Telecommunications Relay Service: FCC Should Strengthen Its Management of Program to Assist Persons with Hearing or Speech Disabilities
Published: 2015-04-29T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: TRS allows persons with hearing or speech disabilities to place and receive telephone calls, often with the help of a communications assistant who acts as a translator or facilitator between the two parties having the conversation. FCC is the steward of the TRS program and the federal TRS Fund, which reimburses TRS providers.
GAO was asked to examine FCC's management of the TRS program. This report examines, among other things, (1) changes in TRS services and costs since 2002, (2) FCC's TRS performance goals and measures and how they compare with key characteristics of successful performance goals and measures, and (3) the extent to which the design of the program's internal control system identifies and considers program risks. GAO analyzed 2002 through 2014 service and cost data, compared TRS performance goals and measures to key characteristics of successful performance goals and measures, compared the design of the TRS's internal control system with GAO's standards for internal control, and interviewed officials from FCC, the 10 companies providing interstate TRS, and associations representing the deaf and hard of hearing.
section_title: What GAO Found
paragraphs: Since 2002, the overall minutes of use and costs for the Telecommunications Relay Service (TRS) program have grown significantly due to the advent of Internet-based forms of TRS and increased usage by the deaf and hard-of-hearing communities. Program data show that total TRS minutes have grown from about 53 million in “rate year” (July-to-June) 2002–2003 to about 249 million in rate year 2013–2014, an almost five-fold increase. Total TRS costs have grown from about $104 million in the 2002–2003 rate year to about $818 million in the 2013–2014 rate year, an almost eight-fold increase. These increases stem from the popularity of new forms of TRS that use the Internet—such as Video Relay Service (VRS) and Internet Protocol Captioned Telephone Service—and the growth in consumers' use of them, according to FCC, some providers, and one consumer group that GAO interviewed.
The purpose of the TRS program under federal law is to provide persons who are deaf or hard of hearing or have a speech disability with telecommunications services that are “functionally equivalent” to those provided to persons without a hearing or speech disability, but FCC has not established specific performance goals to guide its efforts. FCC has established some performance measures for TRS in the form of minimum performance standards for TRS providers, such as regulations requiring that TRS communications assistants must answer 85 percent of TRS calls (except VRS) within 10 seconds; however, these standards are not linked to higher-level performance goals. By establishing performance measures before establishing performance goals, FCC may be spending time and resources on efforts not well linked to key dimensions of the program. Because of the lack of specific TRS performance goals—and specific performance measures crafted around those goals—it is difficult to determine in an objective, quantifiable way if TRS is making available functionally equivalent telecommunications services, and it is difficult for FCC to manage the program in a proactive, results-oriented manner.
FCC has designed some internal controls for the TRS program, but lacks a comprehensive internal-control system to manage program risks. To address fraud, FCC has designed numerous controls to address compliance risks. For example, FCC eliminated the ability of TRS providers to use subcontractors in 2011 and strengthened TRS's provider-certification rules and user registration rules in 2013. Internal control standards call for the completion of a risk assessment to identify and analyze program risks. FCC's last risk assessment, in 2013, was a one-page document that did not comprehensively identify programmatic risks. A robust risk assessment would help FCC identify risks to providing functionally equivalent services and inform the development of the overall internal-control system. Internal control standards also call for effective external communications to groups that can impact the program, such as TRS's users and providers. FCC's program policies are spread across numerous reports and orders. Six of 10 TRS providers told us they experienced difficulties understanding TRS rules. FCC has sought comment on how best to reorganize its rules to improve clarity, but has not yet adopted any such changes. Doing so could improve FCC's communication of TRS rules and procedures to the deaf community and the companies providing services.
section_title: What GAO Recommends
paragraphs: GAO recommends that FCC develop specific TRS performance goals and measures, conduct a robust program risk assessment, and improve the communication of TRS's rules and procedures. In commenting on a draft of this report, FCC agreed with the recommendations and discussed actions it plans to take to implement them.

section_title: Letter
paragraphs: Persons with hearing or speech disabilities want or need to have  telephone conversations with persons who do not have such a disability— for example, a call to their doctor, their child’s school, or a close relative.  The Telecommunications Relay Service (TRS) allows persons with a  hearing or speech disability to place and receive telephone calls with the  help of a “communications assistant,” (CA) who acts in various ways as  an interpreter or facilitator between the two parties having the  conversation. Different forms of TRS involve different technologies,  including the use of video, the Internet, or special caption telephones.  Section 401(a) of the Americans with Disabilities Act of 1990 (ADA)  requires the Federal Communications Commission (FCC), the steward of  the TRS program and the Interstate Telecommunications Relay Services  Fund (TRS Fund), to ensure that TRS is available, to the extent possible  and in the most efficient manner, to persons in the United States with  hearing or speech disabilities. TRS Fund disbursements were  approximately $818 million in the 2013–2014 “rate year,” up from about  $104 million in the 2002–2003 rate year, when according to FCC, Video  Relay Service (VRS)—a popular form of TRS—began to be widely  offered.
In 2008, the FCC Office of Inspector General (OIG) initiated an  investigation into VRS fraud. Several individuals eventually pleaded guilty  to committing VRS fraud, and FCC made changes to program rules  intended to prevent and detect fraud, waste, or abuse in the program.  You requested that we examine FCC’s management of the TRS  program. This report addresses the following questions: 1.  How have the services and costs of the TRS program changed since  2002?  2.  What are FCC’s performance goals and measures for the TRS  program, and how do they compare with key characteristics of  successful performance goals and measures?  3.  To what extent does the design of the TRS program’s internal control  system identify and consider program risks?  4.  According to program stakeholders, what challenges, if any, exist in  ensuring quality services for users and a competitive environment for  providers?
For each of our research questions, we reviewed relevant FCC TRS  orders and comments filed in FCC proceedings. We also conducted  interviews with officials from the FCC; the FCC Office of Inspector  General (OIG); Rolka Loube Saltzer Associates (RLSA), the current TRS  Fund administrator; the National Exchange Carrier Association (NECA),  the previous TRS Fund administrator; each of the 10 companies currently  providing TRS; and associations representing the deaf, hard of hearing,  and speech-disabled (referred to in this report as consumer groups). We  analyzed these interviews to identify major themes that emerged about  how and why TRS services have changed over time and what issues  exist regarding quality, competition, and management of the program. To  determine how the services and costs of the TRS program have changed  since 2002, we obtained and analyzed FCC program data on costs and  minutes of usage from 2002 through 2014 for the six major TRS services.  We selected 2002 as the start date for our review because it was the first  year that VRS—the service that accounts for the majority of TRS Fund  payments—was widely offered. Based on documentation and  conversations with FCC about how the data are collected and managed,  we determined the cost and usage data were sufficiently reliable for the  purposes of presenting program trends. To assess FCC’s performance  goals and measures, we reviewed FCC documents, including strategic  plans and performance plans, and interviewed FCC staff about the  program’s goals and measures. We compared the goals and measures to  key characteristics of successful goals and measures, as developed by  GAO in previous work and as contained in the GPRA Modernization Act  of 2010 (GPRAMA). To assess how the design of the TRS program’s  internal control system identifies and considers program risk, we obtained  TRS’s internal control documentation, including risk assessments,  descriptions of control activities, and audit reports. We compared the  design of the TRS internal control system with the requirements  contained in GAO’s Standards for Internal Control in the Federal  Government. To obtain quantifiable information about issues related to  TRS quality and competition, we conducted a survey of all 10 current  TRS providers. We obtained a 100-percent response rate to our survey.  In addition, we conducted a market concentration analysis of the six main  forms of TRS by analyzing the number of providers for each service from  2008 through 2014. We also analyzed other measures of market  concentration for the two largest forms of TRS (VRS and Internet Protocol  Captioned Telephone Service) in terms of current compensation received  by providers for the most recent rate years. Appendix I provides additional  information about our objectives, scope, and methodology, including a list  of the organizations we interviewed.
