[Federal Register Volume 71, Number 129 (Thursday, July 6, 2006)]
[Rules and Regulations]
[Pages 38268-38270]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6012]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 03-123; DA 06-1100]


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

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this document, the Commission, on its own motion, 
reconsiders 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. This action 
is necessary because the May 2006 Declaratory Ruling addressing Telco 
Group's Petition did not contain an analysis of the complete record.

DATES: Effective May 25, 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 06-1100, 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Declaratory Ruling on 
Reconsideration, CG Docket No. 03-123, DA 06-1100, adopted May 25, 
2006, released May 25, 2006, reconsidering 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 06-1100 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 06-1100 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

    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, 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. Petition at 3. 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

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Commission will address GSI's petition in a separate order. Telco Group 
filed reply comments. Reply of Telco Group, Inc. to Oppositions to 
Telco Group's Petition for Declaratory Ruling, or in the Alternative, 
Petition for Waiver (filed December 10, 2004, in CC Docket No. 98-67).

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 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. 
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, (TRS I 
Order), 6 FCC Rcd at 4660-4661, paragraph 18, published at 56 FR 36729, 
August 1, 1991 (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); See Telecommunications Relay Services for Individuals with 
Hearing and Speech Disabilities, and the Americans with Disabilities 
Act of 1990, Order on Reconsideration, Second Report and Order, and 
Further Notice of Proposed Rulemaking, (TRS III Order), 8 FCC Rcd at 
5301, paragraph 9, note14, published at 58 FR 12204, March 3, 1993 and 
58 FR 12175, March 3, 1993 (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. Therefore, this approach is both equitable and 
nondiscriminatory, even as applied to an entity like Telco Group that 
may largely have international revenues. 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.'' Opposition of MCI 
at 3. See also Telco Reply Comments at 2-3 (arguing that the TRS 
funding mechanism is not equitable and nondiscriminatory as applied to 
Telco Group because it must pay a high proportion of its ``U.S. 
interstate revenues into the TRS Fund'').
    In any event, 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 is 
jurisdictional in nature. See 47 U.S.C. 225(d)(3) (addressing 
jurisdictional separation of costs). Telco Group also suggests that 
even if TOPUC does not apply in the TRS context, the Commission has the 
discretion to apply a similar rule for TRS. Telco Reply Comments at 4. 
The issue presented is

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not, however, whether the Commission could apply the TOPUC principle to 
TRS, but whether the rule the Commission did adopt for TRS (requiring 
payments into the Fund based on international revenues) is reasonable 
and in the public interest. Accordingly, Telco Group's request for a 
declaratory ruling excluding international services revenue from the 
interstate contribution base is denied. Telco Group also asserts that 
because it does not receive any TRS funds, and does minimal business in 
the United States, it should not have to pay into the Fund based on 
international revenues ``in return for `benefits' largely and primarily 
enjoyed by other carriers.'' Telco Reply Comments at 3-4. The 
obligation to pay into the Fund, however, is not tied to particular 
benefits contributors may receive from the Fund. Under the rules, a 
broad range of interstate telecommunications carriers are required to 
pay into the Fund, regardless of whether they also provide relay 
services paid for by the Fund or otherwise ``benefit'' directly from 
the provision of relay service. See 47 CFR 64.604(c)(5)(iii)(A) of the 
Commission's rules.
    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. See also 
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 on 
Reconsideration 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, 0.361, and 1.108 of the Commission's rules, 47 CFR 0.141, 0.361, 
and 1.108, the Declaratory Ruling on Reconsideration is hereby denied.

Federal Communications Commission.
Monica S. Desai,
Chief, Consumer & Governmental Affairs Bureau.
[FR Doc. 06-6012 Filed 6-30-06; 12:30 pm]
BILLING CODE 6712-01-P