[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Rules and Regulations]
[Pages 8032-8039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02369]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 13-24 and 03-123; FCC 13-13]


Misuse of Internet Protocol (IP) Captioned Telephone Service; 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals With Hearing and Speech Disabilities

AGENCY: Federal Communications Commission.

ACTION: Interim rule.

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SUMMARY: In this document, the Commission adopts interim rules 
prohibiting all referrals for rewards programs (as described in the 
synopsis below) and any other form of direct or indirect inducements, 
financial or otherwise, to subscribe to or use, or encourage 
subscription to or use of, Internet Protocol Captioned Telephone 
Service (IP CTS); requiring each IP CTS provider, as a precondition to 
providing service to new IP CTS users, to register each new IP CTS 
user, to obtain from the user, as part of the registration process, 
self-certification that the user has a hearing loss that necessitates 
IP CTS to communicate in a manner that is functionally equivalent to 
communication by conventional voice telephone users, and where the 
consumer accepts IP CTS equipment at a price below $75 from any source 
other than a governmental program, to also obtain from the user a 
certification from an independent, third party professional attesting 
to the same; and requiring IP CTS providers to ensure that equipment 
and software used in conjunction with their service have a default 
setting of captions off at the beginning of each call, so that the 
consumer must take an affirmative step to turn on the captions each 
time the consumer wishes to use IP CTS. The Commission's action is 
intended to address certain practices related to the provision and 
marketing of IP CTS that appear to be contributing to a recent and 
dramatic spike in reimbursement requests to the Interstate 
Telecommunications Relay Service Fund (TRS Fund or Fund), of sufficient 
magnitude to constitute a serious threat to the Fund if not promptly 
and decisively addressed.

DATES: Effective February 5, 2013, except the amendments to Sec.  
64.604(c)(10) of the Commission's rules which is effective March 7, 
2013. and 64.604(c)(9) of the Commission's rules which contain new 
information collection requirements that have not been approved by the 
Office of Management and Budget (OMB). This amendment will become 
effective upon publication in the Federal Register of a notice 
announcing the approval of such requirements by the Office of 
Management and Budget under the Paperwork Reduction Act of 1995. The 
Commission will publish a separate document in the Federal Register 
announcing the effective date.

FOR FURTHER INFORMATION CONTACT: Eliot Greenwald, Consumer and 
Governmental Affairs Bureau, Disability Rights Office, at (202) 418-
2235 or email [email protected]. For additional information 
concerning the PRA information collection requirements contained in 
document FCC 13-13, contact Cathy Williams at (202) 418-2918, or email: 
[email protected] and [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order, 
document FCC 13-13, adopted on January 24, 2013 and released on January 
25, 2013, in CG Docket Nos. 13-24 and 03-123. In document FCC 13-13, 
the Commission also adopted a Final Rule and a Notice of Proposed 
Rulemaking, each of which is summarized in a separate Federal Register 
publication. The full text of document FCC 13-13 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. It also may 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: (800) 378-3160, fax: (202) 488-5563, 
or Internet: www.bcpiweb.com. Document FCC 13-13 can also be downloaded 
in Word or Portable Document Format (PDF) at http://www.fcc.gov/cgb/dro/trs.html#orders. To request materials in accessible formats for 
people with disabilities (Braille, large print, electronic files, audio 
format), send an email to [email protected] or call the Consumer and 
Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 
(TTY).

Final Paperwork Reduction Act of 1995 Analysis

    Document FCC 13-13 contains new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, will invite the general public to comment on 
the information collection requirements contained in document FCC 13-13 
as required by the PRA of 1995, Public Law 104-13 in a separate notice 
that will be published in the Federal Register. In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how the 
Commission might further reduce the information collection burden for 
small business concerns with fewer than 25 employees. In this present 
document, the Commission has assessed the effects of imposing various 
requirements on IP CTS providers and on consumers of IP CTS. The 
Commission recognizes that these requirements are necessary to detect 
and prevent abuse and waste in the IP CTS program. The Commission takes 
these actions to ensure the sustainability of the program upon which 
individuals with hearing disabilities have come to rely for their daily 
communication needs. In doing so, the Commission has balanced 
preserving the sustainability of the IP CTS program and minimizing the 
information collection burden for consumers and small business 
concerns, including those small businesses with fewer than 25 
employees. For example, in adopting requirements for IP CTS providers, 
in order to be eligible for compensation from the TRS Fund for 
providing service to new IP CTS users, to register the users and obtain 
from the users certification of hearing loss necessitating use of IP 
CTS, the rule affords considerable flexibility by allowing those 
consumers who have purchased their IP CTS equipment for $75 or more, or 
obtained equipment from a governmental program, to self-certify as to 
their hearing loss. Nevertheless, such procedures are necessary to 
limit use of IP CTS to those who actually have a hearing loss that 
necessitates use of the service.

Synopsis

    1. In document FCC 13-13, the Commission takes immediate, interim 
steps to address certain practices related to the provision and 
marketing of IP CTS that appear to be contributing to a recent and 
dramatic spike in reimbursement requests to the TRS Fund, of sufficient 
magnitude to constitute a serious threat to the Fund

