[Federal Register Volume 71, Number 158 (Wednesday, August 16, 2006)]
[Rules and Regulations]
[Pages 47141-47145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-13486]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 03-123; FCC 06-87]


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.

-----------------------------------------------------------------------

SUMMARY: In this document, the Commission addresses issues raised in a 
petition for reconsideration which include: the adoption of the final 
2003-2004 Video Relay Service (VRS) rate of $8.854; whether the VRS 
rate should be fully retroactive; the compensability of research and 
development expense incurred for telecommunications relay service (TRS) 
enhancements that go beyond the applicable TRS mandatory minimum 
standards from the Interstate TRS Fund (Fund); and the applicability of 
``rate of return'' regulation to traditional TRS and speed of answer 
requirements to VRS.

DATES: Effective August 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 FCC 06-87, 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Order on 
Reconsideration, CG Docket No. 03-123, adopted June 20, 2006, released 
July 12, 2006 addressing issues raised in the Communications Services 
for the Deaf, Inc. (CSD) September 30, 2004 petition for 
reconsideration; National Video Relay Service Coalition (NVRSC) October 
1, 2004 petition for reconsideration; Hands On Video Relay Service, 
Inc. (Hands On) October 1, 2004 petition for partial reconsideration; 
and Hamilton Relay, Inc. (Hamilton) October 1, 2004 petition for 
reconsideration, arising from the Report and Order Telecommunications 
Relay Services and Speech-to-Speech Services for Individuals with 
Hearing and Speech Disabilities, Report and Order, (2004 TRS Report and 
Order), CC Docket No. 98-67, FCC 04-137; published at 69 FR 53346 
(September 1, 2004) and Telecommunications Relay Services and Speech-
to-Speech Services for Individuals with Hearing and Speech 
Disabilities, Order, (2003 Bureau TRS Order), CC Docket No. 98-67, DA 
03-2111, 18 FCC Rcd at 12835-12836, paragraphs 29-38 (June 30, 2003) 
(adopting TRS compensation rates for the 2003-2004 Fund Year). The full 
text of document FCC 06-87 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 FCC 06-87 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 FCC 06-87 can also be downloaded in Word or Portable 
Document Format (PDF) at: http://www.fcc.gov/cgb/dro.

Synopsis

Background

Telecommunications Relay Service
    Title IV of the Americans with Disabilities Act of 1990 (ADA) 
requires common carriers offering ``telephone voice transmission 
services'' to also provide TRS throughout the area in which they offer 
service, so that persons with hearing and speech disabilities can use 
the telephone system. 47 U.S.C. 225(c). The statute also mandates that 
eligible TRS providers be compensated for their costs of providing TRS. 
47 U.S.C. 225(d)(3). As a general matter, states compensate providers 
for the costs of providing intrastate TRS, and the Interstate TRS Fund 
compensates providers for the costs of providing interstate TRS. See 
generally 2004 TRS Report and Order, 19 FCC Rcd at 12482-12483, 
paragraphs 7-8. The cost recovery framework--and the annual 
determination of the TRS compensation rates--is intended to cover the 
``reasonable'' costs incurred in providing the TRS services mandated by 
Congress and Commission regulations. 2004 TRS Report and Order, 19 FCC 
Rcd at 12543, paragraph 179; see generally 47 CFR 64.604(c)(5)(iii)(E) 
(providers shall be compensated for the ``reasonable costs'' of 
providing TRS). The intent of Title IV is to further the Communications 
Act's goal of universal service by ensuring that individuals with 
hearing or speech disabilities have access to telephone services that 
are ``functionally equivalent'' to those available to individuals 
without such disabilities. See 47 U.S.C. 225(a)(3). TRS became 
available on a nationwide basis in 1993. See generally 
Telecommunication Services for Individuals with Hearing and Speech 
Disabilities, and the Americans With Disabilities Act of 1990, Report 
and Order and Request for Comments, CC Docket No. 90-571; published at 
56 FR 36729 (August 1, 1991), (TRS I).
    VRS. In 2000, the Commission recognized VRS as form of TRS eligible 
for compensation from the Interstate TRS Fund. See Telecommunications 
Relay Services and Speech-to-Speech Services for Individuals with 
Hearing and Speech Disabilities, CC Docket No. 98-67, Report and Order 
and Further Notice of Proposed Rulemaking, 15 FCC Rcd 5140, 5152-5154, 
paragraphs 21-27 (March 6, 2000) (Improved TRS Order and FNPRM) 
(recognizing VRS as a form

