[Federal Register Volume 83, Number 124 (Wednesday, June 27, 2018)]
[Rules and Regulations]
[Pages 30082-30088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13753]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 13-24 and 03-123; FCC 18-79]


IP CTS Modernization and Reform

AGENCY: Federal Communications Commission.

ACTION: Final rule and clarification.

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SUMMARY: In this document, the Commission alters the methodology for 
setting provider compensation rates for internet Protocol Captioned 
Telephone Service (IP CTS) and establishes interim compensation rates 
for Fund Years 2018-19 and 2019-20. The Commission also adopts rules 
that address the provision of volume control on IP CTS devices, require 
the accuracy of IP CTS information disseminated by providers, and 
prohibit the provision of service to ineligible users. Finally, the 
Commission declares that speech-to-text automation, without the 
participation of a communications assistant (CA), may be used to 
generate IP CTS captions.

DATES: 
    Effective dates: 47 CFR 64.604(c)(10) and (c)(13)(i)-(ii) are 
effective July 27, 2018. The Commission will publish a document in the 
Federal Register announcing the effective date of 47 CFR 
64.604(c)(11)(v) and the amendments to 47 CFR 64.604(c)(5)(iii)(D)(1), 
(6), and (c)(13)(iii)-(iv) of the Commission's rules, which contain 
modified information collection requirements that have not yet been 
approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. The IP CTS 
compensation rate adopted for the 2018-19 Fund Year shall be effective 
July 1, 2018.
    Applicability date: IP CTS providers must comply with the 
requirement to ensure that any volume control or other amplification 
feature can be adjusted separately and independently of the caption 
feature on or before December 8, 2018.

FOR FURTHER INFORMATION CONTACT: Michael Scott, Consumer and 
Governmental Affairs Bureau, FCC, at (202) 418-1264, or email 
<a href="/cdn-cgi/l/email-protection#d19cb8b2b9b0b4bdff82b2bea5a591b7b2b2ffb6bea7"><span class="__cf_email__" data-cfemail="672a0e040f06020b4934040813132701040449000811">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order and Declaratory Ruling in CG Docket Nos. 03-123 and 13-24; 
document FCC 18-79, adopted on June 7, 2018 and released on June 8, 
2018. Document FCC 18-79 concerns the modernization and reform of the 
Commission's rules for IP CTS. The Commission previously sought comment 
on these issues in Misuse of internet Protocol (IP) Captioned Telephone 
Service; Telecommunications Relay Services and Speech-to-Speech 
Services for Individuals with Hearing and Speech Difficulties, 
published at 78 FR 54201, September 3, 2013 (2013 IP CTS Reform FNPRM). 
A Further Notice of Proposed Rulemaking (Further Notice) and Notice of 
Inquiry are contained in document FCC 18-79 and address additional 
issues concerning the funding, administration, and user eligibility for 
this service, as well as performance goals and metrics to ensure 
service quality for users. The Further Notice and Notice of Inquiry 
will be published elsewhere in the Federal Register. The full text of 
document FCC 18-79 will be available for public inspection and copying 
via the Commission's Electronic Comment Filing System (ECFS), and 
during regular business hours at the FCC Reference Information Center, 
Portals II, 445 12th Street SW, Room CY-A257, Washington, DC 20554. To 
request materials in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an email 
to <a href="/cdn-cgi/l/email-protection#2f494c4c1a1f1b6f494c4c01484059"><span class="__cf_email__" data-cfemail="badcd9d98f8a8efadcd9d994ddd5cc">[email protected]</span></a>, or call the Consumer and Governmental Affairs Bureau 
at (202) 418-0530 (voice), (844) 432-2272 (videophone), or (202) 418-
0432 (TTY).

[[Page 30083]]

Congressional Review Act

    The Commission sent a copy of document FCC 18-79 to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act, 5 U.S.C. 801(a)(1)(A).

Final Paperwork Reduction Act of 1995 Analysis

    The Report and Order in document FCC 18-79 contains modified 
information collection requirements, which are not effective until 
approval is obtained from OMB. The Commission, as part of its 
continuing effort to reduce paperwork burdens, will invite the general 
public to comment on these information collection requirements as 
required by the PRA. The Commission will publish a separate document in 
the Federal Register announcing approval of the information collection 
requirements. Pursuant to the Small Business Paperwork Relief Act of 
2002, Public Law 107-198, 44 U.S.C. 3506(c)(4), the Commission 
previously sought comment on how the Commission might ``further reduce 
the information burden for small business concerns with fewer than 25 
employees.'' 2013 IP CTS Reform FNPRM.

