Structure and Practices of the Video Relay Service Program; Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[CG Docket Nos. 10-51 and 03-123; FCC 13-82]

Structure and Practices of the Video Relay Service Program; Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission adopts further measures to improve the structure, efficiency, and quality of the video relay service (VRS) program, reducing the inefficiencies in the program, as well as reducing the risk of waste, fraud, and abuse, and ensuring that the program makes full use of advances in commercially-available technology. These measures involve a fundamental restructuring of the program to support innovation and competition, drive down ratepayer and provider costs, eliminate incentives for waste that have burdened the Telecommunications Relay Services (TRS) Fund in the past, and further protect consumers. The Commission adopts several measures in order to: ensure that VRS users can easily select their provider of choice by promoting the development of interoperability and portability standards; enable consumers to use off-the-shelf devices and deploying a VRS application to work with these devices; create a centralized TRS User Registration Database to ensure VRS user eligibility; encourage competition and innovation in VRS call handling services; spur research and development on VRS services by entering into a Memorandum of Understanding with the National Science Foundation; and pilot a National Outreach Program to educate the general public about relay services. In this document, the Commission also adopts new VRS compensation rates that move these rates toward actual costs over the next four years which will better approximate the actual, reasonable costs of providing VRS, and will reduce the costs of operating the program. The Commission takes these steps to ensure the integrity of the TRS Fund while providing stability and certainty to providers.

DATES:

Effective August 5, 2013, except amendments to 47 CFR 64.604(c)(13); 64.606(a)(4), (g)(3), and (g)(4); 64.611(a)(3) and (4); 64.615(a); 64.631(a) through (d), (f); 64.634(b); 64.5105(c)(4) and (c)(5); 64.5107; 64.5108; 64.5109; 64.5110; 64.5111, of the Commission's rules which contain new information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a separate document in the

Federal Register

announcing the effective date.

FOR FURTHER INFORMATION CONTACT:

Eliot Greenwald, Consumer and Governmental Affairs Bureau, Disability Rights Office, at (202) 418-2235 or email

Eliot.Greenwald@fcc.gov.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's

Structure and Practices of the Video Relay Service Program; Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities,

Report and Order (

Order

), document FCC 13-82, adopted on June 7, 2013 and released on June 10, 2013, in CG Docket Nos. 10-51 and 03-123. In document FCC 13-82, the Commission also seeks comment in an accompanying Further Notice of Proposed Rulemaking (FNPRM), which is summarized in a separate

Federal Register

Publication. The full text of document FCC 13-82 will be available for public inspection and copying via ECFS, and during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. It also may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone: (800) 378-3160, fax: (202) 488-5563, or Internet:

www.bcpiweb.com.

Document FCC 13-82 can also be downloaded in Word or Portable Document Format (PDF) at

http://www.fcc.gov/encyclopedia/telecommunications-relay-services-trs.

To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to

fcc504@fcc.gov

or call the Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

Final Paperwork Reduction Act of 1995 Analysis

Document FCC 13-82 contains new information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, will invite the general public to comment on the information collection requirements contained in document FCC 13-82 as required by the PRA of 1995, Public Law 104-13 in a separate notice that will be published in the

Federal Register

.

Synopsis

1. In the Report and Order, which is part of document FCC 13-82, the Commission adopts measures to improve the structure, efficiency, and quality of the VRS program, reduce the noted inefficiencies in the program, as well as reduce the risk of waste, fraud, and abuse, and ensure that the program makes full use of advances in commercially-available technology.

2. Under Title IV of the ADA, the Commission must ensure that telecommunications relay services (TRS) are available, to the extent possible and in the most efficient manner to persons in the United States with hearing or speech disabilities. In addition, the Commission's regulations must encourage the use of existing technology and must not discourage the development of new technology. Finally, the Commission must ensure that TRS users pay rates no greater than the rates paid for functionally equivalent voice communication services. To this end, the costs of providing TRS on a call are supported by shared funding mechanisms at the state and federal levels.

3. In March 2000, the Commission recognized VRS as a reimbursable relay service.

See, e.g.,

Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,

CC Docket No. 98-67, Report and Order and Further Notice of Proposed Rulemaking; published at 65 FR 38432, June 21, 2000, and at 65 FR 38490, June 21, 2000 (

2000 TRS Order

). VRS allows persons with hearing or speech disabilities to use American Sign Language (ASL) to communicate in near real time through a Communication Assistant (CA), via video over a broadband Internet connection. VRS communications require the interaction of three separate yet interlinked components: VRS access technologies, video communication service, and relay service provided by ASL-fluent CAs. To initiate a VRS call, a consumer uses a VRS access technology to connect to an ASL-fluent CA over the Internet via a broadband video communication service. The CA, in turn, places an outbound telephone call to the called. Party. During the call, the CA relays the communications between the two parties, signing what the hearing person says to the ASL user and conveying the ASL user's responses in voice to the hearing person. In this manner, a conversation between an ALS user and a hearing person can flow in near real-time. The Commission remains

committed to fulfilling the intent of Congress to ensure the provision of VRS that is functionally equivalent to conventional voice telephone services.

4. On December 15, 2011, the Commission released the

2011 VRS Reform FNPRM,

seeking comment on wide-ranging proposals to improve the structure and efficiency of the VRS program, to ensure that the program is as immune as possible from the waste, fraud, and abuse that threaten its long-term viability, and to revisit the rate methodology used for compensating VRS providers.

See Structure and Practices of the Video Relay Service Program,

CG Docket No. 10-51, Further Notice of Proposed Rulemaking; published at 77 FR 4948, February 1, 2012 (

2011 VRS Reform FNPRM

). The Commission's implementation of section 225 of the Act relied heavily on competition in order to allow VRS users to choose among providers. However, there are shortcomings to this approach. First, multiple providers offer substantially similar services with no opportunity for price competition, as end users receive the service at no cost. The result is that the rates paid for VRS will be efficient solely insofar as the Commission can itself determine and mandate appropriate rates. Further, the Commission's existing rate-setting process inefficiently supports providers that have failed to achieve economies of scale. In addition, rates are based on cost information supplied by providers, and the FCC has not had a meaningful opportunity to measure the claims against facts or cost information from neutral or independent sources. Second, providers' self-interest in maximizing their compensation from the Fund may make them less effective at carrying out the Commission's TRS policies. The vulnerability of the program to waste, fraud, and abuse by providers has been well established.

See, e.g.,

Structure and Practices of the Video Relay Service Program,

CG Docket No. 10-51, Declaratory Ruling, Order and Notice of Proposed Rulemaking; published at 75 FR 25255, May 7, 2010 (

VRS Call Practices NPRM

). Also, despite encouragement for VRS providers to work together to develop systems and standards that will facilitate compliance with the Commission's rules, the VRS industry has not fully achieved the standardization needed for full interoperability and portability.

5. The

2011 VRS Reform FNPRM

and the subsequent

VRS Structure and Rates PN

sought comment on a range of possible solutions to these problems. See Structure and Practices of the Video Relay Service Program;

Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,

CG Docket Nos. 03-123 and 10-51, Public Notice; published at 77 FR 65526, October 29, 2012.

6. In the Report and Order, the Commission:

• Directs the Managing Director, in consultation with the Chief Technology Officer (CTO), the Chief of the Office of Engineering and Technology (OET), and the Chief of the Consumer and Governmental Affairs Bureau (CGB), to determine how best to structure, fund, and enter into an arrangement with the National Science Foundation (NSF) (or cause the TRS Fund administrator to enter into such an arrangement) to enable research designed to ensure that TRS is functionally equivalent to voice telephone services and improve the efficiency and availability of TRS;

• Directs the Managing Director, in consultation with the Chief of CGB, to establish a two-to-three year pilot iTRS National Outreach Program (iTRS-NOP) and to select one or more independent iTRS Outreach Coordinators to conduct and coordinate IP Relay and VRS outreach nationwide under the Commission's (or the TRS Fund administrator's) supervision;

• Promotes the development and adoption of voluntary, consensus interoperability and portability standards, and to facilitate compliance with those standards by directing the Managing Director to contract for the development and deployment of a VRS access technology reference platform;

• Directs the Managing Director to contract for a central TRS user registration database (TRS-URD) to ensure accurate registration and verification of users, to achieve more effective fraud and abuse prevention, and to allow the Commission to know, for the first time, the number of individuals that actually use VRS; and

• Directs the Managing Director to contract for a neutral party to build, operate, and maintain a neutral video communication service platform, which will allow eligible relay interpretation service providers to compete without having to build their own video communication service platforms.

7. In addition, the Commission accompanies these actions with more targeted, incremental measures to improve the efficiency of the program, help protect against waste, fraud and abuse, improve the Commission's administration of the program, and generally ensure that VRS users' experiences reflect the policies and goals of section 225 of the Act. Specifically, the Commission:

• Clarifies responsibility for disability access policy and TRS program administration within the Commission;

• Adopts a general prohibition on practices resulting in waste, fraud and abuse;

• Requires providers to adopt regulatory compliance plans subject to Commission review;

• More closely harmonizes the VRS speed of answers rules with those applicable to other forms of TRS by reducing the permissible wait time for a VRS call to be answered to 30 seconds, 85 percent of the time, and by requiring measurement of compliance on a daily basis;

• Adopts rules to protect relay consumers against unauthorized default provider changes, also known as “slamming,” by VRS and Internet Protocol Relay Service (IP Relay) providers;

• Adopts rules to protect the privacy of customer information relating to all relay services authorized under section 225 of the Act and to point-to-point video services offered by VRS providers;

• Adopts permanently the interim rules adopted in the

2011 iTRS Certification Order

requiring that providers certify, under penalty of perjury, that their certification applications and annual compliance filings required under § 64.606 of the Commission's rules are truthful, accurate, and complete;

Structure and Practices of the Video Relay Service Program,

Second Report and Order and Order, CG Docket No. 10-51; published at 76 FR 47469, August 5, 2011, and at 76 FR 47476, August 5, 2011 (

2011 iTRS Certification Order

); and

• Initiates a step-by-step transition from existing, tiered TRS Fund compensation rates for VRS providers toward a unitary, market-based compensation rate.