[[Page 47142]]

of TRS), published at 65 FR 38432 (June 21, 2000) and 65 FR 38490 (June 
21, 2000); 47 CFR 64.601(17). Presently, all VRS calls are compensated 
from the Interstate TRS Fund. See Improved TRS Order and FNPRM, 15 FCC 
Rcd at 5154, paragraphs 26-27. As most frequently used, VRS allows a 
deaf person whose native language is American Sign Language (ASL) to 
communicate in ASL with the CA through a video link. The CA, in turn, 
places an outbound telephone call to a hearing person. During the call, 
the CA communicates in ASL with the deaf person and by voice with the 
hearing person. VRS calls reflect a degree of ``functional 
equivalency'' unimaginable in a solely text-based TRS world. As the 
following figures for approximate monthly minutes of use of VRS 
demonstrate, usage continues to rise: May 2003--189,422; July 2004--
900,000; August 2005--2.7 million; April 2006--3.2 million.
    Cost Recovery. Section 225 of the Communications Act provides that 
the costs of providing interstate TRS ``shall be recovered from all 
subscribers for every interstate service.'' 47 U.S.C. 225(d)(3)(B). 
This mandate requires both collecting contributions to establish a fund 
(the Interstate TRS Fund) from which TRS providers can be compensated, 
and paying money from the Fund to eligible providers for their 
provision of eligible TRS services. See generally 47 CFR 
64.604(c)(5)(iii)(A) and (E) of the Commission's rules. These duties 
are performed by the Interstate TRS Fund administrator, selected by, 
and under the direction of, the Commission. See 47 CFR 
64.604(c)(5)(iii) of the Commission's rules. The current Interstate TRS 
Fund administrator is the National Exchange Carrier Association (NECA).
    The TRS Fund administrator presently makes payments to eligible 
providers based on per-minute compensation rates for traditional TRS 
and IP Relay, Speech-to-Speech (STS), and VRS. In the 2005 TRS Rate 
Order, the Commission concluded that it would adopt separate rates for 
traditional TRS and IP Relay. Accordingly, beginning with the 2005-2006 
Fund year.
    Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Order, FCC 05-135, CC 
Docket No. 98-67, CG Docket No. 03-123; published at 70 FR 38134 (July 
1, 2005) (2005 TRS Rate Order). The compensation rates are set on an 
annual basis. The TRS Fund administrator requests and collects 
projected cost and demand (i.e., minutes of use) data from the 
providers. See 47 CFR 64.604(c)(5)(iii)(C) of the Commission's rules. 
After the Fund administrator reviews the submitted projected costs and 
minutes of use, it calculates proposed per-minute compensation rates 
based on data submitted (or modified, as necessary). As NECA has 
explained, NECA calculates a national average cost per minute of use. 
It does so by totaling projected costs and minutes of use for all 
providers for a two year period, and then dividing each sum (costs and 
minutes) by two. Then the average costs are divided by the average 
minutes to determine the average cost per minute. See NECA, Interstate 
Telecommunications Relay Services Fund Payment Formula and Fund Size 
Estimate, filed April 25, 2005, at 9 and Appendix 1E. The Fund 
administrator then files these proposed rates with the Commission, and 
they are placed on public notice. See, e.g., National Exchange Carrier 
Association (NECA) Submits the Payment Formula and Fund Size Estimate 
for Interstate Telecommunications Relay Services (TRS) Fund for July 
2005 Through June 2006, CC Docket No. 98-67, Public Notice, DA 05-1175 
(April 28, 2005); published at 70 FR 24790 (May 11, 2005) (2005 TRS 
Rate Notice). The Commission reviews the proposed rates and, in 
adopting compensation rates for the ensuing Fund year, may approve or 
modify the proposed rates. See generally Telecommunications Relay 
Services and the Americans with Disabilities Act of 1990, CC Docket No. 
90-571, Third Report and Order, 8 FCC Rcd 5300, 5305, paragraph 30 
(July 20, 1993); published at 58 FR 39671 (July 26, 1993) (the TRS rate 
calculated by the administrator ``shall be subject to Commission 
approval'').
    If either the Fund administrator or the Commission disallows any of 
a provider's submitted costs, the provider has the opportunity to 
contest the disallowances before they are finalized. Because of 
confidentiality issues, this is generally done either in a telephone 
conversation or in an individual meeting with each provider. The 
precise process by which the providers' challenges to cost 
disallowances have been handled has varied, depending in part on 
whether the Fund administrator or the Bureau has made the disallowance. 
The providers may further challenge the adopted rates, including any 
cost disallowances, by seeking review of the rate order. Since 1993, 
the Commission has released orders at least annually setting forth the 
per-minute compensation rates for the various forms of TRS. The 
Commission released the first rate order on September 29, 1993. See 
Telecommunications Relay Services, and the Americans with Disabilities 
Act of 1990, CC Docket No. 90-571, Second Order on Reconsideration and 
Fourth Report and Order, 9 FCC Rcd 1637 (September 29, 1993); published 
at 58 FR 53663 (October 18, 1993). Subsequent rate orders have been 
released at the bureau level, with the exception of the 2005 TRS Rate 
Order.

