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. 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).