Synopsis

IP CTS Compensation

    1. IP CTS, a form of telecommunications relay services (TRS) 
supported by the Interstate TRS Fund (TRS Fund), allows individuals 
with hearing loss to both read captions and use their residual hearing 
to understand a telephone conversation. IP CTS providers receive 
compensation from the TRS Fund on a per-minute basis. The compensation 
rate has been determined using a methodology known as the Multistate 
Average Rate Structure (MARS) Plan, which calculates the weighted 
average per-minute compensation paid by state TRS programs to providers 
of intrastate CTS for the prior calendar year.
    2. The Commission's mandate in determining TRS compensation rates 
is to ensure that the rates correlate to actual reasonable costs. MARS 
is no longer an effective methodology to accomplish this. The 
Commission therefore terminates use of the MARS methodology.
    3. The per-minute costs currently reported by IP CTS providers are 
not comparable to those for CTS--largely, it appears, because demand 
for IP CTS now greatly exceeds the demand for CTS. Specifically, from 
2011 to 2017, annual CTS minutes declined from approximately 40 million 
to 19.9 million, while annual IP CTS minutes grew from approximately 29 
million to 362 million--an amount that is more than 18 times greater 
than annual CTS minutes. Average per-minute expenses for IP CTS dropped 
from $2.0581 in 2011 to $1.2326 in 2017, while the MARS rate increased 
from $1.7630 to $1.9467 for the same period. The 2017-18 MARS rate 
exceeds the average 2017 IP CTS expenses by approximately 58 percent. 
This divergence invalidates the rationale for continuing to use a MARS-
based rate to determine IP CTS compensation.
    4. Setting a Rate Closer to Reasonable IP CTS Costs. The Commission 
finds it important to act without delay to bring provider compensation 
more in line with reported provider costs. IP CTS minutes have 
increased dramatically over the last nine years and the contribution 
base for the TRS Fund has been shrinking, requiring interstate and 
international telecommunications and VoIP service providers, and their 
subscribers, to contribute an ever-larger percentage of revenues to 
support these services. The Commission is also concerned that excessive 
compensation for IP CTS may increase provider incentives to recruit and 
register IP CTS users, regardless of their actual need for the service, 
leading to even greater potential for waste of TRS Fund dollars.
    5. The Commission concludes that the most recently filed cost and 
demand data are sufficiently reliable to serve as a basis for setting 
interim IP CTS rates. As with video relay service (VRS) compensation 
rates, a weighted average of the historical per-minute expenses 
reported by providers for 2017 and the projected per-minute expenses 
for 2018, which for IP CTS is approximately $1.28 per minute, provides 
a reasonable baseline for taking initial steps to move the IP CTS 
compensation rate toward actual cost. Further, the Commission finds it 
reasonable to allow an operating margin between 7.6% to 12.35% for IP 
CTS providers in the same ``zone of reasonableness'' that applies to 
VRS providers given the service sector similarities between VRS and IP 
CTS, and that the bulk of costs for both are attributable to labor 
rather than capital. Adding an operating margin within that reasonable 
range to the average IP CTS expenses of $1.28 results in a total 
average cost between approximately $1.38 and $1.44.
    6. While the Commission's goal is to move the IP CTS rate to a 
cost-based level, immediately reducing the IP CTS compensation rate to 
this extent could produce a disruption in the IP CTS market and 
potentially negative consequences for both providers and consumers. 
Initial rate reductions of approximately 10 percent per year, over two 
years, will strike a reasonable balance between the need to bring IP 
CTS rates in line with costs and reduce the TRS Fund contribution 
burden, and avoiding rate shock for IP CTS providers and potential 
disruption of the provision and quality of service for consumers. This 
approach will allow a reasonable opportunity for higher-cost providers 
to adjust to average-cost-based compensation by reducing unnecessary 
expenses--and thereby encourage multiple providers to remain in the IP 
CTS market. Finally, allowing the compensation rate to stay, for the 
present, at levels well above average allowable costs allows IP CTS 
providers to continue participating in research and thus will ``not 
discourage or impair the development of improved technology.'' 47 
U.S.C. 225(d)(2).
    7. Applying these interim rates for a period of two years will 
allow the Commission to fully evaluate the appropriateness of some 
categories of allowable costs for this service, as well as the extent 
to which compensation for this service should be subject to price-cap-
index adjustments. In addition, this period will afford the Commission 
an opportunity to determine how best a fully automated method of 
providing IP CTS should be compensated.
    8. The Commission directs that the IP CTS compensation rate be 
reduced in two steps of approximately 10 percent each: First, a 
$0.19467 reduction from the $1.9467 per minute rate currently in 
effect, to a rate of $1.75 per minute for the 2018-19 Fund Year, from 
July 1, 2018, to June 30, 2019; and second, a further $0.17 reduction 
of the compensation rate from $1.75 to $1.58 per minute for the 2019-20 
Fund Year, from July 1, 2019, to June 30, 2020. These reductions will 
save the TRS Fund a minimum of $399 million over two years, as compared 
to applying the MARS rate. If the Commission finds that actual costs 
are substantially below the interim rates, the Commission may adjust 
those rates accordingly.
    9. While the use of provider cost data adds complexity, and may 
require detailed analysis, it would not be reasonable for the 
Commission, in order to avoid such complexity, to continue to rely on a 
proxy that does not bear a reasonable relationship to actual costs. Any 
burden arising from switching to a more complex rate methodology is 
outweighed by the benefits of having a more accurate compensation rate, 
including the benefit of savings to the Fund.
    10. Setting interim rates for two years, rather than a single year, 
will provide a

