IP CTS Modernization and Reform, 33899-33915 [2018-15336]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 83, Number 138 (Wednesday, July 18, 2018)]
[Proposed Rules]
[Pages 33899-33915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-15336]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 13-24 and 03-123; FCC 18-79]


IP CTS Modernization and Reform

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) proposes measures to ensure that internet Protocol 
Captioned Telephone Service (IP CTS) remains sustainable for those 
individuals who need it by reducing waste and thereby bringing under 
control the exponential growth of the program. The Commission seeks 
comment on measures to ensure fair and efficient provider compensation, 
including compensation for the provision of IP CTS using fully 
automated speech recognition (ASR); move the compensation rate closer 
to reasonable cost; expand the IP CTS contribution base; and reduce the 
risk of providers signing up ineligible customers and encouraging IP 
CTS usage regardless of a consumer's need for the service. The 
Commission also seeks comment on IP CTS performance goals and metrics 
to ensure service quality for users.

DATES: Comments on the Further Notice of Proposed Rulemaking are due 
September 17, 2018; reply comments on the Further Notice of Proposed 
Rulemaking are due October 16, 2018. Comments on the Notice of Inquiry 
are due October 16, 2018; reply comments on the Notice of Inquiry are 
due November 15, 2018.

ADDRESSES: You may submit comments, identified by CG Docket Nos. 03-123 
and 13-24, by either of the following methods:
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the Commission's Electronic Filing 
System (ECFS): https://www.fcc.gov/ecfs/filings. Filers should follow 
the instructions provided on the website 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. 03-123 and 13-24.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    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: Michael Scott, Consumer and

[[Page 33900]]

Governmental Affairs Bureau, at (202) 418-1264, or email 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking and Notice of Inquiry (Further 
Notice and NOI), document FCC 18-79, adopted on June 7, 2018, released 
on June 8, 2018, in CG Docket Nos. 03-123 and 13-24. The Report and 
Order and Declaratory Ruling, FCC 18-79, adopted on June 7, 2018 and 
released on June 8, 2018, was published at 83 FR 30082, June 27, 2018. 
The full text of this document is available for public inspection and 
copying via the Commission's Electronic Comment Filing System (ECFS), 
and during regular business hours at the FCC Reference Information 
Center, Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 
20554. 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), (844) 432-2272 (videophone), 
or (202) 418-0432 (TTY). 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. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th Street SW, Room TW-A325, Washington, DC 20554. The filing 
hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held 
together with rubber bands or fasteners. Any envelopes and boxes must 
be disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW, Washington, DC 20554.
    This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. 47 CFR 
1.1200 et seq. 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 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 rule 1.1206(b). In proceedings governed by 
rule 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.

Initial Paperwork Reduction Act of 1995 Analysis

    The Further Notice and NOI in document FCC 18-79 seek comment on 
proposed rule amendments that may result in modified information 
collection requirements. If the Commission adopts any modified 
information collection requirements, the Commission will publish 
another document in the Federal Register inviting the public to comment 
on the requirements, as required by the Paperwork Reduction Act. 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. Public Law 107-198; 44 
U.S.C. 3506(c)(4).

Synopsis

Further Notice of Proposed Rulemaking

    1. IP CTS is a form of TRS that permits an individual who can speak 
but who has difficulty hearing over the telephone to use a telephone 
and an internet Protocol-enabled device via the internet to 
simultaneously listen to the other party and read captions of what the 
other party is saying. Generally, IP CTS employs two network paths: A 
connection via the public switched telephone network (PSTN) or a Voice 
over internet Protocol (VoIP) service for the voice conversation 
between the parties to the call, and a separate internet connection 
that transmits the other party's voice from the IP CTS user's phone to 
a communications assistant (CA) and transmits captions from the CA back 
to the IP CTS user.
    2. When an IP CTS user places or receives a call, he or she is 
automatically connected to a CA at the same time that the parties to 
the call are connected. In the most widely used version of IP CTS, the 
CA then revoices everything the hearing party says into a speech 
recognition program, which automatically transcribes the words into 
captions. In a second version, the CA uses stenography to produce the 
captions, typing the speech content directly into captions. Today, five 
providers have certification from the Commission to provide IP CTS. All 
IP CTS minutes are compensated from the interstate telecommunications 
relay services (TRS) fund (TRS Fund), and, like other forms of 
internet-based TRS, IP CTS is entirely administered by the Commission.
    3. IP CTS growth has been exponential in recent years. From 2011 to 
2017, annual IP CTS minutes have grown from approximately 29 million to 
363 million. According to the TRS Fund administrator, in 2018-19, IP 
CTS will represent approximately 78 percent of the total minutes of TRS 
compensated by the TRS Fund and about 66 percent of total TRS Fund 
payments to TRS providers. At the same time, the end-user 
telecommunication revenue base from which IP CTS and other forms of TRS 
are supported is steadily declining, raising the threat that over the 
long term, ever-increasing levels of contribution may not be 
sustainable.
    4. One reason for greater usage of IP CTS over other forms of TRS 
may be the ease and convenience of using IP CTS, including the absence 
of direct interaction between the parties to the call and the CA. For 
example, during an IP CTS call, the presence of a CA is not announced 
to the hearing party, and communication with the CA by the

[[Page 33901]]

person who has hearing loss takes place in only one direction. While 
such ease and convenience facilitate use of the service by people with 
hearing loss who need it for effective communication, these 
characteristics also create a risk that IP CTS will be used even when 
it is not needed.
    5. Further, a large portion of the recent growth in IP CTS may be 
attributable to perverse incentives for providers to market this 
service to individuals who do not need it and the consequent wasteful 
use of IP CTS by individuals who could derive equal or greater benefit 
from less costly alternatives, such as high-amplification phones. 
Providers engage in a number of marketing practices that likely 
contribute to waste in the IP CTS program. These include (1) touting 
the usefulness of IP CTS to anyone with hearing loss--regardless of 
their level of hearing loss or need for captioning (over other types of 
assistive or auxiliary devices); (2) linking together amplification and 
captioning features on IP CTS devices, which causes waste (e.g., when 
the phone is used by others in a household who may not need captions); 
(3) failing to effectively assess each individual's need for IP CTS 
through neutral and independent third-party evaluations before 
permitting use of the service; (4) engaging in preestablished and 
sometimes exclusive or joint arrangements with third-party 
professionals that compromise the objectivity of such assessments; and 
(5) routinely giving out free IP CTS devices with features, such as 
added amplification and the ability to create a transcript of the call, 
that make these products attractive to consumers who may not need 
captions for functionally equivalent telephone communication. It is the 
Commission's goal to eliminate provider practices and incentives to 
promote use of IP CTS by individuals who do not need it, and to ensure 
that this service remains sustainable for those who actually need it.

IP CTS Compensation

    6. From 2011 to 2017, under the Multistate Average Rate Structure 
Plan (MARS Plan), the IP CTS compensation rate increased from $1.763 to 
$1.9467 per minute, while average allowable IP CTS expenses dropped 
from $2.0581 to $1.2326 per minute. In part because of this excessive 
compensation rate, payments to IP CTS providers from the TRS Fund are 
putting ever-increasing pressure on a declining TRS Fund contribution 
base--pressure that sooner or later, if unchecked, will threaten the 
viability of the TRS program itself.
    7. To address this widening gap between compensation and reasonable 
costs, the Commission, in the Report and Order, ends reliance on the 
MARS Plan methodology and takes interim steps to move the compensation 
rate closer to average costs, reducing compensation over a two-year 
period. Here, the Commission seeks comment on how to set IP CTS 
compensation rates following this interim period, to allow recovery of 
reasonable provider costs and ensure that IP CTS is provided in the 
most efficient manner.
    8. The Commission proposes to use average provider costs to set 
per-minute compensation rates for a multi-year rate period for IP CTS. 
Such an approach can simplify the rate-setting process, facilitate TRS 
provider planning and budgeting, and provide incentives for providers 
to increase their efficiency through innovation and cost reduction. The 
Commission seeks comment on the costs and benefits of this proposal, 
including comments on: (1) The reasonableness and allowability of 
certain provider costs; (2) the specifics of setting a cost-based rate, 
including issues concerning extension of the ``glide path'' towards a 
cost-based rate, the use of rate tiers, the duration of the rate 
period, and within-period rate adjustments; (3) alternative approaches; 
and (4) compensation for IP CTS using full ASR.

Identifying Eligible IP CTS Costs

    9. The Commission seeks comment on the reasonableness of the costs 
currently reported by IP CTS providers. Do these reported costs, in the 
aggregate, accurately reflect the actual average costs of providing 
this service? Below, the Commission discusses whether it should 
consider placing caps on allowable costs for outreach and marketing. 
Should the Commission consider placing caps on any other cost 
categories? Further, should the Commission refine these categories in 
any way, for example, by requiring providers to provide more detail 
regarding their indirect expenses? Providers currently report average 
expenses to the TRS Fund administrator, Rolka Loube, for the following 
categories of IP CTS costs: Facilities; CA Related; Non-CA Relay 
Center; Indirect; Depreciation; Marketing; Outreach; and Other.
    10. Subcontractor Expenses. Expenses reported in the ``Other'' 
category consist mainly of undifferentiated ``subcontractor expenses.'' 
The Commission seeks comment on whether the Commission has the 
authority to, and should, require subcontractors to submit directly to 
the TRS Fund administrator their underlying cost data for the fees 
charged to certified IP CTS providers, in accordance with the 
administrator's instructions and TRS cost categories, to ensure that 
the reported costs can be reviewed for their accuracy, appropriateness, 
and reasonableness. As an alternative, the Commission seeks comment on 
whether to amend its rules to provide that, in the event that a 
subcontractor accounts for more than a certain threshold percentage of 
a certified IP CTS provider's total costs, the subcontractor itself 
shall be deemed a TRS provider and be required to submit an application 
for certification showing its qualifications to provide service meeting 
the Commission's minimum standards. The Commission also seeks comment 
on what the appropriate threshold percentage should be for such a 
requirement. The Commission invites providers and subcontractors to 
submit information in this proceeding about the specific subcontractor 
services provided or received and the basis on which fees for specific 
services provided by subcontractors should or should not be deemed 
reasonable costs of providing IP CTS.
    11. Licensing Fees. The Commission believes a significant portion 
of subcontractor payments represent licensing fees charged to providers 
for the use of patents and other intellectual property. As background, 
when PSTN-based captioned telephone service (CTS) was first authorized 
in 2003, the Commission recognized that the service was offered at that 
time solely by Ultratec, Inc. (Ultratec), using its proprietary 
technology. In authorizing IP CTS in 2007, the Commission continued to 
express concern about the consequences of a single company having 
control of CTS technology and conditioned its approval of the proposed 
IP CTS offering on Ultratec's representation that it would continue to 
license its captioned telephone technologies, including technologies 
relating to IP CTS, at reasonable rates.
    12. The Commission seeks comment on the circumstances under which 
license fees paid for technology used to provide IP CTS should be 
included in allowable costs, and on what method the Commission should 
use to determine whether license fees for such technology are 
``reasonable.'' Should the Commission cap ``reasonable'' licensing fees 
for such technology, and at what level? In deciding on a method or cap 
for reasonable license fees, should the Commission consider that this 
technology is used for a service that is paid for through an FCC fund, 
and for which there is no bargaining by users as

