TRS Fund Contributions, 14859-14862 [2021-04484]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 86, Number 52 (Friday, March 19, 2021)]
[Proposed Rules]
[Pages 14859-14862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04484]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 03-123, 10-51, 13-24; FCC 20-161; FRS 17375]


TRS Fund Contributions

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) proposes to expand the telecommunications relay services 
(TRS) Fund contribution base for support of video relay service (VRS) 
and internet Protocol (IP) Relay to include intrastate, as well as 
interstate, end-user revenues from providers of telecommunications and 
Voice over IP (VoIP) services.

DATES: Comments are due April 19, 2021. Reply comments are due May 3, 
2021.

ADDRESSES: You may submit comments, identified by CG Docket Nos. 03-
123, 10-51, and 12-38, by either of the following methods:
     Federal Communications Commission's website: https://www.fcc.gov/ecfs/filings. Follow the instructions for submitting 
comments.
     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 document FCC 20-161 at 
https://docs.fcc.gov/public/attachments/FCC-20-161A1.pdf.

FOR FURTHER INFORMATION CONTACT: Michael Scott, Consumer and 
Governmental Affairs Bureau, at: (202) 418-1264, or email 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), document FCC 20-161, adopted on November 
18, 2020, released on November 20, 2020 in CG Docket Nos. 03-123, 10-
51, and 12-38. The full text of document FCC 20-161 is available for 
public inspection and copying via the Commission's Electronic Comment 
Filing System (ECFS). 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.
    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 Sec.  1.1206(b). In proceedings governed by 
Sec.  1.49(f) or for which the Commission has made available a method 
of electronic filing, written ex parte presentations and memoranda 
summarizing oral ex parte presentations, and all attachments thereto, 
must be filed through the electronic comment filing system available 
for that proceeding, and must be filed in their native format (e.g., 
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding 
should familiarize themselves with the Commission's ex parte rules.

Initial Paperwork Reduction Act of 1995 Analysis

    The NPRM seeks 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 notice 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

    1. In the NPRM, document FCC 20-161, the Commission proposes to 
complete the process of updating the mechanism for the funding of 
internet-based TRS. When the Commission first authorized use of the 
internet to provide TRS, it decided as an interim measure that all of 
the costs of providing internet-based TRS should be paid by 
contributors to the TRS Fund, based only on their interstate 
telecommunications revenue. In the IP CTS Contributions Order, 
published at 85 FR 462, January 6, 2020, the Commission recognized that 
this ``interim'' funding mechanism, which disproportionately burdens 
providers and users of interstate services, was no longer justifiable 
as a means of supporting one internet-based form of TRS--internet 
Protocol Captioned Telephone Service (IP CTS), and expanded the 
contribution base for that service to include intrastate as well as 
interstate end-user revenues. The Commission now proposes to expand the 
TRS Fund contribution base for the other two forms of internet-based 
TRS--video relay service (VRS) and internet Protocol Relay Service (IP 
Relay)--so that providers of intrastate voice communications must 
contribute to the TRS Fund for the support of these services as well.
    2. To conform the funding of VRS and IP Relay to the requirements 
of section 225 of the Communications Act of 1934, as amended (the Act), 
and to harmonize cost recovery for these services with the cost 
recovery plan adopted for IP CTS, the Commission proposes to expand the

[[Page 14860]]

