42656 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Rules and Regulations 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 64 

[CG Docket No. 03–123, RM–11820; FCC 22– 

48; FR ID 96083] 

Internet Protocol Relay Service 

Compensation Formula 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, to ensure 

that the providers of 

Telecommunications Relay Service 

(TRS) are compensated for the provision 

of internet Protocol Relay Service (IP 

Relay), the Federal Communications 

Commission (Commission) adopts a 

formula to compensate such providers 

from the Interstate TRS Fund for the 

provision of service for the next fouryear compensation period. 

DATES: This rule is effective July 18, 

2022. 

FOR FURTHER INFORMATION CONTACT: 

William Wallace, Consumer and 

Governmental Affairs Bureau, at (202) 

418–2716, or email William.Wallace@

fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order, document FCC 22–48, 

adopted on June 25, 2022, released on 

June 30, 2022, in CG Docket No. 03–123 

and RM–11820. The Commission 

previously sought comment on these 

issues in a Notice of Proposed 

Rulemaking (Notice), published at 86 FR 

64440, November 18, 2021. The full text 

of document FCC 22–48 can be accessed 

electronically via the FCC’s Electronic 

Document Management System 

(EDOCS) website at www.fcc.gov/edocs 

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). 

Congressional Review Act 

The Commission sent a copy of 

document FCC 22–48 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 

Document FCC 22–48 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). 

Synopsis 

1. IP Relay is an internet-based textto-voice relay service. With IP Relay, an 

individual with a hearing or speech 

disability can communicate with voice 

telephone users by transmitting text via 

the internet. The text transmission is 

delivered to an IP Relay call center, 

where a communications assistant (CA) 

converts the user’s text to speech for the 

hearing party and converts that party’s 

speech to text for the IP Relay user. 

2. IP Relay is supported entirely by 

the Interstate TRS Fund. Under the 

current methodology for determining IP 

Relay provider compensation, a base 

level of per-minute compensation is 

determined every three years, based on 

the weighted average of providers’ 

reasonable costs. The base 

compensation level approved by the 

Commission is subject to annual 

adjustments for inflation and efficiency 

based on pre-approved factors, as well 

as ad hoc adjustment in the event that 

a provider incurs eligible ‘‘exogenous’’ 

costs. The current inflation factor is the 

Gross Domestic Product—Price Index 

(GDP–PI). After three years, a new 

reasonable-cost-based compensation 

level is determined for the next period. 

The current compensation period began 

July 1, 2019, and ended June 30, 2022. 

Reasonable-Cost Based Compensation 

3. The Commission continues the 

practice of periodically resetting the 

base level of IP Relay compensation 

based on a determination of reasonable 

provider cost. While certain criteria for 

determining reasonable IP Relay costs 

need adjustment in light of subsequent 

experience, the record does not support 

more radical changes in the IP Relay 

compensation methodology. The 

Commission has developed a consistent 

approach to determining the reasonable 

costs of providing TRS, which can be 

applied without imposing undue 

administrative burdens on either 

providers or the Commission. Further, 

although any ratemaking method is 

subject to imprecision, provider cost 

data, which is subject to audit, has been 

reasonably reliable and consistent. TMobile fails to support its claim that the 

current methodology ‘‘precludes any 

increase in compensation regardless of 

the extent to which the costs of 

supplying the service may have risen.’’ 

To the contrary, over the last eight 

years, compensation has risen from 

$1.0147 to $1.7146 per minute, due to 

rising costs and waivers of certain 

allowable-cost criteria. 

4. Outreach. The Commission revises 

its allowable-cost criteria to provide that 

reasonable costs associated with IP 

Relay provider outreach are recoverable 

from the TRS Fund. The concerns 

underlying the Commission’s 2013 

decision to terminate TRS Fund support 

for IP Relay outreach are no longer 

applicable. The pilot National Outreach 

Program, established to provide 

coordinated national outreach for both 

video relay service (VRS) and IP Relay, 

expired in 2017 and has not been 

reauthorized. In the absence of a 

Commission-directed outreach program, 

IP Relay provider outreach activity no 

longer represents wasteful duplication 

of effort. Further, the company 

providing IP Relay appears to be 

reasonably well positioned to 

communicate with potential users. In 

addition, the concern that TRS 

providers tend to focus on competitive 

marketing of their own brand, rather 

than outreach to new users, is not 

applicable to the current IP Relay 

context, in which only one company 

offers the service. 