We conducted this performance audit from April 2014 to April 2015, in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: FCC manages and oversees the federal TRS program. FCC develops  program rules and policies, sets annual rates for compensating providers,  and oversees compliance with program rules. FCC contracts out the daily  administration of the TRS Fund to a third-party administrator. NECA was  the fund administrator from 1993 through June 2011; RLSA has been the  administrator since July 2011. The administrator calculates proposed  TRS compensation rates and contribution factors, collects fees, and  handles the disbursements from the TRS Fund to TRS providers.
According to FCC officials, prior to the ADA, there was no federal  requirement for telephone providers to offer a means for people who were  deaf, hard of hearing, or speech disabled to access the nation’s  telephone services, although many states provided a form of TRS at that  time. The ADA created the first requirement for a federal program, and  the TRS program was established in 1993 in response. The ADA requires  that persons with hearing or speech disabilities be provided with  telecommunications services that are “functionally equivalent” to the  services provided to persons without hearing or speech disabilities. Until  2000, text-to-voice communication using a text telephone (TTY), a text  input device, was the only form of TRS available to users. The advent of  Internet-based TRS technologies, however, has increased  telecommunications options for people who are deaf and hard of hearing.  TRS is available in all 50 states, the District of Columbia, and the U.S.  territories for local and long distance calls and some international calls.  TRS involves no additional charges for the TRS user. According to FCC  officials, FCC has plans to develop a central user-registration database,  but currently the number of TRS users is unknown. FCC officials told us  that there are roughly 250,000 assigned VRS numbers, but assigned  numbers do not equate one-to-one with the number of users.Centers for Disease Control and Prevention’s National Center for Health  Statistics reported in February 2014 that there are about 38-million  individuals with hearing disabilities in the United States. Although the  number of current TRS users is likely much lower than that, according to  the National Association of the Deaf, this number could represent the  number of potential users.
The  There are currently six main forms of TRS: Video Relay Service (VRS),  Text Telephone (TTY), Captioned Telephone Service (CTS), Internet  Protocol Captioned Telephone Service (IP CTS), Internet Protocol Relay  (IP Relay), and Speech-to-Speech Relay Service (STS) (see fig. 1).
TRS providers include both traditional telecommunications companies,  such as AT&T or Sprint, and companies primarily focused on providing  TRS service, such as Convo or the Communication Axess Ability Group.  Companies are compensated from state TRS funds for the costs of  providing intrastate TRS and from the federal TRS Fund for the costs of  providing interstate and Internet-based TRS. There are currently 10 TRS  providers that are compensated from the federal TRS Fund. No single  company offers all six forms of TRS. For example, in October 2014, six  companies provided VRS, while three provided TTY and CTS. For all  forms of Internet-based TRS, providers must be certified by FCC before  they can offer service.
TRS companies provide TRS services and are then reimbursed on a per-  The TRS reimbursement rate varies  minute basis out of the TRS Fund.by service and is typically set by FCC annually based on reported  provider costs, which include an 11.25-percent return on capital  investment. For example, as shown in figure 1, the 2014–2015  reimbursement rates ranged from $1.03 per minute to $5.29 per minute  for the different forms of TRS. In the 2013–2014 rate year, approximately  $818 million in total reimbursements were paid out of the TRS Fund to the  companies that provided TRS services.
The rates for the various forms of TRS are determined in the following  ways:
Text Telephone, Speech-to-Speech, Captioned Telephone  Service, and Internet Protocol Captioned Telephone Service:  FCC uses the Multi-state Average Rate Structure (MARS)  methodology to determine compensation. MARS uses an average of  competitively bid state rates for intrastate TRS to determine  predictable, fair, and reasonable costs of interstate TRS.
Internet Protocol Relay: FCC employs a price cap regulation to  determine the compensation rate for IP Relay.
Video Relay Service: According to FCC, to encourage competition  while recognizing efficiencies through economies of scale, FCC  compensates VRS providers using a three-tiered rate structure based  on the minutes of service provided. For January 1, 2015, through  June 30, 2015, VRS rates are:
Tier I rate: $5.29 per minute for minutes up to 500,000 per month;
Tier II rate: $4.82 per minute for minutes from 500,000.1 to  1,000,000 per month; and
Tier III rate: $4.25 per minute for minutes over 1,000,000 per  month.
All VRS providers are compensated at the tier I rate for their first 500,000  minutes, but as providers become larger and provide more minutes of  service, they are compensated at lower rates for the additional minutes.  The three-tier rate structure is intended to reflect cost differences among  large and small providers and encourage current entrants to remain in the  VRS market, while improving their efficiency over time. FCC intends to  eliminate the rate tiers over time. In its 2013 VRS Reform Order, FCC  adopted a schedule to phase out the differences between tier I and tier II  rates by January 2016 as part of a “glide path” toward an eventual unitary  cost-based rate for VRS. According to FCC, it is seeking to replace the  cost-of-service ratemaking approach for VRS with more market-based  approaches, to the extent that this approach can be accomplished without  adversely affecting the public interest and goals of the ADA. FCC  believes that a market-based approach to providing VRS will result in  lower costs for the TRS program.
section_title: Total TRS Minutes and Costs Have Grown Significantly since 2002 due to Internet-Based TRS and Increased Usage
paragraphs: According to officials from FCC, most of the TRS providers, and all of the  consumer groups that we interviewed, the development of Internet-based  TRS technologies and increased usage of these technologies have led to  growth in overall program minutes and costs. TRS program data show  that total TRS minutes have grown from about 53 million in rate year  2002–2003 to about 249 million in rate year 2013–2014, an almost five- fold increase. Total TRS costs have grown from about $104 million in  2002 to about $818 million in rate year 2013–2014, an almost eight-fold  increase (see fig. 2). According to FCC, some providers, and one  consumer group we spoke with, the development of TRS technologies  that use the Internet—such as VRS, IP Relay, and IP CTS, along with  consumer knowledge about them—has led to wider use of TRS services.  Since the federal TRS Fund supports the provision of Internet-based  TRS, a rise in federal TRS costs occurred in concert with the  development and popularity of the Internet-based services (VRS initially  and then IP CTS). According to FCC, some providers, and one consumer  group, other technology advancements also have increased TRS usage.  For example, CTS and IP CTS involve the use of a telephone that  provides people who are hard of hearing with captions of what the other  party to the conversation is saying. CTS and IP CTS have opened the  TRS market to a new group of users—senior citizens—some of whom  can become increasingly unable to follow everything said in a telephone  conversation due to hearing loss late in life. Also, two consumer groups  noted that consumers can now use mobile phone applications to access  most TRS, thus no longer being tied to specialized equipment in the  home and likely further increasing total program usage.
