71994 Federal Register / Vol. 88, No. 201 / Thursday, October 19, 2023 / Rules and Regulations 

Country Entity License requirement License review policy Federal Register citation 

Superburning Semiconductor (Nanjing) Co., 

Ltd., 

No. 8, Lanhua Road, Room 806, Building 4, 

Pukou District, Nanjing, China. 

For all items subject to the 

EAR. (See §§ 734.9(e)(2) 

and 744.11 of the EAR) 4. 

Presumption of denial ............ 88 FR [INSERT FR PAGE 

NUMBER ] 10/19/2023. 

******

Suzhou Xinyan Holdings Co., Ltd., a.k.a., the 

following one alias: 

—Shanghai Xinzhili Enterprise Development 

Co., Ltd. 

For all items subject to the 

EAR. (See §§ 734.9(e)(2) 

and 744.11 of the EAR) 4. 

Presumption of denial ............ 88 FR [INSERT FR PAGE 

NUMBER ] 10/19/2023. 

Modern Logistics Building (no. 112), Room 

139, No. 88 Modern Avenue, Suzhou Industrial Park, Free Trade Pilot Zone 

Suzhou Area, Suzhou, China; and Building 

C, No. 888 Huanhu West 2nd Road, 

Lingang New Area, Shanghai, China. 

* * * * * * 

Zhuhai Biren Integrated Circuit Co., Ltd., 

Building 18, Room 419, No. 1889 Huandao 

East Road, Hengqin New District, Zhuhai, 

China. 

For all items subject to the 

EAR. (See §§ 734.9(e)(2) 

and 744.11 of the EAR) 4. 

Presumption of denial ............ 88 FR [INSERT FR PAGE 

NUMBER ] 10/19/2023. 

******

*******

******* 4For this entity, ‘‘items subject to the EAR’’ includes foreign-produced items that are subject to the EAR under § 734.9(e)(2) of the EAR. See § 744.11(a)(2)(ii) for 

related license requirements and license review policy. 

Thea D. Rozman Kendler, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2023–23048 Filed 10–17–23; 8:45 am] 

BILLING CODE 3510–33–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 64 

[CG Docket Nos. 03–123, 10–51; FCC 23– 

78; FR ID 177808] 

Video Relay Service Compensation 

Formula 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, to ensure 

that the providers of 

Telecommunications Relay Services 

(TRS) are compensated for the provision 

of Video Relay Service (VRS), the 

Federal Communications Commission 

(Commission) adopts a formula to 

compensate such providers from the 

Interstate TRS Fund (TRS Fund) for the 

provision of service for the next fiveyear compensation period. 

DATES: This rule has been classified as 

a major rule subject to Congressional 

review. The effective date is December 

18, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Michael Scott, Consumer and 

Governmental Affairs Bureau, 202–418– 

1264, Michael.Scott@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order, in CG Docket Nos. 03–123 

and 10–51; FCC 23–78, adopted on 

September 22, 2023, released on 

September 28, 2023. The Commission 

previously sought comment on these 

issues in a Notice of Proposed 

Rulemaking, published at 86 FR 29969, 

June 4, 2021, with a correction 

published at 86 FR 31668, July 15, 2021. 

The full text of this document can be 

accessed electronically via the FCC’s 

Electronic Document Management 

System (EDOCS) website at https://

docs.fcc.gov/public/attachments/FCC23-78A1.pdf or via the FCC’s Electronic 

Comment Filing System (ECFS) website 

at www.fcc.gov/ecfs. To request 

materials in accessible formats for 

people with disabilities (Braille, large 

print, electronic files, audio format), 

send an email to fcc504@fcc.gov, or call 

the Consumer and Governmental Affairs 

Bureau at (202) 418–0530 (voice). 

Synopsis 

1. Section 225 of the Communications 

Act of 1934, as amended (the Act), 

requires the Commission to ensure the 

availability of Telecommunications 

Relay Services (TRS) to persons who are 

deaf, hard of hearing, or deafblind or 

have speech disabilities, ‘‘to the extent 

possible and in the most efficient 

manner.’’ 47 U.S.C. 225(b)(1). 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.’’ 47 U.S.C. 

225(a)(2). VRS, a relay service that 

allows people with hearing or speech 

disabilities who use sign language to 

communicate with voice telephone 

users through video equipment, is 

supported entirely by the TRS Fund. 

VRS providers are compensated for the 

reasonable costs of providing VRS in 

accordance with payment formulas 

approved by the Commission. In a 

number of decisions over the past 20 

years, the Commission has addressed 

whether certain cost categories are 

reasonable costs eligible for recovery 

from the TRS Fund. Reasonable costs 

are generally defined as those costs that 

providers must incur to provide relay 

service in accordance with mandatory 

minimum TRS standards. 

2. In 2007, to ensure that VRS users 

could choose from a range of service 

offerings, despite significant disparities 

in VRS providers’ market shares and 

per-minute costs, the Commission 

introduced a tiered compensation 

structure for VRS. Under this approach, 

a VRS provider’s monthly compensation 

payment is calculated based on the 

application of different per-minute 

amounts to each of three specified 

‘‘tiers’’ of minutes of service. The 

highest per-minute amount applies to an 

initial tier of minutes up to a defined 

maximum number, a lower amount 

applies to the next tier, again up to a 

second defined maximum number of 

minutes, and a still lower amount 

applies to any minutes of service in 

excess of the second maximum. Under 

the tiered approach, providers that 

handle a relatively small amount of 

minutes and therefore have relatively 

higher per-minute costs will receive 

compensation on a monthly basis that 

likely more accurately correlates to their 


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actual costs—and the same is true of 

providers that have more minutes and 

lower per-minute costs. 

The 2021 Notice of Proposed 

Rulemaking 

3. In May 2021, the Commission 

released the Notice of Proposed 

Rulemaking, seeking comment on the 

adoption of a new VRS compensation 

plan. The Commission proposed to 

maintain a tiered compensation 

structure. The Commission also found 

no reason to depart from the 

Commission’s longstanding policy 

objectives of bringing TRS Fund 

payments into closer alignment with 

allowable costs and preserving and 

promoting quality-of-service 

competition among multiple providers. 

In addition, the Commission sought 

comment on how cost and demand 

estimates should be adjusted, if at all, to 

account for post-COVID costs and 

demand, and whether projected costs 

were reliable enough to serve as a 

reasonable basis to set rates for a new 

multi-year rate cycle. The Commission 

also sought comment on whether to rely 

on historical costs only, in anticipation 

that VRS costs and demand may 

decrease to pre-pandemic levels once 

the pandemic subsides. Further, the 

Commission asked what labor cost 

adjustments, if any, should be applied. 

The Commission also sought comment 

on whether and how to modify the 

current compensation structure, 

whether to revisit any prior Commission 

determinations on allowable costs, what 

rate levels should be set, how to 

structure the compensation period, and 

whether to provide for rate adjustments 

during that period. 

The Need for a Revised Compensation 

Plan 

4. In setting VRS compensation 

formulas, the Commission first 

determines the relevant costs of 

providing service. Relying on cost and 

demand data reported by VRS providers 

to the TRS Fund administrator, the 

Commission estimates each provider’s 

average per-minute cost to provide VRS 

(the provider’s total allowable expenses 

divided by its total minutes), and also 

calculates a weighted-average perminute cost for the industry as a whole 

(all providers’ total allowable expenses 

divided by their total minutes). The 

Commission then adds an allowed 

operating margin. In the Notice of 

Proposed Rulemaking, the Commission 

sought comment on whether to revisit 

any of its prior determinations regarding 

allowable costs. 

Changes in Allowable Cost Criteria 

5. Research and Development (R&D). 

The Commission revises its allowable 

cost criteria to allow TRS Fund support 

for the reasonable cost of research and 

development to enhance the functional 

equivalency of VRS. No commenter 

opposes this change. The Commission 

agrees with commenters who assert that 

the current criterion is unnecessarily 

restrictive. First, in 2013, when it 

authorized TRS Fund support of 

Commission-directed (non-provider) 

research to improve the efficiency, 

availability, and functional equivalence 

of TRS, the Commission recognized that 

TRS Fund resources can appropriately 

be used to support research into service 

improvements that may exceed the 

existing minimum TRS standards. 

Authorizing providers (as well as 

Commission-directed entities) to 

conduct such research is consistent with 

the Commission’s policy of promoting 

service improvement by encouraging 

VRS providers to compete with one 

another based on service quality—a 

form of competition that logically may 

lead a provider to develop innovative 

features not already required by the 

Commission’s rules. The Commission 

finds that expenses incurred by VRS 

providers to develop such 

improvements are appropriately 

included as part of the ‘‘reasonable 

cost’’ of service supported by the TRS 

Fund. 

6. Second, changed circumstances 

support removal of the current 

limitation. Recent changes in how 

people communicate are posing new 

technology challenges for VRS 

providers. To promote the integration of 

VRS with video conferencing, even 

though it is not currently required by 

the Commission’s rules, VRS providers 

need to conduct research and 

development on methods of achieving 

such integration. Further, the risk of 

wasting TRS Fund resources on 

unproductive research appears less 

likely today, because the Commission 

no longer resets compensation each year 

based on annual cost reporting, as it did 

in 2004 when the current limitation on 

allowable research and development 

costs was established. With 

compensation plans now being set for 

multi-year periods, providers that 

reduce costs during a compensation 

period are able to retain the resulting 

profit. Consequently, providers are less 

likely to spend money on wasteful or 

unnecessary research. 

7. Therefore, the Commission 

concludes that the development of 

service improvements is deserving of 

TRS Fund support, even if such 

improvements exceed what is necessary 

for compliance with the Commission’s 

minimum TRS standards. The 

Commission stresses that, as with all 

provider-reported expenses, expenses 

for research and development to 

improve VRS are allowable only if 

reasonable. In addition, expenses 

incurred to develop proprietary user 

devices or software (or any non-TRS 

product or service) are not recoverable 

from the TRS Fund. 

8. Number Acquisition and 911 

Calling. The Commission revises its 

allowable-cost criteria to permit TRS 

Fund support for the reasonable cost of 

assigning and porting North American 

Numbering Plan telephone numbers for 

TRS users. Last year, the Commission 

similarly revised its allowable-cost 

criteria for IP Relay to permit recovery 

of number assignment costs by IP Relay 

providers. The Commission agrees that 

precluding recovery of such costs is no 

longer justified. Based on the current 

record, the Commission concludes that 

voice service providers and VRS 

providers are not similarly situated 

regarding the ability to recover such 

costs from users. As a threshold matter, 

since 2008 it has become clear that a 

VRS provider’s cost of obtaining the 

numbers it assigns to its registered users 

actually is attributable to the use of 

relay service to facilitate a call. If relay 

service were not provided, these 

numbers would not be needed by VRS 

users. Further, the current record 

indicates that, as a practical matter, 

these costs are never passed on to VRS 

users, but rather are absorbed by VRS 

providers. While voice service providers 

have a billing relationship with their 

customers, VRS providers typically do 

not, and there would be little point in 

creating such a relationship for the sole 

purpose of passing through what likely 

would be a de minimis monthly charge. 