5. The Commission also finds that 

there is an affirmative need for TRS 

Fund support of IP Relay outreach. 

Given the limited current use of the 

service, the Commission’s rules should 

not discourage providers from making 

efforts to effectively educate 

consumers—especially relatively 

narrow subgroups of eligible users, such 

as consumers who are deafblind— 

regarding the availability of and 

improvements to the service. Further, 

with only one IP Relay provider, the 

Commission believes that provider 

outreach expenditures are more likely to 

be focused on educating potential new 

users about the service rather than on 

encouraging or preventing ‘‘churn’’ 

among existing customers. Finally, the 

Commission acknowledges the 

Consumer and Governmental Affairs 

Bureau’s (Bureau) conclusion that a 

review of the outreach reports submitted 

by T-Mobile indicates that its outreach 

activity since 2016 has not shown that 

it is misdirected toward ineligible users. 

The Commission does not find it 

necessary at this time to impose a 

quantitative limit on allowable outreach 


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costs or require specific reporting to the 

Commission on IP Relay outreach 

activity. When the Commission 

periodically resets the base 

compensation level based on a 

determination of reasonable cost, the 

administrator’s review of reported 

expenses will help the Commission to 

assess whether outreach expenses are 

reasonable and directed toward 

permissible purposes. 

6. Indirect Overhead. The 

Commission concludes that the record 

does not support modifying, for IP 

Relay, the current prohibition on TRS 

Fund support of general overhead costs, 

where a company has both TRS and 

non-TRS lines of business and it is not 

possible to assign such costs directly to 

the company’s TRS. In 2007, the 

Commission concluded that, when a 

company provides both TRS and nonTRS services, general overhead costs 

should not be supported by the TRS 

Fund. Therefore, overhead costs cannot 

be allocated to TRS based on a formula, 

e.g., by multiplying a company’s total 

overhead costs by the percentage of the 

company’s total revenues that are 

derived from TRS. In adopting the rule, 

the Commission reasoned that because 

‘‘Congress placed the obligation to 

provide TRS on common carriers that 

were already offering voice telephone 

service,’’ the rule is necessary for 

consistency with the statute and to 

avoid having the TRS Fund subsidize 

non-TRS services. 

7. The comments do not persuade the 

Commission that this rationale is 

flawed. Although the Commission 

sought comment on a number of 

questions relevant to this issue, none of 

the comments addresses those questions 

in any detail. For example, the record 

does not provide any explanation of 

what kinds of costs fall into this 

category, the amount of such costs that 

would be allocated to TRS, were such 

allocation allowed, and why overhead 

costs attributable to TRS could not be 

directly assigned. 

8. Cost of Telephone Numbers. The 

Commission revises its allowable-cost 

criteria for IP Relay to allow TRS Fund 

support of an IP Relay provider’s 

reasonable costs of acquiring North 

American Numbering Plan telephone 

numbers. There is no valid rationale for 

prohibiting support of such costs. In 

2008, the Commission reasoned that 

such costs are not attributable to the use 

of a relay service to facilitate a call, 

noting that analogous costs incurred by 

voice service providers are typically 

passed through to their customers. 

However, given that the Commission’s 

rules require IP Relay providers to issue 

telephone numbers, the Commission 

finds it illogical to treat number 

acquisition costs as ‘‘not attributable to 

the use of relay to facilitate a call.’’ 

Further, the circumstances relevant to 

recovery of such costs by voice service 

providers and IP Relay providers are not 

equivalent. While voice service 

providers have a billing relationship 

with their consumers, IP Relay 

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 for any 

particular IP Relay user. 

9. Research and Development. 

Currently, the TRS Fund supports 

research and development conducted by 

a TRS provider to ensure that its service 

meets the Commission’s minimum TRS 

standards, but it does not support the 

cost of developing TRS enhancements 

that exceed this criterion. The question 

of whether to modify the criterion for 

research and development affects other 

forms of TRS and is currently at issue 

in a parallel proceeding, the 2021 VRS 

Compensation NPRM, published at 86 

FR 29969, June 4, 2021. For these 

reasons, the Commission defers 

resolution of this question to a later 

time. 