The largest portion of TRS costs are for VRS, which is used by members  of the deaf population who communicate in American Sign Language  (ASL). According to the National Association of the Deaf (NAD), the  primary reason for VRS’s increased use is that it allows users to  communicate at roughly 200 words-per-minute instead of the 60 words- per-minute enabled by the typing of traditional TTY. In addition, according  to NAD, ASL can be a deaf individual’s native language and, when used  as part of a telephone conversation, provides a richer communication  experience, much closer to that of a hearing individual. VRS requires a  specialized CA workforce of ASL interpreters who, according to some of  the stakeholders we spoke with, can be in low supply and can command  fairly high salaries. These higher CA costs and, according to one  provider, the more expensive video link between the deaf individual and  the CA have led to VRS costs per minute that are higher than other forms  of TRS. VRS costs grew from about $25 million in rate year 2002–2003 to  about $601 million in rate year 2013–2014. VRS reimbursement costs  peaked in the 2008–2009 rate year at $621 million, which accounted for  about 85 percent of the TRS fund at that time. In rate year 2013–2014,  VRS accounted for about 74 percent of the $818 million in TRS  reimbursements (see fig. 3). IP CTS is the second most reimbursed TRS  service at about 21 percent of total TRS costs.
Although VRS costs are the largest percentage of current program costs,  IP CTS costs are growing at the fastest rate. From rate years 2009–2010  through 2013–2014, IP CTS grew from $9 million to $174 million, or about  a 19-fold increase (see fig. 4). Some stakeholders we spoke with saw IP  CTS as an area where TRS usage is likely to continue increasing as baby  boomers age and face increased hearing loss. Today, VRS and IP CTS,  both Internet-based technologies, account for about 95 percent of TRS  costs.
As shown in figures 4 and 5, other forms of TRS are declining or staying  the same in terms of costs and usage. IP Relay and traditional TTY, both  of which require the person who is deaf or hard of hearing to type his or  her part of the conversation, are declining in both minutes of use and  costs. IP Relay minutes have decreased from about 83 million in rate year  2006–2007 to about 18 million in rate year 2013–2014. TTY minutes have  decreased from about 27 million in rate year 2002–2003 to about 3 million  in rate year 2013–2014. Similarly, total program costs for both services  have declined as well. Officials from FCC, TRS providers, and consumer  groups told us that the growth in popularity of VRS and IP CTS have  contributed to a decrease in the popularity of IP Relay and TTY. VRS and  IP CTS allow for much quicker and more natural conversations than the  text-based IP Relay and traditional TTY. In recent years, CTS and STS  have remained at a steady level in both minutes of use and costs. CTS  functions like IP CTS, but uses the traditional telephone network rather  than the Internet. STS serves a small, discrete population with severe  speech disabilities. As shown in figure 3, both services account for small  percentages of the entire cost of the TRS Fund. In rate year 2013–2014,  CTS costs accounted for about 2 percent of the fund, while total STS  costs were less than 1 percent of the fund. Figure 5 shows changes in  minutes of use from rate years 2002–2003 through 2013–2014 for each  form of TRS.
The per-minute reimbursement rates for TRS have varied over time,  although the reimbursement rate for VRS has decreased significantly.  VRS reimbursement rates decreased from about $17 per minute in 2001– 2002 to about $4.25 per minute for VRS Tier 3 in 2015 (see fig. 6).  Nonetheless, despite this decrease in the VRS reimbursement rate, its  costs have grown significantly over this time period due to increased  usage as discussed previously. The reimbursements rates for other forms  of TRS, such as CTS, IP CTS, TTY, and STS, have increased moderately  since 2011, while rates for IP Relay have decreased.
According to FCC, one provider and one consumer group, reducing fraud  also has played a role in reducing costs for some forms of TRS.  According to the FCC OIG, as the FCC OIG investigated VRS fraud and  VRS reimbursement rates decreased, VRS costs decreased from rate  year 2008–2009 to rate year 2010-2011, as shown in figure 4, even as  VRS minutes increased in these rate years. In addition, FCC officials  have told us that the efforts of the FCC Enforcement Bureau and OIG  have contributed to a decrease in IP Relay fraud and thus IP Relay costs.  For example, according to FCC officials, FCC’s Enforcement Bureau  investigated IP Relay providers to determine whether they had  implemented a reasonable process to verify the accuracy of users’  registration information. Similarly, the FCC OIG worked with the  Department of Justice to investigate allegations that a TRS provider had  submitted false claims, such as Nigerian scam calls, from foreign  locations in provision of an IP Relay. The FCC OIG attributes some of  the reductions in IP Relay costs since 2008 to these fraud reduction  efforts. In addition to its fraud reduction efforts, FCC made TRS providers’  research and development costs and outreach costs no longer  reimbursable in FCC’s June 2013 VRS Reform Order, which could also  reduce costs for some forms of TRS.
section_title: FCC Has Not Established Performance Goals and Related Performance Measures for the TRS Program
paragraphs: We have previously found that results-oriented organizations commonly  perform a number of key practices to effectively manage program  performance. In particular, results-oriented organizations implement two  key practices to lay a strong foundation for successful program  management. First, these organizations set performance goals to clearly  define desired program outcomes. Second, they develop performance  measures that are clearly linked to the performance goals.
With regard to the TRS program, the ADA directs FCC to ensure that  telecommunications services are available, to the extent possible and in  the most efficient manner, to persons with a hearing or speech disability,  and that such services are “functionally equivalent” to the  telecommunications services available to individuals without a hearing or  speech disability.that the high-level purpose of the TRS program is this provision of  functionally equivalent telecommunications to people with hearing or  speech disabilities, but FCC has not established specific performance  goals to guide its efforts toward achieving that purpose. Officials told us  that they believe that the TRS program’s rules and numerous related  reports and orders have sufficiently identified the performance goals of  the program. We identified some performance measures associated with  the program, but these measures are not clearly linked to any agency or  program performance goals and are sometimes not well defined or  measureable. Without stated program goals, it can be challenging for  FCC to determine the extent to which it is fulfilling the purpose of the  program.
Pub. L. No. 103-62, § 4, 107 Stat. 286 (1993), codified at 31 U.S.C. § 1105(a). performance plans. For example, in its fiscal year 2012 performance plan,  FCC had a goal to increase access to TRS services. However, this goal  does not appear in current performance plans, and FCC officials told us  they were unable to determine how many unique users participated in the  TRS program or the number of potential TRS users. Thus, no  performance measure—or method for obtaining the measurement data— was linked to this goal, making it difficult for FCC to demonstrate whether  or to what extent access to services among the target populations had  increased.