Discussion

The Final 2003-2004 VRS Compensation Rate was Based on Reasoned 
Analysis
    Background. The 2003 Bureau TRS Order rejected NECA's proposed VRS 
rate of $14.023 per minute and adopted an ``interim'' rate of $7.751, 
subject to possible revision pending a more complete analysis of the 
providers' cost data. 2003 Bureau TRS Order, 18 FCC Rcd at 12835-12836, 
paragraphs 29-38. Five parties filed petitions for reconsideration, 
challenging the adoption of the interim VRS rate of $7.751 and 
requesting that the Commission accept NECA's proposed rate of $14.023 
retroactive to July 1, 2003 (the first day of the 2003-2004 Fund year). 
See 2004 TRS Report and Order, 19 FCC Rcd at 12538, paragraph 165 and 
note 474. These parties were Sprint, AT&T, Sorenson, Hands On, and CSD. 
The Commission concluded, based on its review of more complete cost 
data submitted by the providers, that it would adopt a final rate of 
$8.854. Hands On now contends that the Commission failed to adequately 
explain how it arrived at the $8.854 rate. Hands On Petition at 11-17. 
Hands On also asserts that the exclusion of ``proprietary'' software in 
the rate analysis was wrong. Hands On Petition at 20.
    Discussion. The Commission denies Hands On's petition to reconsider 
the $8.854 final VRS rate. See 2004 TRS Report and Order, 19 FCC Rcd at 
12545-12547, paragraphs 183-187. After the release of the interim 2003-
2004 TRS compensation rates, the Commission reviewed additional cost 
data submitted by the providers. As the Commission explained, ``because 
all of the providers filed for confidential treatment, the adjustments 
made [were] described in the aggregate.'' The Commission noted that it 
added back various costs that were excluded in calculating the $7.751 
rate relating to salaries, engineering support, and return on capital 
investment, as well as the costs from one provider that had been 
excluded in their entirety. These