TRS Fund contribution base for VRS and IP Relay to include intrastate 
revenues of telecommunications carriers and VoIP service providers for 
several reasons.
    3. First, the current funding arrangements were authorized as 
interim measures to speed the development of these services and were 
not intended to be permanent. Twenty years later, the primary purpose 
of these interim arrangements has been achieved. VRS has grown to be 
the second largest TRS program, and even IP Relay, with much lower 
demand than VRS, now accounts for more annual minutes than all state 
TRS programs combined.
    4. Second, the inherent inequities and limitations of the interim 
contribution arrangement for these services loom much larger today, 
given the current size of the TRS funding requirement--more than $1.6 
billion for TRS Fund Year 2020-21. Nearly all of this amount is 
attributable to support for the three internet-based relay services--IP 
CTS, VRS, and IP Relay. IP CTS is projected to cost the TRS Fund 
approximately $1 billion and is supported by all end-user 
telecommunications and VoIP revenues, with a contribution factor of 
less than 1%. VRS and IP Relay, with projected expenditures of $575 
million in Fund Year 2020-21, are supported by a 1.33% contribution 
only from interstate end-user telecommunications and VoIP revenues, 
with no contribution from intrastate revenues. By contrast, 
approximately 58% of IP CTS costs are funded from intrastate end-user 
revenues, and 75% of the costs of relay services provided through state 
TRS programs are funded from intrastate sources.
    5. The burden of supporting the $575 million annual cost of VRS and 
IP Relay has widely disparate impacts on TRS Fund contributors, based 
solely on the extent of interstate usage of their services. In TRS Fund 
Year 2020-21, for example, providers of interstate-only services must 
contribute approximately 1.33% of their annual end-user revenues to 
support VRS and IP Relay. By contrast, service providers for which only 
42% of end-user revenues are interstate (the industry average) 
contribute only 0.56% of annual end-user revenues to support these 
services. And providers of intrastate-only services, of which there are 
at least 200, contribute nothing to support VRS and IP Relay, despite 
consumers' use of VRS and IP Relay to make intrastate calls.
    6. Third, the recovery of VRS and IP Relay costs based on 
interstate revenues alone appears likely to cause distortions in the 
pricing of interstate and intrastate voice services due to inaccurate 
market signals regarding their relative costs. As the Commission has 
recognized in various contexts, applying artificial regulatory 
distinctions or other disparate treatment to providers of similar 
services may create unintended market distortions, which can reduce the 
effectiveness of competition in ensuring efficient pricing of 
telecommunications services.
    7. Fourth, the total amount of end-user revenues from which TRS 
Fund contributions can be drawn has been steadily decreasing over time, 
worsening the impact of the current funding arrangement on interstate 
service providers and users and increasing any existing distortion 
between intrastate and interstate service prices. Expanding 
contributions to support VRS and IP Relay to encompass intrastate as 
well as interstate revenues would strengthen the sustainability of 
these services.
    8. The Commission seeks comment on this proposal and its costs and 
benefits. Are there additional aspects of the current state of the VRS 
and IP Relay programs that support either altering or maintaining the 
current interstate-only funding mechanism? Are there differences 
between those programs and IP CTS, such that the interim funding 
arrangement for VRS and IP Relay should be retained, notwithstanding 
the facts stated above and the Commission's 2019 determination that the 
interim plan was no longer suitable for IP CTS?
    9. Legal Authority. Section 225 of the Act requires the Commission 
to ensure that both ``interstate and intrastate [TRS] are available, to 
the extent possible and in the most efficient manner.'' The Act directs 
the Commission to adopt, administer, and enforce regulations governing 
the provision of interstate and intrastate TRS, including rules on cost 
separation, which ``shall generally provide'' that interstate TRS costs 
are recovered from interstate services and intrastate TRS costs are 
recovered from the intrastate jurisdiction. Section 225 of the Act also 
authorizes, but does not require, the establishment of state-
administered TRS programs and funding mechanisms, subject to approval 
by the Commission.
    10. The Commission believes it has statutory authority to include 
the intrastate end-user revenues of telecommunications carriers and 
VoIP service providers in the calculation of TRS Fund contributions to 
support VRS and IP Relay, to the extent that these services continue to 
be funded solely through the TRS Fund. Section 225 of the Act expressly 
directs the Commission to ensure that both interstate and intrastate 
TRS are available and grants the Commission broad authority to 
establish regulations governing both interstate and intrastate TRS, 
including TRS cost recovery. Congress expressly carved section 225 out 
from the Act's general reservation of state authority over intrastate 
communications, and responsibility for administering TRS is shared with 
the states only to the extent that a state applies for and receives 
Commission approval to exercise such authority. The Commission believes 
this analysis equally supports the Commission's authority to adopt the 
same approach to funding an appropriate share of the costs of VRS and 
IP Relay from intrastate revenues. The Commission seeks comment on the 
above analysis and assumptions. Are there differences between the 
provision of IP CTS and the provision of VRS and IP Relay that could 
affect the Commission's statutory analysis?
    11. Implementation. The Commission proposes to apply a separate 
contribution factor for VRS and IP Relay which is applied to all 
(interstate and intrastate) end-user revenues of each TRS Fund 
contributor, using a single contribution factor to determine the total 
level of support required for all three services from a contributor's 
total intrastate and interstate end-user revenues. To implement this 
approach, the TRS Fund administrator would determine a revenue 
requirement for all three services, based on the applicable 
compensation rates and projected demand. Next, based on the total 
intrastate and interstate end-user revenue data reported by TRS Fund 
contributors on Forms 499-A, the TRS Fund administrator would compute a 
separate TRS Fund contribution factor for the three services, by 
dividing the revenue requirement by contributors' total intrastate and 
interstate end-user revenues.
    12. The Commission tentatively concludes that implementation of 
this approach does not require separation of VRS and IP Relay costs, 
because a single contribution factor would apply to contributors' total 
interstate and intrastate end-user revenues, regardless of the 
proportion of VRS and IP Relay minutes and costs that might be deemed 
interstate or intrastate. Accordingly, it would not be necessary to 
refer this matter to a Federal-State Joint Board, absent a state 
request to include VRS or IP Relay in state program offerings. The 
Commission seeks comment on this implementation proposal and tentative 
conclusion. Is the above approach reasonable, equitable to all 
providers, and consistent with the requirements of

