+----------------------------------+----+------------------------------+
| In the matter of                 | *  | CC Docket No. 98-67          |
|                                  | *) |                              |
| Telecommunications Relay         | ** |                              |
| Services                         |    |                              |
|                                  | *  |                              |
| and Speech-to-Speech Services    | *) |                              |
| for                              | ** |                              |
|                                  |    |                              |
| Individuals with Hearing and     | *  |                              |
| Speech                           | *) |                              |
|                                  | ** |                              |
| Disabilities                     |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: December 29, 2004 Released: December 30, 2004**

By the Chief, Consumer & Governmental Affairs Bureau:

# 

1.  On May 3, 2004, the National Exchange Carrier Association, Inc.
    (NECA), the Interstate Telecommunications Relay Services (TRS) Fund
    Administrator, filed its annual Interstate Telecommunications Relay
    Services Fund Payment Formula and Fund Size Estimate for the July 1,
    2004, to June 30, 2005, fund year.[^1] That filing proposed TRS
    provider compensation rates for traditional TRS and IP Relay,
    Speech-to-Speech (STS), and Video Relay Service (VRS).[^2] On June
    30, 2004, the Consumer & Governmental Affairs Bureau (CGB) released
    the *2004 Bureau TRS Rate Order,*[^3] which approved -- subject to
    certain possible adjustments -- NECA's proposed TRS provider
    compensation rates for these services.[^4] The *2004 Bureau TRS Rate
    Order* expressly noted that the compensation rates adopted were
    subject to revision pending our review of: (1) any supplemental cost
    data relating to capital investment, and (2) any adjustments to cost
    disallowances challenged by a provider in response to that
    order.[^5]

2.  The *2004 Bureau TRS Rate Order* summarized these two possible
    adjustments as follows. First, because NECA had not included the
    permissible 11.25% rate of return on capital investment in
    determining its proposed rates, the *2004 Bureau TRS Rate Order*
    invited providers to submit supplemental cost data reflecting their
    capital investment for each form of TRS.[^6] The *2004 Bureau TRS
    Rate Order* provided that because of this omission, "the rates
    adopted in this order may be revised based on an analysis of how
    inclusion of a rate of return on capital investment for those
    providers who choose to submit supplemental cost data may affect the
    compensation rates."[^7] Second, in calculating its proposed TRS
    compensation rates, NECA disallowed some of the submitted costs of
    some of the providers, but did not detail those disallowances in its
    *2004 NECA Filing.* The *2004 Bureau TRS Rate Order* noted that
    "because of confidentiality issues the details of the disallowances
    could not be set forth in NECA's filing."[^8] The *2004 Bureau TRS
    Rate Order* stated that, for the same reason, the cost disallowances
    could not be detailed in that order. The *2004 Bureau TRS Rate
    Order*, however, "invite\[d\] the providers to contact CGB if they
    want\[ed\] to review what costs specific to their filing were
    disallowed," and stated that "\[i\]f, as a result of that review of
    the providers' data, we conclude that certain disallowances should
    not have been made, the rates adopted herein will be adjusted
    accordingly."[^9]

3.  Pursuant to these directions, some, but not all, of the providers
    elected to submit capital investment data and/or to challenge cost
    disallowances specific to their filing. We have reviewed the capital
    investment data submitted, and have made adjustments to the per
    minute compensation rates based on the inclusion of this data in the
    rate calculations. We have also reviewed all cost disallowances
    challenged by a provider, and as a result of that review we have
    added back some costs that were previously disallowed for the
    various TRS services.[^10] The inclusion of these costs has also
    resulted in adjustments to the compensation rates.

