[Federal Register Volume 75, Number 137 (Monday, July 19, 2010)]
[Pages 41863-41866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17575]



[CG Docket No. 10-51; FCC 10-111]

Structure and Practices of the Video Relay Service Program

AGENCY: Federal Communications Commission.

ACTION: Notice.


SUMMARY: In this document, the Commission takes a fresh look at its 
video relay service (VRS) rules so that the Commission can ensure that 
this vital program is effective, efficient, and sustainable in the 
future. VRS allows persons with hearing or speech disabilities to use 
American Sign Language (ASL) to communicate with friends and family and 
to conduct business in near real time. In this proceeding, the 
Commission seeks to improve the program to ensure that it is available 
to and used by the full spectrum of eligible users, encourages 
innovation, and is provided efficiently so as to be less susceptible to 
the waste, fraud, and abuse that plague the current program and 
threaten its long-term viability. The Commission's goal is to solicit a 
wide range of thoughts and proposals for making the program work better 
for those who could benefit from it and those who pay into it.

DATES: Comments are due on or before August 18, 2010. Reply comments 
are due on or before August 3, 2010.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554
    You may submit comments, identified by [CG Docket number 10-51 and/
or FCC Number 10-111, by any of the following methods:
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the Commission's Electronic Comment 
Filing System (ECFS) http://fjallfoss.fcc.gov/ecfs2/ or the Federal 
eRulemaking Portal: http://www.regulations.gov. Filers should follow 
the instructions provided on the website for submitting comments. For 
ECFS filers, in completing the transmittal screen, filers should 
include their full name, U.S. Postal Service mailing address, and the 
applicable docket or rulemaking number, which in this instance is CG 
Docket No. 10-51.
     Parties may also submit an electronic comment by Internet 
e-mail. To get filing instructions, filers should send an e-mail to 
[email protected], and include the following words in the body of the 
message, ``get form .'' A sample form and 
directions will be sent in response. In addition, parties submitting an 
electronic copy must send a copy of such filing to (1) Mark Stone, 
Consumer and Governmental Affairs Bureau, [email protected]; (2) 
Nicholas Alexander, Wireline Competition Bureau, 
[email protected]; (3) Diane Mason, Consumer and Governmental 
Affairs Bureau, [email protected]; and (4) Nicholas A. Degani, 
Wireline Competition Bureau, [email protected].
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. Filings can be sent by 
hand or messenger delivery, by commercial overnight courier, or by 
first-class or overnight U.S. Postal Service mail. In addition, parties 
must send one copy of each pleading to: the Commission's duplicating 
contractor, Best Copy and Printing, Inc., 445 12th Street, SW., 
Washington, DC 20554.

[[Page 41864]]

     All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission. 
All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St., SW, Room TW-A325, Washington, DC 20554. All hand deliveries 
must be held together with rubber bands or fasteners. Any envelopes 
must be disposed of before entering the building. The filing hours are 
8 a.m. to 7 p.m.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, 
Express, and Priority mail must be addressed to 445 12th Street, SW., 
Washington DC 20554.

FOR FURTHER INFORMATION CONTACT: Diane Mason, Consumer and Governmental 
Affairs Bureau, Disability Rights Office, at (202) 418-7126 (voice), 
(202) 418-7828 (TTY), or e-mail at [email protected]

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Structure and Practices of the Video Relay Service Program, Notice of 
Inquiry, document FCC 10-111, adopted on June 8, 2010, and released on 
June 28, 2010, in CG Docket No. 10-51. The full text of document FCC 
10-111 and copies of any subsequently filed documents in this matter 
will be available for public inspection and copying via ECFS and during 
regular business hours at the FCC Reference Information Center, Portals 
II, 445 12th Street, SW, Room CY-A257, Washington, DC 20554. They may 
also be purchased from the Commission's duplicating contractor, Best 
Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room CY-
B402, Washington, DC 20554, telephone: (202) 488-5300, fax: (202) 488-
5563, or e-mail http://www.bcpiweb.com. Pursuant to 47 CFR 1.415 and 
1.419, interested parties may file comments and reply comments 
regarding document FCC 10-111 on or before the dates indicated on the 
first page of this document. All filings related to this Notice should 
refer to CG Docket No. 10-51. The Commission strongly encourages 
parties to develop responses to this Notice that adhere to the 
organization and structure of this Notice. Furthermore, the Commission 
is specifically interested in concrete data or analyses that respond to 
the questions in this Notice.
    Pursuant to 47 CFR 1.1200 et seq., this matter shall be treated as 
a ``permit-but-disclose'' proceeding in accordance with the 
Commission's ex parte rules. Persons making oral ex parte presentations 
are reminded that memoranda summarizing the presentations must contain 
summaries of the substance of the presentation and not merely a listing 
of the subjects discussed. More than a one or two sentence description 
of the views and arguments presented generally is required. Other rules 
pertaining to oral and written ex parte presentations in permit-but-
disclose proceedings are set forth in 47 CFR 1.1206(b).
    People with Disabilities: 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 and Governmental Affairs Bureau at (202) 418-0530 (voice) or 
(202) 418-0432 (tty).
    Paperwork Reduction Act. Document FCC 10-111 does not contain 
proposed information collections subject to the Paperwork Reduction Act 
of 1995, Public Law 104-13. In addition, therefore, it does not contain 
any proposed 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. 