[[Page 14861]]

section 225 of the Act? What are the costs and benefits of this 
approach? How should a state opting to include VRS or IP Relay in its 
state TRS program affect the Commission's analysis?
    13. Are there alternative implementation approaches the Commission 
should consider? Commenters proposing an alternative approach should 
discuss the costs and benefits of their preferred approach.
    14. Inclusion of VRS and IP Relay in State Programs. To date, no 
state TRS program provides VRS or IP Relay, and the Commission believes 
that some of the same impediments to states administering and funding 
intrastate IP CTS may exist for intrastate VRS and IP Relay.
    15. The Commission nonetheless seeks comment on how the Commission 
should proceed in the event that a state requests certification to 
include VRS or IP Relay in a state TRS program. What modifications to 
the cost recovery method described above would be necessary to ensure 
that cost recovery is fairly apportioned and that TRS Fund contributors 
providing service within the affected state are not subjected to double 
payment of their share of intrastate VRS or IP Relay costs? Should the 
Commission refer such state requests to a Federal-State Joint Board, in 
order to make an appropriate determination regarding separation of 
intrastate and interstate TRS costs?
    16. Economic Impact. Expanding the TRS Fund contribution base for 
VRS and IP Relay to include intrastate revenues would likely reduce the 
TRS funding contributions that are passed on by contributing providers 
to users of interstate telecommunications and VoIP services, and 
concomitantly increase the contributions that are passed on to users of 
intrastate services. This broadening of the base on which TRS Fund 
contributions are made would tend to reduce any current distortions in 
the relative prices of intrastate and interstate services, increasing 
economic efficiency by more accurately signaling relative costs to 
purchasers, which in turn will generate more efficient provider 
investment signals. The change the Commission proposes would cause some 
one-off implementation costs, but with the exception of any repricing, 
most of these would be de minimis, since current TRS Fund 
administrative processes would be left intact. Any repricing costs, 
being one-off, are likely to be small relative to the ongoing benefits 
such repricing would bring. Thus, the Commission tentatively concludes 
the benefits of more efficient production and consumption would exceed 
any implementation costs of the proposed rule change. The Commission 
seeks comment on this. Broadening the base on which TRS Fund 
contributions are based also would ensure fair treatment of intrastate 
and interstate service providers and users in TRS funding and the long-
term sustainability of the TRS Fund. This justifies the redistribution 
the Commission's action would impose on interstate and intrastate 
service providers and their customers. The Commission seeks comment on 
this analysis.
    17. Compliance date. In the IP CTS Contributions Order, the 
Commission required intrastate carriers and VoIP service providers to 
contribute revenue to fund IP CTS starting with TRS Fund year 2020-21, 
to allow reasonable time for the Commission to amend relevant forms, 
for any carriers and VoIP service providers that have only intrastate 
revenue to register and prepare for submission of IP CTS contributions 
to the TRS Fund administrator, and for the TRS Fund administrator and 
Universal Service Administrative Company (USAC) to process such 
registrations. In setting that timeline, the Commission afforded seven 
months for these steps to be taken. If the Commission moves forward 
with implementing its proposed rule change, carriers and VoIP service 
providers that have only intrastate revenue will already be registered 
to submit contributions to the TRS Fund given the Commission's earlier 
change to the IP CTS cost recovery rules. Nevertheless, the Commission 
will still need to amend the instructions for the relevant forms, and 
it would be administratively efficient to tie the compliance date to 
the start of new TRS Fund year. The Commission seeks comment on whether 
a similar timeline should apply to affected providers if the proposed 
rule change is adopted, or whether some other timeline would be more 
appropriate.

Initial Regulatory Flexibility Analysis

    18. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared the 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 NPRM. 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 NPRM. The Commission will 
send a copy of the NPRM to the Chief Counsel for Advocacy of the Small 
Business Administration (SBA).

Need For, and Objectives of, the Proposed Rules

    19. In the NPRM, the Commission proposes to expand the TRS Fund 
contribution base for VRS and IP Relay to require contributions based 
on a percentage of interstate, international, and intrastate end-user 
revenues. The Commission also seeks comment on how it should proceed in 
the event that a state requests certification to include VRS or IP 
Relay in a state TRS program.