9. In this regard, there is an important 

difference between traditional texttelephone (TTY) based TRS and 

internet-based TRS. To place a call 

using a TTY, a consumer must subscribe 

to traditional telephone service, for 

which a telephone number is 

automatically issued to the subscriber 

(and for which the number acquisition 

cost is bundled into the service rate). To 

place a call using VRS, a consumer must 

subscribe to broadband internet access 

service, for which no telephone number 

is automatically provided (unless the 

consumer also subscribes to Voice over 

internet Protocol (VoIP) service—which 

a VRS user would have no reason to do). 

10. As for costs associated with 

acquisition and use of toll-free numbers, 

the record does not indicate that any 

VRS provider still issues toll-free 


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numbers to registered VRS users. 

Therefore, the Commission does not 

find it necessary to revisit that question. 

11. Similarly, the record does not 

indicate that any VRS provider is 

currently assessed a fee under a state or 

local E911 funding mechanism. Such 

fees are typically assessed on providers 

of telephone service. As a general 

matter, the TRS Fund supports the 

reasonable cost of ensuring that E911 

calls placed by VRS users are handled 

in a functionally equivalent manner. 

FCC rules impose numerous E911- 

related requirements on VRS providers, 

including that they provide automatic 

location information for mobile VRS 

calls to 911 if technically feasible. The 

Commission clarifies that the TRS Fund 

supports reasonable expenses incurred 

by VRS providers to improve their 

ability to quickly connect a VRS user’s 

911 call to the Public Service Answering 

Point (PSAP) nearest the user’s location 

and to automatically provide specific 

location data to such PSAP. Such costs 

are directly related to routing TRS calls 

to an appropriate PSAP and facilitating 

emergency call handling. Thus, such 

costs are allowable under the criteria 

adopted by the Commission in 2008. 

12. Outreach. TRS outreach has a dual 

educational focus: making the general 

public aware of the availability and use 

of relay services, e.g., to prevent the 

uninformed rejection of TRS calls by a 

called party; and providing ‘‘nonbranded’’ information about relay 

services to potential users—i.e., 

members of the public who are deaf or 

hard of hearing—to make them aware of 

the availability and benefits of TRS. 

Before 2013, the TRS Fund 

compensated TRS providers for 

outreach activities. However, the 

Commission grew concerned about the 

effectiveness of provider outreach. In 

2013, the Commission directed the 

establishment of a pilot program to 

provide coordinated nationwide 

outreach for VRS and IP Relay through 

contractors or other third parties. The 

Commission also disallowed TRS Fund 

support for outreach conducted by VRS 

and IP Relay providers. Last year, the 

Commission revised its allowable-cost 

criteria for IP Relay to permit recovery 

of outreach costs by IP Relay providers. 

13. The Commission concludes that 

VRS providers’ reasonable outreach 

expenses should be recoverable from the 

TRS Fund. First, the pilot National 

Outreach Program expired in 2017 and 

has not been reauthorized. Although the 

Commission continues to be skeptical 

about the extent to which providerconducted outreach can be effective in 

educating the general public, in the 

absence of a national outreach program, 

the TRS Fund should support outreach 

by VRS providers who choose to engage 

in it. However, outreach expenses of 

this kind are allowable only to the 

extent that the communication focuses 

on educating the public about the 

availability and use of VRS. 

Expenditures on advertisements about 

other matters do not constitute 

allowable outreach expenses. 

14. Second, it appears that little is 

accomplished by continuing to prohibit 

TRS Fund support of provider outreach 

to potential VRS users. As the 

Commission has previously observed, 

outreach to potential TRS users (unlike 

outreach to the general public) is not 

always easy to distinguish from branded 

marketing, and branded marketing is an 

allowable TRS expense. Since the 

Commission’s 2013 determination to 

cease TRS Fund support for outreach by 

VRS providers, the amounts reported by 

VRS providers as outreach have 

decreased, while the amounts reported 

as allowable marketing expenses have 

increased. To the extent that VRS 

providers are motivated to communicate 

with potential users, whether through 

branded marketing or otherwise, such 

efforts can be effective in introducing 

the service to new users, including 

subgroups that may lack awareness of 

the availability of a service or how it can 

meet their needs. 

15. In allowing outreach, the 

Commission does not reopen the door to 

wasteful spending. As explained earlier 

in connection with research and 

development, with compensation plans 

being set for multi-year periods, 

providers that reduce costs during a 

compensation period are able to retain 

the resulting profit. Consequently, 

providers are less likely to spend 

wastefully on unproductive outreach 

activity—especially as the resources 

involved are more likely to lead to 

increased compensation revenue if used 

for branded marketing. 

16. User Access Software. The 

Commission revises its allowable-cost 

criteria to allow TRS Fund support for 

the reasonable cost of providing 

downloadable software applications that 

are needed to enable users to access 

VRS from off-the-shelf user devices. The 

Commission agrees that the TRS Fund 

should support reasonable costs 

incurred by VRS providers in 

developing, maintaining, and providing 

the software necessary to allow VRS 

users’ non-proprietary equipment to 

route calls and connect to VRS. The 

Commission allows TRS Fund recovery 

of VRS providers’ reasonable costs 

directly related to the provision of 

software that can be downloaded and 

self-installed by VRS users onto off-theshelf user devices such as mobile 

phones, desktop computers, and laptops 

running on widely available operating 

systems. Such costs must be incurred by 

any provider to enable users to connect 

to its service platform; therefore, they 

are attributable to the provision of VRS. 

Further, recovery of the cost of software 

needed to connect such user devices to 

VRS is consistent with the 

Commission’s policy to promote the 

availability of off-the-shelf IP-enabled 

devices for VRS use and decrease 

consumers’ dependence on VRS 

equipment specifically designed for 

connection to a particular VRS provider. 

17. However, the Commission 

declines to also allow recovery of costs 

incurred in developing, maintaining, or 

providing software for user devices that 

are distributed by one VRS provider and 

cannot be directly connected to other 

VRS providers’ services. While the 

Commission agrees that users need a 

software interface to access VRS, they 

do not need proprietary devices that can 

be connected to and used with only one 

provider’s service, nor do they need 

software designed for such devices. 

Although the Commission has not 

prohibited providers from distributing 

such devices and software to consumers 

requesting them, it is not necessary to 

support proprietary devices and 

software with TRS Fund resources. 

Sorenson Communications, LLC 

(Sorenson), asserts that the proprietary 

devices it distributes offer higher video 

resolutions and more screen space than 

off-the-shelf platforms, but provides no 

details supporting this claim. Even if 

true, Sorenson fails to show that such 

alleged advantages necessitate the 

availability of TRS Fund payments for 

such features or the software supporting 

them. Sorenson acknowledges that 

many of its customers (as well as 100% 

of the customers of other providers that 

do not distribute proprietary devices) 

use VRS software running on an off-theshelf device, either alone or in addition 

to using a proprietary Sorenson device. 

Therefore, whatever perceived 

advantages proprietary devices may 

have, as a practical matter they provide 

a useful but not essential means of 

accessing VRS. 

18. Further, allowing recovery of such 

software costs would not advance the 

Commission’s policy to enable users to 

access VRS from off-the-shelf IP-enabled 

devices and to avoid dependence on 

VRS equipment specifically designed 

for a particular provider’s network. By 

limiting TRS Fund support to user 

software that allows VRS access from 

off-the-shelf equipment that can be 

connected to any VRS provider, the 


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Commission promotes the availability of 

multiple service options for consumers. 

19. The Commission recognizes that it 

may often be difficult for a VRS 

provider to differentiate precisely 

between the portions of certain 

expenses that are attributable to, e.g., 

the development of software 

applications for connecting proprietary 

and non-proprietary equipment to the 

provider’s platform. In cases where such 

expenses cannot be directly assigned, 

the provider should adopt a reasonable 

allocation method and specify the 

method used in its cost reports, so that 

it can be evaluated by the TRS Fund 

administrator and the Commission. 

20. Field Staff Issues. Because the 

costs of installing, maintaining, and 

training customers to use providerdistributed devices are not recoverable 

through TRS Fund compensation, 

providers must not report the costs of 

field staff visits for such purposes as 

allowable expenses. Costs incurred to 

install and maintain software for a VRS 

provider’s proprietary user devices are 

also non-allowable. Therefore, field staff 

costs related to installation, 

maintenance, and training of customers 

to use such software also must be 

excluded. However, the Commission 

clarifies that the reasonable cost of 

service-related work performed by field 

staff during a visit to a new or current 

user is an allowable cost of providing 

VRS. Reasonable costs incurred for 

service-related field staff visits for the 

purpose of, e.g., assisting customers 

with registration, use of VRS on a nonproprietary device, or completing a port 

are allowable. 

21. The above clarifications also apply 

to the reporting of field staff costs 

incurred by IP CTS providers. However, 

any change in the allowability of field 

staff costs related to installation and 

provision of IP CTS equipment is 

beyond the scope of this proceeding. 

Estimating Costs 

22. Need for adjustment of provider 

cost projections. For the past 13 years, 

the Commission has established the cost 

basis for provider compensation by 

averaging VRS providers’ reported 

historical expenses for the prior 

calendar year with their projected 

expenses for the current calendar year. 

The Commission has found this method 

to be a useful way to counteract 

providers’ tendency to overestimate 

future costs. However, for a number of 

reasons specific to this proceeding, the 

Commission’s averaging approach 

requires modification to achieve 

reasonably accurate estimates of 

provider costs for the purpose of 

establishing VRS compensation for the 

new compensation period. 

23. First, due to a recent increase in 

the general inflation rate, which does 

not appear to be offset by comparable 

efficiency improvements, the average of 

VRS providers’ historical 2022 and 

projected 2023 expenses is likely to 

understate the costs that will be 

incurred by VRS providers in many 

expense categories in the new 

compensation period. There is likely to 

be significant inflation during the 12- 

month lag between this 2022–23 

reporting period and the 2023–24 Fund 

Year, which is the first year of the new 

compensation period. Second, VRS 

providers may incur expenses in newly 

allowable cost categories, which are not 

reflected in their current reporting of 

allowable costs. Third, the record 

indicates that, due to a shortage of 

qualified American Sign Language 

(ASL) interpreters and the challenges 

posed by new modes of communication, 

VRS providers need to substantially 

increase communications assistant (CA) 

wages and technology spending to 

continue providing high-quality, 

functionally equivalent service. 

24. Finally, recent inflation and other 

factors appear to have caused an 

unusual amount of uncertainty and 

variation in VRS providers’ estimates of 

future costs. In projecting costs for 2023 

and 2024, different providers appear to 

have made very different assumptions 

about future input costs, as well as the 

extent to which compensation levels 

will increase sufficiently to justify 

additional spending. As a result, 

estimating each provider’s cost of 

providing VRS based on an average of 

that provider’s historical and projected 

expenses is likely to cause 

discrepancies. 