4.  As a result of these adjustments in the underlying cost data, we
    have recalculated the compensation rates for each of the TRS
    services. As a result, effective for the July 1, 2004, to June 30,
    2005, TRS fund year, the TRS compensation rates shall be as follows:
    for eligible traditional TRS and IP Relay, \$1.398 per minute (an
    increase of \$0.049); for eligible STS, \$1.596 per minute (an
    increase of \$0.156); and for eligible VRS, \$7.596 per minute (an
    increase of \$0.303). As a result of this adjustment to the TRS
    compensation rates, NECA is directed to make such supplemental
    payments to the providers for services compensated under the initial
    rates adopted in the *2004 Bureau TRS Rate Order* so that the
    providers' compensation for services rendered beginning July 1,
    2004, will be consistent with the rates adopted in this
    *Order.*[^11]

5.  Accordingly, IT IS ORDERED, pursuant to the authority contained in
    225 of the Communications Act of 1934, as amended, 47 U.S.C. § 225,
    and sections 0.141, 0.361 and 64.604(c)(5)(iii) of the Commission's
    rules, that this ORDER is hereby ADOPTED.

6.  IT IS FURTHER ORDERED that the TRS compensation rates for the
    2004-2005 fund year as set forth in the *2004 Bureau TRS Rate Order*
    are hereby modified, retroactive to July 1, 2004. NECA shall
    compensate traditional telecommunications relay service (TRS)
    providers and IP Relay providers at the rate of \$1.398 per
    completed interstate conversation minute (and, for IP Relay, per
    completed intrastate conversation minute) for the period July 1,
    2004, through June 30, 2005; Speech-to-Speech relay service (STS)
    providers at the rate of \$1.596 per completed interstate
    conversation minute for the period July 1, 2004, through June 30,
    2005; and Video Relay Service (VRS) providers at the rate of \$7.596
    per completed interstate or intrastate conversation minute for the
    period July 1, 2004, through June 30, 2005.

7.  To request materials in accessible formats (braille, large print,
    electronic files, or audio format), send an e-mail to
    <fcc504@fcc.gov> or call the Consumer & Governmental Affairs Bureau
    at (202) 418-0530 (voice) or (202) 418-0432 (TTY). This *Order* can
    also be downloaded in Word and Portable Document Format (PDF) at
    <http://www.fcc.gov/cgb.dro>.

    FEDERAL COMMUNICATIONS COMMISSION

    K. Dane Snowden, Chief Consumer & Governmental Affairs Bureau

[^1]: NECA, *Interstate Telecommunications Relay Services Fund Payment
    Formula and Fund Size Estimate*, CC Docket No. 98-67, filed May 3,
    2004 (*2004 NECA Filing*).

[^2]: *See generally* 47 U.S.C. § 225; 47 C.F.R. §§ 64.601 *et seq.*
    (the TRS regulations).

[^3]: *Telecommunications Relay Services and Speech-to-Speech Services
    for Individuals with Hearing and Speech Disabilities,* Order, CC
    Docket No. 98-67, DA 04-1999, 19 FCC Rcd 12224 (June 30, 2004)
    (*2004 Bureau TRS Rate Order*).

[^4]: These rates are: \$1.349 per minute for traditional TRS and IP
    Relay; \$1.440 per minute for STS, and \$7.293 per minute for VRS.
    *See 2004 Bureau TRS Rate Order* at ¶¶ 1-2.

[^5]: *Id.* at ¶ 2.

[^6]: *Id.* at ¶ 38.

[^7]: *Id.*

[^8]: *Id.* at ¶ 39.

[^9]: *Id.* In approving NECA's proposed compensation rates, subject to
    possible modification, the Bureau did not make additional cost
    disallowances beyond those reflected in NECA's proposed rates.

[^10]: Once again, because of provider confidentiality concerns, we
    cannot detail the cost adjustments reflected in this *Order*. *Cf.
    2004 Bureau TRS Rate Order* at ¶ 18 n.57. Those providers who had
    costs that have been added back will be so notified.

[^11]: Although the increased rates set forth in this Order will result
    in additional payments being made from the Interstate TRS Fund, we
    do not find it necessary at this time to modify the total fund size
    requirement or the carrier contribution factor as adopted in the
    *2004 Bureau TRS Rate Order*. *See 2004 Bureau TRS Rate Order* at ¶
    1 (setting forth current fund size requirement and carrier
    contribution factor).