowable
costs in excess of their revenues in 2015 and 2016. The Commission
notes that several parties attempt to renew claims made in prior
proceedings alleging that the categories of allowable costs are too
narrow to permit recovery of all reasonable VRS costs. Those claims
were considered and rejected in the VRS Reform Order. See VRS Reform
Order, 78 FR 40599, July 5, 2013. Further, while a number of parties
contend that implementation of structural reforms has imposed
additional costs, no party has submitted specific estimates or
documentation regarding such implementation costs.
11. In summary, while some parties contend that the compensation
rates for currently profitable providers should be frozen, allegedly to
prevent reductions in the quality of VRS, the Commission does not
perceive any immediate risk that any of the larger VRS providers have
been or will be unable to continue to provide service that meets the
Commission's minimum TRS standards in 2015 and 2016. The Commission
notes, however, that there is an open rulemaking on a number of broader
VRS ratemaking proposals and issues. See VRS Reform FNPRM, 78 FR 40582,
July 5, 2013. Some of the comments filed in response to the VRS Rate
Freeze FNPRM address those matters, as well as raising
[[Page 14986]]
new issues regarding quality of service and the viability of future
competition in the VRS market. To the extent relevant, the Commission
may address these comments when it completes action on the broader VRS
rulemaking proposals.
12. In summary, the Commission directs the TRS Fund administrator,
Rolka Loube, to compensate the smallest VRS providers at a rate of
$5.29 per minute, applicable from July 1, 2015, through October 31,
2016. More specifically, from the effective date of this Report and
Order through October 31, 2016, the Commission directs the
administrator to pay compensation to the smallest VRS providers at a
rate of $5.29 per minute. Second, the Commission directs the
administrator to pay each of the smallest VRS providers a one-time lump
sum reflecting the difference between the compensation they would have
received if they had been paid at a rate of $5.29 per minute and the
compensation they actually received at the lower applicable rates, for
all compensable calls completed during the period between July 1, 2015,
and the effective date of document FCC 16-25. In addition, to avoid
subjecting the smallest VRS providers to a sudden drop in compensation
upon the expiration of the 16-month period, the Commission directs the
administrator to pay compensation to the smallest VRS providers at a
rate of $5.06 per minute from November 1, 2016, through April 30, 2017,
and at a rate of $4.82 per minute from May 1, 2017, through June 30,
2017.
Final Regulatory Flexibility Act Certification
13. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared the Final Regulatory Flexibility Certification
(FRFC) as to the policies and rules adopted in document FCC 16-25. The
Commission will send a copy of document FCC 16-25, including the FRFC,
to the Chief Counsel for Advocacy of the Small Business Administration
(SBA). (See 5 U.S.C. 603(a).)
14. After consideration of the comments received in response to the
VRS Rate Freeze FNPRM, the Commission modifies in part the four-year
compensation rate plan for video relay service (VRS) adopted in the
2013 VRS Reform Order. Although the Commission believes that the four-
year schedule of VRS compensation rate reductions continues to be
justified in order to gradually move compensation rates close to a
level close to average allowable provider costs, the Commission
modifies the schedule as applied to the smallest VRS providers, i.e.,
those providing 500,000 or fewer compensable minutes of use of VRS per
month. Spreading rate reductions over a four-year period was largely
intended to provide a reasonable opportunity for the smallest providers
to reach minimum efficient scale while benefitting from the VRS Reform
Order initiatives, which were intended to address many of the issues
that have made it difficult for small providers to operate efficiently.
15. The smallest providers have achieved significant reductions in
their per-minute costs but have yet to approach the size or efficiency
levels of their larger rivals. Further, some small providers offer
service features that may be helpful in advancing the goal of
functionally equivalent service for certain subsets of VRS consumers,
such as Spanish language speakers and deaf-owned businesses. Therefore,
the Commission adopts the temporary, limited compensation rate
``freeze'' proposed in the VRS Rate Freeze FNPRM. Specifically, from
the effective date of document FCC 16-25 through October 31, 2016, the
Commission directs the TRS Fund administrator to pay compensation to
the three smallest VRS providers at a rate of $5.29 per minute. In
addition, the Commission directs the administrator to pay each of the
smallest VRS providers a one-time lump sum reflecting the difference
between the compensation they would have received if they had been paid
at a rate of $5.29 per minute and the compensation they actually
received at the lower applicable rates, for all compensable calls
completed during the period between July 1, 2015, and the effective
date of document FCC 16-25. In addition, to avoid subjecting the
smallest VRS providers to a sudden drop in compensation upon the
expiration of the 16-month period, the Commission directs the
administrator to pay compensation to the smallest VRS providers at a
rate of $5.06 per minute from November 1, 2016, through April 30, 2017,
and at a rate of $4.82 per minute from May 1, 2017, through June 30,
2017.
16. In document FCC 16-25, the Commission adopts its proposal to
temporarily ``freeze'' the compensation rates applicable to the
smallest VRS providers and determines, as it concluded in the Initial
Regulatory Flexibility Analysis, that this measure will not impose any
additional compliance requirements on small businesses and would
temporarily ease the impact of existing VRS regulations on small
entities by temporarily increasing the VRS compensation rate for small
entities above the rate currently in effect. Therefore, the Commission
certifies that the rule amendments in document FCC 16-25 will not have
a significant economic impact on a substantial number of small
entities.
Ordering Clause
Pursuant to the authority contained in sections 4(i), 201(b), and
225 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i),
201(b), 225, document FCC 16-25 is adopted.
Federal Communications Commission.
Gloria J. Miles,
Federal Register Liaison Officer, Office of the Secretary.
[FR Doc. 2016-06305 Filed 3-18-16; 8:45 am]
BILLING CODE 6712-01-P