Rule2023-03553
Order Denying Petition for Reconsideration of 2020 IP CTS Compensation Order
Primary source
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Published
February 22, 2023
Effective
March 24, 2023
Issuing agencies
Federal Communications Commission
Abstract
In this document, the Federal Communications Commission (FCC or Commission) denies petitions for reconsideration of several aspects of the Commission's final rule setting compensation from the Telecommunications Relay Services (TRS) Fund for the provision of Internet Protocol Captioned Telephone Service (IP CTS). The document also denies a related request filed jointly by six IP CTS providers. In denying these petitions and requests, the Commission finds that they do not raise any new arguments or provide sufficient evidence that the Commission's initial treatment of the issues in question was incorrect or incomplete. Additionally, the Commission finds that it fully considered the issues, based its decision on the evidence in the record, and fully explained the rationale behind its decision.
Full Text
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<title>Federal Register, Volume 88 Issue 35 (Wednesday, February 22, 2023)</title>
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[Federal Register Volume 88, Number 35 (Wednesday, February 22, 2023)]
[Rules and Regulations]
[Pages 10853-10855]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-03553]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[CG Docket Nos. 03-123, 13-24, 22-408; FCC 22-97; FR ID 127353]
Order Denying Petition for Reconsideration of 2020 IP CTS
Compensation Order
AGENCY: Federal Communications Commission.
ACTION: Denial of petitions for reconsideration.
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SUMMARY: In this document, the Federal Communications Commission (FCC
or Commission) denies petitions for reconsideration of several aspects
of the Commission's final rule setting compensation from the
Telecommunications Relay Services (TRS) Fund for the provision of
Internet Protocol Captioned Telephone Service (IP CTS). The document
also denies a related request filed jointly by six IP CTS providers. In
denying these petitions and requests, the Commission finds that they do
not raise any new arguments or provide sufficient evidence that the
Commission's initial treatment of the issues in question was incorrect
or incomplete. Additionally, the Commission finds that it fully
considered the issues, based its decision on the evidence in the
record, and fully explained the rationale behind its decision.
DATES: This ruling is effective March 24, 2023.
FOR FURTHER INFORMATION CONTACT: Michael Scott, Disability Rights
Office, Consumer and Governmental Affairs Bureau, at (202) 418-1264, or
<a href="/cdn-cgi/l/email-protection#3e73575d565f5b52106d5d514a4a7e585d5d10595148"><span class="__cf_email__" data-cfemail="bdf0d4ded5dcd8d193eeded2c9c9fddbdede93dad2cb">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
on Reconsideration, document FCC 22-97, adopted on December 21, 2022,
released on December 22, 2022, in CG Docket Nos. 03-123, 13-24, and 22-
408. The full text of document FCC 22-97 is available for public
inspection and copying via the Commission's Electronic Comment Filing
System. To request materials in accessible formats for people with
disabilities (Braille, large print, electronic files, audio format),
send an email to <a href="/cdn-cgi/l/email-protection#23454040161317634540400d444c55"><span class="__cf_email__" data-cfemail="e0868383d5d0d4a0868383ce878f96">[email protected]</span></a> or call the Consumer and Governmental
Affairs Bureau at (202) 418-0530.
Synopsis
Background
1. Section 225 of the Communications Act of 1934, as amended (the
Act), 47 U.S.C. 225, requires the Commission to ensure that TRS are
available to persons who are deaf, hard of hearing, or DeafBlind or
have speech disabilities, ``to the extent possible and in the most
efficient manner.'' TRS are defined as ``telephone transmission
services'' enabling such persons to communicate by wire or radio ``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.''
2. IP CTS, a form of TRS, permits an individual who can speak but
who has difficulty hearing over the telephone to use a telephone and an
IP-enabled device via the Internet to simultaneously listen to the
other party and read captions of what the other party is saying. IP CTS
is supported entirely by the TRS Fund, which is composed of mandatory
contributions collected from telecommunications carriers and voice over
Internet Protocol (VoIP) service providers based on a percentage of
each company's annual revenue. IP CTS providers receive monthly
payments from the TRS Fund to compensate them for the reasonable cost
of providing the service, in accordance with a per-minute compensation
formula approved by the Commission.
3. Before 2018, compensation for IP CTS providers was determined by
proxy, by averaging the payments made by state TRS programs to
providers of an analogous service, Captioned Telephone Service (CTS).