[[Page 30084]]

greater degree of rate certainty for providers and can mitigate the 
risk of rewarding inefficiency, discouraging innovation, and 
incentivizing providers to incur unnecessary costs, all potential 
effects of annual cost-of-service rate setting. A multi-year approach 
allows individual providers to gain additional profit during each 
multi-year period from any innovations and efficiency enhancing 
measures that reduce their per-minute costs during that period.
    11. The TRS Fund administrator's cost calculations used to 
establish the interim rates are based on the same categories of 
provider costs that generally have been deemed allowable in calculating 
rates for other forms of TRS. Provider objections to these categories 
raise no significant arguments that have not been addressed and 
previously resolved in the Commission's prior rulings.
    12. Collecting Additional Cost Information for Setting Future IP 
CTS Rates. The Commission remains concerned that some of the expenses 
incurred by IP CTS providers have not been reported in sufficient 
detail to enable the Fund administrator to confirm their allowability 
and reasonableness. Some IP CTS providers, who contract with other 
entities for the provision of call centers, CA staffing, and other 
services, as well as the licensing of intellectual property, report 
payments to contractors as ``subcontractor expenses,'' with no 
breakdown into specific expense reporting categories. Given that the 
expenses classified in this manner comprise an unusually large portion 
of total reported IP CTS costs, such reporting obscures the nature of a 
substantial portion of reported IP CTS costs and hinders review of such 
costs incurred by such providers to assess their allowability and 
reasonableness. Accordingly, the Commission directs the TRS Fund 
administrator to require IP CTS providers that contract for the supply 
of services used in the provision of TRS to include information about 
payments under such contracts classified according to the substantive 
cost categories specified by the administrator, including, e.g., 
allocation of subcontractor expenses between call center expenses and 
intellectual property licensing fees, and how the provider determined 
or calculated the portion of contractual payments attributable to each 
cost category. All cost reports submitted in the future by IP CTS 
providers shall provide such a breakdown and explanation. The 
Commission also directs the Fund administrator, to the extent that the 
administrator reasonably deems necessary for the purpose of determining 
the allowability and reasonableness of costs reported to be incurred in 
the provision of TRS, to require providers to submit additional detail 
on such contractor expenses, including the submission of complete 
copies of such contracts and related correspondence or other records 
and information relevant to determining the nature of the services 
provided and the allocation of the costs of such services to cost 
categories. This additional transparency will help the Commission 
ensure that the costs reported by providers are reasonable.
    13. The Commission believes that its current authority to collect 
the above information is contained in rules that require TRS providers 
to provide the TRS Fund administrator ``true and adequate data, and 
other historical, projected and state rate related information 
reasonably requested to determine the TRS Fund revenue requirements and 
payments,'' and which authorize both the TRS Fund administrator and the 
Commission ``to examine and verify TRS provider data as necessary to 
assure the accuracy and integrity of TRS Fund payments.'' 47 CFR 
64.604(c)(5)(iii)(D)(1), (6). To further clarify such authority, 
however, and to provide for greater consistency in the rules, the 
Commission amends its rules to explicitly provide for the collection of 
information laid out in the preceding paragraph. In addition, the 
Commission further amends its rules to provide that, in the course of 
an audit or otherwise upon demand, an IP CTS provider must make 
documentation, including contracts with entities providing services or 
equipment directly related to the provision of IP CTS, available to the 
Commission, the TRS Fund administrator, or any person authorized by the 
Commission or TRS Fund administrator to conduct an audit.