[[Page 33902]]

to its price? Should the Commission also consider the extent to which a 
single company controls intellectual property that is needed for 
certain forms of IP CTS, effectively compelling providers to use a 
proprietary technology, as well as the extent to which there are 
economic barriers that prevent providers from easily switching 
technologies--such as providers being locked into proprietary user 
devices and servers, or having long-term supply contracts with the 
owner of the technology? To aid this inquiry, the Commission invites 
parties to submit quantitative data (which may be accompanied by a 
request for a protective order) on the license fees they currently pay 
for specific types of IP CTS technology.
    13. The Commission also seeks comment on a proposal by Sorenson 
Communications, Inc. (Sorenson) that allowable IP CTS costs should 
include the imputed value of intellectual property developed by the IP 
CTS provider itself. Given that the Commission currently allows TRS 
providers to recover as an allowable expense the research and 
development costs incurred to ensure that a relay service meets minimum 
TRS standards, is it ever appropriate to permit a provider to also 
recover the imputed value of the resulting intellectual property? Would 
such a rule be consistent with using a methodology that is based on 
compensating providers for their actual reasonable costs? Sorenson also 
contends that license fees, based on imputed value and paid by an IP 
CTS provider to its own affiliate for intellectual property developed 
by the IP CTS provider and then transferred to the affiliate, should be 
deemed reasonable IP CTS expenses. Should the Commission's Part 32 rule 
on affiliate transactions of common carriers continue to apply in such 
cases? Is there any valid reason why the carrier affiliate transaction 
rule should not apply to a TRS provider, given the potential incentives 
for self-dealing and the difficulties of objective valuation?
    14. Outreach Expenses. Commission rules require common carriers to 
conduct TRS outreach to assure that callers in their service areas are 
aware of the availability and use of all forms of TRS. For many years, 
however, the Commission has raised concerns about the effectiveness of 
outreach efforts on the national level. In 2013, the Commission 
terminated the allowed recovery of outreach expenses by VRS and IP 
Relay, intending to centralize the outreach function at the national 
level. The Commission seeks comment on whether it should allow outreach 
expenses to be compensable from the TRS Fund as part of an IP CTS 
provider's reasonable expenses. The Commission invites IP CTS providers 
to describe the specific types of activities for which they report 
expenses in this category. In light of the tenfold growth of IP CTS 
minutes in the last six years, the Commission seeks comment on whether 
TRS-Fund supported outreach to potential new IP CTS users is currently 
needed to further the goals of section 225 of the Communications Act of 
1934, as amended (the Act). Moreover, considering that unlike VRS and 
IP Relay, IP CTS calls tend to not immediately be identifiable as relay 
calls to the non-caption-using party, is outreach to the public needed 
to encourage hearing individuals to place or accept IP CTS calls to the 
same extent as for other forms of TRS? If the Commission concludes that 
some outreach should be supported by the Fund, should it limit 
allowable outreach expenses to a specified percentage or amount, and, 
if so, what percentage or amount should that be?
    15. Marketing Expenses. Marketing has been defined as branded 
advertising and other promotional activity aimed at encouraging the use 
of a particular provider's service. Marketing expenses are currently 
allowable costs. The Commission invites IP CTS providers to describe 
the specific types of activities for which they report expenses in that 
category. Given the history of inappropriate IP CTS marketing and the 
susceptibility of this service to being used regardless of need, the 
Commission is concerned about having the TRS Fund support marketing 
activities that have the potential to promote widespread use of the 
service by individuals who may not need it to obtain functionally 
equivalent telephone service. Therefore, the Commission seeks comment 
on whether compensation for marketing expenses should be disallowed or, 
in the alternative, limited. For example, should the Commission cap 
such expenses at a specific level, and if so, what would be the maximum 
percentage of expenses or amount (e.g., per minute) that should be 
recoverable?
    16. Definitions. In the event that the Commission decides to treat 
marketing and outreach differently in terms of allowability, the 
Commission seeks comment on whether and how to provide more precise 
definitions of these two expense categories. In general, should the TRS 
Fund administrator's current definitions of ``outreach'' and 
``marketing'' as defined in the Provider Data Collection Form & 
Instructions, be modified, and if so, in what respects?
    17. Operating Margin. The Commission seeks comment on whether the 
operating-margin approach and zone of reasonableness established in 
2017 for VRS and used in the Report and Order of document FCC 18-79 in 
establishing interim IP CTS compensation rates is appropriate for the 
purpose of setting an IP CTS rate for 2020-21. Are there any material 
differences between VRS and IP CTS that would justify a different zone 
than the 7.6%-12.35% range? Have there been changes in capital markets 
that would support moving the end-points of the range up or down? The 
Commission also seeks comment on where to set a specific allowed 
operating margin within the zone of reasonableness.
    18. Historical vs. Projected Costs. The Commission used a weighted 
average of providers' historical and projected per-minute costs to set 
compensation rates in setting interim IP CTS rates in the Report and 
Order in document FCC 18-79. The Commission seeks comment on whether it 
should continue to use a weighted average of historical and projected 
costs in setting compensation rates for IP CTS. Should the Commission 
take into account the extent to which projections line up with the 
historical cost trend, and whether there is an adequate explanation 
when projections deviate significantly from the historical trend?
    19. Further Adjustment of Interim Rates. In the Report and Order in 
document FCC 18-79, the Commission set interim compensation rates for 
2018-19 and 2019-20 based on previously approved categories of 
allowable TRS costs and on the information currently available 
regarding actual costs in the IP CTS context, with the goal of striking 
a reasonable balance between the need to bring rates in line with costs 
and reduce the TRS Fund contribution burden, on the one hand, and 
avoiding rate shock and potential service disruption, on the other. If 
the Commission determines, based on the record compiled in this 
rulemaking, that some costs have been incorrectly reported or are 
otherwise not ``reasonable'' for TRS Fund recovery, should the interim 
rates should be adjusted to take account of such determinations?

Moving to a Cost-Based Rate

    20. In the Report and Order in document FCC 18-79, the Commission 
reduced the per-minute compensation rate for IP CTS by 10 percent 
annually, to interim levels of $1.75 for 2018-19 and $1.58 for 2019-20, 
in order to begin a ``glide path'' toward a cost-based level, using as 
a reference point the TRS Fund

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administrator's current estimate of historical and projected IP CTS 
expenses for calendar years 2017 and 2018, which average $1.28 per 
minute. According to the historical cost trend, however, IP CTS costs 
have been consistently declining over time. Further, the Commission may 
decide that some previously reported costs should not be recoverable 
from the TRS Fund.
    21. Need for an Extended Glide Path. To limit the short-term 
potential for undesirable loss of competitive alternatives and 
disruption of service to consumers, should the Commission extend the 
interim-rate ``glide path,'' and if so, what should the extended glide 
path look like? In setting the interim rates the Commission found that 
a 10 percent reduction provided a reasonable ``glide path'' toward a 
cost-based rate. If IP CTS providers' reasonable costs, as determined 
based on the record to be compiled, are not substantially lower than 
the cost estimate the Commission used for the purpose of setting 
interim rates, it would appear that no extension of the glide path 
would be needed. The Commission seeks comment on this view. On the 
other hand, if reasonable provider costs prove to be substantially 
lower than the current estimate, what transition to a cost-based rate 
level would be appropriate to ensure a reasonable level of certainty 
and predictability for IP CTS providers while also ensuring the most 
efficient use of the TRS Fund? Would the fact that costs have been 
substantially lower than previously thought mitigate in favor of a 
longer or shorter glide path?
    22. Tiered Rates. Some parties have previously expressed concern 
that, even if costs do not change, setting a compensation rate based on 
average cost may force some above-average cost providers out of the IP 
CTS market. In order to encourage smaller competitors to remain in the 
market, while still narrowing the gap between total compensation and 
total IP CTS costs, would it be appropriate to adopt a tiered rate 
structure for IP CTS? In the past, the Commission has found that the 
use of a single rate based on weighted average costs is appropriate for 
TRS. Although the Commission has deviated from this principle in 
setting VRS rates, there are a number of underlying reasons specific to 
VRS that have justified maintaining a tiered rate structure. The 
Commission seeks comment on the extent to which unique factors are 
present in the IP CTS market that would make a tiered rate structure 
more appropriate than averaged compensation rates. For example, are 
there barriers to a smaller provider's ability to expand its share of 
the IP CTS market, despite the unusually fast growth in IP CTS demand? 
How would tiered rates affect provider incentives to operate more 
efficiently, improve service quality, or invest in new technology, such 
as ASR? Are there scale economies in IP CTS that would help identify 
where to set tier boundaries? In the event that the Commission does 
adopt tiered rates, how should the tiers be structured to reflect any 
such scale economies in IP CTS and avoid limiting a provider's 
incentive to increase their minutes above the next tier boundary? How 
should a tier structure be updated as the market evolves? How are the 
economies of scale different for IP CTS using ASR? Finally, how should 
a tiered structure take account of subcontracted operations?
    23. Emergent Provider Rate. For VRS, the Commission adopted a 
special ``emergent provider'' rate, applicable on a temporary basis for 
newly certified providers and certain other very small providers, in 
order to encourage new entry and provide appropriate growth incentives. 
Factors contributing to that decision included a desire to maintain VRS 
competition in an unbalanced market, the incompleteness of VRS reforms 
intended to support full interoperability, the extremely wide per-
minute cost differentials among VRS providers, and the potential role 
of smaller providers in offering service features designed for niche 
VRS market segments. Are these or other factors present in the IP CTS 
context to justify the adoption of an emergent rate to encourage or 
assist competitive entry? If so, how should such a rate be designed and 
implemented?
    24. Rate Period. The Commission also seeks comment on the 
appropriate duration of the next rate period. Should the duration be 
governed solely by the time it will take to reach a cost-based 
compensation rate--i.e., strictly based on the length of the ``glide 
path'' that the Commission deems appropriate for transitioning to a 
cost-based level? Or should other factors be given weight, and if so, 
what rate period duration would appropriately balance the needs for 
administrative efficiency, rate certainty, and cost-reduction 
incentives with the need for a timely review of how IP CTS costs may 
change in the future, e.g., with the use of ASR?
    25. Price Cap Adjustments. The Commission seeks comment on whether 
price-cap factors should be used, and on the appropriate indices to use 
to reflect inflation and productivity, once a cost-based level has been 
reached. To what extent should the Commission follow the price cap 
approach used for IP Relay, or approaches proposed to the Commission 
for IP CTS?
    26. Exogenous Costs. The Commission seeks comment on whether to 
allow adjustment of the compensation rate during the rate period based 
on exogenous costs. Specifically, should IP CTS providers be permitted 
to seek compensation for well-documented exogenous costs that (1) 
belong to a category of costs that the Commission has deemed allowable, 
(2) result from new TRS requirements or other causes beyond the 
provider's control, (3) are new costs that were not factored into the 
applicable compensation rates, and (4) if unrecovered, would cause a 
provider's current allowable-expenses-plus-operating margin to exceed 
its IP CTS revenues? Would such allowance for exogenous cost 
adjustments sufficiently address provider concerns regarding 
compensation for unforeseeable cost increases?

Alternative Approaches

    27. Alternatives to Averaging Costs. While the Commission generally 
has viewed an average-cost approach to rate-setting as beneficial 
because it encourages higher-cost providers to become more efficient, 
the Commission seeks comment on whether a different approach could 
better ensure that functionally equivalent IP CTS is provided in the 
most efficient manner. For example, should the Commission encourage 
greater efficiency by setting the compensation rate equal to the costs 
of the lowest-cost provider--or, to ensure that users have a choice of 
at least two providers, should the Commission set the rate equal to the 
costs of the second-lowest-cost provider? To the extent that 
competition is beneficial to ensuring functional equivalence for IP 
CTS, what is the optimal number of competitors to ensure that this is 
achieved ``in the most efficient manner''?
    28. Alternatives to Setting Cost-Based Rates. Finally, the 
Commission seeks comment on other approaches to IP CTS compensation 
that can successfully align the rates for this service with actual 
provider costs and enable the Commission to provide IP CTS in the most 
efficient manner. To the extent that commenters wish to suggest 
alternative market-based approaches that could simplify or otherwise 
improve the IP CTS compensation rate-setting process, the Commission 
invites the submission of specific proposals, along with an explanation 
of how each proposal would successfully align the IP CTS compensation 
rate with actual provider costs and otherwise advance

[[Page 33904]]

the objectives of section 225 of the Act. For example, Sorenson has 
suggested consideration of holding a reverse auction to set a multi-
year compensation rate for IP CTS. How should a reverse auction operate 
in this context? For example, how many providers should be selected in 
an auction to serve the IP CTS market, and why? If multiple providers 
are to be selected, how should bidders' market shares be determined? 
What would be the costs and benefits of using a reverse auction to set 
rates, compared to cost-of-service ratemaking?