Legal Authority

8. Section 225 of the Act defines TRS as a service that allows persons with hearing or speech disabilities to communicate in a manner that is functionally equivalent to voice telephone service. 47 U.S.C. 225(a)(3) of the Act. Section 225 of the Act requires the Commission to ensure that TRS is available, to the extent possible and in the most efficient manner to persons with hearing or speech disabilities in the United States. 47 U.S.C. 225(b)(1). The statute requires that the Commission's regulations encourage the use of existing technology and not discourage the development of new technology. 47 U.S.C. 225(d)(2). Section 225 of the Act further requires that the Commission prescribe regulations that,

among other things, establish functional requirements, guidelines, and operations procedures for TRS and establish minimum standards that shall be met in carrying out the provision of TRS. 47 U.S.C. 225(d)(1)(A).

9.

Functional Equivalence.

TRS is required by statute to provide telecommunication services which are functionally equivalent to voice services to the extent possible. Functional equivalence is, by nature, a continuing goal that requires periodic reassessment. The ever-increasing availability of new services and the development of new technologies continually challenge the Commission to determine what specific services and performance standards are necessary to ensure that TRS is functionally equivalent to voice telephone service.

See 2000 TRS Order

at paragraph 4;

see also Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,

Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking, CC Docket Nos. 98-67 and 03-123; published at 68 FR 50093, August 25, 2003, and at 68 FR 50973, August 25, 2003 (

2003 TRS Order

). The establishment of well-defined interoperability and portability standards and the deployment of the VRS access technology reference platform will ensure that VRS users actually experience the functional equivalency upon which the Commission' interoperability rules were predicated. Harmonizing the VRS speed of answers rules with those applicable to other forms of TRS and adopting anti-slamming and CPNI rules all will make the VRS user's experience more functionally equivalent to voice telephone service.

10. “

Availability” and “Efficiency.”

Research will be conducted more efficiently under an arrangement with the NSF than it would be if conducted by individual providers with disparate incentives. The Commission's changes to the outreach program will improve the efficiency of the Commission's outreach efforts while simultaneously improving the availability of TRS through education of TRS users and the hearing population alike. The establishment of well-defined interoperability and portability standards and the deployment of the VRS access technology reference platform are consistent with the Commission's obligation to establish minimum standards for provider performance, and will promote efficiency in VRS provider operations. Establishment of a neutral video communication service provider will promote the availability of VRS by allowing the entrance of new, eligible, standalone VRS CA service providers, and will promote efficiency through a reduction in duplicative expenditures on video communication service platforms and through provider compliance with the Commission's interoperability mandates. The TRS-URD and the eligibility certification and identity verification requirements the Commission adopt will help to reduce the potential for waste, fraud, and abuse, improving the efficiency of the program and the availability of TRS.

11.

Fund Expenditures.

Congress determined that the Commission should ensure that compensation is provided for the costs caused by interstate TRS. 47 U.S.C. 225(d)(3)(B). The Commission adopted a cost recovery framework that entails collecting contributions from providers of interstate telecommunications services to create a fund from which eligible TRS providers are compensated for the costs of eligible TRS services. Contributions to the Interstate TRS Fund (Fund) are based on the carrier's interstate and end-user revenues. All contributions are placed in the Fund, which is administered by the TRS Fund administrator. The Commission must often balance the interests of contributors to the Fund, who are ratepayers with the interests of

users

of TRS. The Commission's obligation to ensure that the goals of the statute are met in the most efficient manner necessitates adopting reasonable compensation rates that do not overcompensate entities that provide TRS. The Commission has had four years of data demonstrating that VRS providers were significantly overcompensated, evidenced by a comparison of the best available data concerning their actual costs per minute to the per minute compensation they have been receiving based on their projected costs per minute. Because the rates the Commission adopt herein are demonstrably sufficient to cover the costs caused by VRS as reflected in the VRS providers' reported average actual and projected costs, the Commission concludes that these are consistent with the requirements in section 225 of the Act, and are consistent with the Commission's commitment to further the goals of functional equivalency through strengthening and sustaining VRS.

Structural Reforms

12. The Commission sets forth reforms which, for certain discrete areas, rely on the efforts of one or more non-provider third parties to carry out the Commission's policies. These reforms are designed to improve the Commission's administration of VRS and the TRS program as a whole, to ensure compliance with the Commission's interoperability and portability requirements, and to further minimize the potential for waste, fraud, and abuse.

Research and Development

13. In the past, the Commission has disallowed expenses associated with research and development (R&D) except to the extent that such expense is necessary to meet the Commission's mandatory minimum standards. The Commission sought comment in the

2010 VRS NOI

on how and whether to revise its rules regarding compensation for R&D, including how to ensure that the results of any R&D supported by the Fund are fairly shared so that all providers and ultimately all users are able to enjoy the results. Structure and Practices of the Video Relay Service Program, CG Docket No. 10-51, Notice of Inquiry; published at 75 FR 41863, July 19, 2010 (

2010 VRS NOI

). The Commission asked in the

2011 VRS Reform FNPRM

what other steps the Commission could take to promote R&D in VRS and other forms of TRS. In order to ensure that R&D on TRS not directly related to provider compliance with the Commission's mandatory minimum standards is conducted in an efficient manner, and that the results of that research benefit the public, the Commission directs the Managing Director, in consultation with the CTO, the Chief of OET, and the Chief of CGB, to determine how best to structure and fund research designed to further the Commission's goals of ensuring that TRS is functionally equivalent to voice telephone services and improving the efficiency and availability of TRS. The Commission directs the Managing Director to enter into an arrangement (or contract with the TRS Fund administrator to enter into an arrangement, if appropriate) with the NSF to conduct the research. After the arrangement is in place, the CTO (or, in the absence of a CTO, the Chief of OET, or the OET Chief's designee), shall serve as the Commission's primary point of contact with the NSF.

TRS Broadband Pilot Program

14. In the

2011 VRS Reform FNPRM

the Commission sought comment on a proposal to implement a TRS Broadband Pilot Program (TRSBPP) that would offer discounted broadband to potential VRS users who could not other afford the costs of Internet access service to the extent that the record shows that there is unaddressed

demand for VRS. There is insufficient data to produce an accurate estimate of the number of Americans with hearing or speech disabilities who are fluent enough in ASL to use VRS, or the subset of those individuals who do not subscribe to VRS due to the expense of a broadband connection. Without better data on whether or to what extent broadband affordability constrains the availability of VRS, and without relevant demographic data on the number of Americans fluent in ASL, it is difficult to determine the demand or need for a TRSBPP. The Commission therefore declines to implement a TRSBPP at this time.

15. The Commission will continue to work to ensure the availability and affordability of broadband to individuals who are deaf, hard of hearing, deaf-blind, and speech disabled not only to enable access to VRS, but generally to facilitate integration into and participation in various aspects of society. In order to promote awareness of the Commission's existing, wider-reaching broadband adoption initiatives, the Commission directs CGB to include within its national outreach plan efforts to build such awareness. In addition, the decision to implement a TRS user registration database in this Order will allow the Commission to identify the actual number of current VRS users, thereby helping the Commission to properly assess the need for a standalone TRSBPP in the future.

National Outreach

16. In 1991 the Commission adopted rules requiring all common carriers to provide the public with information to ensure that callers in their service areas are aware of the availability and use of all forms of TRS.

See Telecommunications Services for Individuals with Hearing and Speech Disabilities and the Americans with Disabilities Act,

CC Docket No. 90-571, Report and Order and Request for Comments; published at 56 FR 36729, August 1, 1991 (

TRS I

). The Commission and various stakeholders repeatedly have raised concerns about the effectiveness of outreach efforts on the national level, and the extent to which providers have characterized as “outreach” actions that would better be described as “branded marketing,” both for TRS in general and for VRS in particular. The failure to effectively educate the general public about the nature of TRS calls has had a negative effect on consumers' ability to use these services, as TRS calls are often rejected, frequently because of mistaken assumptions about their purpose.

17. In light of the Commission's continued concerns regarding the effectiveness of IP Relay and VRS providers' outreach efforts, the Commission concludes that an Internet-based TRS National Outreach (iTRS-NOP) that does not rely on the efforts of individual IP Relay and VRS providers is necessary and appropriate to achieve the purposes of section 225 of the Act; that is, to fulfill Congress's intent to make TRS available to the extent possible and in the most efficient manner. The Commission believes that section 225 of the Act's directive for the Commission to prescribe regulations that ensure relay services are available * * * in the most efficient manner both make it appropriate to take new steps to better educate the public about the purpose and functions of TRS, and provides the Commission with sufficient authority to direct that the iTRS-NOP be funded for this purpose from TRS contributions as a necessary cost caused by TRS. The iTRS-NOP will achieve the Commission's objectives by educating merchants and other business in a neutral fashion about the importance of accepting legitimate relay calls and by eliminating duplicative outreach efforts by multiple providers.