[[Page 8033]]

if not promptly and decisively addressed. IP CTS permits people who can 
speak, but who have difficulty hearing over the telephone, to speak 
directly to another party on a telephone call and to use an IP-enabled 
device to simultaneously listen to the other party and read captions of 
what that party is saying. In document FCC 13-13, the Commission finds 
good cause to adopt on an emergency basis interim rules (1) prohibiting 
all referrals for rewards programs (as described below) and any other 
form of direct or indirect inducements, financial or otherwise, to 
subscribe to or use, or encourage subscription to or use of, IP CTS; 
(2) requiring each IP CTS provider, in order to be eligible for 
compensation from the Fund for providing service to new IP CTS users, 
(i) to register each new IP CTS user, (ii) as part of the registration 
process, to obtain from the user a self-certification that the user has 
a hearing loss that necessitates IP CTS to communicate in a manner that 
is functionally equivalent to communication by conventional voice 
telephone users, and (iii) where the consumer accepts IP CTS equipment 
at a price below $75 from any source other than a governmental program, 
to also obtain from the user a certification from an independent, third 
party professional attesting to the same; (3) requiring IP CTS 
providers to ensure that equipment and software used in conjunction 
with their service have a default setting of captions off at the 
beginning of each call, so that the consumer must take an affirmative 
step to turn on the captions each time the consumer wishes to use IP 
CTS. The interim rules will take effect in three stages. First, the 
interim rules prohibiting referrals for rewards will become effective 
upon publication in the Federal Register. Second, the interim rules 
requiring a default setting of captions off at the beginning of each 
call will become effective thirty days after publication in the Federal 
Register. Third, the interim rules on registration and certification 
will become effective upon publication in the Federal Register of a 
notice announcing the approval of such requirements by the Office of 
Management and Budget under the Paperwork Reduction Act of 1995. These 
interim rules will sunset on a common date, which will be either (1) 
180 days after the effective date for the interim rules on registration 
and certification or (2) the effective date of final rules on these 
issues, whichever date is sooner. The Commission will publish a 
separate document in the Federal Register announcing the sunset date.
    2. Telecommunications relay services (TRS) enable an individual 
with a hearing or speech disability to communicate with other 
individuals ``in a manner that is functionally equivalent'' to a 
hearing individual's ability to communicate using voice communications 
services. 47 U.S.C. 225. This is currently accomplished through TRS 
facilities staffed by communications assistants (CAs) who relay 
conversations between persons using various types of assistive 
communication devices and persons using end user telephone equipment, 
such as a standard telephone, smartphone, or computer. Captioned 
telephone service (CTS) works by having the hard of hearing user dial 
the number she or he wishes to call. The user's phone is automatically 
connected to a captioned telephone CA at the same time she or he 
reaches the called party. Once connected, the CA re-voices everything 
the called party says and uses voice recognition technology to 
automatically transcribe those words into captions. The captions then 
are transmitted directly to the user and are displayed, shortly after 
the called party speaks, on the display of a captioned telephone 
device, a computer, or a smartphone. The public switched 
telecommunications network (PSTN) version of CTS was approved in 2003. 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Declaratory Ruling, 
CC Docket No. 98-67, published at 68 FR 55898, September 29, 2003 (CTS 
Declaratory Ruling). The Internet-based version of CTS (IP CTS) was 
approved in 2007. Telecommunications Relay Services and Speech-to-
Speech Services for Individuals with Hearing and Speech Disabilities, 
CG Docket No. 03-123, Declaratory Ruling, published at 72 FR 6960, 
February 14, 2007 (IP CTS Order). When this service was first 
established, the Commission set only the minimum standards that apply 
to all TRS, but did not establish any eligibility criteria specifically 
for use of this service.
    3. Section 225 of the Communications Act of 1934, as amended (Act), 
47 U.S.C. 225, and its implementing regulations provide that the costs 
for providing TRS, including IP CTS, are not charged to the consumers 
using these services; rather, the costs are passed on to all consumers 
of telecommunications and voice over Internet Protocol providers. 47 
U.S.C. 225(d)(3); see also Sec.  64.604(c)(5) of the Commission's 
rules. Interstate relay calls and all calls made via Internet-based 
forms of TRS are funded through mandatory contributions made to the 
Fund by these providers. 47 U.S.C. 225(d)(3); see also Sec.  CFR 
64.604(c)(5) of the Commission's rules. Eligible providers of 
compensable TRS are then entitled to recover their ``reasonable'' costs 
of providing service from this Fund in compliance with the Commission's 
service rules. See Sec.  64.604(c)(5)(iii)(E) of the Commission's 
rules. IP CTS and interstate CTS providers are paid using a methodology 
known as the Multi-state Average Rate Structure Plan (MARS Plan), which 
calculates the compensation rate for IP CTS using a weighted average of 
the state rates for intrastate CTS. Given this funding methodology, the 
Commission presently does not require providers of these services to 
file annual cost and demand data submissions with the Fund 
administrator. Telecommunications Relay Services and Speech-to-Speech 
Services for Individuals with Hearing and Speech Disabilities, CG 
Docket No. 03-123, Report and Order, and Declaratory Ruling, published 
at 73 FR 3197, 3200, January 17, 2008. In the absence of such data, the 
Fund administrator estimates CTS and IP CTS demand projections based on 
actual historical demand. See, e.g., Telecommunications Relay Services 
and Speech-to-Speech Services for Individuals with Hearing and Speech 
Disabilities; Structure and Practices of the Video Relay Service 
Program, CG Docket Nos. 03-123 & 10-51, Order, 27 FCC Rcd 7150, 7155 at 
paragraph 13, footnote 56 (CGB 2012) (2012 TRS Rate Order).
    4. In recent months, IP CTS has been experiencing unprecedented and 
unusually rapid growth. For example, the total number of minutes for 
which compensation was requested by providers increased by an average 
of 11% per month from June to October 2012. In October 2012 alone, 
requested minutes exceeded the minutes budgeted for this service by the 
Fund Administrator by 38% and as a consequence, the total requested 
payout also exceeded the budgeted amount by 38%, almost $4 million. As 
discussed below, the Commission has reason to believe that this growth 
is being caused by the offering of incentives for referrals to use this 
service, as well as usage of this service by people without a hearing 
loss that necessitates the use of IP CTS to communicate in a 
functionally equivalent manner, and that, if unchecked, this growth 
threatens in the very near term to overwhelm the Fund. Because all 
forms of TRS are supported through one Fund, this puts all forms of