Setting Compensation for ASR

    29. The Commission seeks comment on setting a compensation rate for 
IP CTS calls using full ASR. First, the Commission seeks comment on 
whether to set separate rates for ASR-only IP CTS and CA-assisted IP 
CTS, or a single rate applicable to both. Would applying a single 
compensation rate to both forms of IP CTS appropriately encourage 
migration to a more efficient technology, or would it create an 
undesirable incentive for providers to overuse ASR where it is not the 
best choice for a particular call? How can the Commission ensure that a 
single rate does not end up significantly over- or under-compensating 
providers?
    30. If separate rates are applied, should compensation for ASR-only 
IP CTS calls be based on per-minute intervals, as is done now for IP 
CTS and for CA-assisted TRS generally, or would it be more consistent 
with cost causation principles to compensate providers on a one-time or 
monthly per-user basis--or a combination of the two? If the Commission 
maintains separate rates, when should an ASR-only IP CTS rate become 
effective? Should the same rate methodology and rate period for ASR-
only IP CTS and CA-assisted IP CTS be used? Should the Commission 
establish cost-based rates that use an operating margin? Would tiered 
or emergent-provider rates be appropriate for ASR-only IP CTS? Should 
the Commission apply price cap adjustments? Would any of the 
alternative approaches discussed be an appropriate rate methodology for 
ASR? What additional information, beyond that already required in 
annual provider cost reports, would be useful in determining an 
appropriate ASR-only IP CTS rate? How should the Commission compensate 
IP CTS calls that use both ASR and human intervention? For example, 
should the Commission limit application of the CA-assisted IP CTS rate 
to the portion of the call when a CA is actively involved in generating 
captions? The Commission also seeks comment on how to amend the data 
requirements for call detail records submitted with requests for 
compensation, to ensure that the TRS Fund administrator has all of the 
information necessary to apply the appropriate rate for calls involving 
ASR.
    31. If separate rates are applied, which categories of provider 
costs are relevant to setting a rate for ASR? In its annual rate report 
for 2018, Rolka Loube recommends that the Commission establish a 
separate ASR compensation rate for IP CTS of $0.49 per minute. Rolka 
Loube arrives at this rate by first disaggregating fixed IP CTS costs, 
projected for 2018-19 to average $0.3659 per minute, from variable 
costs, which, for the same period, are projected to average $0.9564 per 
minute. Rolka Loube then multiplies $1.75 (Rolka Loube's recommended 
interim rate for CA-assisted IP CTS) by the ratio of fixed IP CTS costs 
to total IP CTS costs, and rounds up the result to $0.49 per minute. 
The Commission seeks comment on this rate recommendation and 
methodology, and invites commenters to suggest alternative rate-setting 
methods and compensation rates for ASR-based IP CTS.
    32. How should overhead and other common costs be allocated between 
CA-assisted and IP CTS provided using ASR? To what extent would it be 
appropriate to set the ASR-only IP CTS compensation rate higher than a 
cost-based level, to create incentives for providers to integrate ASR 
into their IP CTS platforms where functional equivalence can be 
achieved? For example, should the Commission allow a higher operating 
margin in relation to underlying costs for ASR than for human-assisted 
IP CTS, and what would be an appropriate amount for such additional 
margin? Conversely, to prevent use of ASR where it might compromise 
service quality, should the Commission limit the allowance of a higher 
margin? Or should such an extra margin be diminished over time, based 
on an expectation of a reduced future need for special incentives to 
adopt this technology? If the Commission provides a higher margin for 
ASR as an incentive, should it also make a corresponding downward 
adjustment in the operating margin for CA-assisted IP CTS, to avoid 
overcompensation for average costs?
    33. Finally, to what extent would it serve the purposes of section 
225 of the Act to modify the definition of allowable research and 
development expenses in order to ensure that ASR development costs are 
subject to compensation even if such research is not strictly necessary 
to ensure that a provider complies with the Commission's minimum TRS 
standards? Alternatively, to the extent that ASR development costs and 
other ASR start-up costs are not captured in the applicable 
compensation rate, should the Commission treat such costs as exogenous 
costs, which may be reimbursed in the same manner and under the same 
criteria as other exogenous costs? What other factors should the 
Commission consider in determining compensation for ASR-only IP CTS?

Restructuring the Funding of IP CTS

    34. To ensure effective cost recovery for TRS, Congress directed 
the Commission to prescribe TRS regulations governing the 
jurisdictional separation of the associated costs, which shall 
``generally provide that costs caused by interstate telecommunications 
relay services shall be recovered from all subscribers for every 
interstate service and costs caused by intrastate telecommunications 
relay services shall be recovered from the intrastate jurisdiction.'' 
47 U.S.C. 225(d)(3)(B). In 2007, however, to encourage nationwide IP 
CTS competition that could enhance consumer choice, service quality, 
and available features, the Commission determined that, on an interim 
basis, all IP CTS minutes, both interstate and intrastate, would be 
supported by TRS Fund contributions from carriers' interstate (and 
international) end-user revenues.
    35. Expanding the TRS Fund Base. In light of the changes to the IP 
CTS landscape described above, and to conform the funding of IP CTS to 
the requirements of section 225 of the Act, the Commission proposes to 
expand the contribution base for IP CTS to include a percentage of 
annual intrastate revenues from telecommunications carriers and VoIP 
service providers, for several reasons.
    36. First, the goal of nationwide availability has been fully 
achieved. IP CTS is offered by five competing providers (as compared to 
only two providers under a single vendor in 2007) and the service is 
used extensively nationwide. The burgeoning growth of this service 
offers evidence that the special arrangement of treating all IP CTS 
costs as interstate costs is no longer necessary as an ``interim'' 
measure to spur the development of this service.
    37. Second, expanding the TRS Fund contribution base for support of 
IP CTS to include intrastate revenues would reduce the inequitable TRS 
support burden borne by those voice service providers whose traffic is 
primarily

[[Page 33905]]

interstate and ensure that a reasonable share of support for IP CTS is 
obtained from those voice service providers with mostly intrastate 
traffic. The Commission seeks comment on these beliefs, and on any 
other benefits or costs that would result from expanding the 
contribution base for IP CTS to include intrastate voice service 
revenues.
    38. Implementation. As the initial step in implementing this 
proposal--which assumes that, at least for the near term, the total IP 
CTS revenue requirement (RR) continues to be paid out of the TRS Fund--
the TRS Fund administrator would aggregate the total end-user revenue 
data reported by TRS Fund contributors on Forms 499-A and 499-Q. With 
approximately 40% of total TRS Fund contributors' end-user revenues 
classified as interstate and approximately 60% classified as 
intrastate, the TRS Fund revenue base available to support IP CTS would 
increase by approximately 150% (60%/40%). Next, the TRS Fund 
administrator would calculate an IP CTS revenue requirement sufficient 
to compensate IP CTS providers for their reasonable costs of providing 
IP CTS. A separate contribution factor or factors would then be 
developed for the purpose of determining the contributions needed from 
each TRS Fund contributor for support of IP CTS.
    39. Under one possible approach, the TRS Fund administrator could 
compute a single contribution factor for IP CTS, which would be applied 
in the same manner to all end-user revenues, both interstate and 
intrastate, in effect treating the IP CTS revenue requirement as a 
single pool to which all TRS Fund contributors would pay the same 
percentage of their total end-user revenues. The Commission seeks 
comment on whether this approach is reasonable, equitable to all 
providers, and consistent with the requirements of section 225 of the 
Act.
    40. Under an alternative plan, the IP CTS revenue requirement would 
be divided into interstate and intrastate portions, based on an 
estimate of the proportion of IP CTS costs and minutes that are 
interstate and intrastate, respectively. Separate contribution factors 
would then be determined for (1) interstate IP CTS, by dividing the 
interstate IP CTS revenue requirement by total interstate end-user 
revenues of all TRS contributors, and (2) intrastate IP CTS, by 
dividing the intrastate IP CTS revenue requirement by total intrastate 
end-user revenues of all TRS contributors (minus intrastate revenues 
attributable to states that do not self-administer IP CTS). Under this 
alternative approach, the contribution factors for interstate and 
intrastate IP CTS, respectively, would not be the same because the IP 
CTS revenue requirement would be allocated between the separate 
jurisdictions based on the percentage of IP CTS minutes and provider 
costs attributed to each jurisdiction, while the contribution base 
would be allocated based on the percentage of end-user revenues 
allocated to each jurisdiction.
    41. Implementation of this second alternative approach would be 
more complicated, and might involve some additional delay, because it 
would require the TRS Fund administrator (or the Commission) to 
estimate the proportions of IP CTS minutes and provider costs that are 
interstate and intrastate. The Commission seeks comment on whether such 
a calculation is necessary to ensure that the burden of TRS Fund 
contributions is distributed equitably among voice service providers 
and consistently with section 225 of the Act. If so, how should such 
separation of IP CTS costs and minutes be determined? Are the current 
separations rules adequate to separate intrastate and interstate IP CTS 
costs, or would it be necessary to refer this issue to the Federal-
State Joint Board on Separations? To the extent that some IP CTS calls 
cannot currently be identified as either intra- or interstate, should 
the Commission permit a percentage classification based on traffic 
studies? Alternatively, should the Commission establish a default proxy 
allocation, and if so, what should the proxy allocation be? The 
Commission also seeks comment on any other implementation alternatives 
that the Commission should consider.

Statutory Authority To Require Intrastate Support of IP CTS

    42. Statutory authority. The Commission believes it has ample 
authority to collect contributions from telecommunications carriers' 
and VoIP service providers' intrastate end-user revenues to support the 
provision of intrastate IP CTS calls, including in situations where the 
state does not assume funding responsibility. First, section 225(d)(3) 
of the Act requires the Commission to prescribe regulations that 
``generally'' provide that TRS costs caused by interstate and 
intrastate jurisdictions are each recoverable from the subscribers of 
their respective jurisdictions. The Commission consistently has ruled 
that by use of the term ``generally,'' Congress intended for the 
Commission to have broad authority to determine how TRS costs will be 
recovered. It was this authority on which the Commission relied to 
permit recovery of the costs of intrastate IP CTS, as well as 
intrastate VRS and intrastate IP Relay calls, from the TRS Fund. 
Further, section 225(b)(2) of the Act states that ``the Commission 
[has] the same authority, power, and functions with respect to common 
carriers engaged in intrastate communication as the Commission has in 
administering and enforcing the provisions of this subchapter with 
respect to any common carrier engaged in interstate communication.'' 
Finally, under section 225 of the Act, where a state does not establish 
a Commission-certified TRS program, the provision of intrastate TRS 
must be directly supervised by the Commission. The Commission asks 
commenters whether they agree that these legislative sources provide 
ample statutory authority for the Commission to address the support for 
intrastate IP CTS calls.
    43. The Commission also believes section 225 of the Act authorizes 
the classification of some IP CTS calls as jurisdictionally intrastate. 
Unlike other forms of internet-based TRS, where one ``leg'' of the end-
to-end communication between the parties to the call necessarily takes 
place via IP facilities, the end-to-end voice communication between the 
calling party and the called party on an IP CTS call uses the same ten-
digit telephone numbers as ordinary voice traffic and is routed via 
traditional PSTN telephone lines or interconnected VoIP, like any other 
voice call. Further, the Commission has previously found that the 
definition of TRS includes transmission using any technology, including 
internet Protocol, and is ``constrained only by the requirement that 
such service provide a specific functionality.'' Accordingly, as with a 
number of other forms of TRS, the Commission believes that when both 
parties to an IP CTS call are located within the same state, the call 
should be classified as an intrastate call under section 225 of the 
Act. The Commission seeks comment on these views.