Operating Margin 

10. The Commission adopts its 

proposal to allow an IP Relay provider 

a reasonable operating margin—i.e., an 

allowance for recovery of a designated 

percentage of allowed expenses, in lieu 

of return on capital investment. In the 

2017 VRS Compensation Order, 

published at 82 FR 39673, August 22, 

2017, the Commission acknowledged 

VRS providers’ claims that a percentage 

return on booked costs for investment in 

fixed plant was insufficient to 

compensate them for the cost of raising 

capital to operate a labor-intensive 

business like VRS. Accordingly, the 

Commission amended its compensation 

rules to specify a percentage of 

allowable expenses as a reasonable 

operating margin for VRS providers. The 

Commission also adopted this approach 

for internet Protocol Captioned 

Telephone Service (IP CTS) 

compensation. 

11. Like VRS and IP CTS, IP Relay 

requires providers to invest relatively 

little in physical plant. Therefore, for 

the same reasons as described above, the 

Commission concludes that allowing an 

IP Relay provider a reasonable margin 

over expenses, which is not tied to the 

relatively low investment in physical 

plant that is needed for the provision of 

this service, will help ensure sufficient 

investment in the provision of this 

service. Taking this step appropriately 

harmonizes the Commission’s general 

approach to compensation methodology 

for all forms of internet-based TRS. 

12. When setting the operating margin 

for VRS, the Commission reviewed the 

operating margins for various 

interpretation and translation services 

and government contractors who are 

paid for services mandated by law and 

supervised by the government. The 

Commission selected the range from 

7.6% to 12.35% as a reasonable range of 

operating margins for VRS. The cost 

structure of IP Relay is similar to that of 

VRS in that an IP Relay provider also 

relies on communications assistants to 

relay conversations between a hearing 

party and a non-hearing party. Given 

these similarities, the range of operating 

margins deemed reasonable for VRS is 

also a reasonable range for IP Relay. 

13. In setting a margin within this 

range, the Commission recognizes that, 

because there is currently only one IP 

Relay provider, the Commission’s riskbenefit analysis is different for IP Relay 

than for VRS and IP CTS. If the 

operating margin should turn out to be 

significantly lower than margins that 

currently can be earned in comparable 

lines of business, the current provider 

might exit the business, leaving 

consumers stranded. To guard against 

this risk, the Commission sets the IP 

Relay operating margin at 12%, near the 

high end of the reasonable range. 

14. The Commission does not agree 

with T-Mobile’s argument that an 

operating margin above the current 

range is needed. The benchmark 

advocated by T-Mobile is based on ‘‘the 

average operating margin obtained by 

T-Mobile and comparable 

communications providers’’ such as 

Verizon, AT&T, CCO Holdings, LLC 

(Charter Communications), and Comcast 

Corporation. Such businesses are capital 

intensive rather than labor intensive, 

requiring more long-term capital 

investment to build and maintain 

physical plant. Indeed, the essential 

dissimilarity in capital requirements 

between such companies and TRS 

providers is what led the Commission to 

adopt an operating-margin approach for 

TRS in the first place. 

15. Given these significant differences 

between TRS and the more capitalintensive market segments in which 

T-Mobile otherwise operates, the 

Commission is unpersuaded by 

T-Mobile’s argument that providing an 

operating margin somewhat lower than 

those earned by more capital intensive 

operations would force T-Mobile ‘‘to 

redirect resources currently allocated to 

that service to other service offerings,’’ 

or even to exit the IP Relay business 

altogether. The logic of T-Mobile’s 


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argument is not sound. Although the 

allowed operating margin for IP Relay 

may be lower than the actual operating 

margin for more capital-intensive lines 

of business, the return on investment— 

given the relatively small proportion of 

capital investment needed for TRS—is 

likely to be higher. Therefore, the 

capital resources allocated to IP Relay 

are likely to be well rewarded. 

