[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Rules and Regulations]
[Pages 35553-35555]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-9795]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 03-123; DA 06-1043]


Telecommunications Relay Services and Speech-to-Speech Services 
for Individuals With Hearing and Speech Disabilities

AGENCY: Federal Communications Commission.

ACTION: Final rule; dismissal of petition.

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SUMMARY: In this document, the Commission denies a petition for 
declaratory ruling (Petition) filed by Telco Group, Inc. (Telco Group) 
requesting that the Commission either exclude international revenues 
from the end-user revenue base used to calculate payments due to the 
Interstate Telecommunications Relay Service (TRS) Fund (Fund), or in 
the alternative, waive the portion of Telco Group's contribution based 
on its international end-user revenues. Further, Telco Group requests a 
stay of its payment obligation pending the Commission's decision. The 
Commission finds that the inclusion of international end-user revenues 
in calculating carriers' obligations to the Interstate TRS Fund is 
appropriate. In addition, the Commission is unable to find good cause 
to waive the portion of Telco Group's Interstate TRS Fund assessment 
based on its international services revenue. Because the Commission 
addresses the merits of the Petition, the request for stay is dismissed 
as moot.

DATES: Effective May 16, 2006.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT:
Thomas Chandler, Consumer & Governmental Affairs Bureau, Disability 
Rights Office at (202) 418-1475 (voice), (202) 418-0597 (TTY), or e-
mail at [email protected].

SUPPLEMENTARY INFORMATION: This document does not contain new or 
modified information collection requirements subject to the PRA of 
1995, Public Law 104-13. In addition, it does not contain any new or 
modified ``information collection burden for small business concerns 
with fewer than 25 employees,'' pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506 
(c)(4). This is a summary of the Commission's document DA 06-1043, 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Declaratory Ruling, 
CG Docket No. 03-123, DA 06-1043, adopted May 16, 2006, released May 
16, 2006, addressing issues raised in Telco Group's Petition for 
Declaratory Ruling, or in the Alternative, Petition for Waiver 
(Petition), filed July 26, 2004.
    The full text of document DA 06-1043 and copies of any subsequently 
filed documents in this matter will be available for public inspection 
and copying during regular business hours at the FCC Reference 
Information Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. Document DA 06-1043 and copies of subsequently 
filed documents in this matter may also be purchased from the 
Commission's duplicating contractor at Portals II, 445 12th Street, 
SW., Room CY-B402, Washington, DC 20554. Customers may contact the 
Commission's duplicating contractor at its Web site http://www.bcpiweb.com or by calling 1-800-378-3160.
    To request materials in accessible formats for people with 
disabilities (Braille, large print, electronic files, audio format), 
send an e-mail to [email protected] or call the Consumer & Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). 
Document DA 06-1043 can also be downloaded in Word or Portable Document 
Format (PDF) at: http://www.fcc.gov/cgb/dro.

Synopsis

Background

    Title IV of the ADA directs the Commission to ensure that 
interstate and intrastate telecommunications relay services are 
available, to the extent possible and in the most efficient manner, to 
individuals with hearing and speech disabilities in the United States. 
See generally Public Law 101-336, 104 Statute 327, 366-69 (July 26, 
1990), codified at 47 U.S.C. 225; see also 47 U.S.C. 225(b)(1). Section 
225 of the Communications Act, requires the Commission to establish 
regulations to ensure the quality of relay service. 47 U.S.C. 225(b). 
The Commission initially implemented this mandate in three orders.
    In TRS I, the Commission adopted rules identifying the relay 
services that carriers offering voice telephone transmission services 
must provide to persons with hearing and speech disabilities and the 
TRS mandatory minimum standards that govern the provision of service. 
See Telecommunications Relay Services for Individuals with Hearing and 
Speech Disabilities, and the Americans with Disabilities Act of 1990, 
CC Docket No. 90-571, Report and Order and Request for Comments, 6 FCC 
Rcd 4657 (July 26, 1991) (TRS I), published at 56 FR 36729, August 1, 
1991; see 47 CFR 64.604 of the Commission's rules (the TRS ``mandatory 
minimum standards''). In TRS II, the Commission adopted a shared 
funding mechanism for interstate TRS cost recovery, spreading the cost 
of providing TRS to all subscribers of every interstate service. See 
Telecommunications Services for Individuals with Hearing and Speech

[[Page 35554]]