State Role in the Administration of IP CTS

    44. The Commission seeks further comment on whether certified state 
TRS programs should be allowed or required to take a more active role 
in the administration of IP CTS. Under section 225(c) of the Act, 
common carriers may fulfill their obligation to offer TRS throughout 
the areas in which they offer telephone service ``individually, through 
designees, through a competitively selected vendor, or in concert with 
other carriers,'' or by complying with the requirements of

[[Page 33906]]

state TRS programs certified by the Commission. Currently, all 50 
states plus six U.S. territories have TRS programs certified by the 
Commission that offer the two forms of TRS currently required for state 
program certification: TTY-voice and speech-to-speech TRS. 
Additionally, all TRS state programs offer, oversee, and support a non-
IP version of CTS on a voluntary basis.
    45. Given their responsibility for administering other forms of TRS 
(including CTS) and their greater proximity to residents using IP CTS 
within their jurisdiction, the Commission believes that state TRS 
programs have the expertise, demonstrated skills, and on-the-ground 
experience to assume administrative functions with respect to IP CTS. 
In an earlier phase of this proceeding, however, at least some 
commenters questioned whether it would be desirable for states to take 
on IP CTS funding and administration before issues related to user 
eligibility, uncontrolled growth of IP CTS demand, and standards of 
service have been addressed at the federal level. Additionally, for 
some states, it appears that state legislative authority may be needed 
to allow such a transition. The Commission seeks to update the record 
on the extent to which states continue to have these various concerns, 
or whether they would have an interest in voluntarily assuming an 
administrative role for IP CTS operations. The Commission also seeks 
comment on how much discretion states that are willing to take on such 
a role should have in designing their IP CTS programs. In general, a 
state IP CTS program would remain subject to certification by the 
Commission, and would be expected to comply with any mandatory minimum 
TRS standards established by the Commission.
    46. To the extent that state TRS programs remain reluctant to 
assume all obligations associated with operating a TRS program, a more 
modest approach would be to allow or require state entities to take on 
particular roles in the administration of IP CTS.
    47. Intrastate Funding. If the Commission adopts its proposal for 
IP CTS to be supported in part by intrastate end-user revenues, as 
proposed above, should state TRS programs be required or permitted to 
administer intrastate funding for the costs of IP CTS to their 
residents (i.e., to ``opt out'' of having revenues from their 
intrastate carriers contributed to the TRS Fund, so that they can 
handle such funding on their own)? In addition to the jurisdictional 
separations issues discussed above, if any state chooses to assume 
responsibility for funding intrastate IP CTS, the TRS Fund's IP CTS 
revenue requirement would need to be adjusted to reflect that 
intrastate IP CTS need no longer be supported for that state, by 
excluding from the intrastate end-user revenues subject to TRS Fund 
contribution all intrastate revenues attributable to voice service 
provided in that state. The Commission seeks comment on how this 
adjustment should be calculated. For example, should the Commission 
require each TRS Fund contributor to calculate and report their own 
state-by-state allocation of end-user revenues? Alternatively, should 
the TRS Fund administrator attribute a portion of some or all 
contributors' end-user revenues to states based on the most recent 
state-by-state USF contribution percentages for various categories of 
telecommunications service, as calculated by the Federal-State Joint 
Board on Universal Service?
    48. Provider Certification. Next, the Commission seeks comment on 
whether state TRS programs should be required or permitted to certify 
IP CTS providers that are allowed to deliver IP CTS services to the 
residents of their states. Presently, such provider certifications are 
handled exclusively by the Commission. If states handle such 
certifications, to what extent should states be required to offer 
consumers a choice of providers, given that most state TRS programs 
presently have a single TRS vendor? Further, the Commission seeks 
comment on the criteria that states should use for approving 
certification, and whether this should be consistent across all state 
programs.
    49. If either the funding or certification functions--or the 
broader function of administering IP CTS--is transferred to state TRS 
programs, the Commission seeks comment on the amount of time state TRS 
programs will need to secure the necessary resources and regulatory 
changes at the local level for their implementation. The Commission 
also seeks comment on whether and how to define a time ``window'' 
within which each state that intends to participate in these functions 
must notify the Commission of such intention.

Ensuring Independent Assessments

    50. Information in the record suggests that only a portion of the 
millions of Americans who have some level of hearing loss require IP 
CTS to achieve functionally equivalent telephone communication. Because 
of IP CTS's ease of use and the absence of any direct interaction 
between the calling parties and the CA, compared with other forms of 
TRS, it appears more likely that individuals who do not have a 
disability or who do not require this form of TRS may use it as a 
convenience, rather than a necessary means to achieve functionally 
equivalent communications. The Commission is concerned that this trend 
and the exponential growth in IP CTS have been exacerbated by the 
failure of user assessments to be sufficiently complete and objective.
    51. First, the record indicates that, as currently conducted, user 
assessments are unlikely to accurately determine whether an 
individual's hearing loss warrants their use of IP CTS. Specifically, 
the extent to which an individual's hearing loss affects that person's 
ability to understand telephonic speech--and, therefore, necessitates 
the use of IP CTS to communicate by phone--can depend on a number of 
factors, including the individual's specific decibel levels of hearing 
loss as affected by different sound frequencies, environmental and 
background noises, and device distortion. This suggests that an 
effective assessment of an individual's need for IP CTS should be based 
on a more specific evaluation than a generalized hearing test or a 
previously recorded audiogram, and should consider whether an 
individual's communications needs can be met by other assistive 
technologies.
    52. In order to prevent the waste of TRS Fund resources, the 
Commission therefore proposes that assessments of IP CTS user need must 
be specifically focused on the consumer's ability to hear and 
understand speech over the telephone and on whether the consumer's 
communications needs can be met by other assistive technologies. The 
Commission seeks comment on this proposal and invites parties to submit 
documentation or other evidence confirming whether the assessments 
currently conducted by health professionals for potential IP CTS users 
actually include these specific elements.
    53. Second, there is evidence that current assessments of users' 
need for IP CTS are unlikely to be objective. Evidence indicates that 
third-party professional assessments of need have become an integral 
part of some providers' marketing plans, such that some third-party 
professionals--through pre-established and sometimes exclusive 
arrangements with certain IP CTS providers--have been helping to 
promote these providers' IP CTS offerings at the same time as they 
purportedly provide an objective certification of their clients' need 
for IP

[[Page 33907]]

CTS. In light of the benefits derived from such arrangements (i.e., 
opportunities to sell professional services and hearing aids to new or 
existing customers), the Commission is concerned that professionals 
have an incentive to acquiesce to their customers' requests for IP CTS 
eligibility certification, rather than thoroughly and objectively 
evaluate their need for IP CTS--even when alternatives to IP CTS often 
may provide a more cost-efficient and effective means of enabling 
telephone communication for these individuals.
    54. To ensure that eligibility screening of IP CTS users is both 
neutral and complete, the Commission proposes to amend its rules to 
require that each prospective IP CTS user undergo an objective 
assessment by a qualified and independent entity that will determine 
whether the individual has a hearing loss that necessitates use of 
captioned telephone service. To ensure that screenings specifically 
assess the need for IP CTS, the Commission further proposes that each 
assessment include a functional assessment of each applicant's 
communication needs, including the extent to which the individual would 
be able to achieve functionally equivalent telephone service by using 
an amplified telephone or other assistive technology. The Commission 
seeks comment on these proposals and rationale. In addition, the 
Commission seeks comment on two alternative approaches.
    55. Assessments by State Programs. Having state TRS programs handle 
IP CTS user eligibility assessments could be an effective means of 
ensuring that such evaluations are sufficiently thorough and not biased 
toward the use of IP CTS. These programs often work in conjunction with 
state EDPs and other state agency programs that have expertise and 
experience in assessing the types of communication technologies needed 
by individuals with hearing loss. The Commission seeks comment on 
whether state TRS programs should be required (as a condition of FCC 
certification under section 225(f) of the Act) to fulfill this user 
eligibility obligation--whether on their own, through state equipment 
distribution programs (EDPs), or through contracting entities.
    56. If this approach is adopted, the Commission also seeks comment 
on how user screenings can be most effectively and efficiently 
conducted. Should all such assessments comport with certain standards 
and practices established by the Commission for nationwide application, 
or should states each be permitted to establish their own eligibility 
criteria and processes for IP CTS screenings? The Commission also seeks 
information, if available, on the number of users that each state 
program likely will be able to screen in a given period of time, such 
as on a monthly basis. Finally, the Commission seeks comment on the 
current capacity of state programs to take on this task, and what 
amount of time may be needed to obtain the necessary resources and 
begin conducting such assessments.
    57. The Commission asks commenters to share information about the 
costs and benefits of having state programs assume this function, based 
on state CTS screenings that have taken place to date. Regarding costs, 
the Commission estimates that the likely cost for state entities to 
conduct an appropriate evaluation of every new IP CTS user would total 
approximately $9 million annually. According to some sources, estimates 
of the cost of a comprehensive hearing evaluation for the purpose of 
determining whether an individual needs a hearing aid range from $54 to 
more than $224. The type of evaluation needed to establish eligibility 
for IP CTS, however, need not include all the elements of a general 
hearing evaluation--for example, a physical examination of the ear--and 
therefore may not cost as much as the upper range of a general hearing 
evaluation. Recently, TEDPA conducted a survey of state equipment 
distribution programs seeking information on the cost incurred by such 
agencies in assessing and evaluating a new applicant's qualifications 
for program services and equipment. Respondents' estimates of the 
average cost of such assessments or evaluations ranged from $50 at the 
low end to $250 at the high end. Estimates varied significantly based 
on whether assessments were conducted at an office, for which the 
median cost estimate was approximately $100, or at the applicant's 
home, for which the median cost estimate was approximately $200. Based 
on the assumption that the majority of assessments would be conducted 
at an agency's offices, as a preliminary estimate, the Commission 
estimates the average cost of such an evaluation to be approximately 
$125 per new user. Assuming no change in the current rate at which new 
users are being added (i.e., approximately 6,000 new IP CTS users per 
month), and multiplying that rate by the estimated average cost (i.e., 
$125 per user), the cost of evaluating new users can be estimated at 
approximately $750,000 per month, or $9 million per year. The 
Commission seeks comment on this estimate and the underlying 
assumptions.
    58. To the extent private professional assessments are currently 
being conducted, the Commission invites providers to submit estimates 
of how many of their new users currently undergo such evaluations, and 
it invites parties generally to submit estimates of the costs currently 
incurred by users, hearing health professionals, and others to complete 
such evaluations. The Commission estimates that these currently 
incurred evaluation costs will be saved to the extent that state 
agencies take over the evaluation function, because such private 
evaluations will not be necessary.
    59. Consistent with the requirement of section 225 of the Act for 
the costs of providing intrastate TRS ``generally'' to be recovered 
from each intrastate jurisdiction, the Commission seeks comment on 
whether states should be permitted to recover expenses associated with 
such screenings from their intrastate telephone subscribers, much along 
the same lines that they now recover other costs associated with the 
provision of intrastate TRS. The Commission further seeks comment on 
whether a share of the costs of providing these assessments, 
proportionate to the interstate minutes of use by each state's 
residents, should be reimbursed to the states by the TRS Fund.
    60. Next, the Commission seeks comment on how to ensure that 
independent screenings are conducted in nonparticipating states that do 
not have EDPs. For example, should the Commission enter into contracts 
with third parties, on a national, regional, or local basis, that have 
the necessary expertise to fill this gap? If so, what qualifications 
should such parties possess, in terms of administrative capabilities, 
professional staffing, and experience? The Commission invites state 
equipment programs and hearing health professionals who have performed 
assessments of need for CTS or IP CTS to describe what assessment tools 
they have used to determine whether these services are necessary in 
addition to or in lieu of other assistive technologies. The Commission 
further proposes that assessments conducted by such independent 
contractors adhere to the same criteria and standards as will apply to 
state programs taking on this function. Additionally, to ensure the 
neutrality of any screening entity--be it a state program or 
independent contractor--the Commission proposes that any personnel 
conducting assessments not have any business, family, or social 
relationships with any IP CTS provider or personnel.