25. Providers suggest different 

approaches for addressing these 

concerns. ZP Better Together, LLC (ZP) 

argues that the Commission should 

abandon any attempt to estimate current 

provider costs. Instead, ZP recommends 

applying an inflation adjustment (as 

well as certain adjustments meant to 

reflect newly allowable costs) to the 

compensation rates set in 2017. The 

Commission rejects this approach, 

which incorrectly assumes that 

providers’ 2016–17 costs (on which the 

rates set in 2017 were based) remain 

relevant for purposes of setting 

compensation for 2023–24 and beyond. 

There is no logical or record basis for 

this assumption, which underlies a 

number of the assertions in ZP’s recent 

ex partes—e.g., that any rate card 

should give ZP and Convo 

Communications, LLC, a share of the 

new revenues at least equal to its market 

share. Due to the changes that have 

taken place since 2017, ‘‘old’’ provider 

revenues resulting from the current rates 

are disproportionately allocated in 

relation to provider cost. Therefore, 

there is no logical necessity for ‘‘new’’ 

revenues to be proportionate to 

providers’ market shares. There is no 

conceivable basis in section 225 of the 

Act or economics for such a proposal, 

divorced from costs and operating 

margins. The relative per-minute costs 

of VRS providers are now very different 

than they were seven years ago. Further, 

ZP’s argument that the tiered rate 

structure and rates of 2017 reflect 

immutable truths about economies of 

scale at different volumes of minutes is 

based on a flawed study. 

26. Sorenson, on the other hand, 

suggests that the Commission modify 

past practice by using historical 2022 

cost, rather than an average of historical 

and projected cost, as a baseline for 

estimating future VRS cost, and apply 

uniform factors to adjust each provider’s 

2022 costs for inflation and to make the 

targeted, above-inflation adjustments 

needed in certain areas. The 

Commission believes this approach has 

merit. Historical costs are more reliably 

accurate, and each provider’s historical 

cost can be adjusted by a uniform factor 

to address inflation or other likely cost 

changes affecting all providers, so as not 

to unduly distort, or give any provider 

an undue advantage in, the resulting 

rates. While ZP has raised concerns 

about some aspects of Sorenson’s 

reported 2022 costs, Sorenson has 

provided reasonable explanations for its 

2022 cost increases. 

27. To address this unusual 

confluence of rate-setting issues, the 

Commission adjusts the costs reported 

in 2022 to: take account of cost changes 

due to inflation during the 18-month 

time lag between calendar year 2022 

(the cost reporting period) and Fund 

Year 2023–24 (the first year of the new 

compensation period); add amounts 

sufficient to cover necessary increases 

in technology spending and CA wages 

and benefits; include estimates of 

provider expenditures in newly 

allowable cost categories; and address 

new costs incurred by Sorenson to 

provide video-text service. Finally, the 

Commission adds an appropriate 

operating margin. The Commission does 

not anticipate that the modifications 

made to address these issues will need 

to be repeated in subsequent 

compensation proceedings. The current 

confluence of pandemic-related effects, 

a sudden change in the inflation rate, 

shortage of skilled labor, and provider 

uncertainty regarding future costs is 

unlikely to recur, or if it does, is 


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unlikely to coincide with the end of a 

compensation period. 

28. Adjusting Historical Cost for 

Inflation. To ensure that compensation 

is sufficient to cover likely inflationrelated cost increases between calendar 

year 2022 and Fund Year 2023–24, the 

Commission increases its estimate of 

each provider’s expenses in most 

categories by 7.23%, which is the 

change from fourth quarter 2021 to 

second quarter 2023 in the Bureau of 

Labor Statistics (BLS) index of 

seasonally adjusted total compensation 

for private industry workers in 

professional, scientific, and technical 

services. 

29. Estimating CA Cost. Several 

commenters report that VRS labor costs 

are likely to continue increasing by 

substantially more than the 18-month 

inflation adjustment described above, 

due to a continuing shortage of CAs. All 

providers increased CA wages in 2022, 

and Sorenson and ZP both projected 

further wage increases, leading to higher 

CA cost in 2023 and 2024. While the 

Commission agrees that a further 

increase in CA wages is needed, 

providers’ projections in that regard 

vary widely. As discussed above, these 

disparate projections appear to be based 

on different assumptions about future 

inflation and future compensation 

levels. To address the need for CA 

wages to increase substantially more 

than inflation, while avoiding the 

distorting effects caused by disparate 

provider projections, the Commission 

estimates costs in this category by 

assuming that all providers’ CA wages 

and benefits will increase by a constant 

percentage over historical levels. 

30. For this category only, the 

Commission uses Fund Year 2020–21 as 

the baseline for estimating increased CA 

cost. This is because, CA wages were 

relatively stable through the end of 

2021, and the wage increases provided 

in 2022 differed substantially among the 

providers. Given the wide disparity 

among the providers’ projections of 

future wage increases, the Commission 

must resort to rough estimates. The 

Commission believes Sorenson’s 

projection, which is at the high end, is 

closer to being accurate than those of ZP 

and Convo. However, the Commission is 

not convinced that CA wages will or 

should increase to the full extent of 

Sorenson’s estimate. 

31. Sorenson’s projection is largely 

based on its claims that community 

interpreters’ compensation averages 

$80–$100 per hour, and that CA wages 

must be raised closer to that level to 

ensure that qualified interpreters are 

willing to work as VRS CAs. However, 

the Commission questions the extent to 

which Sorenson’s estimate of $80–$100 

per hour for community interpreter 

compensation is applicable nationwide. 

Information from other sources appears 

inconsistent with Sorenson’s claim. 

Also, many of the rates cited by 

Sorenson do not include travel time. If 

an interpreter can handle VRS calls at 

home, as many increasingly do, two 

hours of VRS work at $50 per hour 

would earn the interpreter $100, while 

a one-hour community interpreting 

engagement, paying $90 per hour of 

interpreting and requiring an additional 

hour of travel to and from the 

interpreter’s home, would earn the 

interpreter only $90. Where travel time 

is compensated, hourly compensation 

may be substantially lower. 

32. Further, while the Commission 

recognizes the inherent difficulty of 

VRS work, working as a CA also has 

certain advantages that may make it 

attractive to interpreters despite lower 

hourly compensation. First, in general, 

community interpreting work is only 

available when a meeting has been 

scheduled that requires an interpreter. 

VRS, by contrast, is operating 24/7, and 

there must always be interpreters ready 

to handle any call that happens to be 

made. Thus, it is often possible for 

interpreters to arrange for VRS work 

during periods when community 

interpreting work is unavailable. 

Second, community interpreting 

necessitates travel, while many VRS 

CAs handle calls from their homes. As 

a result, VRS work not only is more 

convenient for interpreters, but also can 

be performed by interpreters who live in 

areas where community interpreting 

work is relatively scarce or whose 

personal circumstances make it difficult 

to work away from home. 

33. Finally, as noted above, VRS 

providers have frequently overprojected the amount by which costs are 

likely to increase. Taking all these 

factors into account, the Commission 

finds it reasonable to assume that the 

CA costs of VRS providers will rise by 

a percentage of the increase projected by 

Sorenson. Under this approach, each 

provider’s CA cost is estimated to be 

65% higher than its CA cost in 2020– 

21. The Commission notes that this 

estimate gives substantial weight to 

Sorenson’s projection, as 65% is 

substantially more than a simple 

average of the CA cost increases 

projected by the three providers. 

34. The Commission recognizes that 

this estimate is necessarily a matter of 

judgment. While the Commission is 

setting compensation for a five-year 

period, the Commission reserves the 

right to make adjustments in the 

formulas, based on a strong showing 

that such adjustments are needed. Thus, 

if CA wages are increased consistently 

with the above estimate, and VRS 

providers then conclude that further 

increases are needed, they may present 

relevant evidence for the Commission’s 

consideration. On the other hand, to the 

extent that CA wages are not increased 

consistently with the above estimate, 

the Commission may also consider and 

make appropriate adjustments in light of 

such evidence. 

35. Estimating Engineering and R&D 

Cost. The Commission finds that 

engineering and R&D expenses are 

likely to increase by a percentage higher 

than inflation, as all providers work to 

address the unusually demanding 

technology upgrades needed to meet 

service challenges in the next 

compensation period. Engineering and 

R&D are closely related aspects of 

technology spending: successful 

research and development leads to 

service innovations, the deployment of 

which increases engineering costs, and 

increased engineering staff and 

resources can also be used to expand 

research and development. Important 

changes in how people communicate— 

such as the rapid growth of video 

conferencing—are posing new 

technology challenges for VRS 

providers. For example, VRS providers 

must dedicate additional research, 

development, and engineering resources 

to collaboration with video platform 

providers, so that VRS CAs can have an 

integrated, audio-visual presence in 

video conferences. In addition, with the 

Commission taking steps to modernize 

the E911 system, the Commission 

anticipates the deployment of new 

technology to automatically provide the 

dispatchable location of any mobile VRS 

user calling 911. VRS providers may 

expend additional resources to help find 

and implement a one-number solution 

that ends the ‘‘siloing’’ of VRS, 

seamlessly merging the use of relay with 

mainstream voice, video, and texting 

services. 

36. The Commission must ensure that 

the TRS Fund supports sufficient 

spending on technology to address the 

challenges described above, so that VRS 

users have functionally equivalent 

access to video conferencing and 

emergency communication. As directed 

by the Act, the Commission must 

implement TRS in a way that both 

encourages the use of existing 

technology and does not deter the 

development of improved technology. 

Further, support for emergency 

communications is a fundamental part 

of the Commission’s TRS mandate. The 

amounts that VRS providers will need 

to spend to address these specific 


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challenges are not easy to quantify. 

Perhaps because providers have more 

leeway to defer spending on new 

technology, current projections for 

technology spending are subject to wide 

variation among the providers. Sorenson 

projects substantially increased 

spending on R&D and engineering in 

2023 and 2024, while ZP and Convo 

project declines. For the reasons stated 

above, the Commission believes all VRS 

providers will need to increase 

spending substantially in these areas to 

ensure that they remain competitive in 

the evolving communications 

landscape. Despite their projections of a 

decline in spending on engineering and 

R&D, ZP and Convo agree that such 

increases are needed. Given the 

uncertainties inherent in predicting 

future spending on technology, the 

Commission recognizes that any 

estimate it makes may be subject to 

error. However, the Commission prefers 

to err on the side of over-predicting the 

amount of spending that will be 

necessary to ensure that VRS technology 

provides functionally equivalent service 

to consumers. While Sorenson projects 

a substantial increase in technology 

spending, that projection was made 

before the Commission issued its Report 

and Order and Proposed Rule on Access 

to Video Conferencing, which pose 

additional technology challenges to VRS 

providers. 88 FR 50053, August 1, 2023; 

88 FR 52088, August 7, 2023. The 

Commission estimates that, in the first 

year of the new compensation period, 

each provider will need to increase 

spending on engineering and R&D by 

approximately 75% over the levels 

reported for 2022. Therefore, the 

Commission further adjusts each 

provider’s estimated costs in these areas 

by adding 75% of the provider’s 

reported 2022 level. As with CA costs, 

the Commission notes that it reserves 

the right to make adjustments in the 

compensation formulas, either upward 

based on a strong showing that 

additional technology expenditures are 

necessary, or downward, based on 

evidence that the increased technology 

expenditures described above have not 

been made. 

