[Federal Register Volume 70, Number 177 (Wednesday, September 14, 2005)]
[Rules and Regulations]
[Pages 54298-54300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18250]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket No. 03-123; DA 05-2066]


Telecommunications Relay Services and Speech-to-Speech Services 
for Individuals With Hearing and Speech Disabilities

AGENCY: Federal Communications Commission.

ACTION: Final rule; clarification.

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SUMMARY: In this document, the Consumer & Governmental Affairs Bureau 
(the Bureau) clarifies under delegated authority, that 
telecommunications relay service (TRS) providers offering free or 
discount long distance service to TRS consumers as an incentive to use 
a particular TRS provider's relay service, or as an incentive for a 
consumer to make more or longer TRS calls, constitutes an impermissible 
financial incentive in violation of the Financial Incentives 
Declaratory Ruling. TRS providers in violation of the Financial 
Incentives Declaratory Ruling will be ineligible for compensation from 
the Interstate TRS Fund.

DATES: Effective January 12, 2006.

FOR FURTHER INFORMATION CONTACT: Thomas Chandler, Consumer & 
Governmental Affairs Bureau, (202) 418-1475 (voice), (202) 418-0597 
(TTY), or e-mail <a href="/cdn-cgi/l/email-protection#6a3e0205070b194429020b040e060f182a0c0909440d051c"><span class="__cf_email__" data-cfemail="4a1e2225272b396409222b242e262f380a2c2929642d253c">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of Commission document DA 
05-2066, adopted July 27, 2005, released July 28, in CG Docket No. 03-
123. This document does not contain new or modified information 
collections requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, it 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, sec 44 U.S.C. 
3506(c)(4). Copies of any subsequently filed documents in this matter 
will be available for public inspection and copying during regular 
business hours at the FCC Reference Information Center, Portals II, 445 
12th Street, SW., Room CY-A257, Washington, DC 20554. They may also be 
purchased from the Commission's duplicating contractor, Best Copy and 
Printing, Inc. (BCPI), Portals II, 12th Street, SW., Room CY-B402, 
Washington, DC 20554. Customers may contact BCPI at their Web site: 
http://www.bcpiweb.com or call 1-800-378-3160. To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an e-mail to <a href="/cdn-cgi/l/email-protection#35535656000501755356561b525a43"><span class="__cf_email__" data-cfemail="e5838686d0d5d1a5838686cb828a93">[email protected]</span></a> or 
call the Consumer & Governmental Affairs Bureau at (202) 418-0530 
(voice) or (202) 418-0432 (TTY). This document can also be downloaded 
in Word and Portable Document Format (PDF) at http://www.fcc.gov/cgb.dro.

Synopsis

    On January 26, 2005, the Bureau, under delegated authority, issued 
the Financial Incentives Declaratory Ruling concluding that any program 
that offers any kind of financial incentive or reward for a consumer to 
place a TRS call, including minimum usage arrangements or programs 
(whether or not tied to the acceptance of equipment), violates section 
225 of the Communications Act. See Telecommunications Relay Services 
and

[[Page 54299]]