    1. The Commission presents document FCC 10-111 in two parts. In 
part I, the Commission asks broad questions on exactly how VRS 
providers should be compensated if the Commission retains the current, 
multiple provider model for delivering VRS. In part II, the Commission 
asks whether it should consider fundamental changes to the delivery of 
VRS and market structure for the service. In both parts, the 
Commission's objective is to find ways to ensure that this vital 
program is effective, efficient, and sustainable. The Commission 
specifically seeks comment on the most effective and efficient way to 
make VRS available and to determine what is the most fair, efficient, 
and transparent cost recovery methodology. The Commission expects to 
complete this proceeding before Interstate TRS Fund (Fund) year 2011-
12, which begins on July 1, 2011.

Part I--Adjustments and Modifications to Improve the Current Video 
Relay Service Compensation Methodology

    2. Accounting Issues. In this section, the Commission asks a series 
of questions about appropriate accounting methods for VRS providers. 
The Commission suggests that VRS providers should all be incurring the 
same types of compensable costs, and seeks comment on the extent to 
which this is the case. The Commission also seeks comment on whether 
part 32 continues to provide the best system of accounting for VRS 
providers, along with what specific sub-accounts are appropriate to 
require for all VRS providers. Next, the Commission seeks comment on 
whether it should set reasonableness limits on the compensability of 
costs in total or for specific cost categories, and on whether the 
Commission should set limits for other types of costs, such as cash 
working capital, building costs and dividend payments.
    3. Company-Specific Compensation. The Commission seeks comment on 
whether to establish company-specific compensation for each provider, 
in order to establish a fairer methodology for all providers and to 
achieve greater accuracy in matching compensation to costs than an 
averaged or three-tiered system. Among other things, this section asks 
commenters to address the extent to which the tiered system should 
continue as is, whether a company-specific compensation methodology 
that continues to disburse funds based on minutes of use would require 
company-specific demand projections, or whether this type of 
compensation methodology could be based on historical demand, adjusted 
by an industry-wide projected growth factor to establish the size of 
the fund. The Commission also seeks comment on the proper use of 
historical cost information, including whether historical costs should 
be used to establish compensation rates to achieve the efficient 
delivery of VRS; the factors that should be applied to historical costs 
to develop reasonable projected costs; and how demand growth factors 
can be considered relevant to provider compensation.
    4. Outreach and Marketing Costs. The Commission seeks comment on 
whether, and the extent to which, the Fund should compensate providers 
for outreach and marketing activities, including whether such funding 
should be capped for each provider.
    5. Research and Development Costs. Newly emerging communication 
technologies could offer significant potential for achieving greater 
functional equivalency for VRS users, and we recognize that Congress 
has directed the Commission to ensure that its TRS regulations do not 
discourage or impair the development of improved technology. The 
Commission therefore seeks comment on whether and, if so, the extent to 
which, the Commission should revise its rules to explicitly permit 
compensation for research and development, as well as what controls

[[Page 41865]]

the Commission should put in place to ensure that such compensation is 
provided equitably across all VRS providers.
    6. Videophone Equipment. In this section, the Commission asks about 
the cost, quality and availability of different videophones and how 
these compare with voice telephones. It also seeks comment on actions 
the Commission should take to ensure that affordable videophone 
equipment is available to VRS users, and the extent to which efforts 
should be made to switch VRS users over to mainstream video technology 
so they can acquire phones from retail establishments rather than be 
dependent on individual providers for their phones.
    7. Protection of Providers from Under-Compensation and Avoidance of 
Over-Compensation. The Commission seeks comment on ways to prevent 
providers from being under- or over-compensated. For example, the 
Commission asks about using a ``true up'' and whether it should 
continue the current process for allowing providers a rate-of-return on 
capital investment. Commenters should address the administrative 
burdens, as well as the potential benefits of their proposals.
    8. Certification. The Commission's rules currently allow potential 
VRS providers to receive compensation from the Interstate TRS Fund if 
they: (a) become part of a certified state program, (b) subcontract for 
another entity eligible to provide TRS, or (c) receive certification 
directly from the Commission. The Commission is concerned that the 
current certification process does not offer adequate oversight and 
assurance that certified VRS providers are offering satisfactory 
service and are only seeking reimbursement for authorized service. The 
Commission asks how the Commission's rules should be changed to 
sufficiently deter potential fraud and abuse.