[[Page 33908]]

Alternatively, should the Commission allow assessments by third-party 
professionals, as outlined below, in states without equipment 
distribution programs? The Commission seeks comment on these proposals.
    61. Assessments by Third-Party Professionals. An alternative to 
having state programs conduct IP CTS screenings is to require IP CTS 
providers to obtain from each potential IP CTS user a certification 
from an independent, third-party hearing health professional affirming 
the user's eligibility to use IP CTS. The Commission continues to be 
concerned, however, about the difficulties associated with relying on 
this gatekeeping function, especially when it is conducted by 
professionals who may be subject to the enticements of free phones for 
their clients and other marketing promotions that can interfere with 
their impartial judgment about a client's eligibility. For this reason, 
if the Commission adopts this approach, it believes that strict 
safeguards should be put into place to improve the objectivity and 
accuracy of these professional assessments, so that only individuals 
who actually need IP CTS will be permitted to register for this 
service. For this purpose, the Commission seeks comment on the 
following measures, and further asks commenters to share any other 
requirements they believe to be necessary to ensure the independence, 
expertise, and objectivity of certifying entities.
    62. First, to ensure that a certifying third-party professional is 
qualified to assess a consumer's need for IP CTS, the Commission 
proposes to require that providers only be permitted to accept user 
assessment certifications signed by physicians specializing in 
otolaryngology, audiologists, or other state certified or licensed 
hearing health professionals qualified to evaluate an individual's 
hearing loss in accordance with applicable professional standards. 
Under this proposal, a person whose profession does not ordinarily 
encompass evaluating hearing loss would not be permitted to provide a 
third-party certification. The Commission seeks comment on this 
proposal and any other qualifications needed for such professionals. To 
ensure compliance with this requirement, and to prevent the possible 
emergence of ``third-party certification mills,'' the Commission also 
seeks comment on whether to require IP CTS providers to report annually 
to the Commission the names and qualifications of professionals that 
certify multiple users annually, and the number of individuals each 
professional certifies for IP CTS in each Fund year.
    63. Second, to provide assurance that a third-party professional's 
certification of a consumer's need for IP CTS is not directly or 
indirectly influenced by IP CTS providers through compensation, 
opportunities for meeting potential clients, or other provider 
enticements, the Commission proposes to prohibit an IP CTS provider 
from accepting a certification from any professional that has a 
business, family, or social relationship with the IP CTS provider or 
with any officer, director, partner, employee, agent, subcontractor, 
sponsoring organization, or affiliated entity (collectively, 
``affiliate'') of the IP CTS provider. The Commission proposes that 
this prohibition specifically include situations where the 
professional, the professional's organization, or a colleague within 
that organization has been referred to the consumer, either directly or 
indirectly, by the IP CTS provider or any affiliate. The Commission 
also proposes to prohibit IP CTS providers from facilitating or 
otherwise playing a role in the acquisition of professional 
certifications by arranging, sponsoring, hosting, conducting, or 
promoting seminars, conferences, meetings, or other activities in 
community centers, nursing homes, apartment buildings, or any other 
location where hearing health professionals offer free hearing 
screenings. Generally, then, providers would be prohibited from 
soliciting, facilitating, or collecting user certifications directly 
from hearing health professionals. Rather, in order to become 
registered for IP CTS, the Commission believes that consumers, rather 
than providers on their behalf, should initiate the process of 
obtaining a third-party certification. The Commission believes that 
these neutrality requirements would impose minimal costs on IP CTS 
providers and hearing health professionals. The Commission seeks 
comment on this view and on the costs and benefits of adopting this 
proposal (including its impact on consumers), as well as whether there 
are other types of relationships or interactions between providers and 
hearing health professionals that should be prohibited to ensure the 
latter's neutrality.
    64. Third, the Commission proposes that before signing a 
certification as to a consumer's need for IP CTS, the certifying 
professional be required to: (1) Conduct functional assessments that 
evaluate the individual's need for IP CTS to achieve functionally 
equivalent telephone communication (as compared to a general 
determination of hearing loss) and (2) assess whether an amplified 
telephone or other services or devices would be sufficient to provide 
functionally equivalent telephone service for the applicant. The 
Commission seeks comment on these proposed requirements and their costs 
and benefits, including whether an assessment that considers multiple 
options can enable professionals to more objectively determine a 
consumer's need for IP CTS. The Commission also seeks comment on the 
extent to which the proposed certification requirement would impose 
additional costs beyond those already incurred by IP CTS users, 
providers, hearing health professionals, and others in connection with 
such assessments. In addition, the Commission seeks comment on how the 
costs and benefits of user assessments, which are discussed in more 
detail above, differ based on whether such assessments are conducted by 
or under the supervision of state entities or by third-party 
professionals without supervision by state entities. The Commission 
also seeks comment on whether the Commission or contracting entities 
should establish an appeals process that would allow potential IP CTS 
users to contest the results of such assessment and, if so, what form 
such process should take.
    65. Fourth, the Commission proposes to require IP CTS providers to 
accept only third-party professional certifications that are in 
writing, submitted under penalty of perjury, and include an attestation 
from the professional that he or she has conducted an evaluation of the 
individual in accordance with applicable professional standards and the 
Commission's rules, and that in the professional's opinion, the 
applicant has a hearing loss that necessitates use of IP CTS for the 
individual to achieve effective telephone communication. The Commission 
further proposes that such attestation state that the professional 
understands, and has explained to the consumer, that (1) the captions 
used for IP CTS may be generated by a CA who listens to the other party 
on the line and provides the captions received by the IP CTS 
subscriber; and (2) there is a per-minute cost to provide captioning on 
each IP CTS call, which is funded through a federal program. This 
requirement will ensure that both the third-party professional and the 
consumer understand the nature of IP CTS, and help eliminate confusion 
between the costs associated with television captioning, which is not 
based on usage, and telephone

[[Page 33909]]

captioning, for which there are ongoing, measured costs. The Commission 
proposes application of these certification requirements to all new 
users other than those who are able to document that they have obtained 
IP CTS devices from a state program administering this function.
    66. Additionally, to assist with enforcement of these rules, the 
Commission proposes that each IP CTS provider be required to maintain a 
copy of each third-party professional certification for a minimum of 
ten years after termination of service to the consumer, and to make 
such records available to the TRS Fund administrator or the Commission 
upon request. The Commission further proposes that failure to provide 
such records may result in denial of compensation for minutes incurred 
by that user, and may be grounds for termination of a provider's 
certification to provide IP CTS. Finally, the Commission proposes that 
IP CTS providers be prohibited from disclosing users' certification 
information in a personally identifiable form, except upon request of 
the Commission or the TRS Fund administrator or as otherwise required 
by law.
    67. The Commission believes that such attestation and record 
storage requirements would impose minimal costs on IP CTS providers. 
The Commission seeks comment on this view and on the costs and benefits 
of adopting these proposals.
    68. Costs and Benefits of Ensuring Independent Assessments of IP 
CTS User Eligibility. The Commission seeks comment on the costs and 
benefits of both approaches. The Commission tentatively concludes that 
significant additional benefits, in the form of savings to the TRS 
Fund, will result if evaluations are more objective and better focused 
on an individual's ability to effectively communicate by telephone than 
the evaluations that are currently conducted.
    69. Usage data provided by Rolka Loube indicates that the average 
new IP CTS user adds approximately 1,250 minutes in the first year 
after initiating service. Accordingly, the Commission estimates that 
the approximately 72,000 new users added in the course of a year will 
generate approximately 90 million minutes of IP CTS in their first year 
of service. If, in the future, 10 percent of the IP CTS usage generated 
by new users results from registration of users who do not need IP CTS, 
then the Commission estimates that improved screening of new users has 
the potential to save the Fund, in the first year, the cost of 9 
million minutes (10 percent x 90 million), at a rate of $1.58 per 
minute, or approximately $14.2 million. If 20 percent of such usage is 
unnecessary, the potential first year's savings would be approximately 
$28.4 million.
    70. The Commission notes that benefits to the Fund of ensuring 
appropriate usage accrue cumulatively over time. In the second year, a 
comparable amount of unnecessary usage from new users would be saved, 
and there would be continued savings from the users screened out in the 
first year. According to usage data provided by Rolka Loube, in a 
user's second year, the minutes of use for an average user drop to 
approximately 66 percent of the user's first-year minutes. Thus, the 
minutes saved in the second year would be approximately 1.66 times 
those saved in the first year. If there is a further 10 percent 
reduction of the IP CTS compensation rate in Fund Year 2020-21, savings 
of unnecessary minutes and Fund expenditures in the second year would 
total approximately 14.9 million minutes and approximately $21.1 
million if 10 percent of usage is unnecessary, and approximately 29.8 
million minutes and approximately $42.2 million if 20 percent of usage 
is unnecessary. In the third and subsequent years, because of the 
continued savings from the screenings conducted in the first two years, 
the Commission believes the amounts saved would continue to multiply. 
The Commission seeks comment on its tentative conclusion and the 
assumptions underlying these estimates.