16. The Commission also does not 

agree that the recent surge of inflation 

dictates a higher operating margin ‘‘to 

provide some cushion against the cost 

increases T-Mobile Accessibility would 

have to absorb before the next annual 

adjustment.’’ As discussed below, the 

compensation formula includes an 

inflation adjustment factor linked to an 

appropriate index. The Commission 

does not find a valid reason to include 

an additional inflation factor in the 

operating margin. Inflation affects all 

businesses, and the record does not 

contain evidence showing such a 

unique impact on IP Relay as to warrant 

special treatment in setting the allowed 

operating margin. Further, if, due to an 

increase in the inflation rate, the annual 

adjustment factor applicable to a given 

year lags behind actual inflation in that 

year, any resulting losses are likely to be 

offset by windfall gains in a future year, 

when the actual inflation rate subsides 

below the applicable adjustment factor 

derived from the previous year’s higher 

rate. 

Projected vs. Historical Costs 

17. The Commission adopts its 

proposal to use projected costs and 

demand as the basis for calculating the 

base compensation level for IP Relay. 

Historically, this was the Commission’s 

practice in setting cost-based 

compensation for any form of TRS. 

However, the Commission found that 

VRS and IP CTS providers’ projections 

of cost and demand proved unreliable, 

resulting in overcompensation of 

providers. For those services, therefore, 

the Commission has adopted a different 

approach, averaging providers’ 

projected per-minute costs for the 

current calendar year and historical perminute costs for the preceding calendar 

year. The Commission found that this 

blended approach was consistently a 

more accurate predictor of actual costs 

for both VRS and IP CTS. 

18. Until 2019, however, the base 

level for IP Relay compensation was still 

set based on projected costs only. In that 

year, the Bureau switched to the 

blended approach, to align the IP Relay 

methodology with those for VRS and IP 

CTS. 

19. As explained in the 2021 IP Relay 

Compensation NPRM, provider 

projections of IP Relay costs have 

proved to be substantially more accurate 

than those for VRS and IP CTS. A 

comparison of T-Mobile’s cost 

projections with the actual cost per 

minute reported between 2015 and 2019 

demonstrates that, in the case of IP 

Relay, the results of the projected-only 

approach have proven to be reasonably 

accurate. The Commission concludes 

that this difference with its findings 

regarding VRS and IP CTS justifies a 

return to the practice of using projectedonly costs and demand when setting IP 

Relay compensation levels. 

Compensation Period and Adjustments 

20. Duration of Compensation Period. 

The Commission finds that the IP Relay 

compensation formula established in 

document FCC 22–48 should remain in 

place for a four-year period. As the 

Commission has previously recognized, 

multi-year compensation periods are 

generally beneficial in the TRS context. 

Longer periods give providers more 

certainty regarding future compensation 

and provide a significant incentive for 

increased efficiency, as cost reductions 

during a multi-year period do not 

immediately result in reduced 

compensation the following year. A 

multi-year compensation period can 

thus reduce the risk of rewarding 

inefficiency, discouraging innovation, 

and incentivizing providers to incur 

unnecessary costs, all potential effects 

of annual cost-of-service compensation 

setting. 

21. The Commission concludes that 

current conditions justify increasing the 

compensation period from three to four 

years. IP Relay costs and demand have 

been relatively stable and accurate in 

recent years, and T-Mobile does not 

anticipate any significant changes to the 

service in the near future. A four-year 

period will provide T-Mobile a 

substantial degree of predictability in its 

reimbursements from the Fund, 

improving its ability to plan future 

operations. Although T-Mobile 

recommends a longer compensation 

period, the Commission has not 

previously set a period longer than four 

years for any form of internet-based 

TRS. Given the inherent uncertainty of 

setting compensation formulas in the 

absence of price competition, the 

Commission declines at this time to 

extend the compensation term beyond 

previous precedent. 

22. The Commission delegates 

authority to the Chief of the Bureau to 

extend the compensation period by 

Order, should such extension prove to 

be necessary to prevent the termination 

of TRS Fund support for IP Relay (e.g., 

if, due to unanticipated data issues or 

other delays, a situation arises where 

there is insufficient time remaining for 

the Commission to complete a 

determination of a revised 

compensation formula for the next 

compensation period). 

