[Federal Register Volume 78, Number 170 (Tuesday, September 3, 2013)]
[Proposed Rules]
[Pages 54201-54209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21273]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 13-24 and 03-123; FCC 13-118]


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: Proposed rule.

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SUMMARY: In this document, the Commission seeks comment on further 
possible actions necessary to improve internet protocol captioned 
telephone relay service (IP CTS), to ensure that it is used exclusively 
by eligible individuals, and to develop a better methodology for 
calculating the compensation rate paid to IP CTS providers. This action 
is necessary to ensure that persons with hearing disabilities have 
access to relay services that address their unique needs, in 
furtherance of the objectives of section 225 of the Communications Act 
of 1934, as amended (Act), to provide relay services in a manner that 
is functionally equivalent to conventional telephone voice services, 
while at the same time protecting the interstate telecommunications 
relay service (TRS) Fund for all forms of TRS.

DATES: Comments are due October 18, 2013 and reply comments are due 
November 18, 2013.

ADDRESSES: You may submit comments, identified by CG Docket Nos. 13-24 
and 03-123, 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), through the Commission's Web site http://fjallfoss.fcc.gov/ecfs2/. Filers should follow the instructions provided on the Web site 
for submitting comments. For ECFS filers, in completing the transmittal 
screen, filers should include their full name, U.S. Postal service 
mailing address, and CG Docket Nos. 13-24 and 03-123.
     Paper filers: Parties who choose to file by paper must 
file an original and one copy 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 (although the 
Commission continues to experience delays in receiving U.S. Postal 
Service mail). 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.
     Commercial Mail sent by 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 should be addressed to 445 12th Street SW., Washington, DC 20554.
    In addition, parties must serve one copy of each pleading with the 
Commission's duplicating contractor, Best Copy and Printing, Inc., 445 
12th Street SW., Room CY-B402, Washington, DC 20554, or via email to 
[email protected] mailto:[email protected].For detailed instructions for 
submitting comments and additional information on the rulemaking 
process, see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Eliot Greenwald, Consumer and 
Governmental Affairs Bureau, Disability Rights Office, at (202) 418-
2235 or email [email protected] 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Misuse 
of Internet Protocol (IP) Captioned Telephone Service; 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Further Notice of 
Proposed Rulemaking (Further Notice), document FCC 13-118, adopted on 
August 26, 2013, and released on August 26, 2013, in CG Docket Nos. 13-
24 and 03-123. In document FCC 13-118, the Commission adopted an 
accompanying Report and Order (IP CTS Order), which is summarized in a 
separate Federal Register publication. The full text of document FCC 
13-118 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 <http://www.bcpiweb.com. Document FCC 13-118 can also be downloaded 
in Word or Portable Document Format (PDF) at <http://www.fcc.gov/encyclopedia/telecommunications-relay-services-trs. To 
request materials in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an email 
to [email protected] [email protected] or call the 
Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
    This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex

[[Page 54202]]

parte rules. Persons making ex parte presentations must file a copy of 
any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the presentation. If the presentation consisted 
in whole or in part of the presentation of data or arguments already 
reflected in the presenter's written comments, memoranda or other 
filings in the proceeding, the presenter may provide citations to such 
data or arguments in his or her prior comments, memoranda, or other 
filings (specifying the relevant page and/or paragraph numbers where 
such data or arguments can be found) in lieu of summarizing them in the 
memorandum. Documents shown or given to Commission staff during ex 
parte meetings are deemed to be written ex parte presentations and must 
be filed consistent with sec. 1.1206(b). In proceedings governed by 
sec. 1.49(f) of the Commission's rules or for which the Commission has 
made available a method of electronic filing, written ex parte 
presentations and memoranda summarizing oral ex parte presentations, 
and all attachments thereto, must be filed through the electronic 
comment filing system available for that proceeding, and must be filed 
in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.

Initial Paperwork Reduction Act of 1995 Analysis

    Document FCC 13-118 seeks comment on potential new and revised 
information collection requirements or may result in new or revised 
information collection requirements. If the Commission adopts any new 
and revised information collection requirement, the Commission will 
publish another notice in the Federal Register inviting the public to 
comment on the requirements, as required by the Paperwork Reduction Act 
of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant 
to the Small Business Paperwork Relief Act of 2002, the Commission 
seeks comment on how it might ``further reduce the information 
collection burden for small business concerns with fewer than 25 
employees.