Communications and Messaging on IP CTS

    71. In response to concerns raised in the record about what has 
been perceived as aggressive IP CTS messaging, some of which may be 
misleading or lacking complete information, the Commission seeks 
comment on measures to ensure that accurate information about IP CTS is 
being imparted by providers to consumers, service providers and other 
members of the public. The importance of ensuring the accuracy of 
marketing information is heightened by use of IP CTS predominantly by 
seniors, as they may be particularly vulnerable to schemes that could 
result in fraud and abuse.
    72. Written Marketing Materials. The Commission proposes to require 
that all provider-distributed online, print, and orally delivered 
materials used to market IP CTS be complete and accurate. The 
Commission seeks comment on whether such a requirement would ensure 
that marketing materials make clear that IP CTS may not be necessary 
for everyone and that to qualify for IP CTS use, consumers with hearing 
loss must be able to certify that captioning is needed to enable them 
to understand telephone conversations. The Commission also seeks 
comment on whether and to what extent this proposed rule change, which 
may require reprinting of previously produced marketing materials, 
would impose a significant cost or administrative burden on providers.
    73. Free Phone Offers. The Commission also continues to be 
concerned about advertised offers of a free phone for anyone with 
hearing loss who wants to subscribe to this service, which could both 
encourage consumers to sign up for IP CTS (just to obtain the phone) 
even if they do not need it and give such individuals the misimpression 
that the associated IP CTS services are also free. In addition to 
enticing consumers, the Commission believes that the incentive of a 
free phone can sway the opinion of third-party professionals, whose 
certification may become more of a stamp of approval on a decision made 
by the consumer in response to provider marketing efforts, rather than 
an independent evaluation of the consumer's need for IP CTS. Would a 
requirement to eliminate from promotional materials, including print 
materials and websites, promises of a free phone for anyone with 
hearing loss, without specifying that this service (and the associated 
phones) are only intended for individuals who have a hearing loss that 
makes it difficult to use the phone, remove such improper incentives 
and reduce the number of consumers who sign up for IP CTS without a 
specific need for this service? The Commission seeks comment on the 
merits of taking this measure and how the First Amendment might apply 
in this context.
    74. Equipment Installer Notifications. To ensure that consumers are 
given full information about the nature and costs of IP CTS prior to 
allowing providers to install these devices in their homes, the 
Commission proposes that whenever there is a home installation of an IP 
CTS device by a provider's employee, agent, or contractor, such 
installer must explain to the consumer, prior to conducting such 
installation: (1) The manner in which IP CTS works, (2) the per-minute 
cost of providing captioning on each call (i.e., the applicable rate of 
provider compensation), and (3) that the cost of captioning is funded 
through a federal program. The Commission seeks comment on this 
proposal.
    75. Incentives to Caretakers and Service Providers for Seniors. The

[[Page 33910]]

Commission proposes to amend its rules to expressly prohibit providers 
from offering or providing any form of direct or indirect incentives, 
financial or otherwise, to any person or entity for the purpose of 
encouraging referrals of potential users, registrations, or use of IP 
CTS. The Commission seeks comment on this proposal.
    76. The Commission tentatively concludes that compliance with these 
requirements regarding marketing materials, notifications by equipment 
installers, and prohibition of certain incentives would impose minimal 
costs on IP CTS providers. The Commission seeks comment on this 
tentative conclusion and on the costs and benefits of adopting this 
proposal.
    77. Finally, the Commission seeks comment on whether there are any 
other components of an IP CTS provider's public relations, marketing, 
media planning, product pricing and distribution, or sales strategy 
that could lead to waste, fraud, and abuse in the IP CTS program, and 
what rules the Commission should adopt to halt such practices.

IP CTS Registration Renewal and Phone Reclamation

    78. The Commission seeks comment on what rules are needed to 
prevent the unauthorized use of a registered user's IP CTS device after 
the authorized user ceases to use the service. In light of the 
reportedly high level of attrition among IP CTS users, the Commission 
believes there is a risk that providers may not be notified when the 
registered user of an IP CTS device discontinues use, and that such 
users' IP CTS devices may end up in the possession of others who are 
not properly registered to use IP CTS. To minimize the risk of 
inappropriate IP CTS use, the Commission proposes to require that IP 
CTS providers biennially obtain from their users a self-certification 
of their continuing need to use IP CTS to achieve functionally 
equivalent telephone communication, and retain copies of each self-
certification, as well as other registration information, for a period 
of ten years. Further, the Commission proposes to prohibit such 
providers from receiving compensation for IP CTS provided to any such 
individual who fails to re-certify within the specified interval or for 
calls associated with any device for which such certification was 
required. At present, the Commission does not see the need to apply 
these new requirements to web and wireless IP CTS because the use of 
log-in credentials will reduce the likelihood of unauthorized use of 
such services upon their discontinuation by consumers who have been 
registered to use them. The Commission seeks comment on this belief.
    79. The Commission also seeks comment on whether to require IP CTS 
providers to notify each individual who receives an IP CTS device, at 
the time of such receipt and initial registration, that the user has an 
obligation to ensure that the provider is notified if such user 
discontinues use of the captioning service. If this proposal is 
adopted, the Commission further proposes that recipients of IP CTS 
devices be permitted to fulfill such obligation either on their own or 
through a designated representative, at which time the provider would 
be required to terminate the provision of IP CTS via that device. The 
Commission further seeks comment on whether to adopt a rule requiring 
the provider to either disable the IP CTS capability of an end-user 
device or ensure that the consumer (or his or her designee) returns the 
device to the provider, after notification that the authorized user is 
no longer using the device for IP CTS. Finally, the Commission seeks 
comment on other steps that IP CTS providers should take to ensure that 
the person who initially registers for a captioning service remains the 
exclusive user of the captioning service provided on that user's 
device.
    80. The Commission believes that compliance with these registration 
renewal and phone reclamation requirements would impose minimal costs 
on providers and seeks comment on this view and on the costs and 
benefits of adopting these proposals.

Requiring an Easy Way To Turn Captions On or Off

    81. The Commission proposes to require providers to ensure that 
their IP CTS equipment provides an easy way to turn captions on or off, 
either before placing a call or while a call is in progress, and to 
prohibit provider practices designed to induce an individual to turn 
captions on, or leave them on, when that person otherwise would not do 
so.
    82. Accordingly, the Commission proposes to require both (1) an 
easily operable button, icon, or other comparable feature that requires 
a single step for consumers to turn captioning on or off, and (2) a 
prohibition against the installation of features in provider-
distributed services or devices that have the foreseeable effect of 
encouraging IP CTS users to turn on captions even when they are not 
needed. The Commission believes that compliance with these requirements 
would impose minimal costs on IP CTS providers and seeks comment on 
this view and on the costs and benefits of adopting these proposals as 
a means of reducing waste and improving the efficiency of IP CTS. The 
Commission also seeks comment on the amount of time that would be 
needed to effect their implementation.

Additional Measures

    83. The Commission also seeks comment on additional steps it could 
take to help prevent waste, fraud, and abuse in the provision of IP 
CTS. What other measures could the Commission implement to better 
ensure that limited program dollars are used to support the use of IP 
CTS by eligible individuals with hearing loss? For instance, do IP CTS 
providers currently have processes in place to enable or require call 
takers to identify individual calls or patterns of calls that may 
suggest noncompliance with program rules? Should the FCC impose 
requirements on providers that they enable or require CAs to flag 
individual calls that may suggest that IP CTS functionality is being 
used improperly? For example, some consumers in a household may use 
captioning features who do not actually need them. Should any steps the 
Commission takes focus on individual calls or identified patterns? 
Should IP CTS providers have an obligation to report any such flags to 
the TRS Fund administrator or the FCC? Should the Commission take steps 
to ensure that any particular calls where IP CTS is improperly used are 
not compensated out of program dollars? Are there auditing procedures 
that the FCC, the TRS Fund administrator, or IP CTS providers should 
take to identify any such calls and to ensure providers are offering IP 
CTS only to eligible consumers?
    84. The Commission also seeks comment on whether it should consider 
additional measures to ensure call quality for 911 calls made using IP 
CTS. Given the important and often exigent circumstances associated 
with 911 calls, the Commission previously adopted rules requiring IP 
CTS providers to transfer emergency calls to 911, to prioritize 
emergency calls, and to communicate essential information to first 
responders answering 911 calls. Are these requirements sufficient to 
ensure proper emergency call handling by IP CTS providers? Are IP CTS 
providers taking sufficient steps to detect and remedy 911 call 
failures? Have callers encountered technical difficulties or call 
quality issues when making 911 calls? To what extent should the 
Commission adopt standards for the accuracy and synchronicity of 
captions on 911 calls handled by IP CTS

[[Page 33911]]

providers, to enable the effective and timely exchange of information 
in an emergency? Are there other minimum criteria that should be 
established for such calls? Are there unique challenges with respect to 
relaying calls to 911 associated with any of the methods used to 
generate IP CTS captions (i.e., fully automated ASR, CA-assisted ASR or 
stenographic supported captions)? Finally, are additional auditing 
requirements, beyond those already governing TRS providers, necessary 
to ensure compliance with the Commission's 911 IP CTS call handling 
requirements? For example, should the Commission conduct regular 
testing to ensure such compliance? The Commission asks commenters to 
address the costs and benefits associated with any proposed measures.

Technological Advances

    85. The Commission also seeks comment on the extent to which 
alternative communication services and applications, which are not 
funded through the TRS program, can complement or reduce reliance on IP 
CTS. For example, to what extent can amplified telephones, high 
definition VoIP services (HD voice) over wired and wireless networks, 
video over broadband and cellular networks, noise-canceling techniques, 
audio personalization, and various forms of text-based communications--
for example, real-time text (RTT), email, short messaging services, 
instant messaging, and online chat sessions--meet the communications 
needs of people with hearing and speech disabilities? To the extent 
that these mainstream technologies enable functionally equivalent 
access to voice telephone services for some individuals, the Commission 
believes they may reduce reliance on IP CTS and thereby help preserve 
the TRS Fund for others for whom IP CTS is essential for telephone 
communication. The Commission seeks comment on this belief, and whether 
there are registered IP CTS users who only use their IP CTS devices in 
certain situations, but rely on more direct alternatives, such as phone 
amplification, in other situations. The Commission further seek comment 
on how it can collect data on the potential markets for these off-the-
shelf technologies, as well as their usage by individuals who are 
current or potential users of IP CTS.

Notice of Inquiry

Performance Goals

    86. The Commission seeks comment on appropriate performance goals 
for the IP CTS program. The Commission's objective here is to state 
these goals in terms that lend themselves to evaluating progress toward 
achieving the Congressional objectives set forth in section 225 of the 
Act.
    87. The Commission believes that the primary goals for the IP CTS 
program should be: (1) To make communications services available to 
individuals with communications disabilities that are functionally 
equivalent to communications services used by individuals without such 
disabilities; (2) to keep up with technological changes and advances in 
the telecommunications industry; and (3) consistent with the concepts 
of good government and proper stewardship of the Fund, to improve the 
efficiency of IP CTS, and reduce the incidence of waste, fraud, and 
abuse. The Commission seeks comment on whether these or other goals are 
appropriate for assessing the IP CTS program and IP CTS provider 
performance.
    88. Goal #1: Functional Equivalence. Given the requirement in 
section 225 of the Act for the Commission to ensure, to the extent 
possible, the availability of TRS for people with hearing or speech 
disabilities that is functionally equivalent to voice telephone 
services used by people without such disabilities, the Commission seeks 
comment on whether it should set as its first goal that communications 
services used by these populations be comparable to communications 
services used by the general public, including communications that take 
place over the PSTN, cellular networks, and VoIP transmissions. In 
April 2011, consumer groups suggested that functional equivalence be 
defined as enabling ``[p]ersons receiving or making relay calls . . . 
to participate equally in the entire conversation with the other party 
or parties and . . . experience the same activity, emotional context, 
purpose, operation, work, service, or role (function) within the call 
as if the call is between individuals who are not using relay services 
on any end of the call.'' The Commission seeks comment on the extent to 
which this is an appropriate definition of functional equivalence for 
the purpose of defining this performance goal.
    89. Goal #2: Technological Advances. Section 225 of the Act directs 
the Commission to adopt regulations that encourage the use of existing 
technology and . . . do not discourage or impair the development of 
improved technology. The Commission therefore asks whether the second 
goal of the IP CTS program should be to ensure that this program 
utilizes technological changes and advances in the telecommunications 
industry to the greatest extent possible, as needed to achieve 
functionally equivalent communication for this population. This goal 
would not be limited to current technological capabilities, but rather 
would seek to ensure that people with communication disabilities are 
able to take full advantage of innovative communication technologies, 
such as ASR, as these continue to be developed. The Commission seeks 
comment on this goal, and more specifically, on how the use of 
mainstream and off-the-shelf technologies can provide functional 
alternatives to, or supplement, IP CTS in meeting the needs of 
individuals who are deaf, hard of hearing, deaf-blind, or have speech 
disabilities. For example, to what extent can individuals who use IP 
CTS also be able to communicate directly with others through the use of 
amplified telephones, high definition VoIP services over wired and 
wireless networks, video over broadband and cellular networks, and 
text-based communications (i.e., electronic messaging services, such as 
email, short messaging service, instant messaging, and online chat 
sessions)? The Commission asks commenters to address the types of 
circumstances when these or other emerging technologies can be used to 
provide functionally equivalent telephone communication for people with 
communications disabilities. What steps, if any, should the Commission 
be taking to foster such direct communication solutions?
    90. Goal #3: Provision of Service in the Most Efficient Manner. 
Section 225 of the Act directs that TRS be made available ``in the most 
efficient manner.'' To this end, the Commission asks whether the third 
program goal should be to improve the efficiency of the IP CTS program 
and to reduce this program's incidence of waste, fraud, and abuse. The 
Commission also seeks comment on whether efficiency can be measured 
solely in terms of the cost incurred to achieve a certain level of 
functional equivalence, or whether there are additional factors, such 
as timeliness and effectiveness, that should go into this 
determination. The Commission further seeks comment on how this goal 
should be balanced against the performance goal of ensuring the 
provision of a functionally equivalent conversational experience 
through IP CTS.