18. The Commission believes that its first efforts to coordinate IP Relay and VRS outreach on a nationwide basis will be best carried out through a pilot program of limited duration and that the outreach directives under the National Deaf Blind Equipment Distribution Program (NDBEDP) provide a useful model for such efforts. Accordingly, for each of the next two Fund years, with an option to extend the program for one additional year, the Commission directs the TRS Fund administrator to set aside a portion of the TRS Fund to be available for VRS outreach. The Commission directs the Managing Director, in consultation with the Chief of CGB, to (i) select one or more iTRS Outreach Coordinators to conduct and coordinate IP Relay and VRS outreach nationwide and be compensated through the Fund or (ii) contract with the TRS Fund administrator to enter into such arrangements under objectives and factors determined by the Managing Director in consultation with the Chief of CGB. The iTRS Outreach Coordinators shall not be affiliated with any iTRS provider and shall disseminate non-branded information to potential new-to-category users and to the general public about IP Relay and VRS, their purposes and benefits, and how to access and use these services. The Commission directs CGB to oversee outreach activities, which may include, but are not limited to:

• Consulting with consumer groups, IP Relay and VRS providers, the TRS Fund administrator, other TRS stakeholders, and other iTRS Outreach Coordinators, if any;

• Establishing clear and concise messaging about the purposes, functions, and benefits of IP Relay and VRS;

• Educating the deaf, hard of hearing, and speech disability consumers about the broadband adoption programs available to low-income families without access to broadband and VRS;

• Determining media outlets and other appropriate avenues for providing the general public and potential new-to-category subscribers with information about IP Relay and VRS;

• Preparing for and arranging for publication, press releases, announcements, digital postcards, newsletters, and media spots about IP Relay and VRS that are directed to retailers and other businesses, including trade associations;

• Creating electronic and media tool kits that include samples of the materials listed in the previous bullet, and which may also include templates, all of which will be for the purpose of facilitating the preparation and distribution of such materials by consumer and industry associations, governmental entities, and other TRS stakeholders;

• Providing materials to local, state, and national governmental agencies on the purposes, functions, and benefits of IP Relay and VRS; and

• Exploring opportunities to partner and collaborate with other entities to disseminate information about IP Relay and VRS.

19. The iTRS Outreach Coordinator(s) will be expected to submit periodic reports to the Managing Director and the Chief of CGB on the measures taken pursuant to the directive above. In addition, the iTRS Outreach Coordinator(s) will be expected to work with and assist the Chief of CGB and Managing Director, as appropriate, to measure and report on the effectiveness of the outreach efforts taken under the iTRS-NOP. The iTRS Outreach Coordinator(s) selected to conduct such outreach must have experience in conducting nationwide promotional and informational programs and experience with and expertise in working with the deaf, hard of hearing and speech disability communities. The Commission directs the Chief of CGB, in consultation with the Managing Director, to further define the selection criteria and the nature and scope of the

IP Relay and VRS outreach program. In addition, the Commission directs the Chief of CGB, in consultation with the Managing Director, to assess the reasonableness and appropriateness of individual outreach expenses proposed by the selected iTRS Outreach Coordinator(s).

20. In the first year, a maximum expenditure of $2 million is reasonable and sufficient funding for the iTRS-NOP. Because of the novel nature of these national outreach efforts, the Commission establishes a two-year pilot program that may extend for up to an additional one year, for a total of three years. The Commission is hopeful that the experience gained during this pilot program will help inform future Commission action to establish a permanent national outreach program for IP Relay and VRS, and potentially other forms of iTRS. The Commission expects that this 24- to 36-month period will give the Commission sufficient time to conduct and analyze the effectiveness of the pilot program, and determine the next steps to make such program permanent, or take such other actions that are necessary to ensure effective education on IP Relay and VRS to the American public.

21. The selection of iTRS Outreach Coordinators does not prohibit IP Relay or VRS providers from otherwise providing the public with information about their individual relay service features, but also that the cost of such efforts may no longer be included in their cost submissions used to determine per minute compensation for IP Relay and VRS as “outreach” costs. In addition, the Commission will consider using its Accessibility Clearinghouse, created pursuant to the CVAA, as a central repository for providers who wish to provide information about any such features designed to address specific communication needs.

Interoperability and Portability Requirements

22. The Commission acts to improve the effectiveness of its interoperability and portability rules. These rules, first adopted in 2006, are intended to (i) allow VRS users to make and receive calls through any VRS provider, and to choose a different default provider, without changing the VRS access technology they use to place calls, and (ii) ensure that VRS users can make point-to-point calls to all other VRS users, irrespective of the default provider of the calling and called party. Providers also must ensure that videophone equipment that they distribute retains certain, but not all, features when a user ports her number to a new default provider. Despite encouragement for VRS providers to work together to develop systems and standards that will facilitate compliance with the Commission's rules, the VRS industry has not fully achieved the standardization needed for full interoperability and portability. Further, ineffective interoperability rules appeared to be hindering competition between VRS providers and frustrating VRS users' access to off-the-shelf VRS access technology. The Commission therefore sought comment in the

2011 VRS Reform FNPRM

on the effectiveness of the current interoperability and portability requirements, and the role that existing VRS access technology standards or the lack thereof may play in frustrating the effectiveness of those requirements.

23. As an initial step, the Commission codifies the existing interoperability and portability requirements in new § 64.621 of the Commission's rules. The Commission also (i) adopts the proposal from the

2011 VRS Reform FNPRM

to clarify the scope of providers' interoperability and portability obligations by eliminating use of the term “CPE” in the iTRS context in favor of “iTRS access technology;” (ii) takes steps to support the development of voluntary, consensus standards to facilitate interoperability and portability; and (iii) directs that a “VRS access technology reference platform” be developed to provide a benchmark for interoperability.

24. The Commission adopted interoperability and portability requirements to ensure that TRS is provided in a functionally equivalent manner, and its actions to improve the effectiveness of those requirements are likewise grounded in section 225 of the Act. The Commission's actions also will improve the availability of VRS by ensuring that consumers have ready access to all VRS providers without the need to switch equipment. Further, the development of interoperability and portability standards and the availability of a VRS access technology reference platform will improve the efficiency of the program by making it far easier for providers to design VRS access technologies to the appropriate standard, and to test their compliance with those standards prior to deployment.

Defining iTRS Access Technologies

25. The Commission adopts the proposal from the

2011 VRS Reform FNPRM

to clarify the scope of providers' interoperability and portability obligations by eliminating use of the term “CPE” in the iTRS context in favor of “iTRS access technology.” The Commission in the

Internet-based TRS Numbering Order

used the defined term “CPE” to describe “TRS customer premises equipment,” or the technology used to access Internet-based TRS.

See, e.g., Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities; E911 Requirements for IP-Enabled Service Providers,

CC Docket No. 08-151, Report and Order and Further Notice of Proposed Rulemaking; published at 73 FR 41286, July 18, 2008 and at 73 FR 41307, July 18, 2008

(First Internet-Based TRS Numbering Order

). The Commission proposed in the

2011 VRS Reform FNPRM

to amend §§ 64.605 and 64.611 of the Commission rules by replacing the term “CPE” where it appears with the term “iTRS access technology.” The Commission further proposed to define “iTRS access technology” as “any equipment, software, or other technology issued, leased, or provided by an Internet-based TRS provider that can be used to make or receive an Internet-based TRS call.” Under this definition, any software, hardware, or other technology issued, leased, or otherwise provided to VRS or IP Relay users by Internet-based TRS providers, including “provider distributed equipment” and “provider based software,” whether used alone or in conjunction with “off-the-shelf software and hardware,” would qualify as “iTRS access technology.” The Commission adopts the original proposal, with one modification. “iTRS access technology” will be defined as “any equipment, software, or other technology issued, leased, or otherwise provided by an Internet-based TRS provider that can be used to make and receive an Internet-based TRS call” to make clear that iTRS access technologies must provide both inbound and outbound functionality. This modification is consistent with existing Commission policies which require that Internet-based TRS users have the ability to make and receive calls. Given the differential treatment of VRS and IP Relay, the Commission further adopts the proposal to refer separately to iTRS access technology as “VRS access technology” and “IP Relay access technology” where appropriate, but decline to further disaggregate iTRS access technology into further sub-categories of iTRS access technology at this time.

Promoting Standards To Improve Interoperability and Portability

26. There is universal support in the record for the development of voluntary,

consensus standards to facilitate interoperability and portability. Progress is being made under the auspices of the SIP Forum, and the public interest is best served by allowing that process to continue. The Commission directs the CTO and the Chief of OET, in consultation with the Chief of CGB, to coordinate Commission support of and participation in that process in order to ensure the timely development of voluntary, consensus standards to facilitate interoperability and portability. The Commission also delegates to the Chief of CGB, after consultation with the CTO and the Chief of OET, the authority to conduct rulemaking proceedings to incorporate into the Commission's rules by reference any interoperability and portability standards developed under the auspices of the SIP Forum, now or in future, or such other voluntary, consensus standard organization as may be formed to address these issues. Recognizing that the scope of the SIP Forum VRS Task Group charter extends beyond the Commission's current mandatory minimum standards, the Commission also delegates to Chief of CGB, after consultation with the CTO and the Chief of OET, the authority to conduct rulemaking proceedings to incorporate into the Commission's rules by reference as new or updated mandatory minimum standards any standards or recommended standards developed by the SIP Forum (or such other voluntary, consensus standard organization as may be formed to address these issues) that the Chief of CGB finds will advance the statutory functional equivalency mandate or improve the availability of TRS, in the most efficient manner. In conducting such rulemakings, the Chief of CGB shall provide guidance on implementation, including the need for a transition period for existing VRS access technologies, complaint resolution, or other actions necessary to ensure full interoperability and portability.

27. The Commission finds that VRS interoperability and portability standards should include the portability of address book and speed dial list features. The portability of such features is critical to effective competition and the provision of consumer choice in VRS. If the standards developed and incorporated into the Commission's rules do not require that VRS access technology and VRS providers support a standard data interchange format for exporting and importing user personal contacts lists and user speed dial lists between VRS access technologies and VRS providers, the Commission directs the Chief of CGB, after consultation with the CTO and Chief of OET, to conduct an accelerated rulemaking to adopt such standards.