Disabilities, and the Americans with Disabilities Act of 1990, CC 
Docket No. 90-571, Order on Reconsideration, Second Report and Order, 
and Further Notice of Proposed Rulemaking, 8 FCC Rcd 1802, 1805-1806, 
at paragraphs 19-27 (February 25, 1993) (TRS II), published at 58 FR 
12204, March 3, 1993 and 58 FR 12175, March 3, 1993. Under section 
225(d)(3) of the Communication's Act, the Commission's regulations 
governing the jurisdictional separation of costs shall generally 
provide that the costs caused by interstate TRS shall be recovered from 
all subscribers to every interstate service, and the costs caused by 
intrastate TRS shall be recovered by the states. 47 U.S.C. 225(d)(3). 
The Commission also proposed that under this mechanism a charge would 
be assessed on all common carriers that offer interstate 
telecommunications services to create the Interstate TRS Fund, and that 
the providers would be compensated from the Fund for providing TRS 
based on a national average TRS interstate minute of use rate. TRS II, 
8 FCC Rcd at 1806, paragraphs 23-26. In TRS III, the Commission 
established the Interstate TRS Fund, currently administered by the 
National Exchange Carrier Association (NECA), to reimburse TRS 
providers for the costs of providing interstate TRS. See 
Telecommunications Services, and the Americans with Disabilities Act of 
1990, CC Docket No. 90-571, Third Report and Order, 8 FCC Rcd 5300 
(July 20, 1993) (TRS III), published at 58 FR 39671, July 26, 1993. 
That order also finalized the contribution methodology for payments 
into the Fund and defined the interstate services subject to the 
contribution assessment. The Commission adopted a regulation providing 
that ``[c]ontributions shall be made by all carriers who provide 
interstate services, including, but not limited to * * * international 
* * * services.'' 47 CFR 64.604(c)(5)(iii)(A) of the Commission's 
rules; see also TRS III, 8 FCC Rcd at 5306, paragraph 33 (ordering 
clause adopting rule amendments set forth in Appendix B); 
Telecommunications Services for Individuals with Hearing and Speech 
Disabilities, Recommended TRS Cost Recovery Guidelines, CC Docket No. 
98-67, Memorandum Opinion and Order and Further Notice of Proposed 
Rulemaking, 16 FCC Rcd 22948, 22949-22950, paragraph 2 (December 21, 
2001), published at 67 FR 4203, January 29, 2002 and 67 FR 4227, 
January 29, 2002 (noting that TRS III required ``that every carrier 
providing interstate telecommunications services contribute to the TRS 
Fund on the basis of * * * interstate and international revenues'').
    In its Petition, Telco Group requests that the Commission exclude 
international revenues from the revenue base used to calculate payments 
due to the Interstate TRS Fund, ``at least for those carriers whose 
international revenues comprise a significant portion of their total 
interstate and international revenues,'' or in the alternative, find 
good cause to waive Telco Group's obligations to the Fund that are 
based on its international revenues. Petition at 1.
    Telco Group maintains that such relief is warranted because, in 
what Telco Group argues is an analogous case involving the Universal 
Service Fund (USF), the United States Court of Appeals for the Fifth 
Circuit required the Commission to revisit the USF assessment on the 
international services revenue of a provider of primarily international 
services and de minimis interstate services. Petition at 3 (citing 
Texas Office of the Public Utility Counsel v. FCC, 183 F.3d 393 (5th 
Cir. 1999) (TOPUC)). The Court found that requiring a carrier to pay an 
assessment on its international services revenue that exceeded the 
carrier's total interstate revenue violated the equitable and 
nondiscriminatory contribution requirement of the Universal Service 
statute, section 254 of the Communications Act of 1934, as amended. 
TOPUC, 183 F.3d at 434-435; see 47 U.S.C. 254(b)(4). Although the 
Interstate TRS Fund is governed by section 225 of the Communications 
Act, rather than section 254 of the Communications Act, Telco Group 
argues that the Interstate TRS Fund contribution rules also are 
``designed to be equitable and nondiscriminatory'' and, therefore, the 
relief afforded in TOPUC should be extended to TRS. Petition at 4. 
Telco Group argues that its circumstance is comparable to the TOPUC 
plaintiff because the ``vast majority'' of Telco Group's revenues--
approximately 96 percent--are derived from international services. 
Moreover, Telco Group argues the public interest will be served by 
granting the requested relief because it will ensure Telco Group 
``remains as a viable competitor in the market for interstate 
services.'' Petition at 9. Telco Group adds that the ``high payment 
obligations also hinder Telco Group's ability to compete outside the 
United States, and so contradict the Commission's efforts to promote 
and encourage competition in the international and interstate 
markets.'' Petition at 9-10 (citing 2000 Biennial Regulatory Review--
Policies and Procedures Concerning the International, Interexchange 
Marketplace, IB Docket No. 02-202, Report and Order, 16 FCC Rcd 10647 
(March 20, 2001)), published at 66 FR 16874, March 28, 2001.
    On October 25, 2004, the Telco Group Petition was place on Public 
Notice. Telco Group, Inc. Files Petition for Declaratory Ruling or 
Waiver to Exclude International Revenues from the Revenue Base Used to 
Calculate Payment to the Interstate TRS Fund, CC Docket No. 98-67, 
Public Notice, 19 FCC Rcd 20965 (October 25, 2004), published at 69 FR 
64573, November 5, 2004. Two oppositions were filed, one from a carrier 
and one from an organization representing the deaf community. Comments 
were filed by MCI (MCI) (November 26, 2004) and Telecommunications for 
the Deaf, Inc. (TDI) (November 24, 2004). Late filed comments were 
filed by Globecomm Systems, Inc. (``GSI'') on February 14, 2006. On 
that same date, GSI also filed a petition for declaratory ruling that 
there is no obligation to pay into the Interstate TRS Fund based on 
revenues arising from traffic that does not originate or terminate in 
the United States. Globecomm Systems, Inc., Petition for Declaratory 
Ruling (filed February 14, 2006). Because the issue in the GSI 
petition--whether certain calls should be considered international 
calls--is distinct from the issue raised in Telco Group's Petition, the 
Commission will address GSI's petition in a separate order. Telco Group 
did not file any reply comments.