Performance Measures

    91. To ensure that its performance goals are being met, the 
Commission must define measurements that can

[[Page 33912]]

provide valuable empirical evidence to objectively assess these goals. 
In addition to enabling the Commission to track the progress and 
success of the IP CTS program, these measurements will provide valuable 
empirical evidence for Commission policy makers to craft rules for 
effective implementation and oversight of the IP CTS program, as well 
as to ensure that consumers are provided with the information they need 
to make informed choices in their selection of provider services.
    92. Some of these metrics may be observed automatically, e.g., by 
call processing logs or other measurement tools, while others may 
require evaluation by IP CTS users or human subject matter experts. The 
Commission seeks comment on whether the derivation of data used to 
measure IP CTS service quality should be overseen by the TRS Fund 
administrator or otherwise developed through contractual or similar 
arrangements with independent third parties selected by the Commission. 
The Commission believes that calculations resulting from IP CTS 
performance measures will have greater efficacy if they are conducted 
independently (i.e., not by the regulated entities).
    93. The Commission also seeks comment on whether it should publish 
the metrics achieved for each provider, as it appears likely that 
making these results available to the public in a standard format will 
aid users in their selection of IP CTS providers. If shared publicly, 
the Commission seeks comment on the merits of developing a system by 
which IP CTS users can rate the quality and performance of IP CTS calls 
(based on the metrics discussed below) to increase competition. 
Finally, the Commission seeks comment on how such information should be 
presented to users, and whether there are concerns with such 
information being utilized in outreach or marketing materials.
    94. Functional Equivalence. The Commission seeks comment on use of 
the following metrics to measure IP CTS service quality: (1) 
Transcription accuracy; (2) transcription synchronicity; (3) 
transcription speed; (4) speed of answer; (5) dropped or disconnected 
calls; (6) service outages; and (7) usage data. How frequently should 
such testing or data gathering be performed and how should the 
information from such testing be reported?
    95. Transcription Accuracy. The Commission believes that standard 
measurements of captioning accuracy (using either CA-assisted and ASR 
versions) are needed to effectively measure functional equivalence on a 
regular basis, and seeks comment on this belief, as well as on the 
appropriate components that should go into such assessments. The 
Commission notes that it has defined accuracy in the context of closed 
captioning for video programming as including (in relevant part) 
considerations for the order of the words, proper spelling and 
punctuation, and correct tense. The Commission seeks comment on whether 
these guidelines are appropriate for IP CTS, and if so, how they should 
be measured. Should the Commission adjust accuracy measurements or 
standards to take account of the type of call measured, e.g., calls to 
911 or calls for services that use a specialized vocabulary, such as 
calls pertaining to medical, legal, or technical computer support?
    96. What methods do providers currently use to evaluate the 
accuracy of IP CTS transcription? Are there metrics used to assess the 
accuracy of computer-assisted real-time translation (CART) or court 
reporting that could be effectively applied to IP CTS? The Disability 
Advisory Committee (DAC) suggests evaluating accuracy by calculating 
major errors (i.e., errors that change the meaning of a transcription) 
and minor errors (i.e., errors that while technically incorrect, do not 
substantively change the meaning of the transcription). The MITRE 
Corporation (MITRE), a contractor for the Commission, suggests 
differentiating between transcription completeness and accuracy. It 
defines completeness as a measure of all the words transcribed, whether 
correctly or incorrectly as a percentage of the total words spoken, and 
accuracy as the percentage of words from the conversation that are 
correctly transcribed on the screen. Another way of assessing accuracy 
may be to examine the semantic error rate, which, according to one 
source, considers ``the fraction of utterances in which we misinterpret 
the meaning.'' Additionally, should transcription readability, which 
can be affected by correct punctuation and capitalization, be a 
component of accuracy? The Commission seeks comment on whether and how 
these various factors should be used to measure IP CTS accuracy, 
whether CA-assisted or entirely automated through ASR, and any other 
metrics that the Commission should use for this purpose.
    97. Finally, the Commission seeks comment on the tools that should 
be used to evaluate transcription accuracy given that its rules 
prohibit TRS providers from retaining records of the content of any 
conversation beyond the duration of a call. Are there real-time or 
other methods that can be used to measure the accuracy of calls 
consistent with this prohibition? For example, should the Commission 
use anonymous callers to make and record call interactions for later 
analysis by experts? Alternatively, should the Commission have 
independent third parties test transcription accuracy using test call 
scripts?
    98. Transcription Synchronicity. Should the Commission measure the 
synchronicity of communications during an IP CTS call as a measure of 
functional equivalency. The Commission seeks comment on use of 
synchronicity as an appropriate metric, and how best to assess it, 
reminding commenters of its past suggestion to calculate the lag time 
between the hearing party's response and the time when the captions 
appear. MITRE proposes a slight variation, to define transcription 
delay as the time elapsed from when an IP CTS user hears the other 
party's voice on a caption phone to when captions of that speech are 
displayed on the phone's screen. The Commission seeks comment on each 
of these approaches.
    99. The Commission also seeks comment on methods that may be 
available to evaluate the synchronicity of captions. Should providers 
be required to collect and report the amount of transcription delay on 
each IP CTS call? Alternatively, should the Commission have independent 
third parties test for this delay using test scripts? How should the 
information from the testing be reported and how frequently should such 
testing and data gathering be performed? To the extent that a delay 
occurs, the Commission seeks comment on how a performance measure 
should factor in its causes, be they technical, network- or equipment-
related, or dependent on the speech of the party whose conversation is 
being captioned.
    100. Transcription Speed. The Commission seeks comment on the need 
to measure the speed of IP CTS transcription. The DAC proposes defining 
transcription speed by calculating the number of words transcribed 
divided by the time needed to transcribe those words (measured in 
seconds) and multiplied by 60. Suggesting that speed cannot be 
accurately measured for live calls because the speaking speed of the 
non-captioned telephone user is unknown and there may be ``silence 
gaps'' during conversations, the DAC instead proposes to rely on test 
scripts to measure compliance with speed requirements. The Commission 
seeks comment on the feasibility of measuring the speed of live calls, 
as well as the use

[[Page 33913]]

of test scripts versus other methods to assess this metric. Are there 
environmental or other factors that may affect whether a speed test 
using a test script accurately reflects transcription speed on a live 
call? The Commission also seeks comment on whether the TRS Fund 
administrator or an independent third-party contracted by the 
Commission should conduct speed tests and the frequency with which 
these tests should be performed.
    101. Speed of Answer. Commission rules require that 85 percent of 
all IP CTS calls be answered within ten seconds. Providers must include 
data that enables tracking of their speed of answer in their CDRs and 
related filings submitted to the TRS Fund administrator. The Commission 
currently measure speed of answer for IP CTS calls by the time it takes 
for CAs to establish the connection between an IP CTS user's request 
for captioning and the start of captioning services. The collection of 
this data enables the Commission to monitor the extent to which 
provider connection time for IP CTS users is comparable to the 
connection time for voice telephone users. The Commission seeks comment 
on inclusion of this metric to assess functional equivalency, and how 
it can best be measured. Should the Commission rely on IP CTS providers 
to measure and report their connection delay, or use independent third 
parties for this purpose? How frequently should the Commission test and 
require the reporting of connection delays?
    102. Dropped or Disconnected Calls. The Commission seeks comment on 
whether to track and measure the percentage and frequency of 
``dropped'' or disconnected calls, and to compare these results with 
the various telephone communication technologies used by the hearing 
community. The Commission believes that to achieve functional 
equivalency, the number of dropped or disconnected IP CTS calls should 
be comparable to the number of dropped or disconnected voice calls 
placed by the hearing public. It seeks comment on use of this metric 
for this purpose, and how such data should be compared with dropped or 
disconnected telephone calls made over mainstream voice networks. 
Should such data be collected through user feedback, test calls, by 
analyzing provider logs or by a combination of these measures? The 
Commission further seeks comment on how such data should be presented 
to IP CTS users, if made publicly available.
    103. Service Outages. Commission rules require all internet-based 
TRS providers to notify the Commission in the event of an unplanned 
service outage of any duration or a voluntary service interruption of 
less than 30 minutes, and to seek advance approval for voluntary 
interruptions of longer duration. In addition, redundancy of facilities 
is a requirement for all forms of TRS. In general, to achieve 
functional equivalence, the Commission believes that the frequency and 
extent of IP CTS service outages and interruptions should not exceed 
that of outages and interruptions occurring on transmission services 
used by hearing people. The Commission seeks comment on this belief and 
use of this metric to measure the goal of functional equivalency.
    104. Usage Data. One measure of determining the extent to which IP 
CTS is successfully providing functionally equivalent communication is 
the extent to which this service is being used by people with hearing 
disabilities who are in need of this service. While the Commission 
generally gathers data on minutes of use, at present, the Commission 
lacks conclusive information about the number of eligible individuals 
using IP CTS in the United States. However, this data could be obtained 
through collection in the TRS-User Registration Database (TRS-URD). 
After measures are implemented to prevent individuals from using this 
service if they do not need it, when measured against demographic 
statistics regarding various kinds and levels of hearing loss, this 
metric may help to assess the program's success and determine whether 
functionally equivalent communication via IP CTS has been made 
available ``to the extent possible,'' as mandated by section 225(b) of 
the Act. The Commission also seeks comment from IP CTS providers on 
what kind of information they collect about the demographics of their 
users, and invite them to submit summaries of such information.
    105. The Commission seeks comment on whether there are other 
metrics that the Commission should consider for measuring the extent to 
which IP CTS call quality achieves functional equivalency for its 
users.
    106. Technological Advances. The Commission seeks comment on ways 
to measure the extent to which evolving communications technologies can 
provide functionally equivalent communications services for people with 
disabilities who cannot use traditional voice telephone options. For 
example, the Commission seeks comment on whether and how it should 
assess the extent to which these alternative technologies can improve 
the accuracy, synchronicity, speed of answer, frequency of dropped or 
disconnected calls, and frequency of service outages of telephone calls 
placed by such individuals. The Commission asks commenters who have 
made such measurements to submit their data.
    107. The Commission believes that, consistent with section 
225(d)(2) of the Act, it should encourage the use of off-the-shelf or 
assistive technologies to achieve direct calling arrangements, so long 
as the service quality afforded by these technologies represents at 
least the same level as, or is an improvement over, the level of 
quality realized by using IP CTS, and seeks comment on this belief. In 
this regard, the Commission notes that whether an individual's use of 
any off-the-shelf or assistive technology creates a functionally 
equivalent direct calling experience will always be unique to the 
individual. Is there some minimum level of service quality below which 
the use of off-the-shelf or assistive technologies to achieve direct 
calling arrangements should not be encouraged?
    108. The Commission further seeks comment on how it can collect 
data on the potential markets for these off-the-shelf technologies, as 
well as their usage by individuals who are current or potential users 
of IP CTS. The Commission believes it can better achieve its goal of 
ensuring that individuals with disabilities make use of technological 
advances with a more complete understanding of who uses IP CTS as 
compared to alternative means of communication. For example, are there 
registered IP CTS users who only use their IP CTS devices in certain 
situations, but rely on more direct alternatives, such as phone 
amplification, in other situations? What measures should be used to 
evaluate the extent to which alternatives to IP CTS are being used by 
people with hearing or speech disabilities? For example, should the 
Commission contract for a survey of deaf and hard of hearing 
individuals to collect such information?
    109. In addition, the Commission seeks comment and data on the 
extent to which any existing TRS regulations ``discourage or impair the 
development of improved technology.'' The Commission asks commenters to 
specifically identify such regulations and whether they should be 
amended.
    110. Program Efficiency. Data on potential and existing IP CTS 
users can help ensure that waste, fraud, and abuse of the TRS program 
are kept to a minimum. Accurate information about the number of users 
and the frequency and duration of their calls will assist the 
Commission in protecting program integrity and ensuring that this 
program

[[Page 33914]]

is being used properly in accordance with Congress's goal of ensuring 
effective telecommunications access to people with communication 
disabilities. The Commission seeks comment on metrics that would be 
appropriate to ensure the efficiency of the IP CTS program.
    111. Other Measures. The Commission seeks comment on other metrics 
it could employ to measure the performance goals for IP CTS. Commenters 
should address, with specificity, what should be measured, how it 
should be measured, and how often it should be measured, along with any 
estimated costs and benefits of such measurements.