One useful practice for developing successful performance goals that we  have identified in previous work is to create a set of goals that address  important dimensions of a program’s performance and balance competing  priorities. For example, officials told us that important dimensions of the  program are, among other things, the quality of the services provided to  users and the existence of competition among TRS providers. However,  FCC has not established performance goals related to these dimensions.  For instance, FCC lacks any goal related to interpreter accuracy, which  consumer groups we met with stressed was critical to achieving quality  services. Accurate relay of important medical, legal, or financial calls by  CAs was of particular concern to consumer groups with whom we spoke.  Without goals related to important dimensions of service quality, such as  interpreter accuracy, it becomes difficult to determine if this attribute of  functional equivalency is being met and to identify whether programmatic  changes need to be made. FCC officials acknowledged that there is no  interpreter accuracy goal, but stated that they believe there is no practical  way to evaluate interpreter accuracy. However, the consumer groups and  some service providers we met with told us that interpreter accuracy  could be evaluated with test scripts. Similarly, with regard to the important  program dimension of competition, different numbers of providers offer  different forms of TRS, but FCC has no performance goals with relation to  levels of competition or ratemaking. For example, FCC stated in its 2013  VRS Reform Further Notice of Proposed Rulemaking that it believes there  is a need to replace its VRS cost-of-service ratemaking with more market- based approaches, and proposed transitioning to contract prices set  through a competitive-bidding process, where feasible, and auctioning a  portion of VRS traffic. However, the proposed rulemaking set forth a  number of questions about how such an approach would work, including  questions about bidder qualifications and ensuring the quality of services.  Establishing performance goals around competition and ratemaking could  help guide FCC’s efforts in these areas and improve the transparency of  FCC’s actions, as decisions could more clearly be linked to the  achievement of program goals.
Although FCC lacks specific performance goals, FCC does have in place  some specific performance measures for TRS in the form of minimum  program standards. Compliance with the minimum standards is  necessary for providers to receive compensation from the TRS Fund.  These performance measures include, among others, that:
Providers shall transmit traditional TRS conversations in real time.
CAs must have a typing speed of at least 60 words per minute.
Providers must have the following service functionalities: (1) call  release, (2) speed dialing, and (3) three-way calling.
Emergency calls must be able to be expeditiously transferred to an  emergency services provider as if a caller had dialed 911 directly.
TRS calls (except VRS) must be answered by CAs within 10 seconds  85 percent of the time.
In addition, to its credit, FCC has formally established performance  measures for the TRS Fund administrator. For example, measures such  as the timeliness of TRS Fund collections, payments, and status reports  to FCC, among others, are included in FCC’s contract with RLSA.
Although FCC has established some TRS performance measures, these  measures are not linked to any TRS or universal-service performance  goals. By establishing performance measures before establishing  performance goals, FCC may be spending its time and resources, and  those of the service providers or program administrator, on efforts not well  linked to key dimensions of the program. Also, the performance measures  FCC is using for the program can be difficult to assess because criteria  are lacking. For instance, other minimum standards state, among other  things, that CAs must be “sufficiently trained” to meet the needs of  individuals with hearing and speech disabilities; must have “competent  skills” in grammar, spelling, and interpretation of typewritten ASL; and  must possess “familiarity” with hearing and speech disability cultures,  languages, and etiquette. These terms are not defined by FCC and, as a  result, are difficult to measure in a consistent manner across TRS  providers. It is up to the service providers to determine that they are meeting these requirements and self-certify that they are doing so.
Thus, although FCC has developed some important performance output  measures through its minimum standards for the TRS program, best  practices for successful management of a program call for a well- balanced set of outcome and output measures that link to specific  program performance goals. determining a program’s progress in meeting its intended outcomes and  allowing Congress, FCC, and RLSA to assess the effectiveness of the  TRS program and determine if operational changes are needed. Because  of the lack of specific TRS performance goals—and specific performance  measures that are crafted around those goals—it is difficult to determine  in an objective, quantifiable way if TRS is fulfilling its purpose of making  available functionally equivalent telecommunications services to persons  with hearing and speech disabilities, and it is difficult for FCC to manage  the program in a proactive, results-oriented manner.
According to the Government Performance and Results Act, “outcome measures” are  assessments of the results of a program compared to its intended purpose, and “output  measures” are the tabulations, calculations, or recordings of activities or efforts and can  be expressed in a quantitative or qualitative manner.
section_title: FCC Has Designed Some Internal Controls but Lacks a Comprehensive Internal Control System to Manage Program Risks An Internal Control System Helps Assure That Program Goals Are Met
paragraphs: Internal control is an integral component of an agency’s management  process that provides reasonable assurance that the objectives of an  agency’s program are being achieved. Program objectives can be broadly  classified into one or more of the following categories:
Operations: the effectiveness and efficiency of program operations;
Reporting: the reliability of reporting for internal and external use;
Compliance: program compliance with applicable laws and  regulations.
GAO’s Standards for Internal Control in the Federal Government  commonly referred to as the “Green Book,” defines the standards for  internal control in the federal government. The Federal Managers’  Financial Integrity Act of 1982 (FMFIA) requires federal executive-branch  entities to establish internal control in accordance with these standards.  GAO has developed a tool to assist agencies in this process, as has  OMB with its Circular A-123. The Green Book identifies the following  five components as being the highest level of the hierarchy of standards  for internal control in the federal government:
Control Environment: The foundation for an internal control system.
The control environment provides the discipline and structure to help  an entity achieve its objectives.
Risk Assessment: Assesses the risks facing the entity as it seeks to  achieve its objectives. This assessment provides the basis for  developing appropriate risk responses.
Control Activities: The actions management establishes through  policies and procedures to achieve objectives and respond to risks in  the internal control system.
Information and Communication: The quality of information that  management uses to support the internal control system.  Communicating quality information is vital for an entity to run and  control its operations.
Monitoring: Assesses the quality of performance over time and  ensures that the findings of audits and other reviews are promptly  resolved.
According to the internal control standards, these five components must  be effectively operating together in an integrated manner to provide  assurance that operations, reporting, and compliance objectives are met.  Management is responsible for an effective internal-control system. As  part of this responsibility, management sets the entity’s objectives,  implements controls, and evaluates the internal control system.
subsections: section_title: FCC Has Designed Some TRS Internal Controls That Address Compliance and Reporting
paragraphs: FCC has designed some internal controls that focus on program  compliance and reporting objectives. In response to TRS fraud, first  identified by the FCC OIG audits of TRS providers, FCC implemented  rule changes. FCC OIG officials told us that they first became suspicious  of possible fraudulent activity in the TRS program based on particular  reimbursement claims that they judged to be unusual. They told us that at  the time there was insufficient scrutiny of call data for irregularities by  NECA, the TRS Fund administrator. The FCC OIG began a formal   As a result of the joint  investigation of the TRS program in 2008.investigation among FCC’s OIG, the Department of Justice, the Federal  Bureau of Investigation, and the United States Postal Service, 26 people  were charged in a scheme to steal more than $50 million from the TRS  Fund.OIG through numerous rulemakings. For example, from 2010 through  2013, FCC, among other things, designed control activities to address  specific fraud risks:   FCC has addressed many of the vulnerabilities identified by the
Prohibited per-minute reimbursement for internal calls: To  address provider practices intended to inflate call minutes, FCC  reiterated its policy that calls made by or to employees of VRS  providers were not eligible for compensation from the TRS Fund on a  per-minute basis.
Eliminated subcontracting: In 2011, FCC changed the certification  eligibility requirements for TRS providers to require that all Internet- based providers be directly certified by the FCC. Prior to this order,  providers who were certified by FCC or by a state commission were  allowed to subcontract some of the provision of services to third  parties that did not have to be certified. FCC officials and other  stakeholders told us that much of the fraud that had occurred in the  VRS program was related to these non-certified subcontractors,  specifically in the form of inappropriately generating minutes. Now that  all providers are directly certified, fraud in the VRS market has  decreased dramatically, according to FCC.