23. Inflation Adjustment. The 

Commission will continue to apply an 

annual adjustment to IP Relay 

compensation to account for inflation 

after the first year of the cycle. As the 

adjustment factor, the Commission 

adopts the Bureau of Labor Statistics’ 

Employment Cost Index for 

professional, scientific, and technical 

services. The Commission concludes 

that, because IP Relay is a laborintensive service, this seasonally 

adjusted index, which includes 

translation and interpreting services, 

will more accurately reflect changes in 

relevant costs. Although T-Mobile urges 

continued use of the Gross Domestic 

Product–Price Index (GDP–PI) as the 

appropriate inflation factor, it fails to 

justify the use of such a broad-gauged 

index, which tracks price increases 

throughout the economy, including 

businesses with proportionately lower 

labor costs, in light of the availability of 

a more narrowly focused index that is 

more likely to reflect actual TRS cost 

changes. 

24. The Commission delegates 

authority to the Chief of the Bureau to 

approve annual inflation adjustments 

for IP Relay, beginning with Fund Year 

2023–24. The Commission directs the 

TRS Fund administrator to specify in its 

annual TRS Fund report, beginning with 

the report due May 1, 2023, 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 a compensation level for IP 

Relay that is adjusted from the previous 

year by a percentage equal to the 

percentage change in the index between 

the first and fifth quarters specified in 

the report. After notice and opportunity 

for comment, the Chief of the Bureau, 

acting under delegated authority, shall 

review the administrator’s proposed 

adjustment and approve it, or make any 

necessary modifications to ensure 

consistency with the Commission’s 

rules and orders. 

25. Efficiency Adjustment. At this 

time, the Commission does not find it 

necessary to offset the inflation factor 

with an efficiency factor analogous to 

those of price-cap regulation. The paired 

inflation and efficiency adjustments are 

a feature of price-cap regulation 

designed to reflect the likelihood that a 

regulated company will become more 

productive or efficient. In 2007, when 

the Commission made the decision to 


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apply an efficiency factor to this service, 

IP Relay was a relatively new service, 

for which substantial efficiency 

improvements might be expected. In 

recent years, by contrast, usage of this 

20-year-old service has been relatively 

stable, and per-minute costs have not 

decreased. Without the presence of 

multiple competing providers, there is 

less likelihood of a competitive 

incentive to achieve annual efficiency 

gains. The Commission declines to 

adopt a negative efficiency factor, as 

recommended by T-Mobile. In adopting 

the Employment Cost Index for 

professional, scientific, and technical 

services as the inflation adjustment 

factor, the Commission has directly 

addressed T-Mobile’s concern regarding 

rising labor costs in the TRS sector. 

26. Exogenous Costs. Under the 

current methodology, the IP Relay 

compensation level can be adjusted to 

permit recovery of exogenous costs. 

These are defined as ‘‘costs beyond the 

control of the IP Relay providers that are 

not reflected in the inflation 

adjustment,’’ such as costs necessitated 

by a new service requirement adopted 

by the Commission. In the Notice, the 

Commission asked whether it should 

align the criteria for exogenous costs in 

the IP Relay compensation regime with 

those adopted in the 2017 VRS 

Compensation Order. Under the VRS 

criteria, which also apply to IP CTS 

compensation, an upward compensation 

adjustment for well-documented 

exogenous costs is available for 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 costs (allowable expenses plus 

operating margin) to exceed its 

revenues. 

27. The Commission finds that these 

exogenous cost criteria are also 

appropriate for IP Relay. Although TMobile urges deletion of the last 

criterion, contending that exogenous 

cost should be recoverable even if 

recovery would add to the provider’s 

revenues, the Commission finds that 

this criterion is appropriate to ensure 

that exogenous cost recovery is 

warranted, i.e., necessary for a provider 

to recover its reasonable costs. 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 Bureau to 

make determinations regarding timely 

submitted exogenous cost claims, 

following notice and opportunity for 

comment. 