[[Page 8034]]

TRS in jeopardy and threatens to deprive people who are deaf or hard of 
hearing of the benefits of the program.
    5. The growth in IP CTS witnessed in recent months represents a 
sudden and sharp departure from the trend of declining rates of growth 
in usage of this service over three prior years. It is only within 
recent months that the Commission learned about the extraordinary 
escalation in this service's usage, as well as the existence of the 
referrals for rewards programs and the lack of specific eligibility 
criteria for new users. Although there was a temporary leveling off of 
usage in September 2012, it was followed by a steep incline in usage in 
October 2012, confirming the Commission's expectation that the 
program's sudden acceleration of growth will continue in the immediate 
months ahead--growth that, if left unchecked, could exacerbate the 
potential for harm to both the Fund and legitimate users of TRS. In 
particular, data indicate that, absent Commission action, there could 
be insufficient funds available in this Fund year to meet the needs of 
the Fund, potentially triggering a violation of the Anti-Deficiency 
Act, 31 U.S.C. 1341(a)(1)(A), and otherwise threatening the 
availability of the service for consumers of this and other relay 
services supported by the Fund.
    6. The Commission concludes that protecting such interests at this 
time outweighs the public interest in providing prior notice of the 
interim rules the Commission now adopts. Moreover, although the 
Commission did not formally provide notice and an opportunity to 
comment, the Commission nevertheless received extensive input from 
interested parties on these issues, including input from all of the 
active providers of IP CTS and a number of consumer groups. In order to 
allow for notice and comment as soon as feasible, however, the 
Commission is putting these rules in place for only a short interim 
period. Because the harm to the Fund appears to result from certain 
practices addressed in document FCC 13-13, the Commission believes the 
most appropriate immediate action is to adopt the few interim rules 
discussed below, rather than simply to allow the Fund to grow unchecked 
while the Commission solicits public comment. Such action will enable 
the Commission to better control the level of TRS disbursements and 
protect the programmatic, legal, and financial integrity of the TRS 
program. Conversely, failing to take immediate action to stem such 
practices could well threaten the availability of this and other relay 
services that are supported by the Fund for the benefit of legitimate 
users. Moreover, because the Commission believes that a substantial 
portion of this growth is arising from practices that may be 
inconsistent with the policies underlying section 225 of the Act and 
the Commission's implementing regulations, the Commission is concerned 
that if interim rules are not adopted immediately, the use of 
questionable practices would continue and even accelerate, adding 
further to the strain on the Fund. In addition, if the Commission were 
to follow ordinary notice and comment procedures, IP CTS providers 
would be able to continue--indeed, to accelerate--the use of 
potentially inappropriate incentives to recruit and sign up new IP CTS 
users without first establishing their eligibility for an extended 
period of time while the rulemaking process is pending.
    7. To prevent these imminent public harms from occurring and to 
bring Fund expenditures for this service under control, the Commission 
finds that three immediate measures are necessary. First, because, as 
discussed below, the Commission finds that referrals for rewards 
programs are likely to unduly and inappropriately incent consumers to 
obtain equipment and use service that they might not otherwise use, the 
Commission prohibits all referrals for rewards programs and any other 
form of direct or indirect inducements, financial or otherwise, to 
subscribe or use or encourage subscription to or use of IP CTS. Second, 
to prevent the unnecessary subscription to and use of the service by 
consumers who do not need IP CTS to communicate in a functionally 
equivalent manner, the Commission adopts interim rules to require each 
IP CTS provider, in order to be eligible for compensation from the TRS 
Fund for providing service to new IP CTS users, to register each new 
user for service with the IP CTS provider and, as part of the 
registration process, to obtain from each user a self-certification 
that (1) the user has a hearing loss that necessitates the use of IP 
CTS to communicate in a manner that is functionally equivalent to 
communication by conventional voice telephone users, (2) the user 
understands that the captioning service is provided by a live CA; and 
(3) the user understands that the cost of the IP CTS calls is funded by 
the TRS Fund. In addition, where the consumer accepts IP CTS equipment 
for less than $75 from any source other than a governmental program 
that distributes the equipment, the provider must obtain from the user 
a certification from an independent, third party professional attesting 
to the necessity for IP CTS. Third, to prevent improper billing of the 
TRS Fund for the use of IP CTS by individuals who do not need IP CTS to 
communicate in a functionally equivalent manner and who are either 
living in the household or visiting the house or office of an eligible 
user, the Commission adopts interim rules requiring IP CTS providers to 
ensure that equipment and software used in conjunction with IP CTS have 
a default setting of captions off at the beginning of each call, so 
that the consumer must take an affirmative step to turn on the captions 
each time the consumer wishes to use IP CTS. At the same time that the 
Commission adopts these rules on an interim basis to address these 
immediate concerns, the Commission seeks comment in the accompanying 
Notice of Proposed Rulemaking (NPRM) on these and other possible 
actions to address the sustainability of this service in the long term.
    8. As noted above, TRS enables an individual with a hearing or 
speech disability to communicate with other individuals ``in a manner 
that is functionally equivalent'' to a hearing individual's ability to 
communicate using voice communications services. Section 225(b) of the 
Act directs the Commission to ensure that TRS services are available to 
persons with hearing and speech disabilities ``to the extent possible 
and in the most efficient manner.'' 47 U.S.C. 225(b)(1). Further, 
section 225(d) of the Act instructs the Commission to adopt regulations 
implementing section 225 of the Act, including regulations 
``establish[ing] functional requirements, guidelines, and operations 
procedures for [TRS],'' 47 U.S.C. 225(d)(1)(A), as well as mandatory 
``minimum standards'' governing the provision of TRS. 47 U.S.C. 
225(d)(1)(A). These provisions authorize the rules adopted herein, and 
as discussed below, the Commission concludes that it has authority to 
adopt these interim rules immediately, without prior notice and 
opportunity for comment.
    9. Section 553 of the Administrative Procedure Act (APA) requires 
that agencies provide notice of and an opportunity for public comment 
on their proposed rules except, inter alia, ``when the agency for good 
cause finds (and incorporates the finding and a brief statement of 
reasons therefor in the rules issued) that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.'' 5 U.S.C. 553(b)(3)(B). The decision not to follow notice 
and comment procedures has been allowed