37. Estimated Expenses in Newly 

Allowable Cost Categories. The 

Commission also adjusts estimated VRS 

costs to include certain expenses that 

were previously non-allowable and are 

now allowable. Newly allowable R&D 

costs are included in the estimates 

discussed above. However, R&D costs 

for user devices and proprietary user 

software remain non-allowable. 

Previously non-allowable expenses for 

numbering activities in 2022 are 

identified by each VRS provider in its 

annual cost report and are included in 

the Commission’s cost estimates. Costs 

for customer support provided by field 

staff remain non-allowable to the extent 

that they are attributable to installation, 

maintenance, or customer assistance 

with provider-distributed devices or 

software for proprietary devices. The 

record indicates that Sorenson currently 

attributes service-related field staff costs 

to the Operations Support cost category. 

Thus, service-related field staff costs are 

already included in reported allowable 

costs. 

38. Outreach. During the next 

compensation period, VRS provider 

expenditures on outreach may increase 

somewhat, building on the 

Commission’s and other Federal 

initiatives to expand broadband access, 

and the expected increase in VRS 

availability to incarcerated persons. 

However, the Commission finds that 

such expenditures are unlikely to 

average $0.09 per minute, as ZP 

estimates. As a general matter, the 

Commission believes VRS providers are 

less likely to spend substantial sums on 

‘‘unbranded’’ outreach than ‘‘branded’’ 

marketing, as unbranded 

communications are less likely to result 

in the registration of users generating 

additional compensation for that 

provider. No significant amount of 

outreach expenses have been reported 

by providers after 2020. Given the 

virtual absence of provider outreach at 

present and the relatively weak 

economic incentives for providers to 

engage in unbranded outreach rather 

than branded marketing, the 

Commission estimates that providers’ 

outreach spending is unlikely to exceed 

one-quarter of their marketing expenses, 

on average. 

39. Further, the Commission finds no 

justification for the view that providers 

will spend on outreach at a uniform perminute rate. It seems more likely that 

outreach spending will represent a 

relatively uniform percentage of each 

provider’s total expenses. Industrywide, VRS providers’ marketing costs 

(adjusted for recent inflation) average 

$0.13 per minute, or 3.1% of total 

expenses. If outreach expenses average 

one-quarter of the industry-wide average 

marketing cost, then each provider will 

devote approximately 0.8% of its total 

expenses to outreach. The Commission 

therefore adjusts each provider’s 

estimated VRS cost by an amount equal 

to 0.8% of its total expenses. 

40. Estimated Costs of Video-Text 

Service. With the decision of ASL 

Services Holding, LLC, dba GlobalVRS 

(GlobalVRS) to terminate its 

involvement with VRS, another VRS 

provider, Sorenson, has undertaken 

efforts to prepare to offer Video-Text 

Service for ASL users who are 

deafblind. Sorenson anticipates that it 

will incur a substantial amount of 

relatively fixed costs, which are 

unlikely to vary substantially with the 

number of minutes of service provided. 

Sorenson estimates these costs to 

include an initial capital expenditure 

and annually recurring costs for field 

support, maintenance, testing, software 

development, etc. The Commission 

finds that this cost estimate is 

reasonable, and increases Sorenson’s 

adjusted annual expenses by this 

amount. Other VRS providers are not 

precluded from offering this type of 

service. However, in response to 

GlobalVRS’s impending exit, only 

Sorenson has represented that it is 

actively preparing to provide this 

service. Therefore, the Commission 

adjusts Sorenson’s costs to reflect these 

estimated expenditures. Sorenson’s 

estimated variable cost of providing this 

service is not included in this 

adjustment. As discussed below, the 

Commission adopts a separate 

compensation formula to allow recovery 

of such costs through an additive 

payment for each minute of Video-Text 

Service. 

41. Operating Margin. The 

Commission finds no reason to modify 

the range of reasonable VRS operating 

margins, currently defined as between 

7.6% and 12.35%. The record does not 

support Sorenson’s argument that the 

allowed operating margin is insufficient 

to encourage capital investment in VRS. 

42. The Commission declines to 

adjust the operating margin to 22% to 

reflect average operating margins for 

competitive telecommunications firms 

or to 17.8% to reflect average operating 

margin for companies in the 

communications and information 

technologies sectors, as urged by 

Sorenson. The current range of 

reasonable operating margins for VRS is 

based on an average of the margins 

earned in analogous industries, 

including government contracting and 

the professional service sector that 

includes translation and interpretation 

services, as well as the information 

technology sector. 

43. Sorenson does not provide a 

convincing explanation of its view that 

average margins for the competitive 

telecommunications firms, or for a mix 

of firms in the communications and 

information technologies sector would 

provide a more appropriate benchmark. 

As a preliminary matter, the 

Commission notes that Sorenson’s 

initial filing was based on a study that 

included telecommunications carriers. 


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The operating margin approach was 

adopted in 2017 because the 

Commission recognized that VRS 

providers are unlike the 

telecommunications industry, in that 

VRS is not a capital intensive business. 

Any proposed benchmark that includes 

the operating margins of 

telecommunications carriers is clearly 

inappropriate. 

44. While the most recent analysis 

submitted by Sorenson does purport to 

filter out capital-intensive companies 

from the sample of information and 

communications technology firms, the 

use of a benchmark based on the high 

technology sector remains flawed, for 

several reasons. First, while VRS 

certainly makes use of advanced 

technology, the bulk of VRS costs are 

labor costs, primarily salaries and 

benefits for interpreters, who need not 

be highly skilled in technology. This 

will remain the case despite the 

technology challenges that require VRS 

companies to increase spending on 

research and development and 

engineering. The economic profile of a 

VRS provider is quite different from the 

high technology companies analyzed in 

the study on which Sorenson relies. 

45. Second, that analysis looks at a 

sample of companies with net profit of 

up to 100%. The Commission is not 

persuaded that these high-profit 

companies are comparable to TRS 

providers. Third, there are a number of 

important differences between the risks 

typically faced by IT companies and the 

risks involved in VRS. For example, 

while IT companies may be subject to 

unexpected, dramatic changes in 

demand for their products, demand for 

VRS has been remarkably stable over 

time. Further, while the prices that IT 

companies can expect to receive for 

their products are subject to variation 

based on, e.g., changing demand and the 

pricing decisions of competitors, VRS 

providers can rely on governmentestablished prices that are 

predetermined for a period of several 

years. 

46. In short, neither Sorenson nor the 

study on which Sorenson relies 

persuasively explain why their 

operating margin analysis, relying on 

surveys of industry sectors that are 

markedly dissimilar to the VRS 

industry, should be deemed preferable 

to the Commission’s 2017 determination 

of reasonable operating margins, based 

on data from a diverse set of industries 

analogous to VRS. 

47. In addition, according to recent 

census figures, typical margins for 

companies in a number of professional 

service sectors, including the 

interpretation services sector, are 

substantially lower than the numbers 

cited by Sorenson and are relatively 

similar to or below the levels of 

operating margin relied upon in setting 

the range of reasonableness. The Census 

Bureau’s survey of public companies’ 

financial data for this sector, defined as 

‘‘Professional, Scientific, and Technical 

Services,’’ but excluding legal, shows 

that average quarterly pre-tax operating 

margins between 2019 and 2022 ranged 

from ¥3.06% (in 1Q2020) to 3.58% (in 

3Q2020), averaging 0.09% in the 2019– 

22 period as a whole and ¥1.78% in 

2022 (the most recent year). The 

subsector that includes translation and 

interpretation services (but excludes 

various less analogous industry 

segments such as accounting, 

architectural and engineering, and 

computer systems design services) saw 

an average operating margin for the 

public firms included in the Census 

Bureau’s survey ranging from 0.62% (in 

1Q2020) to 11.56% (in 2Q2019) for the 

2019–22 period and averaging 6.67% in 

the 2019–22 period as a whole and 

6.11% in 2022. Sorenson’s analysis does 

not address the relevant census data. 

48. While the operating margins for 

public companies defined as 

‘‘Professional, Scientific, and Technical 

Services,’’ but excluding legal, have 

fluctuated over time (and currently are 

lower than when the Commission 

adopted the reasonableness range of 

7.6%–12.35%), the Commission does 

not believe it would be beneficial to 

revise the reasonable range of operating 

margins that has guided the 

Commission’s TRS compensation 

methodology over the past decade. It is 

also beneficial to retain consistency in 

the reasonable operating margin range 

that participants in the TRS program 

should expect, absent a clearer 

indication that operating margins for 

companies providing comparable 

services have significantly changed. The 

record does not establish such a 

significant change to operating margins 

when considering the complete scope of 

industries comparable to VRS. 

Therefore, the Commission retains the 

current reasonableness range for the 

VRS operating margin. 

49. Sorenson’s argument that the 

operating margin should be reassessed 

to take account of a previously proposed 

increase in Federal corporate income tax 

applicable to the top tax bracket, from 

21% to 28%, appears to be moot, as the 

proposed tax rate increase was not 

adopted. The Commission also notes 

that the current range of reasonable 

operating margins was established in 

2017, based on estimates of average pretax operating margins for companies 

comparable to VRS providers. During 

the 2013–16 period from which the 

sample was drawn, corporate income 

tax for the top bracket was 35%— 

substantially higher than the current 

21% and even higher than the 28% rate 

projected by Sorenson. Therefore, the 

corporate income tax burden that 

Sorenson claims is unfairly depressing 

its returns has actually decreased, not 

increased, since the reasonable range of 

margins was established by the 

Commission. 

Compensation Structure and Formulas 

50. The Commission adopts the 

tentative conclusion of the Notice of 

Proposed Rulemaking that the purposes 

of section 225 of the Act are best served 

by structuring VRS compensation to 

support multi-provider competition 

based on quality of service. The record 

supports the Commission’s prior 

findings that, by offering VRS users a 

choice among multiple providers, the 

Commission can efficiently and 

effectively ensure that functionally 

equivalent VRS is available to all 

eligible users. The availability of 

multiple service offerings encourages 

VRS providers to compete for customers 

by exceeding minimum service quality 

standards. In addition, a multi-provider 

environment encourages diverse service 

offerings, including specialized services 

and features needed by sub-groups 

within the sign language-using 

population. 