Alternative Compensation Methodology 

28. The Commission is unpersuaded 

that it should derive IP Relay 

compensation by proxy, from the MultiState Average Rate Structure (MARS) 

based compensation formula for 

interstate traditional (TTY-based) TRS, 

as advocated by T-Mobile. To 

implement its proposed approach, TMobile explains, the Commission would 

take as a starting point the current 

MARS-based formula for interstate 

traditional TRS, which is calculated 

annually as a weighted average of the 

per-minute compensation levels for 

intrastate traditional TRS (and speechto-speech relay service (STS)) in each 

state TRS program. Next, the 

Commission would (1) multiply the 

interstate traditional TRS formula by 

projected IP Relay minutes for the next 

Fund Year, (2) subtract from that figure 

those annual costs that are incurred by 

T-Mobile in providing traditional TRS 

but not IP Relay, and (3) add in those 

annual costs that are incurred in 

providing IP Relay but not traditional 

TRS. The resulting funding total would 

be divided by projected IP Relay 

demand to determine the per-minute 

compensation level. 

29. Flaws in T-Mobile’s Proposal. The 

Commission concludes that reliance on 

T-Mobile’s proposed MARS-based 

methodology would not result in 

compensation that is commensurate 

with the reasonable costs of IP Relay. 

Notwithstanding some functional and 

operational similarities between IP 

Relay and traditional TRS, the record 

does not support T-Mobile’s claim that 

the services have similar cost structures. 

T-Mobile itself acknowledges that there 

are substantial differences between the 

costs of the two services, as illustrated 

by the substantial subtractions and 

additions included in its proposal. The 

record shows that a cost-based 

compensation level for IP Relay 

(including a reasonable operating 

margin), as determined in this Report 

and Order, is $1.9576, less than half the 

compensation level for traditional TRS 

($4.5098). The disparity between perminute IP Relay costs and traditional 

TRS compensation has increased over 

time, and it is reasonable to assume that 

it will continue increasing. 

30. Even if there were not such a large 

disparity between the proposed proxy 

and actual costs, T-Mobile’s proposed 

formula must be rejected, as it would be 

substantially more difficult to apply 

than the current methodology and less 

likely to result in a compensation 

formula that that aligns with reasonable 

provider costs. T-Mobile acknowledges 

that a substantial portion of the 

compensation for traditional TRS 

reflects costs unique to state-program 

TRS, including sales staff, account 

management/support staff, equipment 

distribution programs, outreach 

programs, and state-mandated call 

centers, none of which apply to IP 

Relay. To avoid over-compensation for 

IP Relay, all these costs (which are not 

currently reported to the TRS Fund 

administrator) must be estimated and 

then subtracted from total compensation 

for traditional TRS. T-Mobile also 

asserts that IP Relay includes additional 

costs not included in state-program 

TRS—for outreach, website operation, 

and regulatory compliance. Verifying 

the accuracy of these complex 

calculations would require a level of 

effort much greater than that currently 

required to review IP Relay costs alone. 

Although T-Mobile claims that the stateprogram-specific costs are included in a 

separate Monthly Recurring Charge 

(MRC), which is separately reported to 

the Fund administrator, T-Mobile 

cautions that some costs relevant to IP 

Relay are included in some states’ 

MRCs, and therefore argues that the 

MRCs cannot be subtracted in their 

entirety. As a further complication, 

some of the state-program compensation 

that is used to calculate the interstate 

traditional TRS formula represents 

compensation for state-program STS. 

Since the actual costs of STS may be 

different from those for providing 

traditional TRS, ensuring that such 

differences do not distort the estimates 

for traditional TRS could require yet 

another calculation, further increasing 

the complexity of T-Mobile’s proposed 

methodology. 

31. Further, the record does not 

indicate that T-Mobile’s costs for 

providing traditional TRS are currently 

reviewed by state regulatory authorities. 

Therefore, the costs identified by TMobile as unique to traditional TRS 

would need to be collected, reported, 

and audited by the TRS Fund 

administrator—even though none of 

those costs is actually relevant to 

providing IP Relay. And because these 

costs are to be subtracted in establishing 

the compensation formula, the provider 

would have no special incentive to 

ensure that it has identified all relevant 

traditional TRS costs. Instead, the 

burden would be on the TRS Fund 

administrator, who would have no 

access to the underlying raw data, to 

ensure that no costs unique to 


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42660 Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Rules and Regulations 

traditional TRS have been omitted or 

underreported. Such a process would 

not be conducive to producing accurate 

cost estimates. 