28. Pending action to incorporate interoperability and portability standards into the Commission's rules by reference by the Chief of CGB, the Commission will accept a demonstration that a provider is fully compliant with completed SIP Forum standards or recommended standards as prima facie evidence of compliance with the Commission's interoperability and portability requirements. Compliance with any standards incorporated into the Commission's rules by reference or otherwise shall be a prerequisite for compensation from the Fund. No VRS provider shall be compensated for minutes of use generated by non-standards compliant VRS access technologies or otherwise generated in a manner inconsistent with the Commission's rules. If a provider cannot reliably separate minutes of use generated through standards compliant VRS access technologies from those generated through non-standards compliant VRS access technologies, the provider will not receive compensation for any of the minutes.

29. The Commission has previously urged the industry to develop interoperability and portability standards, but such efforts have proven ineffective. The Commission strongly encourages the SIP Forum's VRS Task Group to adhere to its proposed schedule, and to take any further steps identified as necessary by the Task Group with alacrity. Given the critical importance of this issue, the Commission will take such steps as are necessary to ensure the development and promulgation of interoperability and portability standards—including the adoption of standards developed outside the context of the SIP Forum—if it becomes apparent that the current effort has bogged down or is unlikely to produce the desired results.

VRS Access Technology Reference Platform

30. The Commission directs the Managing Director to contract for the development and deployment of a VRS access technology reference platform. The lack of clearly defined interoperability and portability standards has made it difficult for providers to determine whether VRS access technologies—theirs or a competitor's—are, in fact, compliant with the Commission's requirements, and what steps must be taken to resolve interoperability and portability issues. A reference platform compliant with the interoperability and portability standards will provide a concrete example of a standards specific VRS access technology implementation and will allow providers to ensure that any VRS access technology they develop or deploy is fully compliant with our interoperability and portability requirements by testing their own devices and apps to ensure that they meet the VRS interoperability standards.

31. Further, the Commission directs the FCC's Managing Director, in consultation with the CTO and the Chief of OET, to select, consistent with the Commission's neutrality criteria, a neutral party (or have the TRS Fund administrator select a neutral party) to develop a VRS access technology reference platform under contract to the Commission (or the TRS Fund administrator) and compensated through the Fund.

32. The VRS access technology reference platform shall be a software product that is compliant with the interoperability and portability standards, and useable on commonly available off the shelf equipment and operating systems. Because it will take time to develop these standards, the Commission directs the Managing Director to allow the neutral party chosen to develop the VRS access technology reference platform to release “beta” versions of this platform at appropriate points in the development process, so long as procedures are in place to update the application as standards are established. The neutral party chosen to develop the VRS access technology reference platform also shall be required to provide appropriate levels of technical support during the term of the contract to entities, including developers, that license the VRS access technology reference platform and to end users, including troubleshooting technical issues that may arise in the placing or processing of VRS or point-to-point calls.

33. The VRS access technology reference platform will be fully functioning VRS access technology; that is, it will function as current provider-specific products function to provide the ability to place VRS and point-to-point calls, including dial-around functionality, the ability to update the users registered location, and such other capabilities as are required by the Commission's rules. In order to maximize the benefit of this investment from the TRS Fund, the VRS access technology reference platform shall be available for use by the public and by developers. Therefore, the Managing Director shall ensure that the VRS

access technology reference platform, in addition to being compliant with standards developed consistent with the development of voluntary, consensus standards to facilitate interoperability and portability, performs consistently with the Commission's rules, including allowing users to select any VRS provider as their default provider and providing dial around capability and such other rules as may be adopted in future.

34. The Commission defers to the Managing Director to determine the terms under which the VRS access technology reference platform will be licensed, but direct that he or she consider “open source” licensing to ensure the widest possible distribution of and use of the VRS access technology reference platform and, to the extent possible, underlying developed code. The Commission also directs that the Managing Director consider licensing the VRS access technology reference platform consistent with the tiered approach, which would allow VRS providers and other developers to tailor the appearance and interface of the VRS access technology reference platform while ensuring that its core functionality remains fully standards compliant.

35. The Commission declines at this time to designate an entity responsible for certifying interoperability among VRS providers' VRS access technologies. The availability of the VRS access technology reference platform should enable providers to test their own products prior to introducing them into the market or issuing upgrades. However, interoperability with the VRS access technology reference platform will be a minimum condition for a provider's VRS access technology to be in compliance with the Commission's rules and thus will be a minimum condition for receiving compensation from the Fund for calls using such technology. In other words, once the VRS access technology reference platform is available for use, and after completion of a reasonable testing period that will be announced in advance, no VRS provider shall be compensated for minutes of use generated by the provider's VRS access technologies that are found to be non-interoperable with the reference platform. To the extent the Commission receives complaints regarding a VRS provider or application developer's failure to comply with standards developed consistent with the development of voluntary, consensus standards to facilitate interoperability and portability, the Commission will rely on existing processes to determine whether compliance with our rules is being achieved, whether it is appropriate to withhold payments, initiate an enforcement proceeding, or take other appropriate actions.

36. The Commission, in its role as custodian of the Fund and the enforcer of the Commission's interoperability rules, must ensure that the platform is developed and released in an expeditious manner, can be updated and/or modified at the Commission's direction as standards and regulations evolve, is licensed in an appropriate manner, and otherwise is developed and maintained in a manner consistent with the Commission's statutory obligations and the public interest. In the interest of avoiding the same conflicts and delays that have hindered the development of consensus industry standards to date, the best possible platform will be procured through the Commission's contracting process.

37. The VRS access technology reference platform should set a baseline for interoperability and should in no way impede future innovation. The VRS access technology reference platform will help to ensure interoperability and portability as required by the Commission's mandatory minimum standards, but should be considered only a floor, not a ceiling on functionality. To the extent providers wish to provide additional features and functions beyond those required by the industry standards or by the Commission's rules, the VRS access technology reference platform should not serve as barrier.

38. If a VRS provider's network and the VRS access technology reference platform do not interoperate properly, the problem may be with the provider's network architecture—if only at the edge where the provider's network and the reference platform interface. While the Commission does not dictate how providers are to comply with the Commission's interoperability and portability requirements, they are nevertheless obligated to meet them—and to achieve this, they may have to alter the operation of their networks to ensure compatibility with the VRS access technology reference platform and the standards-based features of other VRS access technologies.

TRS User Registration Database (TRS-URD) and Eligibility Verification

39. The Commission acts to improve the mechanism used to register and verify the eligibility of VRS users through creation of a TRS-URD and implementation of centralized eligibility verification requirements. Ensuring that the VRS program is as immune as possible from the waste, fraud, and abuse that threatens the long-term viability of the program as it currently operates has been a core goal of this proceeding. When a VRS provider engages in fraudulent practices, the VRS system is made inefficient and the availability of VRS for legitimate users is limited, contrary to section 225 of the Act. 47 U.S.C. 225(b)(1). VRS provider practices that result in waste, fraud, and abuse threaten the sustainability of the TRS Fund and are directly linked to the efficiency and effectiveness of the TRS Fund support mechanisms upon which VRS providers rely for compensation. Moreover, such practices unlawfully shift improper costs to consumers of other telecommunications services, including local and long distance voice subscribers, interconnected VoIP, and others.

40. To help combat such fraud, the Commission (i) directs the development and implementation of a TRS user registration database and (ii) adopts a centralized eligibility verification requirement to ensure that registration for VRS is limited to those who have a hearing or speech disability. A user registration database will provide the Commission, for the first time, a definitive count of the number of unique, active VRS users, and a tool that will allow for more effective auditing and compliance procedures. A centralized eligibility verification system will also help to prevent the registration of fraudulent users and therefore ensure the compensability of VRS calls handled and increase the efficiency of the VRS program.

41. Development and deployment of the TRS-URD, including the ability to conduct eligibility verification, will impose costs that are covered by the TRS Fund. The price for startup and implementation of the TRS numbering directory database and a one year base operating period was $1,541,000. The cost of the TRS-URD is likely to be comparable, if not significantly less. The resultant improvement in functional equivalence and VRS availability for consumers, ease of compliance by providers, and overall efficiency in the operation of the TRS program justifies imposition of these costs.

42. The Commission directs the FCC's Managing Director, in consultation with the CTO, the Chief of OET, and Chief of CGB, to select (or have the TRS Fund administrator select under objectives and factors determined by the Managing Director in consultation with the CTO, the Chief of OET, and Chief of CGB), consistent with the Commission's neutrality criteria, a neutral party to build, operate, and maintain a user

registration database under contract to the Commission (or the TRS Fund administrator) and compensated through the Fund. Each VRS provider shall be required to register each of its users, populate the database with the necessary information for each of its users, and query the database to ensure a user's eligibility for each call.

43. The TRS-URD must have certain capabilities to allow the TRS Fund administrator and the Commission to: (a) receive and process subscriber information provided by VRS providers sufficient to identify unique VRS users and ensure each has a single default provider; (b) assign each VRS user a unique identifier; (c) allow VRS providers and other authorized entities to query the database to determine if a prospective user already has a default provider; (d) allow VRS providers to indicate that a VRS user has used the service; and (e) maintain the confidentiality of proprietary data housed in the database by protecting it from theft, loss, or disclosure to unauthorized persons. The TRS-URD cannot serve its intended purpose unless VRS providers populate the database with the necessary information and query the database to ensure a user's eligibility for each call. The Commission therefore adopts a rule requiring each VRS provider to submit to the TRS-URD administrator the following information for each of the users for which it serves as the default provider:

• Full name, full residential address, ten-digit telephone number assigned in the TRS numbering directory, last four digits of the Social Security number, and date of birth;

• The user's registered location information for emergency calling purposes;

• VRS provider name and dates of service initiation and termination;

• A digital copy of the user's self-certification of eligibility for VRS and the date obtained by the provider;

• The date on which the user's identification was verified; and

• The date on which the user last placed a point-to-point or relay call.