Speech-to-Speech Services for Individuals With Hearing and Speech 
Disabilities, CC Docket No. 98-67, CG Docket No. 03-123, Declaratory 
Ruling, 20 FCC Rcd 1466-1468, paragraph 4, released January 26, 2005, 
published at 70 FR 9239, February 25, 2005, (Financial Incentives 
Declaratory Ruling). The Bureau explained that ``in view of the intent 
and nature of section 225 of the Communications Act, and the obligation 
placed on entities providing voice telephone services to also offer TRS 
as an accommodation to persons who, because of a disability, cannot 
meaningfully use the voice telephone system, the Bureau interprets 
section 225 of the Communications Act and the implementing regulations 
to prohibit a TRS provider's use of any kind of financial incentives or 
rewards, including arrangements tying the receipt of equipment to 
minimum TRS usage, directed at a consumer's use of their TRS service.'' 
The Bureau further explained that because the Interstate TRS Fund, and 
not the consumer, pays for the cost of the TRS call, such financial 
incentives are tantamount to enticing consumers to make calls that they 
might not ordinarily make. The Bureau therefore concluded that, 
effective March 1, 2005, any TRS provider offering such incentives for 
the use of any of the forms of TRS will be ineligible for compensation 
from the Interstate TRS Fund.
    The Financial Incentives Declaratory Ruling was in response to a 
TRS provider's customer loyalty program which offered the provider's 
customers the opportunity to have their DSL or cable modem bill 
reimbursed by the provider through the accumulation of points based on 
minutes of use of the provider's TRS service. Sprint Corporation 
(Sprint) sought clarification whether its free long distance service 
promotion violated the prohibition against TRS financial incentives set 
forth in the Financial Incentives Declaratory Ruling. See Letter from 
Spring to Thomas E. Chandler, Chief, Disability Rights Office, Consumer 
& Governmental Affairs, Federal Communications Commission, dated 
February 7, 2005, regarding Declaratory Ruling (DA 05-140) issued 
January 26, 2005 in CC Docket No. 98-67 and CG Docket No. 03-123 (Ex 
Parte Communication) (Sprint Letter).
    As Sprint explained, it provides traditional TRS in a state 
(California) that has more than one provider of this service (i.e., a 
``multi-vendor'') state. See Sprint Letter at 1-2. Therefore, a TRS 
consumer in that state can choose which available TRS provider he or 
she wants to handle his or her TRC call. To give the consumers an 
incentive to use Sprint's relay service, Sprint adopted a promotion 
whereby long distance calls would be free to consumers who select 
Sprint as their provider of both relay and long distance services. See 
Sprint Letter at 1. Providers of traditional TRS may not charge 
consumers for the cost of the TRS service; the may, however, charge the 
consumer for long distance service. The Commission's rules require 
providers of traditional TRS to offer their consumers access to the 
consumer's long distance carrier of choice. See 47 CFR 64.604(b)(3). In 
other words, TRS consumers must be afforded the same opportunity given 
to non-TRS consumers to use whichever long distance service they choose 
when making a long distance call. See generally Telecommunications 
Relay Services and Speech-to-Speech Services for Individuals with 
Hearing and Speech Disabilities, CC Docket No. 98-67, CG Docket No. 03-
123, Second Report and Order, Order on Reconsideration, and Notice of 
Proposed Rulemaking, 18 FCC Rcd 12375, 12412-12415, paragraphs 54-61, 
released June 17, 2003, published at 69 FR 53346, September 1, 2004, 
(2004 TRS Report & Order). (The Bureau notes that the carrier of choice 
rule is presently waived for the provision of Internet Protocol Relay 
Service (IP Relay) and Video Relay Service (VRS). See, e.g., 2004 TRS 
Report & Order, 19 FCC Rcd 12594, Appendix E.) Sprint asserted that is 
free long distance program is distinguishable from the kind of 
financial incentive programs prohibited by the Financial Incentives 
Declaratory Ruling, and therefore should be permissible. Sprint 
asserted that, unlike customer loyalty programs, the free long distance 
program does not provide any benefits independent of the calls 
themselves, and therefore there is no incentive to make unnecessary TRS 
calls. Sprint also noted that discounts from standard rates have long 
been characteristic of the super-competitive long distance market. 
Finally, Sprint noted that even if the Bureau found that Sprint's free 
long distance program violated the Financial Incentives Declaratory 
Ruling, the Bureau should make clear that the prohibition applies only 
to interstate long distance service, and not intrastate long distance 
service. See Sprint Letter at 2, note 1. On March 11, 2005, Nordia, 
Inc., another provider of traditional TRS in California, addressed by 
letter the provision of free long distance service along with 
traditional TRS service. See letter from Vinson & Elkins (Counsel for 
Nordia, Inc.) to Thomas E. Chandler, Chief, Disability Rights Office, 
Consumer & Governmental Affairs, Federal Communications Commission, 
dated March 11, 2005, regarding Declaratory Ruling Regarding Hands-On 
Video Relay Services, Inc., CC Docket No. 98-67 and CG Docket No. 03-
123.