Strengthened certification: In 2011, FCC amended the TRS  certification process to require that providers submit evidence  demonstrating compliance with FCC’s rules and authorizing on-site  inspections of providers’ facilities. In 2013, FCC further changed  provider certification rules to require providers’ senior managers to  sign under penalty of perjury that their companies’ claims for  compensation from the fund were valid and that the data they  reported were true and accurate. This change was implemented to  deter fraudulent activity and further ensure that providers’ senior  managers were diligent in verifying the information they submitted for  reimbursement.
Strengthened user registration rules: In 2012, the Commission  implemented a rule that prohibited IP Relay providers from handling  non-emergency calls made by first-time users without first verifying  the user’s registration information. Prior to this rule change, IP relay  services entailed some degree of anonymity of end users and  provided the technical ability to mask one’s calling location. Some  individuals exploited this anonymity by using IP relay services to  perpetrate scams and other types of abuse. In 2013, FCC also  established new VRS registration rules to address the problems of  fraud, waste, and abuse by improving the mechanism by which VRS  users are verified. The new rule requires VRS users to register with  each provider they use and certify that they had a qualifying disability.  Users were also given a 10-digit number that was associated with  their registered account. According to FCC officials, this change has  drastically reduced the number of fraudulent calls placed through the  TRS program.
In addition to these controls, FCC has also implemented controls with  regard to the TRS Fund’s administrator and routine audits of the program.  FCC better defined the role of the fund administrator in the contract it  entered with RLSA. Among other things, the contract outlined the fund  administrator’s roles in collecting, disbursing, and protecting TRS funds;  in providing routine reports to FCC on the status of the fund; and in  analyzing provider data for irregularities and withholding compensation  when appropriate. FCC has also implemented an audit program, with  audits conducted by the OIG, which includes periodic audits on the fund  administrator and audits of service providers to ensure compliance with  several TRS program rules. Since 2008, the OIG has conducted one  audit of the fund administrator and 33 audits of providers. OIG officials  told us that their audits of TRS have focused on fraud and financial risks  to the TRS Fund rather than risks related to the overall management of  the TRS program or the quality of the relay services provided to  customers.
section_title: FCC Lacks a Comprehensive Internal Control System to Manage TRS Program Risks
paragraphs: FCC has designed some internal controls for the TRS program,  particularly with respect to program compliance; however, as previously  discussed, FCC does not have clear program performance goals. Without  performance goals, it is difficult to create a comprehensive internal control  system which identifies and manages the risks to achieving the program’s  goals. It is clear from FCC’s agency-wide plans and program-specific  orders that combating fraud is a priority, and FCC has designed a number  of controls to do so. But the purpose of the TRS program is to provide  functionally equivalent telecommunications to persons with hearing or  speech disabilities. Thus, it is important that FCC’s internal control system  be designed around identifying and addressing risks to providing  functionally equivalent service, of which fraudulent activity would be one  risk. We compared FCC’s control system with Green Book standards and  found several instances where practices were not aligned. These  instances, among others, create risks that program’s resources are not  being effectively used to achieve the program’s purpose.
Risk Assessment: Internal control standards call for a risk  assessment that will identify risks, both internal and external, and  analyze the risks for possible effects. Risk assessments are then used  to help management formulate an approach for risk management.  According to documents provided by FCC, the last risk assessment of  the TRS program was conducted in 2013. FCC’s risk assessment of  the TRS program was a one-page document that did not  comprehensively identify risks or considerations of all interactions  between FCC and external parties. We found that the risk assessment  focused on fraud, waste, and abuse and did not look at other risks to  achieving the provision of functionally equivalent telecommunications  to persons who are deaf, hard of hearing, or have speech disabilities.  Six total risks were identified, none of which was specific to TRS. For  example, one of the six risks identified in the TRS risk assessment  was the “failure by management to recognize fraud in FCC programs.”
While it is important that fraud risks and risks to program resources  are identified and addressed to keep the program efficient and viable,  the Green Book and other internal control guidance state that a risk  assessment should identify all relevant risks posed to achieving  program goals. Without a robust risk assessment of the TRS  program, FCC may not be able to identify and address the relevant  risks to ensuring the provision of functionally equivalent  telecommunications to people with hearing and speech disabilities.
Information and communication: Internal control standards call for  effective external communications to those groups that can have an  impact on programs; such groups in the case of TRS, would include  TRS users and service providers. TRS rules are contained in federal  regulations, and FCC program policies are explained across  numerous reports and orders. Six of 10 providers told us about  challenges understanding the program’s rules that applied to them in  part because rules for a specific type of TRS service are discussed  throughout FCC orders rather than compiled in one place for each  type of TRS service. As an example, we found changes affecting IP  Relay services incorporated into the 2013 VRS Reform Order.  Specifically, among other things, the order modifies the rules so that  all Internet-based providers are required to obtain individual user  consent before a default provider change may occur. Thus, a provider  of IP CTS, for example, might not know that rules for its service were  part of a VRS order and could be unaware of changes affecting its  company. Further, this issue was highlighted in a 2008 OIG audit of  the program when the OIG recommended that FCC develop a TRS  handbook for providers to supplement FCC rules and consolidate  TRS program and administrative policies into a single reference  guide. FCC officials told us that such a TRS handbook has not been  created because they have prioritized other activities in managing the  TRS program. In 2011, FCC, in observing that TRS rules had become  “somewhat unwieldy” since 2000, sought comment on whether to  reorganize section 64.604 of its rules, which pertains to the TRS  program. FCC did not act on that proposal, but in 2013 proposed  instead to revise the structure of its rules so that they are service  specific and transmission specific, where appropriate, and sought  comments more broadly on how best to reorganize its rules to  improve program clarity. To date, FCC has not improved its external  communications to program users or providers through better  organization of TRS rules and regulations nor provided any specific  time frames for doing so.
Monitoring. Monitoring can include, for a program like TRS that  serves the public, the analysis of consumer complaints. Such  complaints may indicate that deficiencies exist—deficiencies that  could be investigated to determine any possible underlying causes.  FCC aggregates the TRS consumer complaints filed with FCC, state  regulators, and providers, as well as aggregating complaints by  service, complaint type, and the amount of time it takes to resolve  them. For example, 76 percent of the 272 TRS complaints were about  VRS. The types of TRS complaints most frequently received included  complaints about customer service, interoperability of a consumer’s  equipment with a service provider’s network, and “slamming” and  “porting.” Subsequent to our request for any analyses FCC may  have conducted on TRS complaints, FCC began conducting an  analysis in August 2014 on complaints received from July 1, 2013,  through June 30, 2014. According to FCC, there had not been any  analysis like this conducted before. As a result of not routinely  analyzing consumer complaints about TRS, FCC was missing an  opportunity to monitor the TRS program and to proactively identify  recurring issues, trends, and potential risks to the program and  determine if corrective actions were needed. We have previously  examined and noted concerns with FCC’s complaint process and  recommended that FCC expand its outreach to consumers about this  process and establish policies and procedures for monitoring and  analyzing trends in consumer complaints, among other things. FCC  agreed with our prior recommendation and, with regard to TRS,  officials told us that they plan to routinely analyze TRS complaints  going forward. In January 2015, FCC launched a new online  consumer help center, which, according to FCC, will make it easier for  consumers to file complaints and help streamline FCC’s process for  synthesizing and analyzing trends in consumer complaints. Such  analyses could help provide FCC with useful TRS data to help it make  performance-based decisions and evaluate its efforts with regard to  management of the TRS program.