[[Page 47143]]

adjustments resulted in including an additional $9,503,801 in costs, 
and a corresponding increase of 213,415 in reimbursable minutes.
    These adjustments resulted both from the Commission's analysis of 
the providers' supplemental cost data, and individual meetings with the 
providers after the release of the 2003 Bureau TRS Order. In these 
meetings, Commission staff discussed any adjustments to an individual 
provider's cost support with the provider in detail. The Commission met 
with Hands On (July 11, 2003), Hamilton (July 10, 2003), Sorenson (July 
17, 2003), and Sprint and CSD (July 18, 2003). The Commission provided 
no specific dollar amounts and discussed adjustments in the aggregate 
because providers claimed that their cost data were confidential. See 
2004 TRS Report and Order, 19 FCC Rcd at 12548-12549, paragraph 191. 
For these reasons, the Commission finds that the Commission adequately 
summarized the cost adjustments to the VRS rate.
    The Commission also rejects Hands On's argument that the Commission 
has failed to set forth in sufficient detail what costs are 
``reasonable'' in certain cost categories. See, e.g., Hands On Petition 
at 14-16. Hands On takes issue with a lack of specific direction on 
certain standards for the provision of service, specifically the number 
of frames per second that should be used to ensure a clear picture and 
standards for compatibility between various computers, software, or 
video systems.
    Providers are required to offer VRS in compliance with all 
applicable non-waived mandatory minimum standards, and entitled to be 
compensated for their reasonable costs of doing so. Each year the TRS 
Fund administrator, NECA, gives the providers instructions for the cost 
data request forms, which outline various cost categories and give 
examples of the types of costs that can be included. See, e.g., NECA, 
Interstate Telecommunications Relay Services Fund Payment Formula and 
Fund Size Estimate, filed May 3, 2004, Appendix A. NECA provides these 
guidelines so that providers consistently report only costs incurred in 
providing compensable services. The providers follow these guidelines, 
and Commission staff review the submitted costs to determine whether 
they are ``reasonable'', see 47 CFR 64.604(c)(5)(iii)(E) of the 
Commission's rules, and consistent with the applicable TRS mandatory 
minimum standards. In some cases, a provider's submitted costs are 
compared to the costs of other providers of the same service, 
particularly if a provider's costs are substantially different from the 
other providers' submitted costs. Commission staff subsequently review 
any disallowances with the individual providers. This method for 
determining ``reasonable'' costs gives providers flexibility to 
determine how best to provide service in compliance with the rules.
    The reasonableness standard satisfies Hands On's concerns over the 
lack of specific frames per second or quality standards for VRS. Hands 
On Petition at 15-16. If, for example, a provider's VRS service uses so 
few frames per second that the picture is not clear and the VRS user 
cannot understand what the interpreter is signing, the provider is not 
offering VRS at all and the service is not compensable.
    Hands On further asserts that the Commission erred in concluding 
that ``proprietary'' software is not a compensable cost. Hands On 
Petition at 20; see 2004 TRS Report and Order, 19 FCC Rcd at 12547-
12549, paragraphs 188-189, and 192. The Commission agrees that the 
categorical exclusion of such costs is not warranted, and clarifies 
that software developed and owned by a provider that is used for the 
provision of TRS may be a compensable cost: (1) to the extent it is 