51. Therefore, the Commission has 

consistently sought to structure VRS 

compensation so as to maintain 

competitive choices for consumers 

while minimizing waste of TRS Fund 

resources. There is no simple recipe for 

achieving these objectives. However, the 

Commission has flexibility to adjust its 

approach as necessary to address 

changed circumstances. 

Compensation for Large Providers 

52. The record of this proceeding 

shows that circumstances have changed 

materially since 2017, when the current 

compensation plan was adopted. See 

Structure and Practices of the Video 

Relay Services Program, 82 FR 39673, 

August 22, 2017 (2017 VRS 

Compensation Order). Specifically, the 

cost structures of the largest VRS 

providers have come closer to parity. As 

a result, modifications are needed to 

avoid overcompensating one or both of 

these providers. To equitably allocate 

TRS Fund resources and ensure the 

availability of functionally equivalent 

VRS in the most efficient manner, the 

Commission modifies the current tier 

structure by eliminating the third tier. 

53. The essential purpose of rate 

tiering is ‘‘to compensate VRS providers 


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in a manner that best reflects the 

financial situation’’ of providers with 

disparate cost structures. In the Notice 

of Proposed Rulemaking, the 

Commission proposed to maintain a 

tiered structure but sought comment on 

various possible modifications of that 

structure. The record now confirms that 

such modifications are needed. Since 

2017, the cost gap between the two 

largest VRS providers, while still 

substantial, has progressively 

diminished. The reasons for the 

substantial decline in ZP’s per-minute 

costs may not be easy to pinpoint, but 

they are likely a combination of ZP 

having successfully grown its call 

volume, allowing it to operate on a 

much larger scale, and having 

apparently completed the consolidation 

of the 2017 merger of its predecessor 

entities, enabling ZP to more fully 

realize the expected scale economies 

from that merger. As modified above to 

take account of inflation, newly 

allowable costs, and the Commission’s 

expectation of increased CA wages, 

engineering and R&D, and certain other 

costs, the similarity in the estimated 

costs of the two providers persists. 

54. These cost changes raise 

significant concerns about the 

continuing validity of the justification 

for tiering that the Commission relied 

on in 2017. While one provider 

continues to handle the majority of VRS 

minutes, its share of minutes has 

dwindled, and it appears to have lost its 

unique cost advantage. Since 2017, the 

second largest provider has increased its 

minutes and its market share, and its 

per-minute costs are now somewhat 

closer to those of the largest provider. 

Thus, the two largest providers now 

have somewhat similar per-minute 

costs, and yet there continues to be a 

substantial disparity in their shares of 

VRS minutes. 

55. These changed circumstances 

warrant a reconsideration of the 

compensation structure. One alternative 

suggested in the record would involve 

compensating the two largest providers 

at a single rate. A single-rate plan (e.g., 

based on the weighted average of the 

providers’ costs) would be simple to 

administer. Arguably, a single-rate plan 

could distribute resources efficiently 

and equitably, ensuring that both 

providers earn reasonable operating 

margins above allowable expenses. And 

it would avoid the growth-incentive 

issues that can arise under a tiered 

structure, due to the reduction in 

compensation for additional minutes of 

service when a provider’s minutes 

increase beyond a tier’s upper 

boundary. 

56. However, at this time the 

Commission concludes it would be 

premature to adopt a single-rate 

compensation plan. First, the record 

continues to be highly contested—and 

inconclusive—regarding the conditions 

under which tiering is or is not 

necessary. For example, the record 

contains widely varying estimates 

regarding the volume of minutes that a 

provider must achieve for economies of 

scale to be exhausted. Citing studies 

presented in previous proceedings, 

Sorenson continues to argue that 

relevant economies of scale are 

essentially exhausted at the level of 

250,000 monthly minutes. The 

Commission has previously found 

Sorenson’s evidence unconvincing, and 

Sorenson provides no new information 

that warrants revisiting this view. At the 

other extreme, ZP argues that relevant 

economies of scale continue to be 

significant until at least 5 million 

monthly minutes. That argument too is 

less than persuasive, given the 

limitations of the model used by ZP’s 

expert. An assessment of ZP’s model by 

Commission staff shows that a reliable 

estimate of industry cost functions 

through regression analysis is not 

possible on the basis of the data points 

provided by ZP’s expert. 

57. Second, setting TRS Fund 

compensation, like ratemaking in 

general, is far from an exact science. 

While the historical gap between the 

per-minute costs of the two largest 

providers has lessened over the last few 

years, it is only in the last year that their 

reported costs are actually similar. The 

Commission cannot rule out the 

possibility that the similarity is unique 

to this historical moment and may not 

be repeated in future years. If the 

apparent narrowing of the cost 

differential were to be reversed during 

the compensation period, applying a 

single rate to both providers could 

endanger the availability of competitive 

choices for VRS users. In analogous 

situations in prior proceedings, the 

Commission has adopted a similarly 

conservative approach when weighing 

the imponderables involved in VRS 

compensation methodology. 

58. For these reasons, the Commission 

chooses to preserve a tiered 

compensation structure for the next 

period, while modifying it to reduce 

unnecessary inefficiency or inequity in 

the allocation of TRS Fund resources. 

Specifically, the Commission merges the 

current Tier II (applicable to monthly 

minutes between 1,000,001 and 

2,500,000) and Tier III (applicable to 

monthly minutes in excess of 

2,500,000). As a result, the new plan for 

VRS providers with more than 1 million 

monthly minutes will have two tiers: 

• Tier I—applicable to a provider’s 

1st 1 million monthly minutes; and 

• Tier II—applicable to a provider’s 

monthly minutes in excess of 1 million. 

Merging the current Tiers II and III 

allows the Commission to set a rate for 

the merged tier that is low enough to 

ensure that, in conjunction with the Tier 

I rate, providers are not overcompensated, i.e., do not earn an 

operating margin above the reasonable 

range, but still provides an incentive to 

continue providing additional minutes 

of service. 

59. Compensation Rates. Within this 

structure, as in 2017, the Commission 

seeks to set the rates for these tiers to 

limit the likelihood that any provider’s 

total compensation will be insufficient 

to provide a reasonable margin over its 

allowable expenses. The Commission 

also seeks to avoid overcompensating 

any provider, i.e., by allowing a 

provider to earn an operating margin 

above its total expenses that is outside 

the reasonable range. The Commission 

achieves this by setting per-minute 

compensation amounts of $6.27 for Tier 

I minutes and $3.92 for Tier II minutes. 

Together, these rates will enable 

providers subject to the tiered formula 

to recover their allowable expenses and 

earn an operating margin within the 

zone of reasonableness. In addition, 

because the Tier II rate is not 

substantially lower than the average perminute expenses of any provider subject 

to that rate, setting the rate at this level 

is unlikely to deter a provider from 

increasing its VRS minutes. 

60. The Commission does not agree 

with ZP’s contention that the 

Commission should not seek to limit the 

operating margins of VRS providers. 

VRS is entirely funded by contributions 

from telecommunications and VoIP 

service providers, which are generally 

passed on to communications rate 

payers. The Commission has a statutory 

obligation to ensure that these funds are 

used efficiently. As with the Universal 

Service Fund, moreover, the 

Commission is the steward of the TRS 

Fund and is obligated to protect it from 

waste, fraud, and abuse. To the extent 

that a VRS provider’s operating margin 

exceeds the reasonable range, the 

additional revenues paid from the TRS 

Fund (and the additional contributions 

exacted from telecommunications 

providers to cover them) are wasted. 

Further, to the extent that ZP’s perminute cost exceeds Sorenson’s, 

manipulating rates to provide a higher 

operating margin for a higher-cost 

provider would be inconsistent with 

economic principles, as in competitive 


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markets, less-efficient providers are not 

rewarded for having higher costs. 

61. Moreover, the limits the 

Commission sets to prevent 

overcompensation do not conflict with 

the Commission’s policy in the 2017 

VRS Compensation Order. In that 

rulemaking, as in every recent TRS 

compensation proceeding, the 

Commission made clear that avoiding 

overcompensation of VRS providers is a 

necessary objective to ensure that TRS 

is provided in the most efficient 

manner. For example, a key benefit of 

the tier structure, cited in that decision, 

is that it allows the Commission to set 

rates that permit each provider an 

opportunity to recover its reasonable 

costs of providing VRS, without 

overcompensating those providers who 

have lower actual costs because, for 

example, they have reached a more 

efficient scale of operations. Further, the 

Commission stressed that the range of 

reasonable operating margins set in that 

decision was a range of ‘‘allowable’’ 

operating margins, cautioning that ‘‘[the 

Commission does] not thereby authorize 

providers to recover additional ‘markup’ 

or profit that goes beyond such 

reasonable allowance.’’ Indeed, there 

would have been little point in setting 

an upper limit on the reasonable range 

of operating margins, had the 

Commission intended to permit 

providers free rein to earn profits above 

that limit. 

62. In 2017, while the Commission 

sought to reduce overcompensation, it 

stopped short of reducing compensation 

all the way down to cost. In that 

decision, the Commission sought to 

address a specific concern raised 

regarding tier structures: that they could 

limit providers’ incentives to grow and 

increase their efficiency, especially if a 

provider’s monthly minutes were about 

to cross the numerical threshold for the 

next tier. This theoretical risk often can 

be addressed by ensuring that tier 

boundaries are wide enough to cover a 

provider’s likely growth during the life 

of the rate plan. However, it appears 

that the Commission was uncertain 

whether the tier boundaries it set 

actually would be wide enough to 

completely erase this risk. Therefore, it 

also sought to set the rate for the next 

tier high enough to ensure that, if a 

provider did grow large enough that it 

came close to a tier boundary, it would 

not be deterred from crossing that 

boundary. Under today’s circumstances, 

by contrast, the Commission can set the 

tier boundaries wide enough to avoid 

this risk. By merging the existing Tiers 

II and III into a single tier, the 

Commission completely removes any 

tier boundary that could affect the 

growth incentives of the two largest 

providers. And by increasing the highest 

tier rate from $2.63 to $3.92, the 

Commission eliminates any realistic 

possibility of deterring any provider 

subject to that tier from serving 

additional minutes. 

63. Alternative Tiering Proposals. The 

Commission declines to adopt the 

alternative tiering proposals proposed 

by ZP and Sorenson in this proceeding. 

None of the alternatives would ensure 

that all providers subject to tiered rates 

earn operating margins within the 

reasonable range. The initial ZP and 

Sorenson proposals—to expand Tier II 

without changing the current perminute amounts for any tier—were 

made before the filing of the 2023 cost 

reports showing a substantial increase, 

as well as convergence, in these 

providers’ costs. The proponents of 

these proposals no longer advocate their 

adoption. 