In 2018, the Commission determined that this approach had resulted in
providers receiving compensation greatly in excess of the average cost
actually incurred to provide IP CTS. Instead, the Commission proposed
that compensation be determined as a weighted average of the actual
allowable
[[Page 10854]]
costs reported by the providers. The Commission also authorized, for
the first time, the provision of IP CTS on a fully automatic basis,
using only automatic speech recognition (ASR) technology to generate
captions, without the participation of a communications assistant (CA).
4. In the 2020 IP CTS Compensation Order, published at 85 FR 64971,
October 14, 2020, the Commission adopted the average-cost methodology.
To close the gap between compensation and average provider cost, while
avoiding disruption to the provision of IP CTS from immediate
application of the average cost methodology, the Commission implemented
the resulting reductions in stages, by approximately 10% annually,
until the compensation level reached the level of providers' average
allowable costs (plus a 10% operating margin). As a result of these
decisions, the compensation formula for IP CTS was reduced from $1.9467
per minute in Fund Year 2017-18 to $1.30 per minute in Fund Year 2021-
22.
5. T-Mobile USA, Inc. (T-Mobile) and IDT Telecom, Inc. (IDT) filed
petitions for reconsideration of the 2020 IP CTS Compensation Order. T-
Mobile requests reconsideration of the Commission's determination of
provider compensation, arguing that the Commission did not have a
reasoned basis for adopting a single compensation formula rather than a
tiered structure and did not adequately consider certain costs. IDT,
while not contesting the level of provider compensation, contends that
the Commission should have reduced the applicable TRS Fund contribution
factor to parallel the reduction in IP CTS compensation.
6. On May 25, 2021, six of the seven then-certified providers of IP
CTS (the Joint Providers) filed a letter requesting that the Commission
halt the reduction in IP CTS compensation from $1.42 per minute to
$1.30 per minute scheduled for July 1, 2021. On July 1, 2021, the
compensation adjustment to $1.30 per minute became effective.
Final Ruling
7. T-Mobile Petition and Joint Providers Request to Freeze
Compensation. The Commission denies T-Mobile's petition for
reconsideration of the Commission's decision in the 2020 IP CTS
Compensation Order to adopt an average-cost methodology for IP CTS and
to set per-minute compensation levels of $1.42 and $1.30 for TRS Fund
Years 2020-21 and 2021-22, respectively. For similar reasons, the
Commission also denies the related request of six IP CTS providers
(Joint Providers), in a May 2021 ex parte letter, to reverse the $1.30
formula previously set for 2021-22, and instead to freeze in place the
$1.42 formula adopted for the 2020-21 Fund Year, thereby continuing
that higher compensation level for a second year.
8. The T-Mobile petition does not identify any reason warranting
reconsideration. The Commission provided a reasoned explanation for
both its decision to set a single compensation level based on average
cost and its rejection of the tiered structure alternative advocated by
some IP CTS providers. While T-Mobile claims that the Commission
continued using its average cost methodology due to inertia and
administrative convenience, the Commission cited numerous reasons for
retaining the methodology, including that it relies on reasonably
reliable and consistent cost data, which is subject to audit; provides
substantial incentives and opportunities for individual TRS providers
to increase their efficiency and capture the resulting profits; and
provides a measure of transitional stability at a time of technological
change. Although T-Mobile disputes whether providers could actually
increase their efficiency, the Commission reasonably concluded that the
record indicated such improvements were likely, especially with the
introduction of fully automatic IP CTS.
9. T-Mobile argues that average cost compensation would force
providers to degrade service ``by moving to automatic speech
recognition (ASR) technology before this newer technology achieves the
same quality levels as current IP CTS offerings. However, the
Commission found that, based on then-current testing, ASR-only IP CTS
already could deliver captions far more quickly than IP CTS provided
with communications assistants, and with comparable or greater
accuracy. More recent testing buttresses that assessment.
10. T-Mobile also argues that the Commission inappropriately
rejected a ``superior alternative,'' i.e., adoption of a tiered
compensation structure. T-Mobile points to nothing in the record to
support its claim that a tiered structure would be ``superior,'' other
than the fact that several providers believed so. In any event, the
Commission fully addressed this question in the 2020 IP CTS
Compensation Order, providing a detailed explanation for its finding
that tiered compensation levels are not appropriate for IP CTS. T-
Mobile offered no arguments not previously considered as to why the
Commission should have reached a different result.
11. Third, T-Mobile argues that the Commission failed to account
for the expenses and uncertainty associated with the COVID-19 pandemic.