Synopsis

    1. During the spring and fall of 2012, the Commission witnessed an 
unusually steep increase in the growth of IP CTS minutes. This sudden 
and unprecedented escalation raised serious concerns for the Interstate 
TRS Fund (Fund) that, if not immediately addressed, threatened to 
overwhelm and, therefore, jeopardize the Fund for all forms of TRS. In 
order to protect the Fund, on January 25, 2013, the Commission took 
swift and immediate action, in the IP CTS Interim Order, published at 
78 FR 8032, February 5, 2013, to terminate, on an interim basis, 
provider practices that appeared to be resulting in the use of IP CTS 
by individuals who did not need this service to communicate in a 
functionally equivalent manner. The Commission's interim rules also 
included a requirement that providers set equipment to a default 
captions-off setting, and certain registration and certification 
requirements. On August 26, 2013, the Commission released the IP CTS 
Order that finalizes and modifies interim rules relating to marketing 
practices and registration, and makes permanent the default captions-
off rule. Misuse of Internet Protocol (IP) Captioned Telephone Service; 
Telecommunications Relay Services and Speech-to-Speech Services for 
Individuals with Hearing and Speech Disabilities, Report and Order and 
Further Notice of Proposed Rulemaking, document FCC 13-118, adopted on 
August 26, 2013, and released on August 26, 2013, in CG Docket Nos. 13-
24 and 03-123. The Further Notice seeks comment on a number of matters 
pertaining to the provision of and funding for IP CTS.
    2. Rate Methodology Used for IP CTS. In the Further Notice, the 
Commission seeks comment on whether to change the methodology for 
calculating the compensation rate paid to providers for IP CTS. 
Currently, IP CTS rates are determined using the Multi-state Average 
Rate Structure Plan (MARS Plan). Under the MARS Plan, the Fund 
administrator calculates the compensation rates for IP CTS using a 
weighted average of competitively bid state rates for intrastate 
captioned telephone service (CTS). See 2007 TRS Rate Methodology Order, 
published at 73 FR 3197, January 17, 2008. At the time the Commission 
adopted the MARS Plan, IP CTS was a nascent service and was provided by 
only a single entity that offered service through two subcontracting 
companies. As such, call volume for this service was small, with costs 
that necessarily reflected this low usage. Since December 2011, IP CTS 
has been experiencing unprecedented and unusually rapid growth that has 
signaled a sharp departure from the trend of declining rates of growth 
in usage of this service over three prior years. At the same time, 
provider projections for IP CTS growth have been called into question, 
as minutes of use have far exceeded their projections in recent months, 
and PSTN-based CTS minutes of use, upon which the MARS rate is largely 
based, have steadily fallen. Given this unusually rapid growth, the 
declining minutes of use of PSTN-based CTS upon which the MARS rate is 
based, concerns about the accuracy of provider forecasts of IP CTS 
demand, and the potential for a vastly larger market and thus even 
larger call volumes, the Commission asks whether use of the MARS plan 
as the rate methodology for IP CTS remains appropriate. The Commission 
also notes that the burgeoning IP CTS market and the proliferation of 
new prospective provider entrants may necessitate the adoption of 
additional mandatory minimum IP CTS standards, which in turn may 
increase the cost of providing the service. Accordingly, the Commission 
seeks comment on whether the original premise underlying the adoption 
of the MARS rate--that the reasonable costs of IP CTS would be 
reflected in an average of the PSTN version of this service 
competitively bid throughout the states--still supports use of this 
methodology for IP CTS. The Commission believes that there are 
currently significant differences in demand levels for PSTN-based CTS 
and IP CTS, such that tying rates for IP CTS to the rates set at the 
state level for PSTN-based CTS may no longer be appropriate. The 
Commission seeks comment on this point, and asks whether economies of 
scale have reduced the costs of IP CTS. In this regard, the Commission 
notes that although the TRS Fund administrator has calculated a 
proposed rate of $1.7877 for the 2013-14 Fund year based on the CTS 
MARS calculation, aggregated provider submitted cost data results in an 
actual cost per minute calculation of $1.4826 for IP CTS.
    3. The Commission also asks for comment on and proposals for 
alternative cost recovery methodologies for IP CTS. For example, should 
the Commission adopt a rate methodology similar to that for VRS and IP 
Relay, i.e., based on a weighted average of actual and/or projected 
costs for each provider? If the Commission adopts a

[[Page 54203]]