64. As for the June 2023 proposals of 

ZP and Sorenson, they would do 

nothing to address the problems with 

the current tier structure, discussed 

above. In addition, both these proposals 

would result in excessive operating 

margins for one or both providers—even 

with providers’ reported costs adjusted 

upward. Sorenson’s September 2023 

proposal also would result in excessive 

operating margins for both Sorenson 

and ZP. 

Compensation for Small Providers 

65. For VRS providers—including 

new entrants—that handle 1 million 

monthly minutes or less, the 

Commission maintains a separate 

compensation formula. When the 

Commission established such a separate 

formula (the ‘‘emergent provider’’ 

formula, then applicable to VRS 

providers with up to 500,000 monthly 

minutes) in 2017, it was intended as a 

temporary measure, to allow the small 

providers operating at that time a 

reasonable window of opportunity to 

grow. The two providers compensated 

under that formula during this most 

recent compensation period did not 

experience a substantial growth in 

traffic volume, and they incurred perminute costs substantially higher than 

those of the two larger providers. 

Nevertheless, as the Commission 

recognized in 2017, the availability of 

additional, reliable service options from 

smaller VRS providers can effectively 

reinforce service quality incentives. 

66. Further, maintaining a separate 

compensation formula for smaller 

providers encourages new entry into the 

VRS program by potentially innovative 

firms. Some small providers may 

advance the availability of TRS by 

focusing on specialized offerings to 

niche populations not served by larger 

providers. Rather than applying a single 

compensation formula to all providers, 

regardless of size and cost structure— 

with the likely result of driving out the 

remaining small provider, deterring new 

entry, and leaving only two VRS 

providers from which VRS users could 

choose—the Commission preserves a 

separate VRS formula for the next 

period. The Commission concludes that 

this approach is the most efficient way 

to maintain the availability of 

functionally equivalent VRS, including 

specialized services that may be needed 

by niche populations. 

67. To avoid reducing any small 

provider’s incentive to grow their 

business, the Commission also raises the 

upper limit for application of the smallprovider formula from 500,000 to 1 

million monthly minutes. The 

Commission is concerned that if it 

maintained the 500,000-minutes limit, a 

small provider growing its minutes 

above that limit may not have an 

opportunity to recover its allowable 

costs and earn a reasonable operating 

margin. Based on the record (which 

indicates that the current small provider 

has not grown substantially since 2017), 

it seems unlikely that any small 

provider or new entrant will approach 

the expanded limit of 1 million monthly 

minutes during the next compensation 

period. However, to address that 

possibility, the Commission provides 

that, during the next compensation 

period, if a provider handled 1 million 

or fewer monthly minutes in June 2023 

(or in the first year of operation for a 

new entrant), and if such provider 

subsequently exceeds 1 million monthly 

minutes, the small-provider formula 

shall continue to apply to the provider’s 

first 1 million monthly minutes, and the 

large-provider formula shall apply to all 

monthly minutes after the first million. 

This is comparable to the plan adopted 

by the Commission in 2017 to address 

analogous circumstances under the 

emergent-provider formula. 

68. Compensation Amount. As in 

previous compensation proceedings, 

when the Commission sets 

compensation formulas for small VRS 

providers, there is no single ‘‘right 

answer’’ to the question; rather, the 

matter is inherently a question of 

administrative line-drawing. For VRS 

providers providing 1 million monthly 

minutes or fewer, the Commission 

adopts a compensation formula of $7.77 

per minute, applicable to all minutes of 

such providers. This formula is based 

on the adjusted per-minute expenses of 

the remaining VRS provider handling 1 

million monthly minutes or fewer, and 


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is designed to allow VRS providers with 

1 million monthly minutes or fewer a 

reasonable opportunity to earn an 

operating margin within the range of 

reasonableness. In setting this perminute formula, the Commission seeks 

to ensure that VRS providers that have 

demonstrated some ability to grow have 

an opportunity to recover their expenses 

and earn a reasonable operating margin. 

This formula also provides an 

opportunity for very small providers 

and new entrants to recover their 

reasonable fixed or start-up expenses. 

However, the Commission does not 

guarantee cost recovery for every such 

provider, regardless of their per-minute 

costs. 

Additional Compensation for VideoText Service 

69. The Commission prescribes 

additional per-minute compensation for 

the provision of a specialized form of 

VRS to ASL users who are deafblind, 

applicable to any VRS provider that 

chooses to offer it. Such additional 

compensation will be paid, in addition 

to the otherwise applicable per-minute 

amount, for each compensable minute 

of this specialized form of VRS. 

70. The Commission refers to this 

specialized form of VRS as Video-Text 

Service. In a typical VRS call, a deaf or 

hard-of-hearing person communicates in 

ASL to a CA, who then voices the 

message to the hearing party. The CA 

then signs the hearing party’s voice 

response to the ASL user. Some ASL 

users who are deafblind, however, are 

able to sign to a CA but unable to see 

the signs from the CA well enough to 

understand them. For such users, there 

is a special variant of VRS, in which a 

CA converts the other party’s side of the 

conversation to text (instead of ASL 

video), which the deafblind party can 

read using a refreshable braille display. 

A CA assigned to a Video-Text Service 

call must not only be fluent in ASL, but 

must also be a swift, accurate, and 

reliable typist. 

71. Up to the present, only GlobalVRS 

has offered this specialized form of VRS. 

With GlobalVRS’s announced exit from 

the VRS industry, Sorenson states it 

intends to provide Video-Text Service to 

users. Sorenson’s cost estimates indicate 

that, while most of the costs involved in 

offering this service do not vary 

significantly with the number of 

minutes served, there are some variable 

costs due to the higher salaries Sorenson 

expects to pay for those CAs equipped 

with the additional skills described 

above. 

72. Given the Commission’s statutory 

responsibility to ensure the availability 

of TRS to persons who are deafblind 

and the additional costs involved in 

providing this Video-Text Service, the 

Commission concludes that additional 

per-minute compensation should be 

authorized for the provision of this 

service by any VRS provider choosing to 

offer it. As an interim measure, pending 

the availability of more precise cost 

data, the Commission estimates the 

variable cost of this service based on the 

estimate submitted by Sorenson plus an 

operating margin to incentivize the 

provision of this specialized service, 

resulting in an additive of $0.19 per 

minute. This amount shall be paid to a 

VRS provider for each compensable 

conversation minute of Video-Text 

Service, in addition to the per-minute 

amount otherwise payable to the 

provider under the applicable 

compensation formula for an ordinary 

VRS call. Sorenson’s non-variable costs 

for this service will be recovered 

through the base compensation rate, as 

they are relatively unaffected by the 

number of minutes of Video-Text 

Service provided. 

73. Alternative Compensation 

Proposal. In its comments, GlobalVRS 

proposes a ‘‘Specialized Access Small 

Business’’ (SASB) designation as an 

alternative compensation approach. To 

qualify for this compensation, providers 

would have to serve 5% or less of total 

program minutes and provide 

specialized language and modality. Each 

SASB-designated provider would be 

subject to an individualized payment 

formula, reset annually to compensate 

for that provider’s reported allowable 

costs. 

74. The Commission rejects this 

proposal for several reasons. First, it 

excludes larger VRS providers from 

receiving additional compensation for 

the provision of specialized services. 

The Commission has stated that offering 

VRS users a choice among multiple 

providers can most effectively carry out 

the Commission’s statutory mandate to 

ensure that functionally equivalent VRS 

is available to all eligible individuals to 

the extent possible and in the most 

efficient manner. By adopting a formula 

that encourages only small providers to 

offer a specialized service, the 

Commission may prevent the service 

from being offered by a provider with 

greater access to the necessary resources 

and inputs, which may enable it to 

provide the service more effectively and 

at lower cost. Second, the method by 

which a provider would be 

compensated under GlobalVRS’s 

proposal is more administratively 

burdensome (as it requires annual 

recalculation of the formula based on 

annual review of the provider’s 

individual costs), and unlike the multiyear compensation plans generally 

preferred by the Commission provides 

no incentive for cost savings. 

75. Registration Process. A VRS 

provider may provide Video-Text 

Service to any registered VRS user who 

states that they need to use the service. 

Registered VRS users need not have 

their identities re-verified by the 

Database administrator before using 

Video-Text Service. To enable the TRS 

User Registration Database 

administrator to review and pay 

compensation requests for this service, 

the Commission directs the 

administrator to design and execute a 

field in the User Registration Database 

to allow a VRS provider to register a 

new or existing user as a registered user 

of Video-Text Service. Once the field is 

implemented, VRS providers shall 

update User Registration Database 

registrations to identify existing users of 

this service and additional users when 

they begin using this service. The 

Commission directs the Consumer and 

Governmental Affairs Bureau to release 

a public notice announcing when the 

Database is ready to accept such updates 

and setting a 60-day deadline for such 

updates of existing VRS users. Once a 

user is registered in the Database, the 

TRS Fund administrator may presume 

that call detail records associated with 

that user are for Video-Text Service, but 

the administrator may review and verify 

payment claims in accordance with the 

Commission’s rules. 

76. At this time, the Commission does 

not establish additional identification 

requirements for Video-Text Service 

users. The Commission notes that the 

conversation process in Video-Text 

Service is slower than an ordinary VRS 

conversation—and a less satisfactory 

process for those VRS users who can see 

and understand video-transmitted signs. 

Therefore, the Commission believes 

VRS users that do not need to receive 

a return communication in text will be 

unlikely to use this service. Further, the 

Commission believes the additive rate 

for Video-Text Service is not so high as 

to significantly increase incentives for 

fraud and abuse, especially as the 

number of minutes of use of this service 

is very small. 

77. Pending the implementation of 

this update, to allow Video-Text Service 

calls to be identified in call detail 

records submitted for payment, the 

Commission directs the TRS Fund 

administrator to accept from any VRS 

provider offering Video-Text Service a 

list of telephone numbers and IP 

addresses assigned to users who have 

requested Video-Text Service. VRS 

providers seeking compensation for 

Video-Text Service shall submit such 


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lists in accordance with instructions 

provided by the TRS Fund 

administrator. VRS providers shall 

provide additional information 

regarding such users and their VideoText Service calls to the TRS Fund 

administrator, upon request, as 

necessary for the administrator to 

perform its data collection, auditing, 

payment claim verification, and TRS 

Fund payment distribution functions. 

Other Specialized Services 

78. Except in the case of Video-Text 

Service, the record is insufficient for the 

Commission to make a determination as 

to whether, and under what 

circumstances, a specialized service 

should be supported by additional 

compensation. 

Effect of New Compensation Formulas 

79. Looking to just the effect on the 

TRS Fund, in the first year of the new 

period the compensation plan adopted 

herein would result in an estimated 

$143 million increase in costs compared 

to maintaining the current 

compensation formulas. Based on 

available data, it will result in an 

industry average operating margin 

within the range of reasonableness and 

provide an opportunity for providers to 

recover their costs plus earn a 

reasonable operating margin. 