44. Furthermore, prior to providing subscriber information to the database, the VRS provider must obtain consent from the subscriber. In doing so, the VRS provider must describe to the subscriber in writing using clear and easily understandable language the specific information being provided, that the information is being provided to the TRS-URD to ensure the proper administration of the TRS program, and that failure to provide consent will result in the registered user being denied service. VRS providers must obtain and keep a record of affirmative acknowledgment by every registered user of such consent.

45. All personally identifying information will only be accessible for access and modification via network connections using commercially reasonable encryption. VRS providers must submit this information for existing registered users to the TRS-URD within 60 days of notice from the Commission that the TRS-URD is ready to accept such information. Calls from existing registered users that have not had their information populated in the TRS-URD within 60 days of notice from the Commission that the TRS-URD is ready to accept such information shall not be compensable. VRS providers must submit this information (except for the date on which the user last placed a point-to-point or relay call, which is not required for newly registered users) for users registered after the TRS-URD is operational upon initiation of service. We require that the TRS-URD be capable of receiving and processing data provided by VRS providers both in real-time and via periodic batches. The Commission directs the Managing Director to ensure that the TRS-URD administrator specifies how VRS providers must submit data to the database subject to both real-time and batch processes.

46.

Per Call Validation.

In order to ensure the compensability of each call, VRS providers shall validate the eligibility of a user by querying the TRS-URD on a per-call basis. Such validation shall occur during the call setup process, prior to the placement of the call. If a caller's eligibility cannot be validated using the TRS-URD, the call shall not be placed, and the VRS provider shall either terminate the call or, if appropriate, offer to register the user if they are able to demonstrate eligibility. Calls that are not completed because the user's eligibility cannot be validated shall not be included in speed of answer calculations. In order to ensure that emergency calls are processed as expeditiously as possible, the Commission excepts emergency calls from this requirement.

47.

Unique User Identifiers.

The TRS-URD shall assign a unique identifier to each user in the TRS-URD. The Commission directs the TRS-URD administrator to determine the form that this unique identifier should take, and the standards and practices associated with assigning and managing the unique identifier, in connection with the contracting process.

48.

Ensuring Data Integrity.

In order to ensure the integrity of the data in the TRS-URD, it is important to periodically remove information for users who are no longer using VRS (

e.g.,

due to death of the user). The Managing Director will ensure that the TRS-URD administrator removes users from the TRS-URD if they have neither placed nor received a VRS or point to point call in a one year period. Users that are removed from the TRS-URD may, of course, reregister at a later time. If a VRS provider is notified by one of its registered users that the user no longer wants use of a ten-digit number or the provider obtains information that the user is not eligible to use the service, the VRS provider must request that the TRS-URD administrator remove the user's information from the database and may not seek compensation for providing service to the ineligible user. The TRS-URD administrator shall honor such requests.

49.

Security.

The data housed in the TRS-URD may include sensitive personal information. The TRS-URD must have sufficient safeguards to maintain the proprietary or personal nature of the information in the database by protecting it from theft or loss. An important component of maintaining the appropriate level of privacy and data security will be limiting access to the database to authorized entities and then only for authorized purposes. The TRS-URD is not to be used for purposes that do not further the efficient operation and administration of the VRS program, and the Commission authorizes use by providers only for the reasons specified herein, and to determine whether information with respect to its registered users already in the database is correct and complete. Moreover, the Commission specifically prohibits providers from conducting lookups in the TRS-URD to identify other VRS providers' customers for marketing purposes, including win-back efforts. The Managing Director shall ensure that the minimum number of entities has access to the TRS-URD, that such access is utilized only for authorized purposes, and that the data available to a provider in a given circumstance is limited to the minimum necessary.

50. The exact form of the data elements in the database, the structure of the database, and other detailed implementation issues shall be specified during the contracting process. It may become necessary, over time, to modify the data that is to be stored in the database or otherwise make changes to the way the database is administered, structured, or interacted with so as to ensure the efficient administration of the program. To facilitate the ability to

respond to such necessary changes efficiently, the Commission delegates to the Managing Director (or the TRS Fund administrator, if appropriate with the approval of the Managing Director) the authority to modify the TRS-URD contract as necessary to implement changes that are necessary to ensure the efficient administration of the program.

Certification of Eligibility and Verification of Identity

51. The Commission requires every VRS provider to obtain from each registered user a self-certification of eligibility and to implement a centralized identity verification requirement to ensure that registration for VRS is limited to those who have a hearing or speech disability. The Commission declines to relieve VRS providers of their obligation to register users for whom they are the default provider by centralizing that process. VRS providers identify and sign up users through their marketing efforts, and have staff that are trained in ASL and customer registration, and are therefore well equipped to gather from users and potential users the information necessary to register, certify, and verify the eligibility of registrants. It would be difficult, if not impossible, to find a third party with the incentive and ability to conduct those tasks effectively.

Certification of Eligibility

52. In order to be eligible for compensation from the TRS Fund for providing service to their registered VRS users, each provider is required to obtain from each registered user and submit to the TRS-URD a written self-certification that the user has a hearing or speech disability that makes them eligible to use VRS to communicate in a manner that is functionally equivalent to communication by conventional voice telephone users.

53. VRS providers shall require their CAs to terminate any call that does not involve an individual that uses ASL or that otherwise, pursuant to the provider's policies, procedures, and practices as described in its annual compliance plan, does not appear to be a legitimate VRS call, and VRS providers may not submit such calls for compensation from the Fund.

54. VRS providers shall submit to the TRS-URD a properly executed certification of eligibility for each of their existing registered users within 60 days of a public notice from the Managing Director providing notice that the TRS-URD is ready to accept information. VRS providers shall submit a properly executed certification for “new to category” users at the time of registration. When registering a user that is transferring service from another VRS provider, VRS providers shall obtain and submit a properly executed certification if a query of the TRS-URD shows a properly executed certification has not been filed. The Commission also requires each VRS provider to maintain the confidentiality of such registration and certification information obtained by the provider, and to not disclose such registration and certification information, as well as the content of such information, except upon request of the FCC, the TRS Fund administrator, or the TRS-URD administrator or as otherwise required by law.

55. The user self-certification mandated by these rules must adhere to several requirements. In particular, a VRS provider must obtain from each user self-certification that: (1) the user has a hearing or speech disability that makes the user eligible to use VRS; and (2) the user understands that the cost of the VRS calls is paid for by contributions from other telecommunications users to the TRS Fund. In addition, this self-certification must be made on a form separate from any other user agreement, and requires a separate signature specific to the self-certification.

Verification of Identity

56. A centralized process by which the identity of users is verified would help to prevent the registration of fraudulent users and therefore ensure the compensability of VRS calls handled and increase the efficiency of the VRS program. VRS providers are in the best position to gather information necessary to verify user identity but conducting all verifications through a single, centralized process will ensure that all users meet the verification standards mandated by the Commission. Further, it is highly likely that requiring all VRS providers to conduct identity verification through a central process will result in cost savings. The Fund will almost certainly be able to negotiate a contract for verification services for all providers that is less expensive than the sum of the individual contracts that would need to be negotiated by each VRS provider.

57. The Commission directs the Managing Director to ensure that the TRS-URD has the capability of performing an identification verification check when a VRS provider or other party submits a query to the database about an existing or potential user. The criteria for identification verification shall be established by the Managing Director in consultation with the CTO and the Chief of OET. VRS providers shall not register individuals that do not pass the identification verification check conducted through the TRS-URD, and shall not seek compensation for calls placed by such individuals.

Neutral Video Communication Service Provider

58. VRS communications require the interaction of three separate yet interlinked components: VRS access technologies, video communication service, and relay service provided by ASL-fluent CAs. In the

VRS Structure and Rates PN,

the Commission sought comment on specific proposals to disaggregate these components, including a proposal by CSDVRS to require an industry structure in which all providers of VRS CA services would utilize an enhanced version of the TRS numbering directory to provide features such as user registration and validation, call routing, and usage accounting.

Additional Comment Sought on Structure and Practices of the Video Relay Service (VRS) Program and on Proposed VRS Compensation Rates,

CC Docket Nos. 03-123 and 10-51, Public Notice and Further Notice of Proposed Rulemaking; published at 77 FR 65526, October 29, 2012 (

VRS Structure and Rates PN

). In effect, the CSDVRS proposal would separate the video communication service component of VRS from the VRS CA service component by providing the functions of the former from an enhanced database (“enhanced iTRS database”). The Commission chooses not to require that all providers utilize a single video communication service provider at this time. In lieu of requiring all VRS providers to use a single video communication service platform, the Commission establishes, by contract, a neutral video communication service provider that will allow consumers to connect to the “standalone” VRS CA service provider of their choice. The neutral video communication service provider will provide user registration and validation, authentication, authorization, ACD platform functions, routing (including emergency call routing), call setup, mapping, call features (such as call forwarding and video mail), and such other features and functions not directly related to the provision of VRS CA services.

59. The creation of a neutral video communication service provider will have multiple beneficial effects, the most obvious being in the promotion of more efficient and effective VRS CA service competition. The availability of a neutral platform will eliminate a significant barrier to entry: the cost of

building and maintaining a video communication service platform. Standalone VRS CA service providers are likely to focus their efforts on distinguishing themselves through innovation in the provision of high-quality ASL interpretation and the hiring of interpreters who can meet a wide variety of VRS user communication needs. A neutral video communication service provider also will provide the Commission direct insight into the operation of the video communication service component of VRS. The Commission will be better able to assess the costs of operating a platform and to develop platform related performance metrics, potentially including metrics that go beyond simple “speed of answer” requirements. Further, a neutral video communication service provider will serve, at least in part, the same functions as the VRS access technology reference platform with respect to ensuring interoperability between providers. The neutral video communication service provider contract will mandate full compliance with industry established interoperability standards, thereby providing a neutral platform against which interoperability issues can be tested. The availability of this neutral video communication service provider also will allow the Commission to be better able to assess claims that independent products or services are not compliant with the Commission's interoperability rules. As with the VRS access technology reference platform, all providers' VRS access technologies and (in the case of vertically integrated providers) video communication service platforms must be interoperable with the neutral video communication service provider's service platform, including for point-to-point calls. After completion of a reasonable testing period that will be announced in advance, the neutral video communication service provider will begin providing service to standalone VRS CA service providers, and from that point on, no VRS provider shall be compensated for minutes of use involving VRS access technologies or video communication service platforms that are not interoperable with the neutral video communication service provider's platform.