[[Page 8035]]

in emergency situations or where delay could result in serious harm. 
Chamber of Commerce, 443 F.3d at 908. See also Rural Cellular Ass'n v. 
FCC, 588 F.3d 1095, 1105-06 (DC Cir. 2009). In this case, the 
Commission finds good cause to adopt immediate interim rules to address 
the recent, unprecedented and unusually rapid increase in IP CTS 
minutes of use in order to maintain the integrity of the Fund, to 
sustain this service and other forms of TRS for legitimate users during 
the coming months, and to help avoid increasing mid-year the amount 
that telecommunications and VoIP providers must pay into the Fund in 
order to account for the rapid growth caused by these potentially 
improper practices. In particular, the Commission finds that because IP 
CTS growth is occurring so rapidly, it would be impracticable and 
contrary to the public interest to delay remedial action by waiting 
until after completion of the notice and comment process, which can 
take several months, to adopt any rules. See, e.g., Amendment of the 
Commission's Rules to Permit FM Channel And Class Modifications by 
Application, Notice of Proposed Rulemaking, 7 FCC Rcd 4943, 4944, 
paragraph 6, footnote 12 (1992). The actions the Commission takes in 
this order thus are aimed at preserving the fiscal integrity of the TRS 
Fund and ensuring compliance with applicable Federal law.
    10. Referrals for Rewards. The recent expansion in usage of IP CTS 
appears to have been precipitated largely by new referral programs that 
offer monetary rewards for the referral of customers who sign up for 
installation of the provider's IP CTS end user equipment. These rewards 
are being given to third parties, including the providers' existing 
customers, members of the general public, and hearing and health care 
professionals such as audiologists. In a variation of these referral 
programs, providers are also making donations to charities, again 
contingent on a consumer's receiving the providers' IP CTS phone and 
service. The Commission is concerned about these financial incentive 
programs, which may well be resulting in the registration for and usage 
of IP CTS by new IP CTS users who do not need these services to 
communicate in a manner that is functionally equivalent to 
communication by conventional voice telephone users. By offering 
rewards to individuals, professionals, and organizations for enlisting 
customers for IP CTS, the referral programs may indirectly encourage 
consumers to sign up for this relay service, whether or not they 
actually need the service to communicate in a functionally equivalent 
manner, in order to earn money for their friends or for programs and 
charitable services that they support. As noted above, such practices 
appear to be having a profound detrimental impact on the Fund. 
Specifically, payment of such rewards to third parties may well 
encourage consumers to order IP CTS service just to gain the incentive 
benefit. For example, such incentive rewards programs appear to prompt 
charitable organizations to advertise a provider's IP CTS to their 
members and to encourage those members to produce the promised 
donations by ordering the provider's IP CTS. When a charitable 
organization promotes registration with an IP CTS provider in order for 
the organization to receive the $50 donations that result, such 
promotions may encourage the organization's members to order the IP CTS 
provider's service in order to support the organization, whether or not 
they actually need the service to communicate in a manner that is 
functionally equivalent to communication by conventional voice 
telephone users. The more customers that sign up to use the provider's 
IP CTS, the greater the financial rewards to participants in the 
incentive programs, and the more compensation the provider is able to 
collect from the Fund, at no cost to the consumer. In short, offering 
such rewards may have the effect of enlisting customers who might not 
otherwise have a reason to use the service. Such practices thus not 
only threaten the Fund, but also may be inconsistent with the very 
purpose of the TRS program--to provide communication services for 
people with hearing or speech disabilities who are otherwise unable to 
use conventional telephone services. See 47 U.S.C. 225(a)(3) (defining 
TRS to ``* * * provide the ability for an individual who is deaf, hard 
of hearing, deaf-blind, or who has a speech disability to engage in 
communication by wire or radio. * * *''). For these various reasons, 
the Commission finds good cause to adopt an interim rule expressly 
prohibiting, for a short term, all referrals for rewards programs and 
any other form of direct or indirect inducements, financial or 
otherwise, to subscribe to or use, or encourage subscription to or use 
of IP CTS, including inducements that provide incentives for potential 
users to subscribe to IP CTS or that incent third parties, such as 
audiologists and other hearing and health professionals, to encourage 
such subscriptions.
    11. The Commission disagrees with the argument that it should treat 
differently the payment of referral fees to hearing specialists and 
payments to non-experts such as friends and charities. To the extent 
that such professionals are offered rewards that incent them to 
encourage consumers to order and use IP CTS--whether or not such 
consumers would actually benefit from IP CTS--such rewards may be 
promoting the use of IP CTS by individuals who do not need this 
service, or who could benefit more from other assistive devices or 
hearing technologies.
    12. In the TRS context, the Commission has had a history of 
addressing fraud, abuse and misuse through restrictions on financial 
incentives such as those adopted here. See Telecommunications Relay 
Services and Speech-to-Speech Services for Individuals with Hearing and 
Speech Disabilities, CG Docket No. 03-123, Report and Order, and 
Declaratory Ruling; published at 73 FR 3197, January 17, 2008 
(prohibiting payments made to third parties and incentives that result 
in the registration of consumers with a TRS provider, as well as 
incentives that increase a subscriber's usage of TRS).
    13. The Commission believes that providers can effectively promote 
IP CTS without offering financial rewards for referrals through, for 
example, the distribution of literature to assistive technology 
specialists, audiologists, and other professionals; the insertion of 
advertisements in mainstream and disability publications, and 
participation in disability conferences and other activities to inform 
professionals and the public about the benefits of this service. The 
Commission also believes that any expectation by professionals that 
they will receive compensation for making such referrals appears to be 
generally inconsistent with established federal policy. For example, 
the Commission's interim prohibition of referral awards to audiologists 
and other professionals is consistent with the health care anti-
kickback statute, which prohibits the offering or payment of any 
remuneration in return for (A) referring an individual for the 
furnishing or arranging for the furnishing of any item or service for 
which payment may be made under a Federal health care program or (B) in 
return for purchasing, leasing or ordering any good, facility, service, 
or item for which payment may be made under a Federal health care 
program. 42 U.S.C. 1320a-7b(b)(2). Subject to receiving further comment 
on this and other issues, the Commission finds that