32. T-Mobile claims that the 

calculation could be simplified after the 

first year by continuing indefinitely to 

apply the percentage cost difference 

initially calculated. In subsequent years, 

T-Mobile suggests, the MARS formula 

simply could be adjusted by a constant 

percentage factor, which represents the 

initially calculated ratio of the net 

difference in the costs of the two 

services to total traditional TRS 

compensation. While such a simplified 

approach may be less burdensome than 

repeatedly recalculating the relevant 

costs, it would remove IP Relay 

compensation even further from any 

plausible relationship to actual IP Relay 

costs. Such reliance on the initially 

calculated cost difference to set 

compensation for future years would be 

especially misleading given the record 

evidence that the cost difference 

between the services is continually 

increasing. By contrast, the 

methodology the Commission adopts 

relies on readily available data collected 

by the TRS Fund administrator from 

providers of IP Relay with reasonable 

adjustments based on Department of 

Labor statistics. The Commission does 

not need to engage in the unusually 

complicated calculations entailed by TMobile’s proposal when a simpler and 

more accurate methodology is readily 

available. 

Compensation Level for 2022–2023 

33. TRS Fund Year 2022–23 will be 

the first year of a new compensation 

cycle for IP Relay, which will extend for 

four years, through June 30, 2026. With 

the addition of a 12% operating margin 

to the average of T-Mobile’s projected 

per-minute costs for calendar years 2022 

and 2023—based on the most recent 

submissions of cost and demand data to 

the Fund administrator—the resulting 

base compensation formula is $1.9576 

per minute, a 14.2% increase from the 

current compensation level of $1.7146 

per minute. This base level of 

compensation shall be applicable during 

Fund Year 2022–23. For the second, 

third, and fourth years, compensation 

for IP Relay shall be adjusted in 

accordance with the inflation and 

exogenous cost adjustment factors 

adopted above. 

Final Regulatory Flexibility Analysis 

34. As required by the Regulatory 

Flexibility Act of 1980, as amended, the 

Commission incorporated an Initial 

Regulatory Flexibility Analysis (IRFA) 

into the 2021 IP Relay Compensation 

NPRM. The Commission sought written 

public comment on the proposals in the 

NPRM, including comment on the IRFA. 

No comments were received in response 

to the IRFA. 

35. Need for, and Objectives of, the 

Rules. Document FCC 22–48 addresses 

how telecommunications relay service 

(TRS) providers receive compensation 

from the Interstate TRS Fund for the 

provision of Interstate Protocol Relay 

Service (IP Relay). The Commission 

adopts a new four-year compensation 

formula using a cost-based methodology 

with the initial year’s compensation 

level based on an average of providers’ 

projected costs and demand for the next 

two years, with annual adjustments for 

inflation and unanticipated exogenous 

costs, if any. The methodology ensures 

that IP Relay providers are compensated 

for the reasonable costs of providing the 

service and increases the assurance that 

IP Relay is made available in the most 

efficient manner. 

36. Summary of Significant Issues 

Raised by Public Comments in Response 

to the IRFA. No comments were filed in 

response to the IRFA. 

37. Response to Comments by the 

Chief Counsel for Advocacy of the Small 

Business Administration. The Chief 

Counsel did not file any comments in 

response to the proposed rules in this 

proceeding. 

38. Description and Estimate of the 

Number of Small Entities to which the 

Rules will Apply. All Other 

Telecommunications. 

39. Description of Projected 

Reporting, Recordkeeping, and Other 

Compliance Requirements. Adoption of 

a new compensation methodology for IP 

Relay does not result in any new or 

modified reporting, recordkeeping, or 

other compliance requirements on IP 

Relay providers. 

40. Steps Taken to Minimize 

Significant Impact on Small Entities, 

and Significant Alternatives Considered. 

By reforming the compensation 

methodology for IP Relay, the 

Commission is (1) taking steps to ensure 

that providers of IP Relay are fairly 

compensated for the provision of IP 

Relay; and (2) to ensure that 

functionally equivalent service and an 

efficient IP Relay market are maintained 

over the long term in accordance with 

the Commission’s statutory obligations. 