methodology based on providers' submission of actual and/or projected 
costs, the Commission anticipates that it will specify which expenses 
may be included as part of the ``reasonable'' costs necessary for the 
provision of IP CTS. The Commission therefore seeks comment on what 
such allowable costs should be. Should the cost categories be different 
than those used in calculating rates for IP Relay and VRS? 
Alternatively, should the Commission adopt a rate methodology for IP 
CTS that calculates rates based on each individual provider's costs? In 
this regard, the Commission questions whether the cost elements that go 
into a determination of the IP Relay rate, now set at $1.0391 per 
minute for the 2013-14 Fund year, are demonstrably different from the 
elements that go into an IP CTS minute. Prior to the adoption of the 
MARS rate for IP CTS, this service was compensated at the same rate as 
IP Relay. Are the labor and outreach costs of providing IP CTS similar 
to the costs of providing IP Relay, and if so, should the Commission 
return to the original method of reimbursing for IP CTS at the same 
rate as IP Relay? What cost categories should be permissible for 
inclusion in the costs for each provider? Should IP CTS costs be lower 
than IP Relay costs, given that an IP Relay CA must be trained to read 
aloud the words of the IP Relay user and transcribe the words of the 
hearing caller, whereas an IP CTS CA need only transcribe the words of 
the hearing caller? To what extent are the cost differences due to 
marketing and outreach expenses? Should the Commission consider 
removing the outreach costs from the rate base for IP CTS as it 
recently did for VRS and IP Relay in the VRS Structural Reform Order 
published at 78 FR 40407, July 5, 2013? Should other expenses currently 
included in the rate calculations for VRS and IP Relay be excluded from 
rate calculations for IP CTS? Conversely, should any expense categories 
currently excluded from the rate calculations for VRS and IP Relay be 
included in rate calculations for IP CTS? The Commission specifically 
seeks input on the extent to which the rate should include an allowance 
for working capital. Commenters that maintain that the costs associated 
with providing these various forms of relay are not comparable should 
be specific in describing the differences that result in disparate 
costs for each service.
    4. Additionally, if the Commission adopts a methodology based on an 
analysis of providers' actual and projected costs, the Commission seeks 
comment on whether it should require the same filings of cost and 
demand data by IP CTS providers as are currently required of VRS and IP 
Relay providers and on the degree of any administrative burden such 
filings would impose on the Commission and the providers. Would any 
burden be outweighed by the benefit of having a rate for IP CTS that 
more accurately reflects the true costs of providing the service?
    5. To the extent that the Commission adopts a new rate methodology, 
it further seeks comment on the period that the IP CTS rate determined 
under this regime should remain in effect. What should the rate period 
be? Should the Commission establish the IP CTS rate for periods longer 
than one year to ensure predictability? Alternatively, should the rate 
be established for periods shorter than one year, in order to provide 
an opportunity to adjust the rate to account for significant changes in 
costs or demand? If the rate period is one year or longer, how should 
rates be adjusted during such longer period? The Commission seeks 
comment on the advantages and disadvantages of using either a one-year 
rate period or some shorter or longer period of time for this service 
category.
    6. The Commission also seeks comment on other alternatives to the 
current rate methodology. For example, should the Commission seek 
competitive bids for the provision of IP CTS, limiting the opportunity 
to provide this service in the future to one or more winning bidders? 
If the Commission were to transition to such a structure, in the 
interim, how should it set rates in order to ensure the continued 
viability of the service to those who need it most? Are there ways to 
utilize competitive bidding or auction-type processes to set rates for 
IP CTS without unduly limiting the number of ultimate providers?
    7. The Commission also seeks comment on whether, under any rate 
methodology for IP CTS, there should be a ``true-up'' at the end of 
each Fund year based on actual reasonable costs of either individual 
providers or, to encourage providers to seek greater efficiencies, 
either a weighted average or the lowest cost among providers of the 
service. Under a true-up, providers would be required to reimburse the 
Fund for any amount by which their payments exceed actual reasonable 
costs, as determined by the Administrator in consultation with the 
Commission, based on filings by the providers. With such a true-up, 
providers' ultimate compensation need not be contingent on estimates of 
costs or minutes of use. Providers would receive periodic payments of 
estimated reasonable costs based on a particular cost methodology, and 
at the end of the Fund year, or other period as determined by the 
Commission, the true-up would reconcile the providers' actual 
reasonable costs for providing service in compliance with the 
Commission's rules and the payments received. The Commission seeks 
comment generally on any issues relating to the use of a true-up, 
including how a true-up could be implemented, what record keeping 
requirements might be required, and when and how often the true-up 
should occur.
    8. Centralized Registration and Verification of IP CTS Users. In 
the Commission's VRS Structural Reform Order, the Commission directed 
the creation of a user registration database (TRS-URD) and 
implementation of centralized eligibility verification requirements to 
ensure that VRS registration is limited to those who have a hearing or 
speech disability. The Commission indicated that such database should 
have capabilities to allow the Fund administrator and the Commission 
to: (a) Receive and process registration information provided by VRS 
providers sufficient to identify unique VRS users and ensure each has a 
single default provider; (b) assign each VRS user a unique identifier; 
(c) allow VRS providers and other authorized entities to query the 
database to determine if a prospective user already has a default 
provider; (d) allow VRS providers to indicate that a VRS user has used 
the service; and (e) maintain the confidentiality of proprietary data 
housed in the database by protecting it from theft, loss, or disclosure 
to unauthorized persons. In the Further Notice, the Commission proposes 
that a centralized registration and verification process will also 
reduce fraud, waste and abuse and ensure greater efficiency in the IP 
CTS program, and seeks comment on whether to apply the same centralized 
registration and verification process that it adopted for VRS to IP 
CTS. The Commission specifically asks whether to require each IP CTS 
provider to give users the capability to register with that provider as 
the user's ``default provider,'' (47 CFR 64.611(a) of the Commission's 
rules), to populate the TRS-URD with information about each user, and 
to query the database to ensure each user's eligibility for each call, 
as well as to generally comment on application of the centralized 
processes for registration and verification that the Commission adopted 
for VRS to IP CTS. Among other things, the Commission asks commenters 
to note any differences

[[Page 54204]]