Discussion

    The Bureau finds that offering free or discount long distance 
service (subject to the exceptions noted below) to TRS consumers as an 
incentive to use a particular TRS provider's relay service, or as an 
incentive for a consumer to make more or longer TRS calls, constitutes 
an impermissible financial incentive in violation of the Financial 
Incentive Declaratory Ruling. When customers receive either free or 
heavily discounted long distance service, they have an incentive to 
make more or longer calls than they would make in the absence of such a 
program. Consequently, the Interstate TRS Fund, which compensates 
providers on a per-minute basis, is bill for minutes the customers 
might not have generated but for the incentive program. Although Sprint 
raises this issue in the context of a multi-vendor state, we note that 
our conclusion applies to TRS providers whether or not they are the 
only provider in a state. Free or discount long distance programs for 
traditional TRS consumers run afoul of the Commission's financial 
incentives prohibition not because they might cause a consumer to 
select one provider's service instead of another provider's service, 
but because such programs may have the effect of causing a TRS consumer 
to make more or longer TRS calls than be or she would otherwise make.
    This document shall be effective January 12, 2006. The record 
reflects that some providers may not be able to immediately change 
their automated billing system. See Letter from MCI to Marlene H. 
Dortch, Secretary, Federal Communications Commission, dated June 10, 
2005, regarding CC Docket No. 98-67 and CG Docket No. 03-123 
(indicating that MCI would need 45 days to comply with ruling 
proscribing free long distance); Letter from Vinson & Elkins (Counsel 
for Nordia, Inc.) to Thomas E. Chandler, Chief, Disability Rights 
Office, Consumer & Governmental Affairs, Federal Communications 
Commission, dated June 16, 2005, regarding Nordia Billing for 
Interstate Calls (indicating company would require 9 to 12 months to 
implement billing system). The Bureau believes that 120 days is a 
reasonable time for providers to come into compliance.

[[Page 54300]]

    There are, however, two important limitations to the Bureau's 
conclusion with respect to free or discount long distance service to 
TRS consumers. First, the Financial Incentives Declaratory Ruling and 
this document apply only with respect to free or discount interstate 
long distance service, not intrastate long distance service. Second, 
the Bureau recognizes that provider have long offered discount long 
distance service to TRS consumers who use a TTY under the rationale 
that, given the nature of traditional TRS, it take substantially longer 
for parties to a traditional TRS call to have a conversation than it 
would for two hearing parties to have the same conversation. Therefore, 
providers have been permitted to offer discount long distance service 
to TRS consumers so, long as the discounts reasonably relate, under the 
functional equivalency principle, to equalizing the cost of the call 
based on the added length of a TRS call. The Bureau prohibits only 
those long distance discounts for TRS consumers that go beyond ensuring 
that the long distance service cost of the TRS call is equivalent to 
what that cost would have been for hearing parties. Programs directed 
at giving the consumer an incentive to make a TRS call in the first 
place, or to place a longer TRS call than consumer might otherwise 
make, are prohibited under this document.
    Nothing in the Financial Incentives Declaratory Ruling or this 
document precludes interstate TRS providers that also offer long 
distance service from offering discounts to all of their consumer when 
the same discount applies to both voice and TRS calls. The Bureau 
addresses herein only the situation where TRS consumers, but not other 
consumers, are given free long distance service (or discount long 
distance service) as incentive for the consumer to use the particular 
TRS provider that also offer the long distance service, or to make more 
or longer TRS calls.

Ordering Clauses

    Pursuant to the authority contained in section 225 of the 
communications Act of 1934, as amended, 47 U.S.C. 225, and Sec. Sec.  
0.141, 0.361, and 1.3 of the Communication Rules, 47 CFR 0.141, 0.361, 
1.3, this document is hereby adopted.
    Any TRS provider offering to TRS consumers financial incentives 
relating to free or discount long distance service, as set forth above, 
shall be eligible for compensation from the Interstate TRS Fund.
    This document shall be effective January 12, 2006.

    Federal Communications Commission.
Monica Desai,
Chief, Consumer & Governmental Affairs Bureau.
[FR Doc. 05-18250 Filed 9-13-05; 8:45 am]
BILLING CODE 6712-01-M


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