60. Aside from this interoperability obligation, existing, vertically integrated providers of VRS are in no way obligated to utilize the neutral video communication service provider, and may continue to deliver VRS over their existing platforms consistent with the Commission's rules. Given the complexity that would result from allowing vertically integrated providers to process calls both over their own video communication service platforms and the neutral video communication service platform the Commission adopts, only providers choosing to operate as standalone VRS CA service providers will be permitted to utilize the neutral video communication service platform to process VRS calls. Existing, vertically integrated VRS providers that wish to transition to operation as a standalone VRS CA service provider may do so upon 60 days notice to the Commission.

Neutral Video Communication Service Provider Performance Requirements

61. The Commission directs the FCC's Managing Director, in consultation with the CTO, the Chief of OET, and the Chief of CGB, to select, consistent with the Commission's neutrality criteria, a neutral party to build, operate, and maintain a neutral video communication service platform under contract to the Commission and compensated through the Fund. The Commission further directs the Managing Director to take the following guidance into account when contracting for the neutral video communication service provider.

62.

Quality of service.

The Managing Director, in consultation with the Chief of CGB, shall specify appropriate benchmarks for service quality, including benchmarks for availability, dropped calls, and call signaling delay, consistent with existing Commission requirements.

63.

Standards compliance.

The neutral video communication service platform must conform to all standards incorporated into the Commission's rules by reference. By extension, the neutral video communication service platform must be interoperable with the VRS access technology platform and other standards compliant VRS access technologies. To the extent the neutral video communication service provider develops and releases iTRS access technology, that iTRS access technology must comply with the Commission's rules.

64.

Backwards compatibility.

The neutral video communication service platform should provide a reasonable level of backwards compatibility with the installed base of existing VRS access technologies.

65.

Functionality.

The Managing Director shall ensure that the neutral video communication service provider provides all of the operational, technical, and functional capabilities specified in the Commission's rules that are not otherwise fulfilled by VRS access technology or a standalone VRS CA service provider. Such requirements include, but are not limited to, routing and delivery of VRS calls to and from the PSTN with interpretation from the user's registered provider, routing of point-to-point calls, and delivery of calling party identifying information. The neutral video communication service platform shall be available 24 hours a day. The neutral video communication service platform shall ensure appropriate processing of emergency calls, using the user's registered standalone VRS CA service provider for interpretation services. Specifically, the technical requirements shall specify that the neutral video communication service provider provides each standalone VRS CA service provider with the functionality necessary to comply with § 64.605(b) of the Commission's rules.

66. The neutral video communication service provider also shall provide such functionality as is required to allow standalone VRS CA service providers to fulfill their registration obligations under § 64.611 of the Commission's rules. Specifically, the neutral video communication service provider will act on behalf of standalone VRS CA service providers to obtain and assign ten digit telephone numbers to consumers during the user registration process, route and deliver inbound and outbound calls, interface with the TRS Numbering Directory, interface with the TRS-URD, and facilitate any necessary actions as pertain to toll-free numbers.

67. Additionally, the neutral video communication service provider shall provide standard interfaces and protocols through which standalone VRS CA service providers will provide interpretation services and send and receive such information as is necessary to ensure compliance with the Commission's rules. The neutral video communication service provider shall deliver to standalone VRS CA service providers such information as is necessary for the standalone VRS CA service provider to process the call and maintain such records as are necessary to allow them to seek compensation from the TRS Fund. The neutral video communication service platform also shall provide advanced capabilities as specified by CGB including video mail and address book capabilities.

68.

Scalability.

The neutral video communication service platform will necessarily carry few minutes of use at the initiation of its operations, but is likely to attract additional minutes of use over time. The neutral video communication service platform

provider therefore must ensure that the platform, in addition to having the capacity to process initial levels of call volume, be scalable (

i.e.,

be able to handle increasing amounts of traffic over time as demand warrants) on a reasonable timeline.

69.

Customer service.

The neutral video communication service provider shall provide appropriate levels of customer service both to standalone VRS CA service providers and to end users, including troubleshooting technical issues that may arise in the placing or processing of VRS or point-to-point calls.

Stakeholder Concerns

70. Given that no VRS provider will be required to utilize the neutral video communication service provider, the Commission need not address general concerns expressed by commenters regarding a “command and control” approach to VRS that would disrupt existing business models and putatively damage competition, innovation, and customer satisfaction. Nevertheless, to the extent that some of these concerns could be applicable to the approach the Commission adopts, the Commission addresses each in turn.

71.

Privacy and Security.

While it is not clear how the neutral video communication service provider would pose any greater (or lesser) risk to consumer data than does an integrated provider, the neutral video communication service provider may possess or have access to sensitive personal information. The neutral video communication service provider must, therefore, have sufficient safeguards to maintain the proprietary or personal nature of the information in its possession by protecting it from theft or loss.

72.

Fraud.

The availability of a centralized communication service platform may increase the risk that “fly-by-night” VRS CA service providers will seek to defraud the TRS Fund. However, standalone VRS CA service providers must go through a certification process like other VRS providers before they are eligible to seek compensation from the TRS Fund. This certification process, taken in combination with the Commission's improved ability to audit data on VRS calls processed by the neutral video communication service provider, will be sufficient to protect the Fund against this kind of waste, fraud, and abuse.

73.

Service quality.

A centralized provider may not be incented to provide quality services, but the services of the neutral video communication service provider are essentially “mechanical” in nature and can be quantified using well-understood industry-standard metrics such as call signaling delay and availability. Appropriately developed service quality benchmarks specified by contract are sufficient to ensure that the neutral video communication service provider will provide an appropriate level of performance. Any neutral video communication service provider that hopes to win a renewal of its contract will be strongly incented to perform.

74.

Compensation.

Changes to the structure of the VRS program will require changes to the existing compensation system. The Commission will modify the way that vertically integrated providers are compensated and set in place a reasonable glide path to market based rates—a process the Commission began years ago. The Commission proposes to transition to a ratemaking approach that makes use of competitively established pricing, i.e., contract prices set through a competitive bidding process, where feasible.

75.

Customer confusion.

The provision of VRS through disaggregated service providers may result in customer confusion and poor customer service if consumers do not know who to contact to resolve technical difficulties and other problems.This Order ensures that consumers may choose to obtain service from an integrated provider or from a standalone VRS CA service provider utilizing the neutral video communication service platform. To the extent consumers are dissatisfied with their existing registered provider, they may choose a different one.

Standalone VRS CA Service Provider Standards

76. The availability of a neutral video communication service platform will lower the barriers to entry in the provision of VRS CA service. This will promote more effective and efficient competition on the basis of service quality, including interpreter quality and the capabilities to handle the varied needs of VRS users. This can be accomplished consistently with maintaining strong certification criteria and service standards and without affording additional opportunities for fraud, abuse, or waste.

77.

General obligations.

Standalone VRS CA service providers shall be providers of VRS and shall be obligated to comply fully with the Commission's TRS regulations, with one general exception: a standalone VRS CA service provider must utilize the neutral video communication service platform to fulfill those obligations not directly related to the provision of VRS CA service. The Commission therefore revises § 64.604(c)(5)(iii)(N)(1)(iii) of the Commission's rules to allow standalone VRS CA service providers to utilize the neutral video communication service platform for the provision of platform functions. Standalone VRS CA service providers shall be responsible for providing VRS CA service and ensuring that the neutral video communication service provider has the information it needs to fulfill these obligations on its behalf. The Commission will not, however, hold a standalone VRS CA service provider responsible for any action, or failure to act, by the neutral video communication service provider involving the non-CA service functions for which the neutral video communication service provider is responsible.

78.

Certification.

The Commission has adopted rigorous rules governing iTRS provider practices and eligibility, certification, and oversight. Like any other iTRS provider, standalone VRS CA service providers must comply with these rules. In complying with the certification requirements set forth in § 64.606 of the Commission's rules, standalone VRS CA service providers shall, in their description of the technology and equipment used to support their call center functions, describe (a) how they provide connectivity to the neutral video communication service provider, and (b) how they internally route calls to CAs and then back to the neutral video communication service provider. Standalone VRS CA service providers need not describe ACD functionality if it is not used for these purposes, as standalone VRS CA service providers will not operate their own video communication service platforms.

79.

Registration.

A standalone VRS CA service provider shall fulfill its obligations under § 64.611(a), (c), (d), and (e) of the Commission's rules through the Commission-contracted neutral video communication service provider. The standalone VRS CA service provider shall be responsible for providing interpretation service and gathering and delivering such information from its users to the neutral video communication service provider as is necessary to ensure the obligations set forth in § 64.611 are fulfilled. For the sake of clarity, standalone VRS CA service providers also must comply with § 64.611(f) and (g) of the Commission's rules.

80.

Speed of Answer.

Standalone VRS CA service providers shall be responsible for meeting the Commission's speed of answer

requirements as measured from the time a VRS call reaches the signaling servers or user agents operated by the standalone VRS CA service provider.

81.

TRS Facilities.