Measures To Limit Unnecessary IP CTS Use and Waste of the TRS Fund

    14. The dramatic growth in IP CTS call volume appears to result in 
part from provider practices that promote over-use of IP CTS, including 
by people with hearing loss who may be able to achieve functionally 
equivalent telephone service using other forms of off-the-shelf or 
assistive technologies. The Commission concludes that the following 
steps are needed to minimize such unnecessary use, and the consequent 
waste of TRS Fund resources.
    15. Volume Control and Caption Settings. The Commission amends its 
rules to prohibit IP CTS providers from linking the volume control and 
captioning functions of an IP CTS device or software application. 
Allowing users to enable volume control only when captions are turned 
on promotes waste, in that it forces the costly generation of captions 
even when the user only requires increased volume to communicate 
effectively by phone. In addition, decoupling these features will 
enable consumers who are not registered IP CTS users to access the 
amplification features of IP CTS devices without the captions. 
Compliance with a delinking requirement will not impose a substantial 
cost on IP CTS providers, and any likely cost will be more than offset 
by the efficiency gain resulting from the reduction in unnecessary 
captioning services.
    16. The compliance deadline for making this change is December 8, 
2018. IP CTS providers must ensure that all IP CTS devices--as well as 
user software for such devices--that they newly distribute to users 
after December 8, 2018 are configured to allow volume control to be 
adjusted independently of the captioning feature. The Commission also 
requires providers to ensure that all previously distributed devices 
are delinked by December 8, 2018.
    17. Website, Advertising and Educational Information Notifications. 
The Commission amends its rules to require IP CTS providers to include 
both of the following factual notifications in a clear and prominent 
location on their advertising brochures, websites, user manuals, and 
other informational materials and websites:
    <bullet> IP captioned telephone service may use a live operator. 
The operator generates captions of what the other party to the call 
says. These captions are then sent to your phone.
    <bullet> There is a cost for each minute of captions generated, 
paid from a federally administered fund.
    The first part of the notification is not required from those IP 
CTS providers who do not use live CAs. In the case of websites, The 
Commission requires such language to be included on the home page, each 
page that provides consumer information about IP CTS, and each page 
that provides information on how to order IP CTS or IP CTS equipment.
    18. Requiring these notifications will enhance the Commission's 
efforts to prevent casual or inadvertent use of IP CTS and will not 
impose a significant burden that outweighs their benefits. When 
captioning devices are turned on by default, it is critical to make 
potential users aware through ``multiple and repeated sources of 
information'' that IP CTS involves significant costs and must not be 
used by individuals who do not

[[Page 30085]]

need it. Persons that truly need this free service for functionally 
equivalent telephone service have every incentive to obtain it. Rather 
than deter IP CTS use by such individuals, these notices will help to 
ensure that individuals who might be attracted to it are aware of its 
functions and financing.
    19. General Prohibition on Providing Service to Users Who Do Not 
Need It. The Commission modifies the current prohibition on VRS 
providers engaging in fraudulent, abusive, and wasteful practices by 
amending it to include IP CTS providers. As amended, the rule prohibits 
both IP CTS and VRS providers from engaging in practices that the 
provider knows or has reason to know will cause or encourage (1) the 
unauthorized use of TRS, (2) false or unverified TRS Fund compensation 
claims, (3) the making of TRS calls that would not otherwise be made, 
and (4) the use of TRS by consumers who do not need the service in 
order to communicate by telephone in a functionally equivalent manner.
    20. The Commission clarifies that ``unauthorized use'' of IP CTS, 
under clause (1) above, means use by an individual who is not 
registered with a provider. Further, a practice is prohibited where it 
artificially stimulates TRS usage, enables or encourages participation 
by unauthorized users, or uses financial incentives to attract new TRS 
users or to increase usage. However, the Commission allows IP CTS 
providers to be compensated for calls made by unregistered users when 
such calls are made from temporary, public IP CTS devices set up in 
emergency shelters. When service for such a device is initiated at the 
shelter, the IP CTS provider must notify the TRS Fund administrator of 
the date of such activation and termination.
    21. In addition, an IP CTS provider shall not seek payment from the 
TRS Fund for any minutes of service that it knows or has reason to know 
are resulting from such prohibited practices. Any IP CTS provider that 
becomes aware of such practices being or having been committed by any 
person shall, as soon as practicable, report such practices to the 
Commission or the TRS Fund administrator. All monies paid from the TRS 
Fund to providers who are found by the Commission to be in violation of 
this new IP CTS rule shall be recoverable by the TRS Fund 
administrator, and such providers may also be subject to forfeitures 
and other enforcement actions.

Declaratory Ruling on Automatic Speech Recognition

    22. In document FCC 18-79, the Commission determines that the 
provision of CTS and IP CTS using automated speech recognition (ASR) to 
generate captions without the involvement of a CA is a form of relay 
service eligible for compensation from the TRS Fund if provided in 
compliance with applicable TRS mandatory minimum standards. 
Specifically, the Commission concludes that such services are included 
within the statutory definition of TRS, as ``telephone transmission 
services that provide the ability'' to engage in communication by wire 
or radio ``in a manner that is functionally equivalent'' to voice 
communications service. 47 U.S.C. 225(a)(3).