section_title: Stakeholders Cited Several Challenges to TRS Service Quality and Competition
subsections: section_title: Stakeholders Identified Challenges to Providing High Quality Services
paragraphs: Consumer groups and TRS providers identified, through interviews and a  survey, the following challenges to TRS service’s quality: the lack of skill- based routing, interpreter accuracy, and decreasing TRS reimbursement  rates.
subsections: section_title: Skill-Based Routing
paragraphs: Some of the consumer groups told us that the lack of skill-based  routing—which would allow users making a TRS call to request a CA with  a particular specialty, such as a medical or legal expertise—negatively  affects TRS service quality. For example, one consumer group  representative told us that under the current program a TRS user’s  assignment is based on interpreter availability. The expectation that  interpreters will be the best fit for all calls is not reasonable and can lead  to poor communication, especially during medical or legal calls. In  addition, 7 of the 10 providers responding to our survey said that the lack  of skill-based routing leads to lower quality service (see app. II for our  survey results). Some consumer groups have requested that VRS  providers be allowed, or required, to offer skill-based routing. FCC is not  in favor of compensating VRS providers for skill-based routing services  due in part to a number of implementation issues. For example, FCC  pointed out in its 2013 VRS Reform Order that skill-based routing  implementation issues include how to reconcile a skill-based routing  function with the requirement that VRS calls be answered in the order  received, the availability of CAs to meet speed of answer requirements,  determining the appropriate skills needed for specialized routing, and  determining if skill-based routing should be mandatory or voluntary.
section_title: Interpreter Accuracy
paragraphs: Some consumer groups we interviewed identified interpreter accuracy as  a TRS service quality challenge. Specifically, according to one consumer  group, the wide range of skill levels across CAs creates the greatest  challenge to users in obtaining accurate interpretation. They noted that  some interpreters do not have the required skill level to ensure accuracy,  a circumstance that can lead to misunderstandings between the two  participants. FCC officials noted that TRS rules allow users to request a  change in the interpreter when the user determines that effective  communication is not occurring. FCC requires interpreters to be  “qualified” but leaves it to the providers to make that determination.officials told us that some providers employ only certified interpreters to  meet this requirement, while other providers use their own testing and  evaluation methods to determine which interpreters are qualified.
section_title: TRS Reimbursement Rates
paragraphs: According to providers, decreasing the amount that TRS providers are  reimbursed for their services can affect a company’s ability to hire and  retain qualified interpreters. For example, 8 of 10 providers responding to  our survey indicated that the current TRS reimbursement rates make it  much more difficult to hire and retain qualified interpreters. Decreases in  TRS reimbursement rates, according to one provider, have led some  providers to find ways to cut costs by hiring less skilled—and therefore  less expensive—CAs. However, there appears to be disagreement  between VRS providers and FCC about whether VRS reimbursement  rates are set at appropriate levels. According to the 2013 VRS Reform  Order, in setting TRS Fund compensation rates for VRS for the 2010–11  fund year, FCC found that in the prior 4 years—where the rates had been  set based on providers’ projected costs—providers had been  overcompensated by more than $2.00 per minute as a result of a reliance  on projected costs and inaccurate demand forecasts submitted by  providers.
section_title: Stakeholders Identified Challenges to Encouraging Competition and Technological Innovation
subsections: section_title: TRS Rate Reductions
paragraphs: The amount of compensation TRS providers receive has decreased over  time, specifically, for VRS services. For example, as previously  discussed, VRS rates have decreased from 2003 to 2015. Providers  noted that the rate reductions have affected competition. Specifically, all  10 providers stated that TRS rate reductions decreased competition, with  6 of those providers stating that TRS rate reductions significantly  decreased competition. Both providers and some consumer groups told  us that TRS rate reductions have prevented new entrants from coming  into the market and subsequently limited the number of providers a user  can choose from. Further, providers told us rate reductions and increases  in compliance requirements will lead more providers to exit the market.  However, FCC stated in its 2013 VRS Reform Order, that there is no  evidence proving that per-minute costs have dropped dramatically based  on the current TRS-fund administrator’s recalculated average of  providers’ current reported per-minute costs. In addition, according to  FCC, there are other reasons outside of rate reductions that could compel  a provider to leave the market, such as a provider’s inability to compete  effectively with other more efficient providers.
We conducted a market concentration analysis and found that  competition among TRS providers is decreasing as the number of  providers for most TRS services is decreasing. For example, the number  of TRS providers has decreased from rate years 2008 through 2014 for  all six TRS services except IP CTS. (See app. III for more detailed results  of our market concentration analysis.) In addition, the VRS and IP CTS  services, which have more providers and may appear to have the most  competition, are dominated by a few providers. Our analysis found that in  2013–2014 rate year the top VRS provider controlled most of the VRS  market while the top three IP CTS providers controlled over 98 percent of  the market, based on total minutes of service provided.
section_title: Lack of Compensation for Marketing and Outreach and Research and Development
paragraphs: Most TRS providers noted that the lack of compensation for marketing  and outreach and research and development hinders competition. For  example, 7 out of 10 providers stated that the lack of compensation to  TRS providers for marketing and outreach has significantly decreased  their ability to compete. According to one provider, a provider’s marketing  and outreach efforts cut significantly into a provider’s profit margin, and as  a result, the lack of marketing and outreach compensation discourages  new entrants into the market and inhibits a provider’s ability to attract new  customers through marketing efforts. According to FCC officials, they no  longer reimburse providers’ marketing and outreach efforts because they  cannot effectively determine whether there is a sufficient amount of  potential new customers to warrant such an incentive. In addition, FCC  stated in its 2013 VRS Reform Order that the majority of TRS’s marketing  compensation appear to have been used by providers to promote  individual-branded marketing campaigns focused on winning back TRS  users from competitors rather than informing the general public about the  nature and functions of relay services.
As mentioned, according to FCC officials, FCC ceased marketing  compensation to providers and called for the creation of a national  marketing and outreach pilot program that will, according to the 2013  VRS Reform Order, seek to ensure that potential TRS users and the  general public are aware of the TRS program and its role in providing  functionally equivalent services. The 2013 VRS Reform Order outlined a  nationwide TRS marketing and outreach pilot program that is intended to,  among other things, establish clear messaging about the purposes,  functions, and benefits of IP Relay and VRS; educate consumers who are  deaf, hard of hearing, or have speech disabilities about broadband  adoption programs available to low-income families; provide materials to  local, state, and national governmental agencies on the purposes,  functions, and benefits of IP Relay and VRS; and explore opportunities to  collaborate with other entities to disseminate information about IP Relay  and VRS. The 2013 VRS Reform Order called for the selection of either  (1) “outreach coordinators” who will conduct and coordinate IP Relay and  VRS outreach nationwide and will be compensated through the TRS  Fund or (2) an FCC contract with the TRS Fund administrator to enter into  a similar arrangement. According to the 2013 VRS Reform order, the  TRS outreach coordinators will not be affiliated with any TRS provider  and they will disseminate non-branded information to potential new users  and to the general public about IP Relay and VRS, the purposes and  benefits of the services, and how to access and use the services.