between VRS and IP CTS that might necessitate adjustment in the way 
that information is entered into the database, the database is 
utilized, and the confidentiality protections that will be needed to 
protect against the unauthorized disclosure of information housed in 
that database.
    9. The Commission also proposes to direct the Managing Director to 
ensure that the centralized user registration database has the 
capability of performing an identification verification check when an 
IP CTS provider or other party submits a query to the database about an 
existing or potential user. It further proposes that the criteria for 
identification verification for IP CTS (e.g., information to be 
submitted, acceptable level of risk, etc.) be established by the 
Managing Director in consultation with the Commission's Chief 
Technology Officer and the Chief of the Office of Engineering and 
Technology. Finally, it proposes that IP CTS providers not be permitted 
to register individuals who do not pass the identification verification 
check conducted through the user registration database, and not be 
permitted to seek compensation for calls placed by such individuals. It 
seeks comment on each of these proposals.
    10. Migration to State TRS Programs. The Commission seeks comment 
on whether it should transfer the responsibilities for funding, 
administering and overseeing IP CTS to all state TRS programs. 
Specifically, the Commission seeks comment on whether the states should 
assume the responsibilities for operating and funding IP CTS (including 
user eligibility assessments overseeing self-certification, and 
registering uses with the TRS-URD); whether this arrangement would help 
address use by ineligible users; and whether the default caption-off 
requirement would still be necessary under such arrangement. The 
Commission asks whether it should prescribe other steps that states 
must make to ensure that IP CTS providers are not seeking compensation 
from the Fund for calls made by ineligible users. The Commission 
further asks to what extent each state program should be permitted to 
define its own eligibility criteria for IP CTS use. The Commission also 
asks, as an alternative, whether it should set minimum or maximum 
standards on eligibility by which all states must comply, or whether 
states should be permitted to establish their own eligibility criteria.
    11. The Commission further asks whether the registration and 
verification functions of providing IP CTS could be easily integrated 
in the states' current CTS operations, and what the costs and benefits 
would be of requiring the state TRS programs to take on the 
responsibilities of administering the IP CTS service. The Commission 
clarifies that if the state TRS programs assume the responsibility of 
administering the IP CTS service, the distribution of IP CTS equipment 
would remain at the states' option. The Commission asks how the 
provision of CTS is currently handled by states that do not have an 
equipment distribution program and whether such states nevertheless 
conduct assessments for participation in their CTS program that could 
be used for determining IP CTS eligibility. The Commission asks what 
new or other responsibilities, in addition to conducting assessments of 
potential IP CTS users, the states would have to take on if the 
transfer of responsibility is made. In addition, the Commission 
solicits comments on what length of time would be needed for such a 
transition, and what effect such a shift would have on functional 
equivalence for users.
    12. Funding IP CTS and Mandating CTS and IP CTS. The Commission 
seeks comment on whether the original incentives for having the TRS 
Fund support the costs of all IP CTS calls still exist, given that 
there are now more providers and vendors offering the service, and that 
a primary reason for originally using Fund support was the difficulty 
in ascertaining the location of calls made using IP transmissions. 
Because the Commission believes that IP CTS providers are able to 
ascertain the origination and destination of IP CTS calls, like 
traditional CTS, in a manner that would allow for compensation for 
these calls to be billed to the states or the Fund, it proposes to 
treat IP CTS like traditional CTS, wherein state relay programs would 
be required to compensate providers for intrastate IP CTS calls, and 
seeks comment on this proposal. If the Commission's assumption is 
incorrect that IP CTS providers are able to discern the points or 
origination and destination of IP CTS calls in a manner that would 
allow them to determine which calls are intrastate versus interstate, 
it seeks input on other ways that it can allocate IP CTS compensation 
for intrastate and interstate calls between the states and the TRS 
Fund, and how the Commission might make such a transition in a way to 
best benefit consumers. For example, it asks whether it should 
establish a default proxy allocation between interstate and intrastate 
call jurisdiction that can be used if actual measurements are not 
possible, and if so, what that allocation should be. It also seeks 
comment on the proposed jurisdictional separation, and asks about the 
time period that would be needed by the states to effectuate this 
change. In addition, the Commission asks how it can achieve this 
transition in a way to best benefit consumers. Finally, because the 
Commission proposes to shift some of the financial obligation to the 
state programs, it seeks comment on whether a mandate for CTS and IP 
CTS is needed to ensure that all states will participate in the 
provision of these services, as well as the consequences to consumers 
were states to discontinue service if the service is not mandated.
    13. Mandatory Minimum Requirements. The Commission seeks comment on 
the need for and propriety of imposing certain mandatory minimum 
requirements for IP CTS. For example, the Commission inquires whether 
requirements for the speed and accuracy of captioning should be 
established, and if so, how such standards should be measured and 
enforced, including whether, if the Commission adopts a specified 
speed, this should be coupled with a specified error rate, and if so, 
what that rate should be. The Commission also seeks comment on whether 
it should institute recordkeeping and/or reporting requirements for 
effective Commission oversight. The Commission also seeks comment as to 
whether providers and/or users should be allowed to choose between 
speed and accuracy. For example, should a provider be given the option 
of having a shorter lag time between the time that the other party to 
the call speaks and the captions appear, even if there is an increased 
error rate as a result of maintaining such speed? Or should providers 
be permitted to opt for a longer lag time in favor of greater accuracy? 
In addition, the Commission seeks comment on whether there are other 
mandatory minimum requirements that are needed to ensure that IP CTS 
providers are offering services to the public that are functionally 
equivalent to voice telephone services. For example, the Commission 
asks about the need to address the lack of compatibility between 
browsers on CTS devices that use Java Script and external large print 
display screens or Braille readers often used by people who have severe 
vision loss along with their hearing loss.
    14. Low Income Consumers. In the IP CTS Order, the Commission 
concluded that the availability of free or discounted equipment through 
state and local governmental equipment distribution programs would help 
to fulfill Congress's and the Commission's

[[Page 54205]]