Benefits of ASR

    23. The use of ASR to generate captions for CTS and IP CTS has 
several benefits. First, ASR can better achieve near simultaneous 
communication than is possible with CA-assisted captions. Second, the 
substantially lower costs of operation for ASR can allow for the 
provision of IP CTS with far greater efficiency. Finally, as a fully 
automated method of generating captions that is not dependent on human 
intervention, ASR can allow enhanced call privacy and ensure the 
seamless continuation of communications when exigent circumstances, 
such as severe weather events, threaten IP CTS call center operations.
    24. Improvements in accuracy, coupled with ASR's advantages in 
speed and privacy, have made ASR a viable alternative to the use of 
human relay intermediaries for CTS and IP CTS. IP CTS providers and 
others have shown heightened interest in utilizing this method for the 
provision of captions, and the Commission has received two applications 
for certification to provide IP CTS using ASR. Additionally, ASR-only 
products are being trialed and adopted internationally as a means of 
generating captions from speech, for people with hearing and speech 
disabilities.
    25. The Commission is not mandating ASR as the sole means of 
offering IP CTS. IP CTS providers will be able to choose among three 
methods of providing Fund-supported IP CTS: (1) IP CTS using fully 
automated ASR; (2) IP CTS using CA-assisted ASR; and (3) stenographic-
supported IP CTS. Consumers will continue to be able to select an IP 
CTS provider based on the overall quality of service each provider 
offers by means of the available methods. As IP CTS providers begin 
offering fully automated ASR, the Commission will be able to gather 
data that can inform the Commission's adoption of further measures to 
improve its utility. Any provider offering ASR must ensure that its 
service complies with the mandatory minimum standards of Sec.  64.604 
of the Commission's rules in order to obtain and retain certification 
to provide IP CTS.

Consistency With Commission Precedent

    26. The use of ASR is consistent with the Commission's prior 
rulings authorizing CTS in both its analog and internet forms. The 
definition of IP CTS does not specify how captions must be generated, 
including whether they should be generated through automation or human-
assisted methods. In this regard, the Commission already has approved a 
form of IP CTS that relies on automated speech recognition programs 
(assisted by CAs) to convert speech to captions during an IP CTS call. 
The only differences between ASR and CA-assisted ASR is that with CA-
assisted ASR, CAs ``train'' speech recognition programs to understand 
their voices when they re-voice a caller's speech, and have a limited 
opportunity to make corrections to the captions that are produced. 
Advancements in ASR reduce the need for such training and human 
editing, and use of this technology for IP CTS without CA involvement 
does not fundamentally change the functional role of the service, which 
is to produce captions from a user's speech.

Statutory Authority

    27. Using ASR for the provision of IP CTS is fully consistent with 
the Commission's statutory authority. The provision of IP CTS utilizing 
ASR will contribute to functional equivalence by enabling providers to 
enhance the privacy, ensure seamless communications, and reduce the 
latency of IP CTS offerings. Section 225 of the Act is neutral as to 
the technology and method used to achieve functional equivalency and 
expressly requires the Commission to encourage technological innovation 
in TRS. Further, offering an ASR option that will largely eliminate 
personnel costs associated with IP CTS will help fulfill Congress's 
directive to provide TRS in the most efficient manner.

Provider Certification and Other Requirements

    28. The Commission authorizes the Consumer and Governmental Affairs 
Bureau (Bureau) to review and approve

[[Page 30086]]

applications for certification to provide IP CTS by means of ASR in 
whole or in part. The Bureau may determine on a case-by-case basis the 
extent to which an applicant's proposed method of providing ASR will 
enable it to provide IP CTS in a manner that meets the Commission's 
minimum TRS standards for functionally equivalent service. To assist 
the Bureau in making this assessment, where use of ASR in conjunction 
with CA-assisted caption generation is proposed, applicants should 
include in their certification applications a detailed description of 
the criteria that will be used to determine when to use and transfer 
between each of these methods. Applicants should support all claims 
regarding their use of ASR and its efficacy through documentary and 
other evidence and should provide information about measures they will 
take to ensure the confidentiality of call content. The Bureau will not 
approve any application to provide IP CTS using ASR that does not 
demonstrate that the applicant will meet the Commission's mandatory 
minimum standards for functional equivalency.
    29. Certifications for the provision of IP CTS using ASR may be 
granted on a conditional basis, to enable the Commission's assessment 
of an applicant's actual performance in meeting or exceeding the 
mandatory minimum standards. In addition, to the extent deemed 
necessary, certification of a provider may be conditioned on the 
submission of periodic data to help confirm whether ASR-driven IP CTS 
is providing functionally equivalent service.
    30. If a currently operating IP CTS provider wishes to incorporate 
ASR in its offerings, it must first receive approval from the Bureau to 
provide IP CTS in this manner. In order to obtain approval, any 
provider operating under conditional certification or interim 
eligibility must update its application for permanent certification to 
describe the change, and may be asked to provide additional data--
beyond what was submitted in its initial application for 
certification--to demonstrate how modifications to its service will 
ensure the provision of a relay service that is functionally equivalent 
to voice telephone service through compliance with the Commission's 
mandatory minimum standards.