According to most TRS providers, the elimination of compensation for  research and development has also reduced competition and limited  innovation. For example, 7 out of 10 providers stated that the lack of  compensation from FCC to TRS providers for research and development  significantly decreases their ability to compete. Specifically, one provider  noted that the lack of compensation for research and development  reduces a provider’s ability to compete through quality service  improvements and innovations, such as new and unique provider-specific  features including improved software functionality, enhancing VRS picture  quality, or increasing captioning speed and accuracy during IP CTS  sessions. However, according to FCC, TRS research and development  compensation is inefficient and duplicative. FCC stated in its 2013 VRS  Reform Order that TRS research and development reimbursement would  allow for duplicative spending because multiple providers would be able  to expend research and development funds on similar or identical  enhancements and would not share the results with potential or existing  competitors. In addition, the 2013 VRS Reform Order, among other  things, directed the FCC Managing Director to enter into an arrangement  with the National Science Foundation to conduct research to ensure that  TRS is functionally equivalent to voice telephone services and to improve  the efficiency and availability of TRS. According to FCC officials, in  January 2015, FCC and MITRE entered into a memorandum of  understanding to conduct this research. FCC officials told us that the  research project establishes a Center of Expertise that is intended to  bring together experts, representatives of the community of persons with  hearing or speech disabilities, and other stakeholders to prioritize and  address the needs of TRS users. According to FCC officials, the Center  of Expertise held its inaugural meeting in March 2015.
section_title: Lack of Interoperability among VRS Providers
paragraphs: The majority of VRS providers stated that the lack of interoperability  among VRS providers can inhibit competition. For example, 5 out of 6  VRS providers stated that the lack of interoperability can lead to  significantly less competition. Multiple providers told us, while  interoperability of VRS equipment is required by FCC, some services are still not interoperable with other providers’ equipment and, as a result,  one provider told us that they filed a petition with FCC.
To address interoperability, improve competition, and quality, FCC  proposed instituting and transitioning to a VRS Advanced Video  Communication Platform (formerly known as Neutral Video  Communication Service Platform). According to the 2013 VRS Reform  Order, a neutral video communication service provider will have multiple  benefits, specifically: more effective and efficient competition on the basis  of service quality, including interpreter quality and the capabilities to  handle the varied needs of VRS, and more efficient and effective VRS CA  service competition through the elimination of new entrant barriers such  as the cost of building and maintaining a video communication service  platform. In addition, the 2013 VRS Reform order directed FCC’s  Managing Director to select a neutral third party to build, operate, and  maintain the Advanced Video Communication Platform. In the order,  FCC stated that it would contract out the above services and  responsibilities to a third party and that party would be compensated  through the TRS Fund. However, FCC officials stated that this  procurement has been cancelled because prices were too high and the  agency determined that it would not be in the federal government’s  interest to accept any of the proposals submitted. Contrary to FCC’s  perspective about the benefits of the Advanced Video Communication  Platform, a majority of the providers responding to our survey stated that  the platform will not improve competition. Specifically, 6 of 10 providers  stated that the Advanced Video Communication Platform will reduce  competition. One provider told us that the Advanced Video  Communication Platform could disincentivize new companies from  entering the market because existing TRS requirements, such as 24-hour  staffing of interpreters, could still be in effect under the proposed  Advanced Video Communication Platform. Therefore, according to the  provider, labor costs could prevent new entrants from making profits.
Some consumer groups and providers told us that the Advanced Video  Communication Platform could stifle innovation. For example, the  Advanced Video Communication Platform request for proposal included a  number of core features that all participating providers will use and offer  to its customers. As a result, according to one provider, VRS providers  would have to give up their proprietary technology and ultimately become  a provider of interpretation services, rather than competing on unique and  provider specific technological features in addition to interpretation. For  example, another provider told us that as a result of a transition to an  Advanced Video Communication Platform, existing innovative provider- specific features would no longer be available and subsequently replaced  by Advanced Video Platform features. Since Advanced Video Platform  features will be the same for all providers—as are reimbursement rates— competition will shift from which company has the best features to which  company has the best interpreters. FCC is in the beginning stages of  developing the Advanced Video Communication Platform, so it is unclear  at this point how it will affect VRS service quality and competition.
section_title: Conclusions
paragraphs: Since 2002, annual TRS Fund expenditures have grown by over $700  million. A variety of factors contributed to this growth, including the  development of Internet-based TRS services, increased TRS usage, and  some fraud in VRS and IP Relay. The size of the TRS Fund is likely to  continue to rise as more persons with hearing or speech disabilities learn  about these services and the hard-of-hearing population increases as the  baby boomers age. FCC’s fraud reduction efforts contributed to the  decreases in total TRS costs that occurred in 2010 and 2011. FCC must  continue to be vigilant about fraud, especially as new technologies  emerge that could require the development of new internal controls.  Beyond fraud reduction efforts, however, it is important that the TRS  program be managed in a proactive manner that is in accordance with  leading management practices. If, for example, FCC does not develop  specific multiyear and intermediate goals that are objective, quantifiable,  and measurable and that have performance indicators, targets, and time  frames, it becomes difficult to determine whether FCC has met the  program’s purpose of providing functionally equivalent services.  Developing linked, TRS-specific performance goals and measures;  conducting a full TRS program risk assessment; and consolidating rules  and procedures for each TRS service will help ensure that FCC is  managing the program in a proactive, result-oriented manner and,  ultimately, that the TRS program is meeting its overall purpose of  providing functionally equivalent telecommunications services to persons  who are deaf, hard of hearing, or have speech disabilities.
section_title: Recommendations for Executive Action
paragraphs: To improve performance management of the Telecommunications Relay  Service, we recommend that the Chairman of the Federal  Communications Commission take the following three actions.
Develop specific performance goals and measures for the TRS  program. FCC should establish goals that would guide its efforts on  major program dimensions—for example, consider goals and  performance measures related to, but not limited to, service quality or  competition among providers.
Following the establishment of TRS’s performance goals, conduct a  robust risk assessment that can help FCC design a comprehensive  internal-control system.
Improve FCC’s communication of TRS rules and procedures to the  community of individuals who are deaf, hard of hearing, or have  speech disabilities and the companies providing TRS services through  the creation and dissemination of a handbook, program manual, or  other consolidation of TRS rules and procedures.
section_title: Agency and Third- Party Comments
paragraphs: We provided a draft of this report to FCC and RLSA for their review and  comment.  FCC agreed with our recommendations and discussed actions  it plans to take to implement the recommendations. A copy of FCC’s letter  is reprinted in appendix IV. FCC also e-mailed technical comments, which  we incorporated as appropriate. RLSA did not have comments on the  report.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 10 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees, the Chairman of the Federal  Communications Commission, the Chief Executive Officer of Rolka Loube  Saltzer Associates, and other interested parties. In addition, the report will  be available at no charge on GAO’s Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202)  512-2834 or goldsteinm@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. Major contributors to this report are listed in appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of this report were to examine (1) how the services and  costs of the Telecommunications Relay Service (TRS) program have  changed since 2002; (2) the Federal Communication Commission’s  (FCC) performance goals and measures for the TRS program and how  they compare with key characteristics of successful performance goals  and measures; (3) the extent to which the design of the TRS program’s  internal control system identifies and considers program risks; and (4) the  challenges, if any, that exist in ensuring quality services for users and a  competitive environment for providers. The scope of our audit did not  include the testing of specific internal control activities.