To the contrary, the Commission made significant efforts to ensure that
the impact of the pandemic was appropriately considered in the IP CTS
compensation decision, including extending the expiration date of the
compensation period and directing the TRS Fund administrator to request
and collect additional cost and demand data for January to June 2020
from CA-assisted IP CTS providers to file an updated 2020 TRS Rate
Report. Based on the additional data reported by the providers, the TRS
Fund administrator found that increased expenditures during the
pandemic had been offset by increased call volumes, resulting in no net
increase in per-minute costs, as a group or even individually. In fact,
per-minute costs were lower due to increased demand during the
pandemic. Recognizing that the lower per-minute costs might not
persist, the Commission set compensation in a conservative fashion,
based on the higher pre-pandemic cost estimates.
12. T-Mobile argues that reliance on the TRS Fund administrator's
report was misplaced because the report addressed only the initial
months of the pandemic and did not reflect additional costs allegedly
incurred later on. However, neither the rulemaking record nor T-
Mobile's petition include any actual estimates of these allegedly
unconsidered costs. Indeed, subsequent provider reports indicate
substantial declines in per-minute costs for the period in question.
13. Finally, contrary to T-Mobile's contention, the Commission
provided a reasonable explanation of its decision to continue setting a
uniform compensation level for IP CTS, applicable to both the CA-
assisted and ASR-only modes. As the Commission explained, absent
sufficient information to assess the costs of the new ASR-only mode, it
would have been arbitrary to attempt to devise a separate compensation
formula for ASR-only IP CTS, and also would have run the risk of
creating an inappropriate disincentive for adoption of this promising
technology. In addition, the Commission reasonably relied on evidence
that, to the extent that a single compensation formula encouraged IP
CTS providers to increase their use of ASR-only captioning, the result
would be an improvement in service quality.
14. The Commission also denies the request of the Joint Providers
to maintain the IP CTS compensation level at $1.42 per minute for the
2021-22 TRS
[[Page 10855]]
Fund year. The Joint Providers' request is essentially a late-filed
petition for reconsideration of the 2020 IP CTS Compensation Order,
which established a lower compensation level, $1.30 per minute, for
that period. In any event, the Commission finds no merit in the Joint
Providers' arguments. Like T-Mobile, the Joint Providers argue that a
compensation freeze is needed to protect service quality and that the
COVID-19 pandemic introduced cost uncertainties for IP CTS providers.
However, as addressed above, the record established that the $1.30 per
minute rate afforded an opportunity for providers to recover their
reasonable per-minute costs of providing IP CTS, plus a reasonable
operating margin. In addition, the uncertainties introduced by the
pandemic and its effect on provider costs were already considered,
addressed, and factored into the compensation plan adopted in the 2020
IP CTS Compensation Order. Accordingly, the Commission denies the
petition of T-Mobile for reconsideration and the request of the Joint
Providers for a freeze of the $1.42 per minute compensation level.
15. IDT Petition. The Commission also denies IDT's petition for
reconsideration of the Commission's 2020 IP CTS Compensation Order. IDT
argues that, when the Commission adopted a mid-year reduction in the IP
CTS compensation formula for the 2020-21 TRS Fund Year (reducing the
compensation level from $1.58 to $1.42 per minute), the Commission also
should have made a mid-year reduction in the applicable TRS Fund
contribution factor. However, the Commission's rules already address
such circumstances by detailing a process to address the collection of
excess funding for a TRS Fund Year, by applying the excess against the
funding requirement for the following year. In accordance with this
rule, in June 2021 the Commission took account of the surplus in the
TRS Fund when determining the contribution requirement and contribution
factor for the 2021-22 TRS Fund Year. The lower contribution
requirement for 2021-22 thus offset, for all TRS Fund contributors, the
excess funding provided in the previous year. Because the contributors
already received the benefit of the excess being applied to the funding
requirement for the following year, no further action is warranted.
Accordingly, the Commission denies IDT's petition as moot.
Ordering Clauses
T-Mobile's Petition for Reconsideration of the compensation
formulas adopted in the 2020 IP CTS Compensation Order is denied.
The Joint Providers' request to freeze compensation at the $1.42
compensation level is denied.
IDT's Petition for Reconsideration of the contribution requirements
adopted in the 2020 IP CTS Compensation Order is denied as moot.
Congressional Review Act
The Commission will not send a copy of the Order on Reconsideration
to Congress and the Government Accountability Office pursuant to the
Congressional Review Act (CRA), see 5 U.S.C. 801(a)(1)(A), because it
does not adopt any rule as defined in the Congressional Review Act, 5
U.S.C. 804(3).
Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.
[FR Doc. 2023-03553 Filed 2-21-23; 8:45 am]
BILLING CODE 6712-01-P
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