Discussion

    Telco Group's Petition is premised on the congruence between 
section 254 of the Communications Act, which establishes Universal 
Service requirements, and section 225 of the Communications Act, which 
establishes requirements for the provision of TRS. Sections 254 and 225 
of the Communications Act, however, differ in fundamental and, in this 
case, dispositive ways. Unlike USF assessments, contributions to the 
Interstate TRS Fund are used, in part, to reimburse international relay 
calls. Therefore, in this case, the public interest lies in ensuring 
adequate funding for interstate TRS--including international TRS--by 
assessing contributions on as broad a revenue base as can be justified. 
Accordingly, Telco Group's request that the Commission exclude 
international revenues from the end-user revenue base used to calculate 
payments due to the Interstate TRS Fund is denied. Because Telco Group 
has not

[[Page 35555]]

demonstrated why individualized relief is appropriate, the company's 
request for waiver of the interstate TRS assessment on international 
services revenue is also denied.
    Unlike the Universal Service Fund, which does not directly support 
international services but only may be used only to support domestic 
services, the Interstate TRS Fund is used to support international TRS. 
TRS I Order, 6 FCC Rcd at 4660-4661, paragraph 18 (discussing comments 
that relay services should relay international calls that originate or 
terminate in the United States provided that equipment of the foreign 
country is compatible with U.S. equipment); TRS III Order, 8 FCC Rcd at 
5301, paragraph 9, note14 (in adopting rule requiring contributions to 
the Fund to be based on, inter alia, international services, Commission 
notes Sprint's argument ``that international services should be 
included because TRS providers will be compensated by the administrator 
for international TRS minutes of use''). IP Relay service is an 
exception to this rule. See, e.g., Telecommunications Relay Services 
and Speech-to-Speech Services for Individuals with Hearing and Speech 
Disabilities, CC Docket No. 98-67, Order, 19 FCC Rcd 12224, 12242, at 
paragraph 48, note, 121 (June 30, 2004) (noting that the Fund ``does 
not currently reimburse providers for the costs of providing 
international calls via IP Relay''); Telecommunications Relay Services 
and Speech-to-Speech Services for Individuals with Hearing and Speech 
Disabilities, CC Docket No. 98-67, Order, 18 FCC Rcd 12823, 12837, at 
paragraph 42 (June 30, 2003) (noting that in March 2003 NECA was 
directed to suspend payment to TRS providers for international IP Relay 
service minutes); see also 2004 TRS Report and Order, 19 FCC Rcd at 
12525, paragraph 129, published at 69 FR 53346, September 1, 2004 and 
69 FR 53382, September 1, 2004 (noting that although Fund does not pay 
for international IP Relay service calls, it does pay for international 
Video Relay Service calls). Therefore, unlike the USF assessments at 
issue in TOPUC, excluding international revenues from the revenue base 
used for calculating TRS contributions would not serve the public 
interest. With the TRS Fund, it is not the case--as in TOPUC--that a 
provider of only de minimis interstate service may be required to bear 
a disproportionately heavy burden in subsidizing the provision of such 
services by other carriers. Contributions to the Interstate TRS Fund 
based on Telco Group's international services revenue can, in turn, be 
used to subsidize international TRS. Moreover, Telco Group is required 
to contribute the same percentage of its interstate and international 
revenues to the Interstate TRS Fund as other carriers that provide both 
interstate and international services. This approach is both equitable 
and nondiscriminatory. Opposition of MCI at 3. As MCI notes, ``it would 
be discriminatory if Telco Group, and other internationally-oriented 
carriers, were allowed to exclude international revenues from the TRS 
contribution base. Companies such as MCI, who also earn international 