Compensation

    31. The Commission reminds all providers that its rules require TRS 
providers seeking compensation from the TRS Fund to ``provide the 
administrator with true and adequate data, and . . . information 
reasonably requested to determine the TRS Fund revenue requirements and 
payments.'' 47 CFR 64.604(c)(5)(iii)(D)(1). Requests from the TRS Fund 
administrator for information that would help establish whether 
payments are justified and help determine the costs for ASR IP CTS 
could reasonably include:
    <bullet> A breakdown, in the provider's monthly call detail report, 
indicating minutes for which ASR is substituted for CA-assisted IP CTS;
    <bullet> Estimates of the difference in the costs incurred to 
handle ASR and CA-assisted calls, with a detailed breakdown of the 
specific variable costs incurred for each type of call, as well as 
underlying assumptions and calculations; and
    <bullet> Documentation of incremental costs incurred in providing 
ASR, including any incremental costs associated with engineering and 
technical implementation, marketing, administrative and management 
support (including oversight, evaluation, and recordkeeping) and, for 
hybrid forms of IP CTS, any costs associated with enabling transfers 
back and forth between ASR and CA-assisted IP CTS.

Final Regulatory Flexibility Analysis

    32. As required by the Regulatory Flexibility Act of 1980, as 
amended, the Commission incorporated an Initial Regulatory Flexibility 
Analysis (IRFA) into the 2013 IP CTS Reform FNPRM. The Commission 
sought written public comment on the proposals in the 2013 IP CTS 
Reform FNPRM, including comment on the IRFA. No comments were received 
in response to the IRFA.

Need For, and Objectives of, the Rules

    33. Document FCC 18-79 adopts an interim rate for IP CTS reflecting 
a weighted, cost-of-service methodology based on an analysis of 
providers' actual and projected costs.
    34. In addition, the Commission directs the TRS Fund administrator 
to require IP CTS providers that contract for the supply of services 
used in the provision of TRS to include information about payments 
under such contracts classified according to the substantive cost 
categories specified by the administrator.
    35. Document FCC 18-79 also adopts three rule changes to facilitate 
the Commission's efforts to reduce waste, fraud, and abuse and improve 
its ability to efficiently manage the IP CTS program. First, the 
Commission prohibits linking volume control and captioning use on IP 
CTS devices. Second, the Commission requires IP CTS providers to 
include the following notifications in a clear and prominent location 
on their advertising brochures, websites, user manuals, and other 
informational materials and websites:
    <bullet> IP captioned telephone service may use a live operator. 
The operator generates captions of what the other party to the call 
says. These captions are then sent to your phone.
    <bullet> There is a cost for each minute of captions generated, 
paid from a federally administered fund.
    The first part of the notification is not required from those IP 
CTS providers who do not use live CAs. Third, the Commission adopts a 
general prohibition against providing IP CTS to consumers who do not 
genuinely need the service. Providers that become aware of prohibited 
practices must report them to the Commission or the TRS Fund 
administrator.

Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA

    36. No comments were filed in response to the IRFA.

Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    37. The Chief Counsel for Advocacy of the Small Business 
Administration did not file any comments in response to the proposed 
rules in this proceeding.

Small Entities Impacted

    38. The rules adopted in document FCC 18-79 will affect obligations 
of IP CTS providers. These services can be included within the broad 
economic category of All Other Telecommunications.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    39. The rule implementing a general prohibition against providing 
IP CTS to consumers who do not genuinely need the service and the 
requirement to separate volume control and captioning functions on IP 
CTS devices do not create direct reporting, recordkeeping or other 
compliance requirements on IP CTS providers.
    40. In transitioning away from the MARS methodology for IP CTS, the 
Commission will require IP CTS providers to file annual cost and demand 
data reports with the TRS Fund administrator. There is no additional 
burden on IP CTS providers to file these reports, as IP CTS providers 
have been voluntarily submitting such reports to the TRS Fund 
administer since 2011. The Commission has received approval to require 
the collection of such