[[Page 8036]]

the underlying public policy reasons for the healthcare anti-kickback 
statute appear to apply equally to awards for referrals provided to 
audiologists and other professionals.
    14. The temporary prohibition adopted by the Commission includes 
any programs initiated, sponsored or operated by IP CTS providers that 
offer financial or other incentives or rewards to third parties for the 
referral of customers who sign up to use the provider's IP CTS 
offering, as well as provider programs or practices offering or 
providing any payment or other thing of value, directly or indirectly 
to a potential or existing IP CTS user. In addition to the prohibition 
against rewards for referrals, the temporary prohibition against any 
other form of direct or indirect inducements, financial or otherwise, 
to subscribe or use or encourage subscription to or use of IP CTS would 
prohibit, for example, a provider from reimbursing a consumer for the 
cost of his or her examination by a hearing or health professional that 
would be needed to establish the consumer's hearing loss or for the 
cost of obtaining other eligibility documentation. The Commission is 
reserving judgment at this point pending the further development of a 
record in response to the accompanying NPRM as to whether there should 
be a permanent prohibition on these practices.
    15. Registration and Certification. The recent and unexpected 
escalation in IP CTS minutes raises serious concerns about whether IP 
CTS is now being made available to and used by some consumers who may 
not need the service to communicate in a manner that is functionally 
equivalent to telephone communication by conventional voice telephone 
users. This sudden swell in IP CTS minutes not only threatens the long 
term viability of this service for those who truly need it, but also, 
on a more immediate basis, it threatens to exhaust monies currently 
available in the Fund for this and other approved TRS within the next 
few months. For the reasons discussed below, the Commission finds it 
necessary to adopt interim rules addressing registration and 
eligibility certification to use this service.
    16. IP CTS is distinguishable from most other forms of TRS by its 
unusual ease and convenience of use. In contrast to other forms of TRS, 
which often require special skills (e.g., knowledge of American Sign 
Language by persons who use video relay services) or are designed for 
very discrete portions of the population with specific communication 
needs (e.g., people with speech disabilities who need to use specially 
trained speech-to-speech CAs), consumers who use IP CTS may be less 
likely to ``self-screen'' in choosing whether to subscribe to IP CTS. 
Furthermore, IP CTS is ``provided in a way that is automated and 
invisible to both parties to the call,'' IP CTS Order, 72 FR 6960, 
February 14, 2007, likely making it a more attractive TRS option than 
other services in which the CA has a known presence. Indeed, one of the 
central benefits to IP CTS is that, unlike most other forms of TRS, IP 
CTS is capable of being used without any interruption in the normal 
flow of a voice telephone conversation. Further, unlike the PSTN-based 
forms of CTS and many other types of TRS, incoming IP CTS calls are not 
encumbered by having to first dial an 800 number to reach a CA; rather, 
the call can be directly dialed to the IP CTS user. Finally, IP CTS 
offers certain features that may attract its use by individuals who may 
not necessarily need the service to communicate in a manner that is 
functionally equivalent to communication by conventional voice 
telephone users, but rather simply desire such features. For example, a 
consumer with no hearing loss might subscribe to and use IP CTS merely 
because it provides a transcription of what the other party to a call 
is saying. Other individuals may use the captions to engage in multiple 
tasks at the same time, and may not be aware that this is a publicly 
funded program that supports the costs of captions each time they are 
produced. And some individuals who do not need captions might sign up 
for service in order to obtain a free or subsidized highly-amplified 
phone from the provider. The Commission therefore finds that there is a 
greater risk, compared with other forms of TRS, that IP CTS is being 
used (with consequent billing of the Fund for the minutes used) by 
individuals who do not need the service to communicate in a manner that 
is functionally equivalent to communication by conventional voice 
telephone users.
    17. To address the anticipated near-term impact on the TRS Fund and 
to ensure that only those individuals for whom TRS truly was intended 
are using this service--and thereby prevent waste of Fund resources--
the Commission finds it necessary and appropriate at this time to 
adopt, on an interim basis, a registration and certification 
requirement to restrict the use of IP CTS to those who have a hearing 
disability that the Commission believes the Act and the Commission's 
rules are intended to address. The Commission believes that the exigent 
circumstances that now exist require the Commission to take such action 
to protect the Fund during the 2012-13 Fund year, and to fulfill 
Congress's mandate for this service to be available to eligible persons 
who genuinely need it to communicate by telephone in a manner that is 
functionally equivalent to telephone use by hearing individuals. The 
Commission further believes that the action it takes today is in 
accordance with section 225 of the Act's mandate to provide TRS ``to 
the extent possible and in the most efficient manner'' to its intended 
population. 47 U.S.C. 225(b)(1).
    18. In order to ease the burden of compliance, the Commission will 
accept a self-certification in those instances in which the user has 
either made a significant financial investment in IP CTS equipment or 
received that equipment through a governmental program. While there is 
no way at this time to pinpoint the precise cost that will most 
effectively deter ineligible usage of IP CTS, the Commission believes 
that setting a floor of at least $75 in order to qualify for the self-
certification-only option represents a reasonable balancing of 
interests. The amount is high enough to affect most consumers' 
purchasing decisions, but not so high as to make the purchase of 
equipment infeasible. Indeed, a floor of $75 is well below the listed 
retail prices for the captioned telephones used with current IP CTS 
offerings. The Commission also finds self-certification alone to be 
sufficient if the individual obtains free or low-cost equipment from a 
governmental program because such programs themselves screen users to 
determine their need for IP CTS.
    19. The Commission believes that limiting the number of potential 
users who need to seek third-party certification in this manner for a 
short period while it determines what permanent certification 
requirements will best serve the Fund is in the public interest, and 
will not place an undue burden on legitimate IP CTS users. As to the 
effect of this rule on low-income individuals who may not be able to 
afford $75 for IP CTS equipment, those individuals may be able to 
obtain IP CTS equipment from state equipment distribution programs, and 
in any event may accept free or very low-priced equipment so long as 
they obtain a third-party certification. Thus, the Commission believes 
that this interim rule is unlikely to prevent those who truly need 
access to IP CTS from receiving the service.
    20. The Commission therefore adopts an interim rule that requires 
each IP