used for the provision of TRS in compliance with non-waived mandatory 
minimum standards, and (2) if it is not sold or licensed to any other 
entity. Further, such costs should be capitalized, see 2004 TRS Report 
and Order, 19 FCC Rcd at 12548, paragraph 190, note 543 (addressing 
capitalization of costs), and are subject to review under the general 
reasonableness standard. This approach ensures that the Fund does not 
become a source of funding for software or other products that the 
provider develops and uses to provide non-TRS services, TRS services 
beyond those required by applicable non-waived mandatory minimum 
standards, or to generate other income from research paid for by the 
Fund.
The Final VRS Rate Should Be Fully Retroactive
    Background. When the Commission adopted the final VRS rate on June 
30, 2004, the Commission concluded that the rate would not be fully 
retroactive to the July 1, 2003, beginning of the Fund year because it 
was based on cost data submitted after the July 1, 2003, adoption of 
the $7.751 interim rate. 2004 TRS Report and Order, 19 FCC Rcd at 
12538-12539, 12549-12550, paragraphs 166, 193. The Commission concluded 
that the new compensation rate would apply to the provision of VRS 
services effective September 1, 2003. Hands On Petition at 21-23.
    Hands On asserts that the modified rate should be fully retroactive 
because providers' costs were the same for July and August 2003 as they 
were after September 1, 2003. Hands On also asserts that the providers 
could not submit additional data until after July 1, 2003. CSD and 
Sprint filed comments supporting Hands On's petition on this issue. CSD 
Comments at 1-4; Sprint Comments at 1-3.
    Discussion. The Commission agrees that it should have made the 
final 2003-2004 VRS rate of $8.854 fully retroactive to July 1, 2003, 
rather than September 1, 2003. In adopting the interim rate, the Bureau 
stated that it would remain in force until the Bureau completed its 
examination of the providers' cost data, ``after which time the Bureau 
will produce the final VRS cost recovery rate for the July 1, 2003, 
through June 30, 2004, fund year.'' 2003 Bureau TRS Order, 18 FCC Rcd 
at 12836, paragraph 37 (emphasis added). Consistent with this 
statement, and in acceptance of Hands On's argument, the Commission now 
determines that the final 2003-2004 VRS rate of $8.854 adopted in the 
2004 TRS Report and Order should be made fully retroactive to July 1, 
2003, the beginning of the 2003-2004 Fund year. Accordingly, effective 
August 16, 2006, the Commission directs NECA to make appropriate 
supplemental payments to those VRS providers compensated for providing 
VRS in July and August 2003 that reflect the difference between the 
interim rate of $7.751 per minute and the final rate of $8.854 per 
minute.
Costs Directed at Meeting Waived Mandatory Minimum Standards
    Background. Petitioners seek reconsideration of the Commission's 
conclusion that research and development costs directed at meeting 
waived mandatory minimum standards are not compensable. Hands On 
Petition at 17-20; CSD Petition at 18-22; see 2004 TRS Report and 
Order, 19 FCC Rcd at 12523, 12547-12548, paragraphs 122, 188-190. For 
VRS, the following mandatory minimum standards are presently waived: 
providing STS; handling any type of call; emergency call handling; 
offering equal access to interexchange carriers; handling 900 calls; 
providing Voice Carry Over (VCO), Hearing Carry Over (HCO), VCO-to-TTY, 
HCO-to-TTY, VCO-to-VCO, HCO-to-HCO; call release; 3-way calling; and 
speed dialing. See 2004 TRS Report and Order, 19 FCC Rcd at 12594-
12596, Appendix E (waiver chart). They argue that when a mandatory 
minimum standard has been waived due to technological infeasibility, a 
provider