[[Page 30087]]

information pursuant to the PRA, and the Commission is requiring the IP 
CTS providers to submit their cost and demand data for 2017. In 
addition, the Commission is requiring providers to supplement their 
cost data filings with information about payments made by providers to 
subcontractors for the provision of call centers, CA staffing, and 
other services by classifying such payments according to the 
substantive cost categories specified by the administrator. These 
requirements, which place minimal additional filing burdens on IP CTS 
providers, will be offset by the benefit to the TRS Fund and its 
contributors by the increased precision of calculating cost-based rates 
resulting from increased accuracy of TRS cost data submitted to the TRS 
Fund administrator.
    41. The adoption of a requirement for IP CTS providers to include a 
notice on IP CTS websites and informational materials to inform 
consumers about the process, cost, and source of funding will place 
only a minimal burden on IP CTS providers. It will be offset by the 
benefit to the TRS Fund and contributors to the Fund resulting from the 
reduction of casual or inadvertent use of IP CTS that such notice may 
provide by educating consumers via multiple sources of information.
    42. The requirement for providers that become aware of prohibited 
practices to report them to the Commission or the TRS Fund 
administrator should not be burdensome and is needed to prevent waste, 
fraud, and abuse of the TRS Fund.

Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    43. The interim rates for IP CTS will apply only to providers who 
are or may become certified by the Commission to offer IP CTS in 
accordance with its rules. The Commission adopts these interim rates 
to: (1) Ensure that rates compensate providers for their reasonable 
cost; (2) reduce waste of TRS Fund resources and the amounts that TRS 
Fund contributors pay to the fund; and (3) ensure that TRS is made 
available to the extent possible and in the most efficient manner. The 
requirement to file cost and demand data annually will not increase the 
burden on IP CTS providers because they have been submitting such data 
to the TRS Fund administrator since 2011. The Commission is requiring 
providers to supplement their cost data filings with information about 
payments made by providers to subcontractors for the provision of call 
centers, CA staffing, and other services by classifying such payments 
according to the substantive cost categories specified by the 
administrator. This requirement, which places minimal additional filing 
burdens on IP CTS providers, will be offset by the benefit to the TRS 
Fund and its contributors by the increased precision of calculating 
cost-based rates resulting from increased accuracy of TRS cost data 
submitted to the TRS Fund administrator.
    44. Separating the volume control and captioning functions on IP 
CTS devices will place a minor burden on IP CTS providers and device 
manufacturers to reconfigure the functionality. Such costs will be 
offset from the likely decrease in waste and misuse of IP CTS, as 
individuals will be able to use a device's amplification features 
without also being required to use the device's captioning features. 
Providers have until December 8, 2018, to ensure that new and 
previously distributed devices are in compliance.
    45. The general prohibition on practices resulting in IP CTS use by 
ineligible individuals, the requirement for providers that become aware 
of prohibited practices to report them to the Commission or the TRS 
Fund administrator, and the requirement for IP CTS providers to include 
notices on their informational materials and websites should not be 
burdensome and are necessary to combat waste, fraud, and abuse. These 
requirements will help ensure the efficiency of the TRS program, 
control the expenditure of public funds, reduce the amounts paid by 
contributors to the TRS Fund, and ensure the future viability of the 
TRS Fund and the provision of IP CTS.

Federal Rules Which Duplicate, Overlap, or Conflict With, the 
Commission's Proposals

    46. None.

Ordering Clauses

    Pursuant to sections 1, 2, 201(b), and 225 of the Communications 
Act of 1934, as amended, 47 U.S.C. 151, 152, 201(b), 225, document FCC 
18-79 is adopted, and part 64 of Title 47 is amended.
    The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of document FCC 18-79, 
including the Final Regulatory Flexibility Analysis, to the Chief 
Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Individuals with disabilities, Telecommunications.

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

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

    Authority:  47 U.S.C. 154, 202, 225, 251(e), 254(k), 
403(b)(2)(B), (c), 616, 620, Pub. L. 104-104, 110 Stat. 56. 
Interpret or apply 47 U.S.C. 201, 202, 218, 222, 225, 226, 227, 228, 
251(e), 254(k), 616, 620, and the Middle-Class Tax Relief and Job 
Creation Act of 2012, Pub. L. 112-96, unless otherwise noted.


0
2. Amend Sec.  64.604 by revising paragraphs (c)(5)(iii)(D)(1) and (6), 
(c)(10), adding paragraph (c)(11)(v), and revising paragraph (c)(13) to 
read as follows:


Sec.  64.604  Mandatory minimum standards.