goals of ensuring the widespread availability of IP CTS to individuals 
who can benefit from the service. Consumer Groups argue that there are 
a number of states that do not have equipment distribution programs, 
and that states that have these programs typically limit distribution 
to the phones offered by one provider only, thereby depriving low 
income consumers of the benefits of competition. The Commission notes 
that it is sensitive to the concerns expressed by the consumers and 
seeks comment on whether state equipment distribution programs are 
meeting the needs of low income consumers. If state equipment 
distribution programs are not meeting those needs, the Commission asks 
what should be done to address the needs of low income consumers in 
states without equipment distribution programs as well as in states 
that are not fully meeting the needs of low income consumers. It asks 
whether it should allow for a low-income exception to the prohibition 
of providing compensation for IP CTS minutes of use generated by 
equipment that is distributed for less than $75, and if so, who should 
be permitted to distribute equipment for less than $75. For example, it 
asks whether charitable organizations should be permitted to distribute 
such equipment, and if so, whether charitable organizations that 
receive funding from IP CTS providers should be permitted or prohibited 
from conducting such equipment distribution. If the Commission were to 
permit distribution of equipment for less than $75, it asks how it can 
ensure that individuals receiving such equipment qualify as low income, 
as well as the income thresholds that should be used to determine 
whether a person has a low income. Specifically, the Commission asks 
whether this should be four times the poverty level or some other 
amount, such as 135% of federal poverty guidelines or participation in 
a government assistance program. The Commission asks as well about the 
type of documentation it should require to demonstrate eligibility as a 
low income consumer, and whether it should require certification under 
penalty of perjury. For consumers who qualify for the low income 
exemption, the Commission also asks whether it should require that they 
submit third party certification under penalty of perjury of their 
hearing loss necessitating the use of IP CTS, and to whom consumers 
should submit all such documentation and certifications. Should the 
documentation and certifications be submitted to the newly created TRS-
URD for processing and review? What other measures should the 
Commission adopt to ensure that individuals receiving such equipment 
qualify as low income and require the use of IP CTS? What are the costs 
and benefits of adopting a low income exception, as well as the costs 
and benefits of adopting measures to ensure that consumers qualify for 
the low income exception and require the use of IP CTS?
    15. IP CTS Software and Applications. The Commission, in document 
FCC 13-118, prohibits compensation from the TRS Fund for IP CTS minutes 
of use generated by IP CTS equipment provided free of charge or at a 
price below $75, other than through a state or local government 
equipment distribution program. The Commission applies the same 
restriction to the provision of IP CTS software and applications to IP 
CTS users who had not already paid $75 for IP CTS equipment, software 
or applications. The Further Notice seeks comment on whether the 
purchase of IP CTS software and applications raises considerations that 
make it appropriate to set a different price threshold for software and 
applications. It also asks whether, if commenters believe that the $75 
price threshold should not be made applicable to the context of 
software and applications, why it should not be made applicable, what 
would be an appropriate alternative price threshold, and why would such 
an alternative be sufficient to deter individuals who do not need IP 
CTS from using the service. The Further Notice also asks commenters to 
also address the costs and benefits of any minimum price they propose.
    16. Default Captions-Off Requirement. Although the Commission 
believes that the rules adopted in the IP CTS Order adequately address 
concerns about emergency calls, it seeks comment for further 
improvements on whether it is technically feasible, and desirable, for 
all IP CTS equipment be defaulted to ``captions turned on'' for 911 
emergency calls and 911 callbacks. In particular, the Commission seeks 
input on whether an override to ``captions on'' for 911 calls is 
necessary and technically feasible. Would such an override confuse or 
assist IP CTS users in an emergency? Would it be technically feasible 
to program an override for incoming call backs from 911 call centers? 
Would all IP CTS device manufacturers be capable of defaulting their 
devices to captions on solely for the purpose of receiving calls from 
911 call centers? Could this also be done to receive specified 
emergency alerts from official authorities such as local, state and 
federal governmental entities? Should consumers be able to override an 
automatic default-on setting for incoming emergency calls, and if so, 
would such override be technologically possible? What other 
requirements relating to the captioning of outgoing or incoming 911 
calls are feasible and appropriate?
    17. Volume Control. The Commission asks for comment on whether to 
require the disassociation of volume control from the use of captions, 
and whether it should prohibit providers from linking the ability to 
manipulate volume or preset the volume to the setting for captions. The 
Commission also asks for comment on the costs and benefits of having 
the volume control and captions functions act independently of one 
another.
    18. Answering Machines and Other Incoming Calls. The Commission 
seeks comment on whether a rule is needed to address the retrieval of 
messages from IP CTS equipment when the captions are defaulted off, and 
asks for input on how answering machines or other IP CTS devices 
capture captions, and the need for a rule to address the retrieval of 
messages from such machines. Specifically, the Commission seeks comment 
on how answering machines or other IP CTS devices capture captions, and 
whether it should amend its rules to address the retrieval of messages 
from such machines. Are all IP CTS devices equipped with built-in 
answering machines? If so, can such IP CTS devices be programmed to a 
captions default on setting for their answering machine functions? How 
would this work for the retrieval of voice mail that is captured in a 
telephone service provider's network or an off-the-shelf answering 
machine that is not integrated into the IP CTS device? Are there other 
incoming call situations that the Commission needs to consider? For 
example, some commenters claim that a captions-off default requirement 
can result in a delay of captioning. How does the captions-off default 
requirement affect the ability of a consumer to communicate on incoming 
calls in a manner that is functionally equivalent to the ability of a 
hearing individual who does not have a speech disability to communicate 
using voice communication services? The Commission seeks additional 
information about whether delays at the start of incoming calls caused 
by this feature may result in consumers missing critical information 
which could result in telephone service that is not functionally 
equivalent. Ultratec notes that having the captions defaulted to ``on'' 
for incoming calls and to ``off'' for

[[Page 54206]]