Standalone VRS CA service providers shall fulfill their obligations regarding TRS facilities, except that they are not required to provide a copy of a lease or licensing agreement for an ACD unless it is used in the provision of CA service.

Delineating Responsibility Between the Neutral Video Communication Service Provider and Standalone VRS CA Service Providers

82. Absence evidence to the contrary, the Commission will generally delineate responsibility based on ownership or control of the network elements responsible for a failure. For example, a standalone VRS CA service provider will not be responsible for a service interruption pursuant to § 64.606(h) of the Commission's rules if that interruption results from an outage of the neutral video communication service provider's network. Violations attributable to the neutral video communication service provider will be addressed through contract enforcement provisions. Violations attributable to the provision of CA service will be addressed through existing Commission procedures. A VRS CA service provider is also responsible for ensuring that the neutral video communication service provider has the information it needs to fulfill non-VRS CA service functions.

Implementation of Structural Reforms

Neutrality Requirements

83. Building, maintaining, and/or operating the TRS-URD, the VRS access technology reference platform, and the neutral video communication service platform will best be done by one or more neutral third parties under contract to the Commission and compensated through the Fund. The neutral administrator of the TRS-URD, the neutral video communication service provider, and the neutral administrator of the VRS access technology reference platform each: (1) Must be a non-governmental entity that is impartial and is not an affiliate of any Internet-based TRS provider; (2) may not themselves, or any affiliate, issue a majority of its debt to, nor derive a majority of its revenues from, any Internet-based TRS provider; and (3) notwithstanding the neutrality criteria set forth in (1) and (2) above, may be determined by the Commission to be or not to be subject to undue influence by parties with a vested interest in the outcome of TRS-related activities.

See

§ 52.12(a)(1)(iii) of the Commission's rules. Any subcontractor that performs functions of the neutral administrator of the TRS-URD, the neutral video communication service provider, and/or the neutral administrator of the VRS access technology reference platform each must also meet these neutrality criteria.

Cost Recovery

84. Section 225 of the Act creates a cost recovery regime whereby TRS providers are compensated for their reasonable costs of providing service in compliance with the TRS regulations.

See

47 U.S.C. 225(d)(3); 47 CFR 64.604(c)(5) of the Commission's rules. The Commission does not routinely grant extraordinary cost recovery for new regulations, and does not believe that the providers' additional costs necessary to implement the requirements adopted herein will be substantial. Thus, the Commission does not find it appropriate to grant additional extraordinary cost recovery in connection with this Order, particularly given that providers currently are compensated well above their actual costs.

Additional Reforms

Improving the Commission's Operations

85. The Commission has delegated authority for disability access policy to CGB, stating that CGB ”advises and makes recommendations to the Commission, or acts for the Commission under delegated authority, in matters pertaining to persons with disabilities. 47 CFR 0.141(f) of the Commission's rules. However, in document FCC 13-82, the Commission delegates financial oversight of the TRS Fund to the Managing Director. Nonetheless, such financial oversight must be consistent with the TRS Orders, rules, and policies, and OMD should consult with CGB on issues that potentially could impact the availability, provision, and continuity of services to consumers. Enforcement regarding TRS will continue to be carried out under the existing authority delegated to CGB, OMD, and the Enforcement Bureau, as appropriate.

86. CGB will retain authority over TRS policy matters. OMD will be responsible for management of all TRS related contracts and contractors, including the TRS Fund administration contract/TRS Fund administrator, and the TRS-URD contract adopted pursuant to this Order. In addition, OMD will be responsible for overseeing TRS Fund audits performed by the TRS Fund administrator, responding (jointly with CGB, if appropriate) to the FCC's Office of Inspector General audits of the TRS Fund, advising the TRS Fund administrator on payment withholding and other financial decisions, and reviewing TRS Fund contribution factor calculations.

87. To meet this clarified responsibility, the Commission notes that the Managing Director has recently designated an FCC employee to serve as a TRS Fund Program Coordinator, which the Commission believes will help OMD to carry out its responsibilities with regard to the TRS Fund. The Commission directs that the Contracting Officer's Representatives (CORs) for all TRS related contracts shall provide support to the TRS Fund Program Coordinator. In addition, the TRS Fund Program Coordinator will coordinate with CGB, the Managing Director, and all other relevant Bureaus and Offices as needed to appropriately oversee the TRS Fund, and will establish and oversee appropriate processes for coordination of Commission staff with the CORs who oversee TRS contracted entities in accordance with their prescribed contractual duties. Issues that could expand the scope of the contract work, extend the length of the contract, or raise the price of performance must be coordinated with the Contracting Officer.

General Prohibitions on Practices Causing Unreasonable Discrimination and Waste, Fraud, and Abuse

88. The

2011 VRS Reform FNPRM,

proposed to adopt regulations that generally prohibit VRS provider practices that discriminate against particular users or classes of users or that otherwise result in waste, fraud, or abuse of the TRS Fund. The Commission concludes that the most appropriate course is to adopt a regulation that mirrors the prohibitions in Section 202(a) of the Act. Section 202(a) of the Act generally prohibits common carriers from engaging in unjust or unreasonable discrimination in charges, practices, classifications,

etc.,

or giving undue or unreasonable advantages or disadvantages to any customer or class of customers, in connection with communications service 42 U.S.C. 202(a). Such a requirement that furthers the “functional equivalence” purpose of section 225 of the Act by providing safeguards against discrimination in the provision of relay services equivalent to those generally applicable to carriers in their provision of voice communication services. Accordingly, the Commission

amends § 64.604 of the Commission's rule to provide that:

“(c)(12) A VRS provider shall not (1) directly or indirectly, by any means or device, engage in any unjust or unreasonable discrimination related to practices, facilities, or services for or in connection with like relay service, (2) engage in or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or (3) subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.”

89. The Commission intends that this rule be interpreted and applied in the same manner that section 202(a) of the Act is applied to common carriers,

i.e.,

that this rule will prohibit VRS providers from discriminating in connection with “like” relay service to the same extent that section 202(a) of the Act prohibits common carriers from discriminating in connection with “like” communication service.

90. The Commission also adopts a general prohibition on VRS providers engaging in fraudulent, abusive, and wasteful practices,

i.e.,

practices that threaten to drain the TRS Fund by causing or encouraging (1) False TRS Fund compensation claims, (2) unauthorized use of VRS, (3) the making of VRS calls that would not otherwise be made, or (4) the use of VRS by consumers who do not need the service in order to communicate in a functionally equivalent manner.

91. To prevent practices that cause or encourage unauthorized or unnecessary use of relay services, the Commission amends § 64.604 of the Commission's rules to provide that:

“(c)(13) A VRS provider shall not engage in any practice that causes or encourages, or that the provider knows or has reason to know will cause or encourage (1) false or unverified claims for TRS Fund compensation, (2) unauthorized use of VRS, (3) the making of VRS calls that would not otherwise be made, or (4) the use of VRS by persons who do not need the service in order to communicate in a functionally equivalent manner. A VRS provider shall not seek payment from the TRS Fund for any minutes of service it knows or has reason to know are resulting from such practices. Any VRS provider that becomes aware of such practices being or having been committed by any person shall as soon as practicable report such practices to the Commission or the TRS Fund administrator.”

92. The Commission intends that this rule encompass, but not be limited by, the Commission's numerous prior declaratory rulings describing wasteful, fraudulent, and abusive practices that violate section 225 of the Act. For purposes of the amended rule, a practice is prohibited where, for example, it artificially stimulates TRS usage, enables or encourages participation by unauthorized users, or uses financial incentives to attract new TRS users or to increase usage. This list is provided by way of example only and is not intended to be exhaustive. Providers are in the best position to identify anomalies and tends based on analysis of their call traffic and abuses detected by CAs. The Commission expects each provider to be diligent in ensuring its practices do not result in waste, fraud, or abuse. All monies paid from the Fund to providers who are in violation of this rule shall be recoverable by the TRS Fund administrator.

Provider Compliance Plans

93. Although the Commission's rules currently require VRS providers who have received Commission certification to submit annual reports providing evidence of ongoing compliance with our minimum standards, its rules do not specifically require the development of or submission to the Commission of an annual compliance plan addressing waste, fraud, and abuse, comparable to what is required of Lifeline-only carriers. To provide an improved mechanism for ensuring that providers have taken adequate steps and adopted sufficient measures to prevent waste, fraud, and abuse, the Commission amends § 64.606(g) of the Commission's rules to add the following requirements:

(g)(3) Each VRS provider shall include within its annual report a compliance plan describing the provider's policies, procedures, and practices for complying with the requirements of § 64.604(c)(13) of the Commission's rules. Such compliance plan shall include, at a minimum: (i) identification of any officer(s) or managerial employee(s) responsible for ensuring compliance with § 64.604(c)(13) of the Commission's rules, (ii) a description of any compliance training provided to the provider's officers, employees, and contractors, (iii) identification of any telephone numbers, Web site addresses, or other mechanisms available to employees for reporting abuses, (iv) a description of any internal audit processes used to ensure the accuracy and completeness of minutes submitted to the TRS Fund administrator, and (v) a description of all policies and practices that the provider is following to prevent waste, fraud, and abuse of the TRS Fund. A provider that fails to file a compliance plan as directed shall not be entitled to compensation for the provision of VRS during the period of noncompliance.

(4) If, at any time, the Commission determines that a VRS provider's compliance plan currently on file is inadequate to prevent waste, fraud, and abuse of the TRS Fund, the Commission shall so notify the provider, shall explain the reasons the plan is inadequate, and shall direct the provider to correct the identified defects and submit an amended compliance plan reflecting such correction within a specified time period not to exceed 60 days. A provider that fails to comply with such directive shall not be entitled to compensation for the provision of VRS during the period of noncompliance. A submitted compliance plan shall not be

prima facie

evidence of the plan's adequacy; nor shall it be evidence that the provider has fulfilled its obligations under § 64.604(c)(13) of the Commission's rules.