Compensation Period and Adjustments 

80. The Commission concludes that 

the compensation period should be five 

years, ending June 30, 2028. This period 

is long enough to give providers 

certainty regarding the applicable 

compensation formulas, provide 

incentives for providers to become more 

efficient without incurring a penalty, 

and mitigate any risk of creating the 

‘‘rolling average’’ problem previously 

identified by the Commission regarding 

TRS. On the other hand, the period is 

short enough to allow timely 

reassessment of the compensation 

formulas in response to substantial cost 

changes and other significant 

developments. 

81. The Commission finds 

commenters’ proposal for a 

compensation period of 6–8 years 

incompatible with the need to 

periodically reassess compensation 

formulas in response to changes in 

provider cost structures, possible 

technological innovations, or other 

developments. Historically, the 

Commission has not set TRS Fund 

compensation periods longer than four 

years. Further, the VRS providers 

neither detail nor support their claims 

that increasing the compensation period 

to 6–8 years will affect providers’ 

stability, opportunities to obtain loans 

or attract long-term investment. The 

Commission is unpersuaded that any 

potential benefits of a longer period 

outweigh the benefits from reassessing 

compensation formulas on a five-year 

schedule. 

82. Adjustments for exogenous costs. 

Under the current methodology, an 

upward adjustment for welldocumented exogenous costs is 

available for costs that belong to a 

category of costs that the Commission 

has deemed allowable, result from new 

TRS requirements or other causes 

beyond the provider’s control, are new 

costs that were not factored into the 

applicable compensation formula, and if 

unrecovered, would cause a provider’s 

current costs (allowable expenses plus 

operating margin) to exceed its 

revenues. The Commission maintains 

this approach to exogenous cost 

recovery and codifies these criteria in its 

rules. Any exogenous cost claims 

should be submitted to the TRS Fund 

administrator with the provider’s 

annual cost report, so that the 

administrator can review such claims 

and make appropriate 

recommendations. The Commission 

delegates authority to the Consumer and 

Governmental Affairs Bureau to make 

determinations regarding timely 

submitted exogenous cost claims. 

83. Adjustments for future cost 

changes. In the Notice of Proposed 

Rulemaking, the Commission sought 

comment on whether per-minute 

compensation amounts should be 

adjusted during the compensation 

period to reflect inflation and 

productivity. The Commission agrees 

with several commenters that there 

should be annual adjustments for cost 

changes. In the past, the trend of VRS 

costs has been generally downward. 

However, in light of recent 

developments, including increases in 

general inflation indices and reports of 

increased wages for VRS CAs, the 

Commission finds it reasonable to adopt 

an adjustment factor to ensure that the 

rates continue to fairly compensate 

providers if relevant costs continue to 

increase. 

84. As a reference point for 

determining such annual adjustments, 

the Employment Cost Index appears 

best suited for tracking relevant cost 

changes. Specifically, the seasonally 

adjusted index of total compensation for 

private industry workers in 

professional, scientific, and technical 

services, which covers translation and 

interpreting services (including sign 

language services), can serve as a 

reasonable proxy for the annual change 

in VRS costs. As interpreters, CAs fall 

squarely in this labor cost category, and 

labor and related costs for CAs, non-CA 

professionals, and administrative 

personnel make up the bulk of VRS 

costs. 

85. This index is better suited than 

the Producer Price Index or the Gross 

Domestic Product Chain-type Price 

Index (GDP–CPI). Both these indices 

reflect changes in the national economy 

as a whole, based on a broad array of 

data from various product and service 

sectors. While these indices may be 

useful inflation measures for the 

economy as a whole, reflecting the ups 

and downs of so many disparate 

industries may not ensure that annual 

adjustments are reasonable. A more 

reliable approach is one that tracks 

changes in a related industry sector. 

Commenters agree that labor is the 

primary expense incurred by VRS 

providers and the most likely to 

increase over time, and the Commission 

finds that labor costs are likely to be a 

key determinant of the quality of VRS as 

currently provided. While there is no 

index that focuses solely on the cost of 

VRS, the index the Commission adopts 

here measures employment cost for a 

sector that includes translation and 

interpreting services, and thus includes 

employee costs for VRS as well as other 

highly comparable services. Adopting 

such an index is more likely to provide 

a stable inflation adjustment that 

reflects cost changes providers are likely 

to incur, while excluding changes that 

are specific to unrelated sectors of the 

national economy. 

86. As for productivity gains, the 

record provides no clear indication of 

the extent to which, if at all, recent VRS 

cost increases have been offset by 

productivity gains. Absent more specific 

data, the Commission finds it reasonable 

to presume no change to productivity 

over the rate period. 

87. The Commission delegates 

authority to the Consumer and 

Governmental Affairs Bureau to approve 

annual inflation adjustments of each 

compensation formula, beginning with 

Fund Year 2024–25. The Commission 

directs the TRS Fund administrator to 

specify in its annual TRS Fund report, 

beginning with the report due May 1, 

2024, the index values for each quarter 

of the previous calendar year and the 

last quarter of the year before that. The 

Commission also directs the TRS Fund 

administrator to propose adjustments 

for each per-minute amount by a 

percentage equal to the percentage 

change in the index between the first 

and fifth quarters specified in the report. 

Those adjusted compensation levels 

also should be used to calculate the 

recommended funding requirement for 


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VRS and the relevant contribution 

factor. 

Accountability Concerns 

88. In adopting VRS compensation 

formulas for the next five years, the 

Commission relies on estimates of 

future provider costs that, in total, 

exceed the most recent historical level 

by approximately $121.5 million, or 

27%. In 2023–24, as a result, VRS 

compensation will be $142.5 million, or 

29.5%, higher than it would be under 

the current formulas. This increase in 

compensation—which will require 

higher TRS Fund contributions from 

telecommunications and VoIP service 

providers—is premised on the 

Commission’s belief that maintaining 

and improving VRS service quality 

requires a major increase in CA wages 

and technology spending by VRS 

providers. As stewards of the TRS Fund, 

the Commission needs to be able to 

assess the extent to which the increased 

TRS Fund support the Commission 

authorizes is achieving the intended 

results. 

89. This requires the collection, 

review, and auditing of relevant cost 

data by the TRS Fund administrator. 

Therefore, the Commission delegates 

authority to the Consumer and 

Governmental Affairs Bureau, in 

coordination with the Office of the 

Managing Director, to work with the 

TRS Fund administrator to update the 

Interstate TRS Fund Annual Provider 

Data Request to align with the actions 

taken in this proceeding. The 

Commission directs these entities to 

focus special effort on ensuring the 

collection of accurate data quantifying 

CA wages and benefits, based on 

uniform definitions and methods of 

calculating key elements such as hourly 

CA compensation, and expenditures on 

improved technology. The Commission 

expects that annual provider cost 

reports shall include detailed 

descriptions of ongoing, planned, 

recently completed, and canceled 

engineering and R&D projects, the 

purpose and intended outcome of each 

project, and the current or projected 

timeline for each project. 

90. By annually collecting such 

specific information, the administrator 

will enable the Commission to review 

whether the increased compensation 

authorized herein is having the 

intended results of enabling service 

improvements that enhance functional 

equivalence, and to make appropriate 

changes in compensation at the end of— 

or if necessary, during—the five-year 

compensation period. In addition, such 

information will help the Commission 

ensure that R&D supported by the TRS 

Fund is being used for TRS 

improvements, rather than projects of 

little or no benefit to TRS users. The 

inclusion of this additional information 

and data will also ensure the 

Commission may address the timing of 

cost changes and concerns of attempted 

regulatory arbitrage. 

True-Up 

91. True-Up of Compensation. The 

Commission directs the TRS Fund 

administrator to perform a true-up, after 

the effective date of document FCC 23– 

78, of the VRS compensation payments 

made pursuant to waivers granted by 

the Commission to extend the 

expiration date of the previously 

adopted compensation formulas until 

the effective date of the new 

compensation formulas. The revised 

compensation formulas adopted in 

document FCC 23–78 are based on 

estimates of the costs VRS providers 

will incur in the 2023–24 Fund Year. 

Overall, these revised formulas 

substantially increase provider 

compensation to reflect recent increases 

in reported costs, as well as the 

Commission’s expectation of further 

increases in certain areas. To allow 

providers a reasonable opportunity to 

recover such increased costs, the 

Commission concludes that they should 

be compensated under the revised 

formulas for all services provided 

during the 2023–24 TRS Fund Year. The 

Commission finds that the benefits of 

ensuring full compensation for this 

Fund Year outweigh the minor 

administrative burden involved in such 

a true-up process. Accordingly, after 

document FCC 23–78 becomes effective, 

the Commission directs the TRS Fund 

administrator to make a supplemental 

payment to each VRS provider for all 

compensable minutes of service 

provided after June 30, 2023, for which 

compensation was paid under the 

extended formulas. Such supplemental 

payment shall consist of the difference 

between the compensation that would 

be applicable under document FCC 23– 

78 and the compensation actually paid 

to the provider. 

Final Regulatory Flexibility Analysis 

92. As required by the Regulatory 

Flexibility Act of 1980, as amended, the 

Commission incorporated an Initial 

Regulatory Flexibility Analysis (IRFA) 

into the Notice of Proposed Rulemaking. 

The Commission sought written public 

comment on the proposals in the Notice 

of Proposed Rulemaking, including 

comment on the IRFA. No comments 

were received in response to the IRFA. 

93. Need for, and Objectives of, the 

Report and Order. In document FCC 23– 

78, pursuant to 47 U.S.C. 225, the 

Commission adopts a five-year 

compensation plan for VRS. To provide 

the appropriate compensation for the 

provision of, and continued availability 

of VRS, the Commission adopts a 

compensation plan that addressed 

increasing costs due to inflation and the 

effect of the COVID–19 pandemic. It 

also updates the inputs for reasonable 

cost criteria to improve the ability of 

VRS providers to provide and receive 

compensation for VRS that is 

functionally equivalent. The 

Commission also adopts a compensation 

formula for the provision of VRS to 

individuals who are deafblind, as a 

specialized service to help ensure the 

continued availability of this service to 

the extent possible for the individuals 

who use this service. Finally, to address 

changes in the cost structures of various 

VRS providers, the Commission 

transitions from a three-tiered rate 

structure to a two-tiered rate structure 

for larger VRS providers providing more 

than one million monthly minutes, 

while maintaining a separate 

compensation rate for providers 

providing one million or fewer monthly 

minutes. 

94. Description and Estimate of the 

Number of Small Entities to Which the 

Rules Will Apply. The policies adopted 

in document FCC 23–78 will affect 

obligations of VRS providers. These 

services can be included within the 

broad economic category of All Other 

Telecommunications. 