outgoing calls ``could be very confusing to consumers. If this is the 
case, the Commission asks whether it should either require captions 
default off for all calls, both incoming and outgoing (other than calls 
that fit within one of the exceptions), or permit captions to default 
on for all calls. Finally, the Commission seeks comment on the costs 
and benefits of requiring that all IP CTS phones defaulted to captions 
on enable consumers to turn off the captioning with a single step.
    19. IP CTS Phones Available Only to Registered Users. As noted in 
the IP CTS Order, Consumer Groups and some providers have suggested 
that there is no need to require a default setting of captions off when 
an IP CTS user is living alone, living only with other individuals who 
are registered users, or is in an office setting where no one else has 
access to that person's IP CTS phone. The Commission remains concerned 
about the unintentional user of IP CTS phones in any setting where 
others are present, such as a household that includes individuals who 
are not registered IP CTS users or a workplace station that is 
available to more than one employee, as well as a consumer living alone 
or with a private phone in a workplace who may not need captioning for 
every call. The Commission is also concerned that consumers who live 
alone or have a private phone in a workplace may not receive 
functionally equivalent service. The Commission therefore seeks comment 
on whether an exception could be implemented, above and beyond the 
hardship exception already granted, and consistent with our goal of 
eliminating unnecessary usage, for individuals who live alone (or only 
with other registered IP CTS users) or work in a situation, such as a 
private office, where no one else can use the individual's phone. The 
Commission asks commenters to provide information on the type of 
documentation that should be required to authenticate their living or 
working situation. In addition, if this exception were to be adopted, 
the Commission seeks comment on how to ensure that recipients of the 
exemption not use captioning when it is not needed. The Commission also 
asks commenters to address the costs and benefits of adopting such an 
exception. In addition, the Commission asks whether it could safely 
adopt any other exceptions to the captions default off requirement, and 
if so, what are the costs and benefits of adopting such exceptions.
    20. State Commission Authority. The Commission asks for comment on 
how a transfer of IP CTS administrative responsibilities to state TRS 
programs would affect the default-off rule. Specifically, should state 
programs be authorized to decide whether and under what circumstances 
to allow captions to be defaulted to on, or should that decision be 
made by the Commission? Would a transfer of responsibilities render the 
default-off rule unnecessary?
    21. Web site, Advertising, and Educational Information 
Notification. The Commission tentatively proposes to adopt a 
requirement to prominently display the following language on all IP CTS 
provider Web sites, advertising brochures and other advertising and 
consumer education and informational materials, including provider-
supplied literature and user manuals: ``FEDERAL LAW PROHIBITS ANYONE 
BUT REGISTERED USERS WITH HEARING LOSS FROM USING IP CAPTIONED 
TELEPHONES WITH THE CAPTIONS TURNED ON.'' The Commission seeks comment 
on this proposal. In the case of IP CTS provider Web sites, the 
Commission proposes that the language be prominently displayed on the 
home page, each page that provides consumer information about IP CTS, 
and each page that provides information on how to order IP CTS or IP 
CTS equipment. In addition, the Commission proposes that all IP CTS 
provider Web sites, advertising brochures and other advertising and 
consumer education and informational materials, including provider-
supplied literature and user manuals, contain clear and prominently 
located statements and information (1) that the captions on captioned 
telephone service are provided by a live communications assistant who 
listens to the other party on the line and provides the text on the 
captioned phone, and (2) that the cost of captioning each Internet 
protocol captioned telephone call is funded through a federal program. 
The Commission seeks comment on these proposals and any alternative 
proposals to inform consumers about the way that IP CTS works and how 
it is funded.
    22. General Prohibition of Providing Service to Users Who Do Not 
Need the Service. In the VRS Structural Reform Order, the Commission 
adopted a general prohibition on VRS providers engaging in fraudulent, 
abusive, and wasteful practices. The Commission seeks comment on 
whether it should adopt a general prohibition on IP CTS providers from 
providing service to consumers who do not genuinely need the service, 
that is, consumers who can understand a telephone conversation with or 
without assistive technology, such as an amplified phone, that does not 
entail the expenditure of money from the Interstate TRS Fund. The 
Commission also seeks comment on any other general prohibitions that 
should be adopted to ensure that only those who need IP CTS actually 
use the service. The Commission further seeks comment how else should 
it ensure that only those who need IP CTS actually use the service.

Initial Regulatory Flexibility Analysis

    23. As required by the Regulatory Flexibility Act (RFA), (5 U.S.C. 
601 et seq., as amended), the Commission has prepared this Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on small entities by the policies and rules proposed in 
the Further Notice. Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments in the Further Notice. The Commission 
will send a copy of the Further Notice, including this IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration (SBA).

A. Need for, and Objectives of, the Proposed Rules

    1. IP CTS is a form of TRS that 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 Internet Protocol-
enabled device to simultaneously listen to the other party and read 
captions of what that party is saying. See 47 CFR 64.601(a)(16) of the 
Commission's rules. In the Further Notice, the Commission seeks comment 
on six main issues. First, the Commission seeks comment on whether to 
change the methodology for calculating the compensation rate paid to 
providers for IP CTS. Second, the Commission seeks comment on whether 
the centralized registration and verification processes that it 
recently adopted for video relay service (VRS) should also apply to IP 
CTS. Third, the Further Notice asks whether the Commission should 
transfer the responsibilities for funding, administering and overseeing 
IP CTS to state TRS programs. Fourth, the Commission asks whether there 
is need for mandatory minimum standards specific to IP CTS, including 
standards on accuracy and speed, and if so, how such standards should 
be measured and enforced. Fifth, the Commission also seeks comment on 
application of its default captions off rule with regard to other 
situations raised in the comments to this proceeding. Finally, the 
Commission solicits input on a proposal that language be prominently 
displayed on all IP CTS provider Web sites,

[[Page 54207]]

advertising brochures and other advertising and consumer education and 
informational materials, including provider-supplied literature and 
user manuals, warning readers that federal law forbids anyone but 
registered IP CTS users from using IP CTS equipment with captioning 
turned on. The Commission tentatively concludes that these proposed 
rule changes may be necessary to ensure that persons with hearing 
disabilities have access to relay services that address their unique 
needs, in furtherance of the objectives of section 225 of the 
Communications Act of 1934, as amended, to provide relay services in a 
manner that is functionally equivalent to conventional telephone voice 
services, while at the same time protecting the interstate TRS Fund for 
all forms of TRS.

B. Legal Basis

    1. The legal basis for any action that may be taken pursuant to the 
Further Notice is contained in sections 1, 2, 4(i), 4(j), and 225 of 
the Communications Act of 1934, as amended.

C. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules May Apply

    1. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the rules. The RFA generally defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act. 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 SBA.
    2. The Commission believes that the entities that may be affected 
by the proposed rules are IP CTS providers. Neither the Commission nor 
the SBA has developed a definition of ``small entity'' specifically 
directed toward STS providers. The closest applicable size standard 
under the SBA rules is for Wired Telecommunications Carriers, which 
consists of all such firms having 1,500 or fewer employees. According 
to Census Bureau data for 2007, there were 31,996 firms in the Wired 
Telecommunications Carrier category which operated for the entire year. 
Of this total, 30,178 firms had employment of 99 or fewer employees, 
and an additional 1,818 firms had employment of 100 employees or more. 
Thus, under this size standard, the vast majority of firms can be 
considered small. (The census data do not provide a more precise 
estimate of the number of firms that have employment of 1,500 or fewer 
employees; the largest category provided is ``Firms with 100 employees 
or more''). Four providers currently receive compensation from the 
Interstate TRS Fund for providing IP CTS: Hamilton Relay, Inc.; Purple 
Communications, Inc.; Sorenson Communications, Inc. and its wholly-
owned subsidiary CaptionCall; and Sprint Nextel Corporation. In 
addition, Miracom USA, Inc. has applied to the Commission for 
certification to be authorized to receive compensation from the 
Interstate TRS Fund (Fund) to provide IP CTS. The Commission concludes 
that two of the five IP CTS providers and applicants that would be 
affected by the proposed rules are deemed to be small entities under 
the SBA's small business size standard.

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    1. Certain rule changes, if adopted by the Commission, would modify 
rules or add requirements governing reporting, recordkeeping and other 
compliance obligations.
    2. If the Commission were to adopt the changes to the methodology 
for calculating the compensation rate paid to IP CTS providers as 
proposed in the Further Notice, the compensation rate may be lower than 
it is now, and IP CTS providers may be required to submit to the Fund 
administrator cost data that they are not now required to provide. 
However, interstate TRS, including IP CTS, is funded through a federal 
program in which interstate telecommunications and voice over Internet 
protocol (VoIP) providers, including small entities contribute to the 
Fund, and the monies contributed to the Fund are used to compensate TRS 
providers, including IP CTS providers. Section 225(b)(1) of the Act, 
requires that TRS is made available ``in the most efficient manner'' to 
individuals with hearing and speech disabilities. The Commission 
therefore has a statutory obligation to ensure that TRS providers, 
including IP CTS providers, are compensated fairly and are not 
overcompensated. The purpose of any change in rate methodology, if 
adopted by the Commission, would be to satisfy this statutory 
obligation.
    3. If the Commission were to adopt centralized registration and 
verification processes as it recently did for VRS, and thereby extend 
the use of the TRS-URD to IP CTS, providers of these services, 
including small entities, would be required to collect certain 
information from consumers and enter that information in the TRS-URD. 
However, the TRS-URD would actually reduce the regulatory and 
recordkeeping burden on IP CTS providers, including small entities, 
because (1) the providers would no longer be required to verify user 
information, which would be accomplished centrally by a single entity 
contracted by the Commission, and (2) the providers would have reduced 
burdens when collecting information from users who switch providers, 
because the user information of those consumers would already be in the 
database.
    4. If the Commission were to adopt the proposal to transfer the 
responsibilities for funding, administering and overseeing IP CTS to 
state TRS programs, IP CTS providers, including small entities, would 
need to submit compensation requests to each state and comply with the 
regulatory obligations, including recordkeeping and reporting, of each 
state. However, the Commission is concerned about misuse of IP CTS that 
may be costly to the interstate telecommunications and VoIP providers, 
including small entities, that contribute to the Fund. One of the 
reasons for shifting regulatory oversight of IP CTS to the states would 
be to provide for greater regulatory oversight to prevent such misuse. 
The Further Notice seeks comment on the costs and benefits of shifting 
regulatory responsibility to the states.
    5. If the Commission were to adopt changes to the mandatory minimum 
standards specific to IP CTS, IP CTS providers, including small 
entities, would be required to comply with the changed standards. The 
Commission initially believes that the costs associated with these 
standards would be reasonable for the IP CTS providers, because in many 
cases the providers support the changes, and have indicated that they 
meet some of the new standards already. The Further Notice seeks 
comment on the recordkeeping that would be required to demonstrate 
compliance with the proposed standards, and initially believes that the 
recordkeeping cost to providers, including small entities, would be 
reasonable and in line with what is required of providers for the other 
forms of TRS, including many of the same providers who offer IP CTS. 
The Further Notice seeks comment on the costs and benefits of modifying 
the proposed mandatory minimum standards for IP CTS.
    6. If the Commission modifies the application of the default 
captions-off

[[Page 54208]]

rule with regard to situations raised in the comments to this 
proceeding, such as to 911 calls, there may be costs to IP CTS 
providers, including small providers, in implementing such a change. 
The Commission initially believes that such costs would be reasonable, 
and the public interest in ensuring access to 911 would outweigh this 
minimal burden. The Further Notice seeks comment on the costs and 
benefits of the proposal to require that captions be turned on for all 
911 calls as well as the other modifications proposed in the Further 
Notice, including whether to require the disassociation of volume 
control from the use of captions, whether to permit that captions be 
defaulted on for answering machines, and whether to permit captions to 
be defaulted on for IP CTS phones that are available only to registered 
users.
    7. Finally, a requirement to provide a warning on all IP CTS 
provider Web sites, advertising brochures and other advertising and 
consumer education and informational materials, including provider-
supplied literature and user manuals, that federal law forbids anyone 
but registered IP CTS users from using IP CTS equipment with captioning 
turned on, would impose only minimal burden on providers, including 
small providers. The changes required by this rule would be one time in 
nature, and the benefits of the proposal, in terms of public education, 
would outweigh this small economic impact.