[[Page 8037]]

CTS provider, in order to be eligible for compensation from the TRS 
Fund for providing service to new IP CTS users, to register each new IP 
CTS user for service and as part of the registration process, to obtain 
from each user a self-certification that (1) the user has a hearing 
loss that necessitates the use of IP CTS to communicate in a manner 
that is functionally equivalent to communication by conventional voice 
telephone users, (2) the user understands that the captioning service 
is provided by a live CA, and (3) the user understands that the cost of 
the IP CTS calls is funded by the TRS Fund. This self-certification 
must be made on a form separate from any other user agreement (such as 
on a separate page), and requires a separate signature specific to the 
self-certification. For the purposes of this requirement, an electronic 
signature has the same legal effect as a written signature.
    21. Where the consumer accepts IP CTS equipment for less than $75 
from any source other than a governmental program, the interim rule 
also requires the provider to obtain a certification from an 
independent, third-party professional attesting that the user has a 
hearing loss that necessitates the use of IP CTS to communicate in a 
manner that is functionally equivalent to communication by conventional 
voice telephone users. Such third-party professionals must be qualified 
to evaluate an individual's hearing loss in accordance with applicable 
professional standards, and may include community-based service 
providers, hearing related professionals, vocational rehabilitation 
counselors, occupational therapists, social workers, educators, 
audiologists, speech pathologists, hearing instrument specialists, and 
doctors, nurses, and other medical or health professionals. Any such 
professionals must certify in writing that the applicant needs IP CTS 
to communicate in a manner that is functionally equivalent to 
conventional voice telephone service experienced by individuals without 
hearing disabilities. In cases where new users have obtained IP CTS 
equipment for free or at low cost through a governmental program, the 
Commission finds it reasonable for purposes of the interim rules to 
permit the provider to rely on documentation demonstrating that the 
equipment was obtained through one of these programs, in lieu of 
providing an independent, third-party certification. These steps will 
protect against registration by individuals who do not need captioning, 
but who are registering merely to receive free or very inexpensive 
phones. The Commission also requires each IP CTS provider to maintain 
the confidentiality of all registration and certification information 
obtained by the provider, and to not disclose such registration and 
certification information, as well as the content of such information, 
except as required by law.
    22. Default Captions Off. In addition to adopting measures to 
ensure that IP CTS equipment and service is provided to subscribers who 
need the service to communicate in a functionally equivalent manner, 
the Commission seeks to prevent billing of the TRS Fund for casual or 
inadvertent use of IP CTS by other individuals who do not need IP CTS 
to communicate by phone, in particular those who may be living in a 
subscriber's household or visiting a subscriber's house or office. It 
is the Commission's understanding that much of the IP CTS equipment 
that is being distributed at this time provides for captions to be 
automatically displayed without the need to affirmatively turn the 
captions on. As a consequence, the TRS Fund is billed unless the person 
using the IP CTS equipment takes affirmative action to turn the 
captions off. Further, some equipment is configured such that the user 
must go through a two-step process to turn captions off, rather than 
having a clear on/off button visible at all times.
    23. To avoid misuse of IP CTS, and to ensure that the Fund is used 
for functionally equivalent telephone service for people with 
disabilities, the Commission is requiring on an interim basis that all 
providers ensure that equipment and software used in conjunction with 
their IP CTS have captions turned off as the default setting. This is 
consistent with actions already taken by a number of states to prevent 
similar misuse of PSTN-based CTS. The Commission anticipates that 
consumers who are provided with a clear on/off option and an 
explanation of how to use it can reasonably be expected to learn to 
turn captioning on at the beginning of each call.
    24. Further, while taking one or more steps, such as pushing a 
button, to receive captions may add a small burden to the process of 
using IP CTS, the Commission preliminarily finds that any burden is 
outweighed by the substantial public interest in preventing the misuse 
of this service. As explained earlier, IP CTS is ``provided in a way 
that is automated and invisible to both parties to the call,'' IP CTS 
Order, 72 FR 6960, is capable of being used without any interruption in 
the normal flow of a voice telephone conversation, and offers certain 
features that may attract its use by individuals who may not 
necessarily need the service to communicate in a manner that is 
functionally equivalent to communication by conventional voice 
telephone users. Because of these IP CTS attributes, with a captions-on 
setting, the likelihood increases that individuals who do not need IP 
CTS may be casually or inadvertently using IP CTS, causing illegitimate 
minutes of use to be billed to the Fund.
    25. For these same reasons, the Commission also requires, on an 
interim basis, that IP CTS equipment not provide consumers the option 
of changing the default setting from captions-off to captions-on. At 
this time, the Commission likewise does not adopt a proposed exception 
to allow a consumer-initiated ``default on'' setting for users that 
provide an elevated certification to the effect that: (a) They 
understand that the captioning service they enjoy free of charge is 
provided by a live CA dedicated to each of their captioned calls, and 
reimbursed by the TRS Fund, (b) their device is not accessed by or 
easily accessible to ineligible users, and (c) they will not permit the 
use of captions on their device by any ineligible persons. Even well-
intentioned users may find it difficult to ensure that there is no 
unnecessary use of captioning once it is turned on; by contrast, the 
burden on the consumer to simply press a ``captions on'' button or 
similar method appears to be minimal. The accompanying NPRM seeks 
comment on this proposed exception, as well as a suggestion that the 
Commission set standards for connection time after the consumer 
activates the captions.
    26. In order to afford IP CTS providers an opportunity to make any 
software and other changes necessary to implement a captions-off 
default setting, the requirements adopted herein will become effective 
30 days after their publication in the Federal Register. To the extent 
that it is technically infeasible for a particular IP CTS provider to 
comply within this 30-day time period for equipment that is already 
deployed, the provider may request additional time by seeking a limited 
waiver of the effective date, supported by an appropriate good cause 
showing.