To determine how the costs and services of the TRS program have  changed since 2002, we reviewed FCC documents, including FCC orders  and stakeholder comments in FCC rulemaking proceedings. In addition,  we reviewed FCC’s OIG, GAO, Congressional Research Service, and  consumer group reports on TRS. We also collected and analyzed TRS  program data on costs and minutes of usage for all six major forms of  TRS from 2002–2014. We assessed the reliability of these data through  conversations with FCC and RLSA officials about how the data are  gathered and maintained. We determined the data were sufficiently  reliable for the purposes of showing trends in program usage and costs.  We selected 2002 for the scope of our review as that was the year when  Video Relay Service (VRS)—a popular form of TRS—was first made  widely available. We interviewed:  Federal Communications Commission  Federal Communications Commission-Office of Inspector General  National Exchange Carrier Association  Rolka Loube Saltzer Associates  American Association of the Deaf-Blind  Association of Late Deafened Adults  Cerebral Palsy and Deaf Organization  Hearing Loss Association of America  National Association of the Deaf  Telecommunications for the Deaf, Inc.
Registry of Interpreters for the Deaf  American Sign Language Services, Inc.  AT&T Inc.  Communication Axess Ability Group  Convo Communications  CSDVRS  Hamilton Relay  InnoCaption, Inc.  Purple Communications, Inc.  Sorenson Communications  Sprint Corporation  We analyzed these interviews to identify how and why TRS services had  changed in costs and minutes from 2002-2014.
To identify FCC’s performance goals and measures for the TRS program,  we reviewed FCC documents, such as strategic plans and performance  budgets; reviewed FCC web pages pertaining to the TRS program; and  interviewed FCC officials about program goals and measures. To assess  program goals and measures, we compared FCC’s performance goals  and measures to key characteristics of successful performance goals and  measures that GAO developed in prior work, as well as to requirements  contained in the Government Performance and Results Act of 1993, as  amended by the GPRA Modernization Act of 2010.
To understand the extent to which the design of the TRS program’s  internal control system appropriately identifies and considers program  risks, we reviewed FCC documents and rules, and spoke with FCC  officials about TRS internal controls. Specifically, FCC, FCC OIG, and the  current TRS Fund administrator provided us program-related  documentation on risk assessments, control activities, and audits. We  identified what controls were in place and then compared the design of  the internal control system with the requirements contained in the GAO  Standards for Internal Control in the Federal Government (the Green  Book).
To assess the challenges to ensuring quality services for users and a  competitive environment for providers, we first identified challenges that  were identified through our interviews with representatives from all 10  TRS providers, associations representing the community of persons who  are deaf or hard of hearing, FCC, FCC OIG, and the current and previous  TRS Fund administrators. We also reviewed TRS-related FCC orders,  standards set in the Americans with Disabilities Act, and industry  literature. In addition, to develop quantifiable information about the  providers’ views on the challenges to ensuring quality services for users  and a competitive environment for providers, we developed a survey  instrument for the providers. We pretested the survey with one provider to  ensure that questions were clear, unbiased, comprehensive, and that  terminology was used correctly. We made changes to the content of the  questions in response to the pretest. We surveyed all 10 providers and  received a 100-percent response rate. Because we administered the  survey to the complete universe of potential respondents, there are no  sampling errors. However, the practical difficulties of conducting any  survey may introduce errors, commonly referred to as non-sampling  errors. For example, difficulties in how a particular question is interpreted,  in the sources of information that are available to respondents, or in how  the data is entered into a database or analyzed can introduce unwanted  variability into the survey results. In addition, to further analyze issues  related to TRS competition and market concentration, we calculated  certain measures of market concentration in the two largest forms of  TRS—IP CTS and VRS—and analyzed the data on TRS minutes of  service from each provider from 2008–2014. We selected 2008 as the  starting year for this analysis because, according to FCC officials, this  was the first year with complete market concentration data on all six  forms of TRS.
We conducted this performance audit from April 2014 through April 2015  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusion based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Survey of Telecommunications Relay Service Providers
paragraphs: The questions we asked in our survey of TRS providers are shown below.  Our survey was comprised of closed- and open-ended questions. In this  appendix, we include all the survey questions and aggregate results of  responses to the closed-ended questions; we do not provide information  on responses provided to the open-ended questions. For a more detailed  discussion of our survey methodology see appendix I.
Please provide the name and contact information of the person  completing this survey in case GAO needs to follow up on the information  provided.  1.  How, if at all, have the current TRS compensation rates affected your  company’s ability to hire and retain qualified interpreters?
2.  Industry wide, how, if at all, has a lack of skill-based routing affected  TRS consumers receiving quality service?
3.  Industry wide, how, if at all, has interpreter workload affected TRS  quality?
4.  Overall, how effective is the FCC’s current oversight and testing of  TRS quality?
5.  Do you have any recommendations for how the FCC could better  oversee and test TRS service quality? If so, please briefly describe  below.  6.  How much, if at all, will the FCC’s proposed Advanced Video  Communication Platform (formerly known as Neutral Video  Communication Service Platform) improve service quality?
7.  Please rank the following TRS quality challenges from the most  significant challenge to the least significant challenge. Please place a  1 in front of the most significant challenge, 2 in front of the second,  etc.
Question  A. TRS compensation rates affect a company’s ability to  hire and retain qualified interpreters.
8.  How much, if at all, have TRS rate reductions affected competition in  the TRS market?
9.  For those services that your company provides or has provided, how  much, if at all, do current TRS rates attract new companies to enter  the TRS market and provide services? (Please respond “Don’t  provide” if your company doesn’t currently or hasn’t previously  provided the service).
10. How, if at all, has a lack of interoperability among providers affected  competition?
11. How, if at all, has the lack of compensation from the FCC to TRS  providers for research and development affected your company’s  ability to compete?
12. How, if at all, has the lack of compensation from the FCC to TRS  providers for marketing and outreach affected your company’s ability  to compete?
13. How, if at all, will the FCC’s proposed Advanced Video  Communication Platform (formerly known as Neutral Video  Communication Service Platform) affect competition?
14. Please rank the following challenges to TRS competition from the  most significant challenge to the least significant challenge. Please  place a 1 in front of the most significant challenge, 2 in front of the  second, etc.
section_title: Appendix III: GAO Analysis of Provider Concentration in TRS Product Markets, 2008–2014 Rate Years
paragraphs: The concentration ratios and the HHI are computed for providers with complete data for the rate year;  the data are not reported for other forms of TRS due to data limitations or confidentiality.
section_title: Appendix IV: Comments from the Federal Communications Commission
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Faye Morrison (Assistant  Director), Daniel Bertoni, Melissa Bodeau, David Bruno, Richard Bulman,  Scott Clayton, Elizabeth Curda, David Hooper, Bert Japikse, John  Karikari, Kelsey Kennedy, Kristen Kociolek, Hannah Laufe, Kieran  McCarthy, Joshua Ormond, Steve Rabinowitz, Oliver Richard, Kelly  Rubin, and James Sweetman Jr. made key contributions to this report.