Part II--Broader and Economic Issues Concerning Video Relay Service

    9. In this part, the Commission asks whether it should consider 
fundamental changes to the delivery of VRS, including questions on the 
structure of the VRS market. The Commission focuses on three key 
issues. Among other things, the Commission seeks to ensure that the VRS 
program fully serves the needs of its intended users as well as it can, 
to improve the efficiencies of this program, and to reduce 
opportunities for fraud and abuse.

The Components of Video Relay Service

    10. VRS communications require the interaction of three separate 
yet interlinked components: videophone equipment, video communication 
service, and ASL relay interpreter service. Although some VRS providers 
now supply all three components as a single package, we question 
whether this vertical integration is necessary, and therefore separate 
them for purposes of the analysis herein.
    11. Videophone Equipment. The Commission seeks to understand the 
types of videophone equipment most used by deaf and hard-of-hearing 
individuals, what functionalities they need, and what role standards-
setting should play with respect to protocols and functionalities. The 
Commission specifically seeks comment on whether it is feasible for the 
Commission to adopt technical standards that would ensure the 
continuation of videophone equipment functionality after a consumer 
switches default providers. The Commission also seeks to understand the 
extent to which VRS users are limited to using videophone equipment 
specifically designed for VRS use, as well as the extent to which 
changes in the VRS program should occur that would allow users to 
utilize off-the-shelf equipment for VRS calls.
    12. Video Communication Service. The Commission asks about the 
functionalities that VRS users need from video communication service 
providers, and the extent to which the separation of broadband 
transmission service from VRS affects what constitutes functionally 
equivalent service. Several years ago, interconnected Voice over 
Internet Protocol (VoIP) was primarily provided as an over-the-top, 
nomadic service. Today, many facilities-based broadband providers offer 
interconnected VoIP with quality-of-service guarantees. The Commission 
asks whether video communication service will witness a comparable 
transition in the near future
    13. Relay Interpreter Service. The Commission asks about the 
functionalities that VRS users need from ASL relay interpreter 
services, and the extent to which CAs have met the quality-of-service 
expectations of VRS users. Parties are also asked to provide feedback 
on ways that the needs of VRS users may evolve over the next three to 
five years.
    14. General View of VRS Components. Looking at these components 
together, the Commission asks how and why VRS users currently choose or 
switch their providers, including how the incentives and costs 
associated with switching VRS providers differ from the incentives and 
costs of switching other video communications service providers. Is 
there any need for the three components described above to be 
vertically integrated?

The Demand for Video Relay Service

    15. In this section, the Commission seeks data about (1) The number 
of current VRS users; (2) the extent to which there may be 
technological barriers to using VRS; (3) the trends in VRS minutes of 
use per user over time; and (4) to what extent potential VRS users are 
meeting their communications needs through other means. The Commission 
also seeks information about other reasons why potential users do not 
actually use VRS.

The Supply of Video Relay Service

    16. In this section, the Commission seeks to understand the 
provision of VRS from a supplier's perspective and the obstacles that 
might limit competition among VRS providers or otherwise reduce 
efficiency in the provision of this service. Among other things, the 
Commission notes that under the present VRS model, multiple providers 
offer substantially similar services with no opportunity for price 
competition. In undertaking this review, the Commission considers each 
of the three components described earlier, i.e., relay interpreter 
service, video communications service, and videophone equipment.

The Regulation of Video Relay Service

    In this section, the Commission seeks to understand how its 
regulations, including the current regime for compensating VRS 
providers, have affected the structure of the market and demands on the 
    17. Paying for VRS Today. The Interstate TRS Fund compensates VRS 
providers using an industry-wide per-minute rate each year. The 
Commission seeks comment on the existing TRS reimbursement structure 
and on other aspects of its regulation of VRS.
    18. The Principle of Cost-Causation. The Commission seeks comment 
on whether the cost-recovery aspects of its current VRS regulations may 
distort the incentives of VRS providers and, in turn, may affect the 
expectations of users. When a cost causer does not internalize all the 
costs it causes, the incentives of both providers and users may be 
distorted. The Commission is concerned that its VRS compensation rules 
may have created such economic distortions.