Effective Date

    27. The APA provides that a substantive rule cannot become 
effective earlier than 30 days after the required publication or 
service of the rule, except ``as otherwise provided by the agency for 
good cause found and published with the rule.'' 5 U.S.C. 553(d). See 
also Sec.  1.427(a) of the Commission's rules. As

[[Page 8038]]

discussed above, the Commission finds good cause to adopt immediately 
interim rules without the opportunity for public comment because the 
Commission believes that the imminent harms to the Fund and legitimate 
TRS users outweigh the public interest in obtaining comment before such 
rules go into effect. The same good cause reasons for adopting 
immediately interim rules without the opportunity for public comment 
apply to making the rules effective as soon as possible. As noted 
above, any delay in making the rules effective would encourage IP CTS 
providers, during the period prior to the effective date, to continue 
and possibly even accelerate the use of inappropriate incentives to 
recruit and sign up new users without first establishing their 
eligibility, adding additional uncontrolled growth that could result in 
TRS payment obligations exceeding the amount available in the Fund. 
Further, the Commission has no reason to believe that IP CTS providers 
cannot comply with the rules adopted herein within the prescribed time 
periods. There are only four providers currently offering IP CTS, and 
the payment of incentives and registration of new users are matters 
well within each provider's immediate ability to control.
    28. The interim rules adopted in document FCC 13-13 shall cease to 
be effective on a common date that is either (1) 180 days after the 
effective date for the interim rules on registration and certification, 
Sec.  64.604(c)(9) of the Commission's rules, or (2) the effective date 
of final rules on these issues, whichever date is sooner. The 
Commission will publish a separate document in the Federal Register 
announcing the sunset date.

Final Regulatory Flexibility Analysis

    29. The Regulatory Flexibility Act (RFA), 5 U.S.C. 603, requires 
that an agency prepare a regulatory flexibility analysis for notice-
and-comment rulemaking proceedings, unless the agency certifies that 
``the rule will not, if promulgated, have a significant economic impact 
on a substantial number of small entities.'' 5 U.S.C. 605(b). The RFA 
generally defines ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term 
``small business'' has the same meaning as the term ``small business 
concern'' under the Small Business Act. 5 U.S.C 601(3). A ``small 
business concern'' is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA). 15 U.S.C. 632.
    30. In document FCC 13-13, in response to an urgent public interest 
need to curtail misuse of IP CTS, the Commission adopts interim rules 
prohibiting all referrals for rewards programs and any other form of 
direct and indirect inducements, financial or otherwise to subscribe or 
use or encourage subscription to or use of IP CTS. The Commission also 
adopts interim rules requiring each IP CTS provider, in order to be 
eligible for compensation from the TRS Fund for providing service to 
new IP CTS users, (1) to register each new IP CTS user for service, (2) 
as part of the registration process, to obtain from each user a self-
certification that the user has a hearing loss that necessitates IP CTS 
to communicate in a manner that is functionally equivalent to 
communication by conventional voice telephone users, and (3) where the 
consumer accepts IP CTS equipment at a price below $75 from any source 
other than a governmental program, to obtain from the user a 
certification from an independent, third party professional attesting 
to the same. The Commission also requires IP CTS equipment to have a 
default setting of captions off at the beginning of each call, so that 
the consumer must affirmatively turn on the captions each time the 
consumer wishes to use IP CTS.
    31. In recent months, IP CTS has been experiencing unusually rapid 
growth. The Commission is concerned that usage of this service by 
people who may not need the assistance of IP CTS, along with improper 
incentives for referrals to use this service are contributing 
substantially to this sudden, rapid increase in IP CTS minutes of use.
    32. With regard to the criterion of the economic impact of document 
FCC 13-13, the Commission concludes that IP CTS providers fit within 
the business classification of Wired Telecommunications Carriers. See 
NAICS Code 517110 (2007). The closest applicable size standard under 
the SBA rules is for Wired Telecommunications Carriers, for which the 
small business size standard is all such firms having 1,500 or fewer 
employees. 13 CFR 121.201, NAICS Code 517110 (2007). Collectively, 
there are four IP CTS providers that are authorized by the Commission 
to offer these services. Only one of these entities is a small business 
under the SBA size standard. Therefore, the interim rules would not 
have a significant economic impact on a substantial number of small 
entities.
    33. The Commission therefore certifies, pursuant to the RFA, that 
the interim rules adopted in document FCC 13-13 will not have a 
significant economic impact on a substantial number of small entities. 
The Commission will send a copy of document FCC 13-13, including a copy 
of the RFA certification, to the Chief Counsel for Advocacy of the SBA.