[[Page 47144]]

should be compensated for the expenses related to developing the 
technology to meet the waived standard. Hands On Petition at 18; see 
also CSD Petition at 18-22 (asserting that it is not reasonable to 
expect a provider to meet a standard by a certain date (i.e., the date 
the waiver expires) if the provider cannot be compensated for the 
expenses associated with developing a means to meet the standard). CSD 
more specifically asserts that the Commission should permit the 
recovery of costs for research and development to enable VRS to meet 
the requirement that all TRS emergency calls be automatically and 
immediately transferred to an appropriate public safety answering point 
(PSAP). See 2004 TRS Report and Order, 19 FCC Rcd at 12521, paragraph 
116. Because VRS is an Internet-based service, the VRS provider does 
not receive the automatic number identification (ANI) of the calling 
party, cannot identify the calling party's location, and therefore 
cannot automatically pass that information to the PSAP. 2004 TRS Report 
and Order at 12522, paragraph 117. The Commission concluded that 
emergency call handling for VRS was technologically infeasible, and 
waived the requirement for VRS until January 1, 2006. See 2004 TRS 
Report and Order at 12522, paragraph 118. On November 30, 2005, the 
Commission released an NPRM seeking comment on rules for access to 
emergency services for the Internet-based forms of TRS. See 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, FCC 05-196, CG Docket 
No. 03-123, Further Notice of Proposed Rulemaking, FCC 05-196; 
published at 71 FR 5221 (February 1, 2006) (2005 TRS 911 NPRM)
    Discussion. The Commission reaffirms the general principle that 
engineering and other expenses for research and development to meet 
waived mandatory minimum standards, or provide enhancements beyond 
applicable non-waived mandatory minimum standards, are not compensable 
from the Interstate TRS Fund. 2004 TRS Report and Order, 19 FCC Rcd at 
12523-12524, 12547-12548, paragraphs 122, 189. As the Commission 
explained, TRS providers are obligated to provide functionally 
equivalent service, and that functionality is defined by the applicable 
mandatory minimum standards. 2004 TRS Report and Order at 12547-12548, 
paragraph 189. Title IV is intended to ensure that entities that offer 
telephone voice transmission services also offer TRS so that persons 
with certain disabilities have access to the functionality of a voice 
telephone call. See 47 U.S.C. 225(a)(3) and (c). When ``a provider 
offers eligible services that meet these standards it may recover its 
costs of doing so from the Interstate TRS Fund.'' 2004 TRS Report and 
Order, 19 FCC Rcd at 12547-12548, paragraph 189 (emphasis in original). 
As the Commission explained, ``this conclusion best reconciles the 
Commission's interest in avoiding placing undue burdens on the 
Interstate TRS Fund with the statutory mandate that the Commission's 
regulations `do not discourage or impair the development of improved 
technology.' '' 2004 TRS Report and Order, 19 FCC Rcd 12548, paragraph 
190 (quoting 47 U.S.C. 225(d)(2)).
    The Commission recognized the ``apparent `Catch-22' that, so long 
as a mandatory minimum standard is waived, providers cannot be 
compensated for the costs of meeting the requirement, but that without 
additional compensation they cannot cover the costs of meeting the 
requirement to therefore justify the end of the waiver. 2004 TRS Report 
and Order, 19 FCC Rcd at 12523-12524, paragraph 122. Nevertheless, the 
Commission took this approach because of the open-ended nature of the 
research and development that might be directed at a particular 
feature. The Commission stated that it would rely on the filing of 
annual reports for information indicating when the termination of a 
waiver may be appropriate and what additional costs may be necessary. 
In other words, the Commission concluded that it would require the 
providers to identify the manner in which the waived standard might be 
met, and the projected associated costs involved, before a provider 
devoted potentially unbounded resources to trying to find a way to meet 
the standard for a particular form of TRS.
    The Commission continues to believe that, as a general matter, this 
approach is reasonable. First, to the extent that some waivers are the 
result of technological limitations presently inherent in Internet-
based services generally, the Interstate TRS Fund should not be a 
source of funding to resolve these limitations. In addition, the 
Commission does not believe it can meaningfully determine what costs 
are reasonable when they are incurred to resolve technological issues 
that no one can resolve in the near term. Further, it may be impossible 
for some waived standards ever to apply to certain forms of TRS. 
Therefore, the Commission again concludes that, absent more specific 
direction from the Commission resulting from the annual waiver reports 
or information otherwise brought to the Commission's attention, 
providers may not be compensated from the Interstate TRS Fund for 
research and development to meet waived mandatory minimum standards. 
This principle applies to the waived emergency call handling 
requirement for VRS. Only in this way can the Commission prevent the 
Fund from becoming an open source of funding for research and 
development efforts over which the Commission, and the Fund 
Administrator, would have no control.
Other Issues
    MARS Plan. Hamilton's petition for reconsideration asserts that the 
Commission should not have applied ``rate of return regulation'' to 
traditional TRS, i.e., regulation requiring that the providers are not 
entitled to compensation that constitutes profit (e.g., a mark-up on 
expenses) but are limited to a rate of return on capital investment. 
Hamilton Petition at iii, 1; see generally 2004 TRS Report and Order, 
19 FCC Rcd at 12542-12545, paragraphs 177-182. Hamilton asks the 
Commission to initiate a proceeding to adopt its proposed alternative 
cost recovery methodology (the Multi-state Average Rate Structure or 
MARS plan) for determining the compensation rate for traditional TRS. 
Hamilton Petition at 1-4. Under the MARS plan, the interstate 
traditional TRS rate would be calculated based on an average of the 
intrastate TRS rates paid by the states. According to Hamilton, this 
approach would be superior to the current cost recovery methodology 
because it is grounded in competition (because most states select an 
intrastate TRS provider through a competitive bidding process), it 
would be easier and less costly to administer, and would benefit 
consumers ``by lowering interstate TRS rates to the competitively based 
market value.'' Hamilton Petition at 2-3. In response to Hamilton's 
petition, comments were filed by USTA, MCI, and Hands On, which 
generally support Hamilton's request. USTA Comments at 1-4; MCI 
Comments at 2-4; Hands On Reply Comments at 3-4. Hamilton also filed 
reply comments, further urging the Commission to consider its MARS 
proposal. Hamilton Reply at 1-4. Because, however, the Commission 
construes Hamilton's petition for reconsideration as a request that it 
adopts a new cost recovery methodology for traditional TRS, the 
Commission denies the petition for reconsideration to the extent it 
challenges the present cost recovery methodology for traditional TRS. 
See generally 2004 TRS