revenues by providing international prepaid calling services, as well 
as other international services, would be required to compete against 
companies who would have been granted a discriminatory cost advantage 
were the Commission to grant Telco Group's request.''
    Moreover, TOPUC is specifically based on the equitable and 
nondiscriminatory contribution requirement of section 254 of the 
Communications Act. Section 254 of the Communications Act states that 
``[a]ll providers of telecommunications services should make an 
equitable and nondiscriminatory contribution to the preservation and 
advancement of universal service.'' 47 U.S.C. 254(b)(4). The Court 
found that requiring COMSAT, a satellite provider of primarily 
international services along with de minimis interstate service 
offerings, to contribute to the Universal Service Fund based on its 
international services revenues was inequitable and discriminatory 
given that COMSAT's contribution based on international services 
revenue would exceed the company's total interstate revenues. The Court 
stated that ``the agency's interpretation of `equitable and 
nondiscriminatory,' allowing it to impose prohibitive costs on carriers 
such as COMSAT, is `arbitrary and capricious' * * * [because] COMSAT 
and carriers like it will contribute more in universal service payments 
than they will generate from interstate service.'' TOPUC, 183 F.3d at 
434-435. Section 225 of the Communications Act, however, contains no 
such express requirement. In the absence of such language, and 
particularly because international services are supported by the 
Interstate TRS Fund, the Commission is not bound by the TOPUC decision 
to reduce or eliminate Interstate TRS Fund assessments on international 
services for Telco Group or similarly situated providers. With respect 
to contributions, the only limiting language of section 225 of the 
Communications Act is jurisdictional in nature. See 47 U.S.C. 225(d)(3) 
(addressing jurisdictional separation of costs). Accordingly, Telco 
Group's request for a declaratory ruling excluding international 
services revenue from the interstate contribution base is denied.
    Telco Group's request for waiver of the interstate TRS assessment 
on its international services revenue is also denied. Although the 
Commission may waive a provision of its rules for ``good cause shown,'' 
47 CFR 1.3 of the Commission's rules; see generally 2004 TRS Report and 
Order, 19 FCC Rcd at 12520, paragraph 110 (discussing standard for 
waiving Commission rules). Telco Group's argument rests on the fact 
that a high percent of its revenues derive from international services 
and therefore its TRS payment is substantially higher that it would be 
if international revenues were not included and burdensome. Petition at 
9-10. As noted above, however, because the Fund supports both 
international and interstate TRS, TRS assessments are based on both 
international and interstate revenues, and the fact that some 
contributors have relatively more international revenues, or more 
interstate revenues, is not relevant to ensuring adequate funding for 
these services.

Congressional Review Act

    The Commission will not send a copy of the Declaratory Ruling 
pursuant to the Congressional Review Act because the adopted rules are 
rules of particular applicability. See 5 U.S.C. 801(a)(1)(A).

Ordering Clauses

    Pursuant to the authority contained in section 225 of the 
Communications Act of 1934, as amended, 47 U.S.C. 225, and Sec. Sec.  
0.141 and 0.361 of the Commission's rules, 47 CFR 0.141 and 0.361, 
Telco Group's Petition for Declaratory Ruling or, in the Alternative, 
Petition for Waiver, is denied.
    Having addressed the merits of the Petition for Declaratory Ruling 
or, in the Alternative, Petition for Waiver, Telco Group's Petition for 
Stay Pending Resolution of Petition for Declaratory Ruling or, in the 
Alternative, Petition for Waiver is moot.

Federal Communications Commission.
Monica S. Desai,
Chief, Consumer & Governmental Affairs Bureau.
[FR Doc. E6-9795 Filed 6-20-06; 8:45 am]
BILLING CODE 6712-01-P