Initial Regulatory Flexibility Act Analysis

    112. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on a substantial number of small entities by the policies and rules 
proposed in the Further Notice. Written public comments are requested 
on this IRFA. Comments must be identified as responses to the IRFA and 
must be filed by the deadline for comments on the Further Notice 
specified in the DATES section. The Commission will send a copy of the 
document 18-79 to the Chief Counsel for Advocacy of the Small Business 
Administration.

Need for, and Objectives of, the Proposed Rules

    113. In the Further Notice, the Commission proposes to adopt a 
multi-year cost-based compensation rate methodology for IP CTS.
    114. The Commission proposes several different methods to 
restructure the funding and administration of IP CTS: (1) Expanding the 
Interstate Telecommunications Relay Services (TRS) Fund base to include 
intrastate revenues; (2) permitting or requiring states to assume 
responsibility for the funding and administration of intrastate IP CTS 
and how to address the funding and administration of intrastate IP CTS 
for states that choose not to assume these duties; and (3) having 
assessments of user need for IP CTS performed under the purview of 
state TRS programs so that the assessments can be neutral, objective 
and independent from provider influence, or allowing or requiring IP 
CTS providers to obtain from new and existing IP CTS users a 
certification from an independent, third-party professional affirming 
the user's eligibility to use IP CTS.
    115. The Commission proposes to include caregivers and other 
professionals within the scope of the prohibition of provider 
incentives to use IP CTS, and to include organizations along with 
individuals in the prohibitions of provider incentives.
    116. The Commission proposes measures to ensure that accurate 
information about IP CTS is being imparted by providers to consumers, 
service providers and other members of the public.
    117. The Commission proposes to require IP CTS providers to 
biennially obtain from each user a self-certification of the user's 
continuing need to use IP CTS to achieve functionally equivalent 
telephone communications and to prohibit such providers from receiving 
compensation for IP CTS provided to any such individual who fails to 
recertify within the specified interval or for calls associated with 
any device for which such certification was required. The Commission 
also seeks comment on whether to require providers to reclaim or 
disable any IP CTS devices that are no longer associated with 
registered users.
    118. Finally, the Commission proposes to require providers to 
ensure that their IP CTS equipment provides an easy way to turn 
captions on or off, either before placing a call or while a call is in 
progress.

Legal Basis

    119. The authority for this proposed rulemaking is contained in 
sections 1 and 225 of the Act, as amended, 47 U.S.C. 151, 225.

Small Entities Impacted

    120. The rules proposed in document FCC 18-79 will affect 
obligations of: Wired telecommunications carriers; telecommunications 
resellers; wireless telecommunications carriers (except satellite); and 
all other telecommunications.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    121. The proposed expansion of the TRS Fund base may require common 
carriers that provide only intrastate telecommunications service that 
are not currently registered with the TRS Fund administrator to 
register with the administrator and submit contribution payments to the 
TRS Fund.
    122. The proposal to require or allow states to administer the IP 
CTS program or oversee IP CTS user eligibility may require states to 
provide additional information in their applications for certification 
to the Commission to indicate the role the state will undertake and 
include information concerning the state's ability to take on this 
additional role.
    123. The proposed third-party certification of IP CTS user 
eligibility would require IP CTS providers to obtain a copy of such 
certification from the user and retain the copy while the user is 
receiving IP CTS and for a minimum of ten years after the user has 
discontinued use of IP CTS.
    124. The proposed marketing rules may require IP CTS providers to 
include specific information in IP CTS informational materials and on 
their websites. The proposal regarding biennial self-certification of 
IP CTS users would require providers to again collect and retain these 
self-certifications from the users. The proposal to require IP CTS 
providers to reclaim or disable IP CTS devices no longer associated 
with registered users may require IP CTS providers to notify users of 
the need to return the devices when no longer using them and may 
require the providers to keep records associated with the device 
reclamation or disabling process.
    125. The proposal to require providers to ensure that their IP CTS 
equipment provides an easy way to turn captions on or off, either 
before placing a call or while a call is in progress would not create 
direct reporting, recordkeeping or other compliance requirements.

Minimize Significant Impact on Small Entities, and Significant 
Alternatives Considered

    126. The Commission seeks comment from all interested parties on 
alternatives to its proposals. Small entities are encouraged to bring 
to the Commission's attention any specific concerns they may have with 
the proposals outlined. The Commission expects to consider the economic 
impact on small entities, as identified in comments filed in response 
to the document FCC 18-79, in reaching its final conclusions and taking 
action in this proceeding.

Federal Rules Which Duplicate, Overlap, or Conflict With, the 
Commission's Proposals

    127. None.

List of Subjects in 47 CFR Part 64

    Individuals with disabilities, Telecommunications, Telephones.

Federal Communications Commission.

Marlene Dortch,
Secretary, Office of the Secretary.

    For the reasons discussed in the preamble, the Federal 
Communications

[[Page 33915]]

Commission proposes to amend 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 continues to read as follows:

    Authority:  47 U.S.C. 154, 201, 202, 218, 222, 225, 226, 227, 
228, 251(e), 254(k), 403(b)(2)(B), (c), 616, 620, 1401-1473, unless 
otherwise noted.

0
2. Amend Sec.  64.604 by:
0
a. Revising paragraphs (c)(8)(ii), (c)(9)(x), (c)(10)(i), and 
(c)(11)(v);
0
b. Redesignating paragraph (c)(8)(v) as paragraph (c)(8)(vi) and 
paragraph (c)(10)(ii) as paragraph (c)(10)(iii); and
0
c. Adding paragraphs (c)(8)(v), (c)(9)(iii)(E), (c)(10)(ii), and 
(c)(11)(vi).
    The additions and revisions read as follows:


Sec.  64.604   Mandatory Minimum Standards.

* * * * *
    (c) * * *
    (8) * * *
    (ii) An IP CTS provider shall not offer or provide to any other 
person or entity any direct or indirect incentives, financial or 
otherwise, to encourage referrals of potential users, registrations, or 
use of IP CTS. Where an IP CTS provider offers or provides IP CTS 
equipment, directly or indirectly, to a hearing health professional, or 
any other person or entity, and such person or entity makes or has the 
opportunity to make a profit on the sale of the equipment to consumers, 
such IP CTS provider shall be deemed to be offering or providing a form 
of incentive to encourage referrals of potential users, registrations 
or use of IP CTS.
* * * * *
    (v) IP CTS providers, and their agents and contractors, may not 
discuss the availability of a free IP CTS device in marketing 
presentations and promotional materials unless such presentations and 
materials also clearly and prominently state that IP CTS and IP CTS 
devices are only intended for individuals who have a hearing loss that 
makes it difficult to use the phone.
    (vi) Any IP CTS provider that does not comply with this paragraph 
(c)(8) shall be ineligible for compensation for such IP CTS from the 
TRS Fund.
    (9) * * *
    (iii) * * *
    (E) Within two years after obtaining a consumer's self-
certification, or within two years of the effective date of this 
paragraph (c)(9)(iii)(E), whichever is later, and within every two 
years thereafter, an IP CTS provider shall obtain a new self-
certification from the consumer in accordance with the requirements of 
this paragraph (c)(9)(iii). Minutes of use of any consumer who has not 
provided a new self-certification by the end of the two-year period 
shall be deemed non-compensable, the provider shall be required to re-
register the consumer for IP CTS service in accordance with the 
requirements of this paragraph (c)(9), and the IP CTS provider shall 
not be compensated for minutes of use associated with that consumer 
during the period of such lapsed registration.
* * * * *
    (x) Each IP CTS provider shall maintain records of any registration 
and certification information for a period of at least ten years after 
the consumer ceases to obtain service from the provider and shall 
maintain the confidentiality of such registration and certification 
information, and may not disclose such registration and certification 
information or the content of such registration and certification 
information except as required by law or regulation.
* * * * *
    (10) IP CTS Settings. Each IP CTS provider shall ensure that, for 
each IP CTS device it distributes, directly or indirectly:
    (i) The device includes a button, key, icon, or other comparable 
feature that is easily operable and requires only one step for the 
consumer to turn captioning on or off;
    (ii) The device shall not include any features that have the 
foreseeable effect of encouraging IP CTS users to turn on captions when 
they are not needed for effective communication; and
    (iii) Any volume control or other amplification feature can be 
adjusted separately and independently of the caption feature.
* * * * *
    (11) * * *
    (v) IP CTS providers shall ensure that their informational 
materials and websites used to market, advertise, educate, or otherwise 
inform consumers and professionals about IP CTS includes the following 
language in a prominent location in a clearly legible font: ``FEDERAL 
LAW PROHIBITS ANYONE BUT REGISTERED USERS WITH HEARING LOSS FROM USING 
INTERNET PROTOCOL (IP) CAPTIONED TELEPHONES WITH THE CAPTIONS TURNED 
ON. IP Captioned Telephone Service may use a live operator. The 
operator generates captions of what the other party to the call says. 
These captions are then sent to your phone. There is a cost for each 
minute of captions generated, paid from a federally administered fund. 
IP CAPTIONED TELEPHONE SERVICE IS NOT FOR EVERYONE WITH HEARING LOSS. 
In order to use captioning, a consumer must be able to certify that 
captioning is needed to hear telephone conversations. Other 
technologies, such as amplified telephones, may better serve a 
consumer's need to hear telephone conversations.'' For IP CTS provider 
websites, this language shall be included on the website's home page, 
each page that provides consumer information about IP CTS, and each 
page that provides information on how to order IP CTS or IP CTS 
equipment. IP CTS providers that do not make any use of live CAs to 
generate captions may shorten the notice to leave out the second, 
third, and fourth sentences.
    (vi) If an IP CTS provider knows or should have known that a user 
is deceased or no longer eligible to use IP CTS, including, but not 
limited to, a user failing to provide a new self-certification in 
accordance with the requirements of paragraph (9)(c)(iii)(E), the IP 
CTS provider shall either deactivate the captioning feature on the IP 
CTS equipment distributed to that consumer or reclaim the equipment, 
and minutes of use associated with the equipment shall not be 
compensable.
* * * * *
[FR Doc. 2018-15336 Filed 7-17-18; 8:45 am]
 BILLING CODE 6712-01-P