[[Page 41866]]

The Incentives of Providers

    19. The Commission wants to ensure not only that the VRS program is 
available and fully responsive to the needs of people with hearing and 
speech disabilities, but also that the use of VRS is driven by real 
demand, not artificial stimulation. The Commission seeks comment on 
what measures it should take to better realize the goal of reimbursing 
VRS providers for the costs of providing relay service, to ensure that 
VRS providers have incentives to provide and promote use of VRS, 
without creating incentives for VRS providers to encourage high-volume 
use that VRS users would otherwise not incur. The Commission is 
particularly interested in knowing: (1) How it can encourage 
competition that would reduce the costs of VRS; (2) how it can channel 
the efforts of VRS providers to foster innovation and improve services 
for VRS users; (3) what data or analyses are particularly important to 
understand in choosing how to restructure the VRS market to improve its 
efficiency and effectiveness; (4) if the Commission decides to modify 
either what constitutes VRS or the regulation of VRS, how it should 
structure the transition to avoid service disruptions; and (5) what 
institutional oversight is required at the federal and state level, and 
how extensive must that oversight be to combat waste, fraud, and abuse.
    20. Choice of VRS Provider. The Commission seeks comment on 
whether, if it decided to use competitive bids to award VRS contracts 
to a single provider or a limited number of providers, there are ways 
to ensure that consumers would still be able to receive functionally 
equivalent service. In addition, it seeks comment on whether 
competitive bidding or a single contract model could work for certain 
components of VRS communications, such as the relay interpreter 
component. Furthermore, it solicits comment on how, if such a contract 
were to be awarded, the contract should pay the winning bidder (e.g., 
using a flat, fixed fee for service, a per-minute compensation rate, a 
per-user compensation rate, or some other method).
    21. Other Models. The Commission seeks comment on the merits of 
applying rate-of-return regulation, modified price cap regulation, 
forward-looking cost model support, or reverse auctions to the 
provision of VRS. The Commission also seeks comment on whether 
structural and accounting safeguards might be effective at encouraging 
efficiency in the VRS market. Finally, the Commission seeks comment on 
issues related to jurisdictional separations, insofar as the Commission 
has thus far treated all VRS calls as interstate calls paid for by the 

The Incentives and Needs of VRS Users

    22. The Commission seeks comment in this section on how to better 
align the incentives of VRS users with cost-causation principles. The 
Commission first seeks input on how to ensure that it properly 
identifies functionally equivalent voice services and rates. The 
Commission then seeks comment on how to structure any federal subsidies 
to ensure that VRS providers meet the needs of VRS users without over-
compensating VRS providers.
    23. Videophone Equipment. In Part I, the Commission asks numerous 
questions concerning the current functionalities, costs, and 
distribution of videophone equipment. These same questions equally 
apply to the Commission's consideration of changes to the structure of 
the VRS program in the future, and are inherently intertwined with 
questions regarding what is the most effective, efficient, and 
sustainable structure.
    24. Individual Subsidies and Vouchers. The Commission seeks comment 
on whether VRS users would be better served if the Commission did not 
subsidize particular components of VRS communications, but instead 
directly subsidized the VRS needs of those individuals. The Commission 
also seeks input on whether it should issue vouchers directly to deaf 
and hard-of-hearing individuals to spend on the end user equipment and 
other components of the TRS program, such as broadband Internet access 
    25. Consumer Incentives. The Commission seeks comment on whether, 
if this is not already the case, the incentives for VRS use need to be 
aligned with the cost of providing the service in a way that makes the 
use of this service comparable to the use of voice communications 
services. In this regard, the Commission seeks comment on whether the 
lack of usage restrictions on VRS creates any incentives for VRS use 
that do not exist for voice telephone use. The Commission also seeks 
comment on whether the cost of broadband service as a prerequisite for 
VRS use is a disincentive for potential VRS users to use VRS.

Other Regulations Affecting VRS Communications

    The Commission seeks input on the effect of its VRS user 
registration requirements on competition among VRS providers in the 
various components. In addition, it asks whether it should impose 
additional reporting requirements on VRS providers, for example 
separately reporting each driver of the Fund (number of users, 
compensable minutes of use per user, and estimated cost per minute of 
use). Finally, the Commission seeks comment on what other VRS 
regulations it should adopt or modify now to prepare for the future.

Ordering Clause

    Pursuant to sections 4(i)-(j), 201(b), 225, and 303(r), 47 U.S.C. 
154(i)-(j), 201(b), 225, and 303(r), document FCC 10-111 is adopted.

Federal Communications Commission.
Marlene H. Dortch,
[FR Doc. 2010-17575 Filed 7-16-10; 8:45 am]