Legal Basis

    20. The authority for the proposed rulemaking is contained in 
sections 1, 2, and 225 of the Act, as amended, 47 U.S.C. 151, 152, 225.

Small Entities Impacted

    21. If the proposed rule amendments are adopted, various categories 
of providers of telecommunications and VoIP services may have to 
increase their contributions to the TRS Fund, including Wired 
Telecommunications Carriers, Telecommunications Resellers, Wireless 
Telecommunications Carriers (except Satellite), and All Other 
Telecommunications.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    22. Because TRS Fund contributors' intrastate end-user revenues are 
currently included in the contribution base for IP CTS, the 
Commission's existing rules require telecommunications carriers and 
VoIP providers that provide intrastate telecommunications services to 
register with the TRS Fund administrator and submit contribution 
payments to the TRS Fund. The NPRM proposes no new reporting, 
recordkeeping, or other compliance requirements.

Steps Taken to Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    23. If the Commission adopts its proposal to require TRS Fund 
contributions from intrastate end-user revenue to support VRS and IP 
Relay, the contributions required from interstate and international 
end-user revenue would be correspondingly reduced. As a result, while 
some small entities may be required to make increased payments to the 
TRS Fund, other small entities would experience a reduction in TRS Fund 
contributions. The proposal would not increase the total contributions 
required, and the additional costs incurred by some small entities 
would be offset by cost reductions for other small entities and by the 
benefits of appropriately

[[Page 14862]]

allocating the funding of the provision of VRS and IP Relay among all 
telecommunications carriers and VoIP providers. By including intrastate 
revenues in the contribution base, the VRS and IP Relay programs, 
including the providers and users, would be supported by a broader, 
more sustainable contribution base.
    24. The Commission seeks comment from all interested parties. Small 
entities are encouraged to bring to the Commission's attention any 
specific concerns they may have with the proposals outlined in the 
NPRM. The Commission expects to consider the economic impact on small 
entities, as identified in comments filed in response to the NPRM, in 
reaching its final conclusions and taking action in this proceeding.

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

    25. None.

List of Subjects in 47 CFR Part 64

    Individuals with disabilities, Telecommunications, 
Telecommunications relay services. Federal Communications Commission.

Marlene Dortch,
Secretary, Office of the Secretary.
    Proposed Rules

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend Title 47 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. 151, 152, 154, 201, 202, 217, 218, 220, 
222, 225, 226, 227, 227b, 228, 251(a), 251(e), 254(k), 262, 276, 
403(b)(2)(B), (c), 616, 620, 1401-1473, unless otherwise noted; Pub. 
L. 115-141, Div. P, sec. 503, 132 Stat. 348, 1091.


Sec.  64.604  [AMENDED]

0
2. Amend Sec.  64.604 by revising paragraphs (c)(5)(ii) and 
(c)(5)(iii)(A) to read as follows:


Sec.  64.604  Mandatory minimum standards.

* * * * *
    (c) * * *
    (5) * * *
    (ii) Cost recovery. Costs caused by interstate TRS shall be 
recovered from all subscribers for every interstate service, utilizing 
a shared-funding cost recovery mechanism. Except as noted in this 
paragraph, costs caused by intrastate TRS shall be recovered from the 
intrastate jurisdiction. In a state that has a certified program under 
Sec.  64.606, the state agency providing TRS shall, through the state's 
regulatory agency, permit a common carrier to recover costs incurred in 
providing TRS by a method consistent with the requirements of this 
section. Costs caused by the provision of interstate and intrastate IP 
CTS, VRS, and IP Relay, if not provided through a certified state 
program under Sec.  64.606, shall be recovered from all subscribers for 
every interstate and intrastate service, using a shared-funding cost 
recovery mechanism.
    (iii) * * *
    (A) Contributions. Every carrier providing interstate or intrastate 
telecommunications services (including interconnected VoIP service 
providers pursuant to Sec.  64.601(b)) and every provider of non-
interconnected VoIP service shall contribute to the TRS Fund, as 
described herein:
    (1) For the support of TRS other than IP CTS, VRS, and IP Relay, on 
the basis of interstate end-user revenues; and
    (2) For the support of IP CTS, VRS, and IP Relay on the basis of 
interstate and intrastate revenues. Contributions shall be made by all 
carriers who provide interstate or intrastate services, including, but 
not limited to, cellular telephone and paging, mobile radio, operator 
services, personal communications service (PCS), access (including 
subscriber line charges), alternative access and special access, 
packet-switched, WATS, 800, 900, message telephone service (MTS), 
private line, telex, telegraph, video, satellite, intraLATA, 
international, and resale services.
* * * * *
[FR Doc. 2021-04484 Filed 3-18-21; 8:45 am]
BILLING CODE 6712-01-P