95. Description of Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements for Small 

Entities. The provider compensation 

plan will not create significant 

reporting, recordkeeping, or other 

compliance requirements for small 

entities. VRS providers that seek 

compensation for the provisioning of a 

specialized form of VRS to deafblind 

individuals must identify any users of 

that specialized service in the TRS User 

Registration Database. This minor 

database modification will be 

implemented through a new field in the 

TRS User Registration Database that will 

allow small and other VRS providers to 

identify users of that service. The 

Commission anticipates this 

modification to be of minimal impact to 

small and other VRS providers, as it is 

the addition of a single new field to a 

database VRS users are already using 

and will allow them to be fully 

compensated for providing VRS to 

deafblind users. 

96. Steps Taken to Minimize the 

Significant Economic Impact on Small 

Entities, and Significant Alternatives 

Considered. The adopted compensation 


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structure and formulas will apply only 

to entities who are, or may become, 

certified by the Commission to offer 

VRS in accordance with its rules. The 

Commission adopted these multi-year 

compensation formulas to compensate 

providers for their reasonable cost of 

providing service, to reduce the burden 

on TRS Fund contributors and their 

subscribers, and to ensure that TRS is 

made available to the greatest extent 

possible and in the most efficient 

manner. The Commission adopted 

separate compensation structures for 

large and small providers to allow small 

entities the opportunity to recover their 

costs in providing VRS, which the 

record suggests are higher than for large 

providers who have achieved some level 

of economies of scale. This action by the 

Commission should minimize the 

economic impact for small entities who 

provide VRS. 

97. The Commission considered 

various proposals for compensation 

methodologies and compensation 

structure and formulas from small and 

other entities, and the adopted rules 

reflect its best efforts to minimize 

significant economic impact on small 

entities. The Commission adjusted the 

allowable cost categories that it 

considers in determining the 

appropriate compensation formulas for 

the provisioning of VRS to allow small 

and other providers to recover costs and 

benefit economically from the increased 

compensation they will receive. 

Ordering Clauses 

98. Pursuant to sections 1, 2, and 225 

of the Communications Act of 1934, as 

amended, 47 U.S.C. 151, 152, 225, 

document FCC 23–78 is adopted and 

the Commission’s rules are hereby 

amended as set forth. 

Congressional Review Act 

99. The Commission sent a copy of 

document FCC 23–78 to Congress and 

the Government Accountability Office 

pursuant to 5 U.S.C. 801(a)(1)(A). 

Final Paperwork Reduction Act of 1995 

Analysis 

100. Document FCC 23–78 does not 

contain new or modified information 

collection requirements subject to the 

Paperwork Reduction Act of 1995, 

Public Law 104–13. Therefore, it also 

does not contain any new or modified 

information collection burden for small 

business concerns with fewer than 25 

employees, pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198. See 44 U.S.C. 

3506(c)(4). 

List of Subjects in 47 CFR Part 64 

Individuals with disabilities, 

Telecommunications, Telephones. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary, Office of the Secretary. 

Final Rules 

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 

■ 1. The authority citation for part 64 

continues to read as follows: 

Authority: 47 U.S.C. 151, 152, 154, 201, 

202, 217, 218, 220, 222, 225, 226, 227, 227b, 

228, 251(a), 251(e), 254(k), 255, 262, 276, 

403(b)(2)(B), (c), 616, 617, 620, 1401–1473, 

unless otherwise noted; Pub. L. 115–141, Div. 

P, sec. 503, 132 Stat. 348, 1091. 

■ 2. The authority citation for subpart F 

continues to read as follows: 

Authority: 47 U.S.C. 151–154; 225, 255, 

303(r), 616, and 620. 

■ 3. Amend § 64.601 by redesignating 

paragraphs (a)(52) through (55) as 

paragraphs (a)(53) through (56) and 

adding new paragraph (a)(52) to read as 

follows: 

§ 64.601 Definitions and provisions of 

general applicability. 

(a) * * * 

(52) Video-text service. A specialized 

form of VRS that allows people who are 

deafblind who use sign language and 

text to communicate through a video 

link. The video link allows the 

communications assistant to view and 

interpret a party’s sign language 

communication and the text 

functionality allows the 

communications assistant to send text to 

peripheral devices employed in 

connection with equipment, including 

software, to translate, enhance, or 

otherwise transform advanced 

communications services into a form 

accessible to people who are deafblind. 

The communications assistant relays the 

conversation using sign language, voice, 

and text between the participants of the 

call. 

* * * * * 

■ 4. Add § 64.643 to subpart F to read 

as follows: 

§ 64.643 Compensation for Video Relay 

Service. 

For the period from July 1, 2023, 

through June 30, 2028, TRS Fund 

compensation for the provision of Video 

Relay Service (VRS) shall be as 

described in this section. 

(a) First year. For Fund Year 2023–24, 

TRS Fund compensation shall be paid 

in accordance with the following 

formulas. 

(1) The Compensation Amount for 

VRS providers handling one million 

conversation minutes or less in a month 

shall be $7.77 per minute. 

(2) The Compensation Amount for 

VRS providers handling more than one 

million conversation minutes in a 

month shall be: 

(i) $6.27 per minute for the first 

1,000,000 conversation minutes each 

month; 

(ii) $3.92 per minute for monthly 

conversation minutes in excess of 

1,000,000. 

(3) For Video-Text Service, as defined 

in this subpart, in addition to the 

applicable Compensation Amount 

under paragraph (a)(1) or (2) of this 

section, an additional Compensation 

Amount of $0.19 per minute shall be 

paid for each conversation minute. 

(b) Succeeding years. For each 

succeeding Fund Year through June 30, 

2028, each per-minute Compensation 

Amount described in paragraph (a) of 

this section shall be redetermined in 

accordance with the following equation: 

AFY = AFY¥1 * (1+IFFY) 

Where: 

AFY is the Compensation Amount for the new 

Fund Year, 

AFY–1 is the Compensation Amount for the 

previous Fund Year, 

IFFY is the Inflation Adjustment Factor for 

the new Fund Year. 

(c) Inflation Adjustment Factor. The 

Inflation Adjustment Factor for a Fund 

Year (IFFY), to be determined annually 

on or before June 30, is equal to the 

difference between the Initial Value and 

the Final Value, as defined herein, 

divided by the Initial Value. The Initial 

Value and Final Value, respectively, are 

the values of the Employment Cost 

Index compiled by the Bureau of Labor 

Statistics, U.S. Department of Labor, for 

total compensation for private industry 

workers in professional, scientific, and 

technical services, for the following 

periods: 

(1) Final Value—The fourth quarter of 

the Calendar Year ending 6 months 

before the beginning of the Fund Year; 

and 

(2) Initial Value—The fourth quarter 

of the preceding Calendar Year. 

(d) Exogenous cost adjustments. In 

addition to LFY, a VRS provider shall be 

paid a per-minute exogenous cost 

adjustment if claims for exogenous cost 

recovery are submitted by the provider 

and approved by the Commission on or 

before June 30. Such exogenous cost 

adjustment shall equal the amount of 


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Federal Register / Vol. 88, No. 201 / Thursday, October 19, 2023 / Rules and Regulations 72007 

such approved claims divided by the 

provider’s projected minutes for the 

Fund Year. An exogenous cost 

adjustment shall be paid if a VRS 

provider incurs well-documented costs 

that: 

(1) Belong to a category of costs that 

the Commission has deemed allowable; 

(2) Result from new TRS requirements 

or other causes beyond the provider’s 

control; 

(3) Are new costs that were not 

factored into the applicable 

compensation formula; and 

(4) If unrecovered, would cause a 

provider’s current allowable-expensesplus-operating margin to exceed its 

revenues. 

[FR Doc. 2023–22936 Filed 10–18–23; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 230224–0053; RTID 0648– 

XD276] 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Pollock in Statistical 

Area 610 in the Gulf of Alaska 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; closure. 

SUMMARY: NMFS is prohibiting directed 

fishing for pollock in Statistical Area 

610 in the Gulf of Alaska (GOA). This 

action is necessary to prevent exceeding 

the annual 2023 total allowable catch of 

pollock for Statistical Area 610 in the 

GOA. 

DATES: Effective 1200 hours, Alaska 

local time (A.l.t.), October 17, 2023, 

through 2400 hours, A.l.t., December 31, 

2023. 

FOR FURTHER INFORMATION CONTACT: 

Krista Milani, 907–581–2062. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the groundfish fishery in the 

GOA exclusive economic zone 

according to the Fishery Management 

Plan for Groundfish of the Gulf of 

Alaska (FMP) prepared by the North 

Pacific Fishery Management Council 

under authority of the MagnusonStevens Fishery Conservation and 

Management Act. Regulations governing 

fishing by U.S. vessels in accordance 

with the FMP appear at subpart H of 50 

CFR parts 600 and 679. 

The annual 2023 total allowable catch 

(TAC) of pollock in Statistical Area 610 

of the GOA is 26,958 metric tons (mt) 

as established by the final 2023 and 

2024 harvest specifications for 

groundfish in the GOA (88 FR 13238, 

March 2, 2023). 

In accordance with § 679.20(d)(1)(i), 

the Regional Administrator has 

determined that the annual 2023 TAC of 

pollock in Statistical Area 610 of the 

GOA will soon be reached. Therefore, 

the Regional Administrator is 

establishing a directed fishing 

allowance of 26,758 mt and is setting 

aside the remaining 200 mt as bycatch 

to support other anticipated groundfish 

fisheries. In accordance with 

§ 679.20(d)(1)(iii), the Regional 

Administrator finds that this directed 

fishing allowance has been reached. 

Consequently, NMFS is prohibiting 

directed fishing for pollock in Statistical 

Area 610 of the GOA. 

While this closure is effective, the 

maximum retainable amounts at 

§ 679.20(e) and (f) apply at any time 

during a trip. 

Classification 

NMFS issues this action pursuant to 

section 305(d) of the Magnuson-Stevens 

Act. This action is required by 50 CFR 

part 679, which was issued pursuant to 

section 304(b), and is exempt from 

review under Executive Order 12866. 

Pursuant to 5 U.S.C. 553(b)(B), there 

is good cause to waive prior notice and 

an opportunity for public comment on 

this action, as notice and comment 

would be impracticable and contrary to 

the public interest, it would prevent 

NMFS from responding to the most 

recent fisheries data in a timely fashion, 

and would delay the closure of directed 

fishing for pollock in Statistical Area 

610 of the GOA. NMFS was unable to 

publish a notice providing time for 

public comment because the most 

recent, relevant data only became 

available as of October 15, 2023. 

The Assistant Administrator for 

Fisheries, NOAA also finds good cause 

to waive the 30-day delay in the 

effective date of this action under 5 

U.S.C. 553(d)(3). This finding is based 

upon the reasons provided above for 

waiver of prior notice and opportunity 

for public comment. 

Authority: 16 U.S.C. 1801 et seq. 

Dated: October 16, 2023. 

Jennifer M. Wallace, 

Acting Director, Office of Sustainable 

Fisheries, National Marine Fisheries Service. 

[FR Doc. 2023–23095 Filed 10–16–23; 4:15 pm] 

BILLING CODE 3510–22–P 


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