Congressional Review Act

    34. The Commission will send a copy of document FCC 13-13 in a 
report to be sent to Congress and the Government Accountability Office 
pursuant to the Congressional Review Act. 5 U.S.C. 801(a)(1)(A).

Ordering Clauses

    35. Pursuant to sections 1, 2, 4(i) and (j) and 225 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i) and 
(j) and 225, document FCC 13-13 is hereby adopted.

List of Subjects in 47 CFR Part 64

    Individuals with disabilities, Reporting and recordkeeping 
requirements, Telecommunications.

Federal Communications Commission
Marlene H. Dortch,
Secretary.

Interim Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation to part 64 continues to read as follows:

    Authority:  47 U.S.C. 154, 254(k); 403(b)(2)(B), (c), Pub. L. 
104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 222, 
225, 226, 227, 228, 254(k), 616, 620, and the Middle Class Tax 
Relief and Job Creation Act of 2012, Pub. L. 112-96, unless 
otherwise noted.

0
2. Amend Sec.  64.604 by adding paragraphs (c)(8), (9), and (10) to 
read as follows:


Sec.  64.604  Mandatory minimum standards.

* * * * *
    (c) * * *
    (8) Inducements for use of IP CTS. (i) An IP CTS provider shall not 
offer or provide to any person or entity any form of direct or indirect 
inducements, financial or otherwise, to subscribe to or use or 
encourage subscription to or use of IP CTS. IP CTS providers offering 
or providing such inducements shall be ineligible for any compensation 
for IP CTS from the TRS Fund.

[[Page 8039]]

    (ii) [Reserved].
    (9) IP CTS registration and certification requirements. (i) IP CTS 
providers, in order to be eligible to receive compensation from the TRS 
Fund for providing IP CTS to a new consumer, must first register the 
new consumer applying for service by obtaining the following 
registration information: The consumer's name, address and telephone 
number.
    (ii) IP CTS providers, in order to be eligible to receive 
compensation from the TRS Fund for providing IP CTS to a new consumer, 
also must first obtain a written certification attesting that the 
consumer needs IP CTS to communicate in a manner that is functionally 
equivalent to the ability of a hearing individual to communicate using 
voice communications services.
    (iii) The certification required by paragraph (c)(9)(ii) of this 
section must include the consumer's certification that:
    (A) The consumer has a hearing loss that necessitates IP CTS to 
communicate in a manner that is functionally equivalent to 
communication by conventional voice telephone users;
    (B) The consumer understands that the captioning service is 
provided by a live communications assistant; and
    (C) The consumer understands that the cost of the IP CTS calls is 
funded by the TRS Fund.
    (iv) The certification required by paragraph (c)(9)(ii) of this 
section must be made on a form separate from any other agreement or 
form, and must include a separate consumer signature specific to the 
certification. For purposes of this rule, an electronic signature, 
defined by the Electronic Signatures in Global and National Commerce 
Act, 15 U.S.C. 7001 et seq., as an electronic sound, symbol, or 
process, attached to or logically associated with a contract or other 
record and executed or adopted by a person with the intent to sign the 
record, has the same legal effect as a written signature.
    (v) In instances where IP CTS equipment is obtained by a new 
consumer for less than $75, the IP CTS provider must also, in order to 
be eligible to receive compensation from the TRS Fund, obtain written 
certification provided and signed by an independent third-party 
professional, except as provided in paragraph (c)(9)(v)(D) of this 
section .
    (A) In instances where certification from an independent third-
party professional is required, such professionals must be qualified to 
evaluate an individual's hearing loss in accordance with applicable 
professional standards, and may include, but are not limited to, 
community-based social service providers, hearing related 
professionals, vocational rehabilitation counselors, occupational 
therapists, social workers, educators, audiologists, speech 
pathologists, hearing instrument specialists, and doctors, nurses, and 
other medical or health professionals.
    (B) In instances where certification from an independent third-
party professional is required, such third-party professionals must 
certify in writing that the IP CTS consumer is an individual with 
hearing loss who needs IP CTS to communicate in a manner that is 
functionally equivalent to telephone service experienced by individuals 
without hearing disabilities.
    (C) In instances where certification from an independent third-
party professional is required, such third-party professional must 
provide his or her name, title, and contact information, including 
address, telephone number, and email address.
    (D) In instances where the new consumer has obtained equipment from 
a governmental program, the new consumer may present documentation to 
the IP CTS provider demonstrating that the equipment was obtained 
through one of these programs, in lieu of providing an independent, 
third-party certification.
    (vi) Each IP CTS provider shall maintain the confidentiality of any 
registration and certification information obtained by the provider, 
and may not disclose such registration and certification information or 
the content of such registration and certification information except 
as required by law or regulation.
    (vii) [Reserved].
    (10) IP CTS default settings. (i) IP CTS providers must ensure that 
equipment and software used in conjunction with their service have a 
default setting of captions off, so that new and existing IP CTS users 
must affirmatively turn on captioning for each telephone call initiated 
or received before captioning is provided.
    (ii) [Reserved].

[FR Doc. 2013-02369 Filed 2-1-13; 4:15 pm]
BILLING CODE 6712-01-P