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered

    1. The RFA requires an agency to describe any significant 
alternatives, specific to small entities, that it has considered in 
developing its approach, which may include the following four 
alternatives (among others): ``(1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for such small entities; (3) the 
use of performance rather than design standards; and (4) an exemption 
from coverage of the rule, or any part thereof, for such small 
entities.''
    2. In general, alternatives to proposed rules are discussed only 
when those rules pose a significant adverse economic impact on small 
entities. In this context, however, one of the proposed rules would 
confer benefits as explained below, and the others do not impose 
significant adverse economic impact.
    3. If the Commission were to adopt the changes to the methodology 
for calculating the compensation rate paid to IP CTS providers as 
proposed in the Further Notice, the compensation rate may be lower than 
it is now, and IP CTS providers may be required to submit to the Fund 
administrator cost data that they are not now required to provide. 
However, interstate TRS, including IP CTS, is funded through a federal 
program in which interstate telecommunications and voice over Internet 
protocol (VoIP) providers, including small entities contribute to the 
Fund, and the monies contributed to the Fund are used to compensate TRS 
providers, including IP CTS providers. Section 225(b)(1) of the Act 
requires that TRS is made available ``in the most efficient manner'' to 
individuals with hearing and speech disabilities. The Commission 
therefore has a statutory obligation to ensure that TRS providers, 
including IP CTS providers, are compensated fairly and are not 
overcompensated. Because the purpose of any change in rate methodology, 
if adopted by the Commission, would be to satisfy this statutory 
obligation, the Commission is not proposing other alternatives for 
small entities.
    4. If the Commission were to adopt centralized registration and 
verification processes, and require IP CTS providers to transfer 
information to the TRS URD, IP CTS providers would transfer information 
which they are already obliged to collect to the central database 
manager, and the TRS Fund would compensate the database manager. 
Providers, including small entities, would thereby be relieved of the 
obligation to maintain registration information, and would not be 
responsible for the cost of maintenance of a registration database. 
There would be no additional reporting or recordkeeping obligations 
associated with the proposed rule change, and the effect of the rule 
would be to reduce recordkeeping obligations on providers, including 
small entities. The Commission is not proposing other alternatives for 
small entities because these requirements may be needed to limit waste, 
fraud and abuse, and an ineligible user can potentially defraud the TRS 
Fund by obtaining service from large and small entities alike. 
Therefore, if the Commission were to adopt centralized registration and 
verification procedures, the same requirements would need to apply to 
users of small entities as well as large entities.
    5. If the Commission were to adopt the proposal to transfer the 
responsibilities for funding, administering and overseeing IP CTS to 
state TRS programs, some current IP CTS providers, including possible 
small entities, would need to submit compensation requests to each 
state and comply with the regulatory obligations, including 
recordkeeping and reporting, of each state. However, the Commission is 
concerned about misuse of IP CTS that may be costly to the interstate 
telecommunications and VoIP providers, including small entities, that 
contribute to the Fund. One of the reasons for shifting regulatory 
oversight of IP CTS to the states would be to provide for greater 
regulatory oversight to prevent such misuse. The Further Notice seeks 
comment on the costs and benefits of shifting regulatory responsibility 
to the states. If regulatory responsibility were shifted to the states, 
it would be up to the states to consider whether to adopt significant 
regulatory alternatives specific to small entities. If the Commission 
were to adopt changes to the mandatory minimum standards specific to IP 
CTS, IP CTS providers, including small entities, would be required to 
comply with the changed standards. The Commission initially believes 
that the costs associated with these standards would be reasonable for 
the IP CTS providers, because in many cases the providers support the 
changes, and have indicated that they meet some of the new standards 
already. The Further Notice seeks comment on the recordkeeping that 
would be required to demonstrate compliance with the proposed 
standards, and initially believes that the recordkeeping cost to 
providers, including small entities, would be reasonable and in line 
with what is required of providers for the other forms of TRS, 
including many of the same providers who offer IP CTS. The Further 
Notice seeks comment on the costs and benefits of modifying the 
proposed mandatory minimum standards for IP CTS. Moreover, the 
Commission is not proposing other alternatives for small entities 
because this proposal applies to the mandatory minimum standards for 
the entire IP CTS program. Section 225(d)(1)(B) of the Act requires 
that the Commission establish mandatory minimum standards, 47 U.S.C. 
225(d)(1)(B), and section 225(a)(3) of the Act requires that TRS be 
provided ``in a manner that is functionally equivalent to the ability 
of a hearing individual who does not have a speech disability to 
communicate using voice communication services. . . .'' 47 U.S.C. 
225(a)(3). In order to ensure functional equivalency, the same 
mandatory minimum standards need to

[[Page 54209]]

apply to small entities as well as large entities.
    6. If the Commission changes the application of the captions 
default-off rule with regard to situations raised in the comments to 
this proceeding, such as to 911 calls, there may be costs to IP CTS 
providers, including small providers, in implementing such a change. As 
noted above, the Commission initially believes that such costs would be 
reasonable, and the public interest in ensuring access to 911 would 
outweigh this minimal burden, and therefore no alternatives are 
proposed for small entities. The Further Notice seeks comment on the 
costs and benefits of the proposal to require that captions be turned 
on for all 911 calls as well as the other modifications proposed in the 
Further Notice, including whether to require the disassociation of 
volume control from the use of captions, whether to permit that 
captions be defaulted on for answering machines, and whether to permit 
captions to be defaulted on for IP CTS phones that are available only 
to registered users. The Commission will consider any comments received 
that propose alternatives that would reduce the burden of any 
regulation on IP CTS providers, including specific proposals to reduce 
the regulatory burden on small entities

F. Federal Rules That May Duplicate, Overlap, or Conflict With Proposed 
Rules

    1. None.

Ordering Clauses

    2. Pursuant to sections 1, 4(i), (j), and (o), 225, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), (j), and 
(o), 225, and 403, document FCC 13-118 Further Notice of Proposed 
Rulemaking IS hereby adopted.
    3. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of document FCC 13-118 
Further Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
Gloria J. Miles,
Federal Register Liaison, Office of the Secretary, Office of Managing 
Director.
[FR Doc. 2013-21273 Filed 8-30-13; 8:45 am]
BILLING CODE 6712-01-P