Reforming the compensation 

methodology for IP Relay will not affect 

the burdens on IP Relay providers or 

other small entities. 

Ordering Clauses 

41. Pursuant to sections 1, 2, and 225 

of the Communications Act of 1934, as 

amended, 47 U.S.C. 51, 152, and 225, 

document FCC 22–48 is adopted, and 

the Commission’s rules are amended. 

42. The Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

the document FCC 22–48, 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, Telephones. 

Federal Communications Commission. 

Marlene Dortch, 

Secretary, Office of the Secretary. 

Final Rule 

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, 620, 716, 1401–1473, 

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

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

Subpart F—Telecommunications Relay 

Services and Related Customer 

Premises Equipment for Persons With 

Disabilities 

■ 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. Add § 64.640 to read as follows: 

§ 64.640 Compensation for IP Relay. 

(a) For the period from July 1, 2022, 

through June 30, 2026, TRS Fund 

compensation for the provision of IP 

Relay shall be as described in this 

section. 

(b) For Fund Year 2022–23, 

comprising the period from July 1, 2022, 

through June 30, 2023, the 

Compensation Level for IP Relay shall 

be $1.9576 per minute. 

(c) For each succeeding Fund Year 

through June 30, 2026, the per-minute 

Compensation Level (LFY) shall be 

determined in accordance with the 

following equation: 

LFY = LFY–1 * (1+IFFY) 

where IFFY is the Inflation Adjustment Factor 

for that Fund Year, determined in 

accordance with paragraph (d) of this 

section. 

(d) The inflation adjustment factor for 

a Fund Year (IFFY), to be determined 


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Federal Register / Vol. 87, No. 136 / Monday, July 18, 2022 / Rules and Regulations 42661 

annually on or before June 30, is 1/100 

times the difference between 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) The fourth quarter of the Calendar 

Year ending 6 months before the 

beginning of the Fund Year; and 

(2) The fourth quarter of the preceding 

Calendar Year. 

(e) In addition to LFY, an IP Relay 

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 such approved claims 

divided by the provider’s projected 

minutes for the Fund Year. Exogenous 

cost adjustments, if any, are not 

included in the previous Fund Year’s 

per-minute Compensation Level (LFY–1) 

for purposes of paragraph (c) of this 

section. 

(f) An exogenous cost adjustment 

shall be paid if an IP Relay 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. 2022–15278 Filed 7–15–22; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 220216–0049; RTID 0648– 

XC174] 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Pacific Ocean Perch 

in the West Yakutat District of 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 Pacific ocean perch in the 

West Yakutat District of the Gulf of 

Alaska (GOA). This action is necessary 

to prevent exceeding the 2022 total 

allowable catch of Pacific ocean perch 

in the West Yakutat District of the GOA. 

DATES: Effective 1200 hours, Alaska 

local time (A.l.t.), July 13, 2022, through 

2400 hours, A.l.t., December 31, 2022. 

FOR FURTHER INFORMATION CONTACT: 

Steve Whitney, 907–586–7228. 

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 2022 total allowable catch (TAC) 

of Pacific ocean perch in the West 

Yakutat District of the GOA is 1,409 

metric tons (mt) as established by the 

final 2022 and 2023 harvest 

specifications for groundfish of the GOA 

(87 FR 11599, March 2, 2022). 

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

the Administrator, Alaska Region, 

NMFS (Regional Administrator), has 

determined that the 2022 TAC of Pacific 

ocean perch in the West Yakutat District 

of the GOA will soon be reached. 

Therefore, the Regional Administrator is 

establishing a directed fishing 

allowance of 1,309 mt, and is setting 

aside the remaining 100 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 Pacific ocean perch 

in the West Yakutat District 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, as it would prevent 

NMFS from responding to the most 

recent fisheries data in a timely fashion 

and would delay the closure of directed 

fishing of Pacific ocean perch in the 

West Yakutat district 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 July 12, 

2022. 

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: July 13, 2022. 

Jennifer M. Wallace, 

Acting Director, Office of Sustainable 

Fisheries, National Marine Fisheries Service. 

[FR Doc. 2022–15286 Filed 7–13–22; 4:15 pm] 

BILLING CODE 3510–22–P 


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