[[Page 47145]]

Report and Order, 19 FCC Rcd at 12542-12545, paragraphs 177-182. The 
Commission will treat this as a petition for rulemaking and request 
public comment on the MARS plan in a future notice of proposed 
rulemaking.
    VRS Speed of Answer. Finally, several parties seek reconsideration 
of the extension of the waiver of the speed of answer requirement for 
VRS providers until January 1, 2006, or at such time the Commission 
adopts a speed of answer rule for VRS, whichever is earlier. See, e.g., 
CSD Petition at 13-18. See generally 2004 TRS Report and Order, 19 FCC 
Rcd at 12522-12524, paragraphs 119-123. On July 19, 2005, the 
Commission released the VRS Speed of Answer Order, which adopted speed 
of answer requirements for VRS providers, effective January 1, 2006. 
See Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Report and Order, FCC 
05-140, CC Docket No. 98-67 and CG Docket No. 03-123, (July 14, 2005), 
paragraphs 4-25; published at 70 FR 51649 (August 31, 2005) (VRS Speed 
of Answer Order). In the VRS Speed of Answer Order, the Commission 
required that: (1) by January 1, 2006, VRS providers must answer 80 
percent of all VRS calls within 180 seconds, measured on a monthly 
basis; (2) by July 1, 2006, VRS providers must answer 80 percent of all 
VRS calls within 150 seconds, measured on a monthly basis; and (3) by 
January 1, 2007, VRS providers must answer 80 percent of all VRS calls 
with 120 seconds, measured on a monthly basis. Because the Commission 
has now adopted a speed of answer rule for VRS, this issue is moot.

Congressional Review Act

    The Commission will not send a copy of the Order on Reconsideration 
pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), 
because the adopted rules are rules of particular applicability.

Ordering Clauses

    Pursuant to the authority contained in sections 1, 2, and 225 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, and 
225, the Order on Reconsideration is hereby adopted.
    The petition for partial reconsideration filed by Hands On is 
granted in part and denied in part, as provided herein, and the 
petitions for reconsideration filed by CSD, NVRSC, and Hamilton are 
denied, as provided herein.
    The final per-minute compensation rate for VRS for the 2003-2004 
Fund year of $8.854 shall apply retroactively to all VRS minutes 
provided during that Fund year commencing July 1, 2003.
    The Order On Reconsideration shall be effective August 16, 2006.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E6-13486 Filed 8-15-06; 8:45 am]
BILLING CODE 6712-01-P