* * * * *
    (c) * * *
    (5) * * *
    (iii) * * *
    (D) Data collection and audits. (1) TRS providers seeking 
compensation from the TRS Fund shall provide the administrator with 
true and adequate data, and other historical, projected and state rate 
related information reasonably requested to determine the TRS Fund 
revenue requirements and payments. TRS providers shall provide the 
administrator with the following: total TRS minutes of use, total 
interstate TRS minutes of use, total TRS investment in general in 
accordance with part 32 of this chapter, and other historical or 
projected information reasonably requested by the administrator for 
purposes of computing payments and revenue requirements. In annual cost 
data filings and supplementary information provided to the 
administrator regarding such cost data, IP CTS providers that contract 
for the supply of services used in the provision of TRS shall include 
information about payments under such contracts, classified according 
to the substantive cost categories specified by the administrator. To 
the extent that a third party's provision of services covers more than 
one cost category, the resubmitted cost reports must provide an 
explanation of how the provider determined or calculated the portion of 
contractual payments attributable to each cost category. To the extent 
that

[[Page 30088]]

the administrator reasonably deems necessary, providers shall submit 
additional detail on such contractor expenses, including but not 
limited to complete copies of such contracts and related correspondence 
or other records and information relevant to determining the nature of 
the services provided and the allocation of the costs of such services 
to cost categories.
* * * * *
    (6) Audits. The Fund administrator and the Commission, including 
the Office of Inspector General, shall have the authority to examine 
and verify TRS provider data as necessary to assure the accuracy and 
integrity of TRS Fund payments. TRS providers must submit to audits 
annually or at times determined appropriate by the Commission, the fund 
administrator, or by an entity approved by the Commission for such 
purpose. A TRS provider that fails to submit to a requested audit, or 
fails to provide documentation necessary for verification upon 
reasonable request, will be subject to an automatic suspension of 
payment until it submits to the requested audit or provides sufficient 
documentation. In the course of an audit or otherwise upon demand, an 
IP CTS provider must make available any relevant documentation, 
including contracts with entities providing services or equipment 
directly related to the provision of IP CTS, to the Commission, the TRS 
Fund administrator, or any person authorized by the Commission or TRS 
Fund administrator to conduct an audit.
* * * * *
    (10) IP CTS settings. Each IP CTS provider shall ensure that, for 
each IP CTS device it distributes, directly or indirectly:
    (i) The device includes a button, key, icon, or other comparable 
feature that is easily operable and requires only one step for the 
consumer to turn on captioning; and
    (ii) On or after December 8, 2018, any volume control or other 
amplification feature can be adjusted separately and independently of 
the caption feature.
    (11) * * *
    (v) IP CTS providers shall ensure that their informational 
materials and websites used to market, advertise, educate, or otherwise 
inform consumers and professionals about IP CTS include the following 
language in a prominent location in a clearly legible font: ``FEDERAL 
LAW PROHIBITS ANYONE BUT REGISTERED USERS WITH HEARING LOSS FROM USING 
INTERNET PROTOCOL (IP) CAPTIONED TELEPHONES WITH THE CAPTIONS TURNED 
ON. IP Captioned Telephone Service may use a live operator. The 
operator generates captions of what the other party to the call says. 
These captions are then sent to your phone. There is a cost for each 
minute of captions generated, paid from a federally administered 
fund.'' For IP CTS provider websites, the language shall be included on 
the website's home page, each page that provides consumer information 
about IP CTS, and each page that provides information on how to order 
IP CTS or IP CTS equipment. IP CTS providers that do not make any use 
of live CAs to generate captions may shorten the notice to leave out 
the second, third, and fourth sentences.
* * * * *
    (13) Unauthorized and unnecessary use of VRS or IP CTS. (i) A VRS 
or IP CTS provider shall not engage in any practice that the provider 
knows or has reason to know will cause or encourage:
    (A) False or unverified claims for TRS Fund compensation;
    (B) Unauthorized use of VRS or IP CTS;
    (C) The making of VRS or IP CTS calls that would not otherwise be 
made; or
    (D) The use of VRS or IP CTS by persons who do not need the service 
in order to communicate in a functionally equivalent manner.
    (ii) A VRS or IP CTS provider shall not seek payment from the TRS 
Fund for any minutes of service it knows or has reason to know are 
resulting from the practices listed in paragraph (c)(13)(i) of this 
section or from the use of IP CTS by an individual who does not need 
captions to communicate in a functionally equivalent manner.
    (iii) Any VRS or IP CTS provider that becomes aware of any 
practices listed in paragraphs (c)(13)(i) or (ii) of this section being 
or having been committed by any person shall, as soon as practicable, 
report such practices to the Commission or the TRS Fund administrator.
    (iv) An IP CTS provider may complete and request compensation for 
IP CTS calls to or from unregistered users at a temporary, public IP 
CTS device set up in an emergency shelter. The IP CTS provider shall 
notify the TRS Fund administrator of the dates of activation and 
termination for such device.
* * * * *

[FR Doc. 2018-13753 Filed 6-26-18; 8:45 am]
 BILLING CODE 6712-01-P


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