Speed of Answer

94. The Commission sought comment in the

2011 VRS Reform FNPRM

on whether to update its VRS “speed of answer” rules, which require VRS providers to answer 80 percent of all VRS calls within 120 seconds, measured on a monthly basis. The record demonstrates that it is appropriate to take steps to more closely align the VRS speed of answer rules with those applicable to other forms of TRS by reducing the permissible wait time for a VRS call to be answered to 30 seconds, 85 percent of the time, and to measure compliance on a daily basis.

95.

Wait time.

VRS providers already achieve a speed of answer of 30 seconds for the majority of VRS calls. The Commission therefore finds it reasonable to reduce the permissible wait time for VRS calls to 30 seconds. This 30 second requirement deviates from the 10 second speed of answer standard required for other forms of TRS, but given that VRS providers already are largely achieving this standard at current CA staffing levels, this action will set a new standard for VRS provider performance without additional cost to providers or the TRS Fund.

96.

Compliance threshold.

Consistent with the Commission's rules for other forms of TRS, the Commission increases from 80 to 85 percent the number of calls that a provider must answer within the allowable wait time. The Commission previously has found that an 85 percent speed of answer compliance threshold allows providers sufficient leeway to compensate for

abandoned calls and fluctuations in call traffic.

97.

Measurement window.

Consistent with the Commission's rules for other forms of TRS, the Commission requires a daily (rather than monthly) measurement of compliance with the Commission's VRS speed of answer standard. Given that providers now have more than a decade of experience managing CA staffing levels and already are largely meeting the 30 second wait time requirement the Commission adopts, deviating from the measurement window the Commission applies to other forms of TRS is no longer necessary.

98.

Calculating speed of answer.

In the

2005 VRS Speed of Answer Order,

the Commission concluded that “the speed of answer measurement begins when the VRS provider's equipment accepts the call from the Internet.”

See e.g., Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,

CC Docket Nos. 98-67 and 03-123; Report and Order; published at 70 FR 51649, August 1, 2005 (

2005 VRS Speed of Answer Order

). Because VRS users can now dial the number they wish to call, and the connection of the call to the called party no longer requires the VRS provider to obtain telephone numbers and other information from VRS users, the Commission now clarifies that the speed of answer will be measured based on the elapsed time between the time at which the call (whether initiated by a hearing or ASL user) is first delivered to the provider's system (handoff time) until the call is either abandoned (call termination time) or answered by any method which results in the caller's call immediately being placed, not put in a queue or on hold (session start time). This clarification mirrors § 64.604(b)(2)(ii) of the Commission's rules governing speed of answer for other forms of TRS, which requires that 85 percent of all calls “be answered within 10 seconds by any method which results in the caller's call immediately being placed, not put in a queue or on hold.” 47 CFR 64.604(b)(2)(ii) of the Commission's rules. Calls that are not completed because the user's eligibility cannot be validated shall not be included in speed of answer calculations.

99.

Phase In.

To allow providers to adjust their operations, as necessary, to meet the new speed of answer requirement, the Commission establishes a phase-in period. Specifically, as measured on a daily basis: (1) by January 1, 2014, VRS providers must answer 85 percent of all VRS calls within 60 seconds; and (2) by July 1, 2014, VRS providers must answer 85 percent of all VRS calls within 30 seconds. The Commission will monitor VRS providers' compliance with these new standards, and re-visit this issue in the future if necessary.

Preventing Slamming

100. In order to protect VRS and IP Relay users from unwanted changes in their default provider, the Commission adopts rules governing how these changes may take place. These rules, which are incorporated into part 64, subpart F of the Commission's rules (TRS regulations) and are modeled after part 64, subpart K of the Commission's rules, prescribe: the type(s) of user authorization that providers must obtain prior to switching a subscriber's default provider; how verification of any such authorization must be obtained and maintained by the receiving provider; whether and how providers may use information obtained when receiving notification of a user's service change to another provider, whether for marketing, win-back, or other purposes; and complaint procedures and remedies for violation of these rules. 47 CFR 64.1100 of the Commission's rules

et. seq.

The rules the Commission adopts are not identical to the slamming rules adopted for telecommunications carriers. Modifications have been made to reflect the differences between Internet-based TRS providers and telecommunications carriers, eliminate redundant provisions, and otherwise make the rules more explicit so as to improve enforcement and administration of the requirements that apply to Internet-based TRS providers.

101. The rules the Commission adopts specifically require a provider to obtain individual user consent before a default provider change may occur. Such consent must be obtained in compliance with prescribed verification procedures, which require that a provider, prior to effecting a default provider change, either: (1) obtain the user's written or electronically signed authorization to change his or her default provider; or (2) utilize an independent third party to verify the subscriber's request. This will help prevent unauthorized default provider changes, thereby reducing the number of consumer complaints. Moreover, the rules the Commission adopts require that third-party verification be conducted in the same language as the underlying transaction. The third-party verifier must elicit: the date of the verification; identification of the user; confirmation that the person on the call is authorized to make the default provider change; confirmation that the person on the call wants to make the default provider change and understands what the change in default provider means, including that the customer may need to return any leased video equipment belonging to the default provider; confirmation that the person on the call understands that a default provider change, not an upgrade to existing service, or any other misleading description of the transaction is being authorized; the name of the new default provider; the telephone number of record to be transferred to the new default provider; and the type of relay service used with the telephone number being transferred. The rules also require that the third-party verification process be recorded, which in the case of a third-party verification conducted in ASL, means video-recorded.

102. In the

First Internet-Based TRS Numbering Order,

the Commission found that iTRS providers and their numbering partners are subject to the same porting obligations as interconnected VoIP providers, with the sole exception of contributing to meet shared numbering administration costs and local number portability (LNP) costs.

Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities; E911 Requirements for IP-Enabled Service Providers,

CG Docket No. 03-123, WC Docket No. 05-196, Report and Order and Further Notice of Proposed Rulemaking; published at 73 FR 41286, July 18, 2008 and at 73 FR 41307, July 18, 2008.

103. Because the Commission already addressed the number portability obligations of iTRS providers the Commission will not, except as discussed herein, revisit the number portability obligations of iTRS providers at this time, and the Commission does not include in the iTRS slamming rules the provisions found in subpart K of part 64 that already apply to the numbering partners of the iTRS providers. However, in response to reports alleging that there have been instances where VRS providers have, upon receiving a number porting request for one of their registered users, failed to process that user's calls pending completion of the port or have disabled or reduced the functionality of that user's VRS access technology during the pendency of the porting process, the Commission reminds iTRS providers and their numbering partners on both ends of the number porting process that they are responsible for coordinating the timing of the number porting to ensure that there is no interruption of service to the user. To

prevent improper degradation or interruption of service, the Commission adopts a rule prohibiting default providers from reducing the level or quality of service provided to their users, or the functionality of their users' iTRS access technology, during the porting process.

104. The Commission adopts recordkeeping requirements applicable to iTRS providers that are five years in duration, as opposed to two years in the case of telecommunications carriers. This is consistent with other recordkeeping requirements applicable to iTRS providers and will ensure that the underlying records supporting verification of a default provider change are maintained and are available to the Commission for review. .

105. In the telecommunications carrier context, subpart K of part 64 of the Commission's rules requires that preferred carrier change orders be submitted within 60 days of obtaining a letter of agency. In the iTRS provider slamming rules adopted, the Commission likewise requires that all default provider change orders be implemented within 60 days, whether verified by a letter of authorization or by a third party verification. The Commission finds that placing a limit on the amount of time between when the default provider change order is received and verified and when the change is implemented avoids situations where, for example, an iTRS provider may implement a stale default provider change order that the iTRS user may no longer desire.

106. The Commission permits a provider to acquire by sale or transfer either part or all of another provider's user base, provided that the acquiring provider complies with the user notification procedures set forth in the new rule. Any such sale or transfer must be to a provider that is certified by the Commission pursuant to § 64.606(a)(2) of the Commission's rules to receive compensation from the Fund to provide the specific relay service for which the sale or transfer is occurring

107. Under the telecommunications slamming rules, a “preferred carrier freeze” prevents a change in a subscriber's preferred carrier selection by placing a “freeze” on that subscriber's selection, unless the subscriber gives the carrier from whom the freeze was requested his or her express consent to change carriers. The Commission will prohibit default provider freezes. Allowing such freezes, especially in a market where anti-slamming procedures have not previously applied, could be detrimental for an industry where competition continues to evolve, and where consumers should be able to change their default providers with ease.

108. The Commission extends to VRS and IP Relay the common carrier prohibition against using carrier proprietary information gained from a number porting request to initiate retention marketing while a number port is in progress. A VRS or IP Relay provider may not use the proprietary information obtained from a provider submitting a number porting request to try to retain its customer during the porting process. Once the port is complete, the carrier change information is no longer proprietary information protected from use by the former default provider, and therefore the former default provider may use such information to market to its former customer, consistent with TRS requirements.

109.

Enforcement.

The telecommunications carrier slamming rules provide that any submitting provider that fails to comply with the slamming rules for a particular subscriber shall pay 150% of the payments from that subscriber to the authorized carrier, who in turn pays a refund to the subscriber of 50% of all such payments. The appropriate remedy is for the submitting provider to pay to the Fund 100% of the amount that was paid by the Fund to the submitting provider. In other words, since the minutes submitted to the Fund for reimbursement by the submitting provider were not authorized, the provider will have to return its compensation for such minutes to the Fund. The Commission will not require the submitting provider to pay to the Fund an additional 50% because such additional payment would amount to a collection of funds in excess of the costs caused by TRS. However, the Commission reminds VRS and IP Relay providers that, in addition to the repayment remedy, violations could result in enforcement or other remedies available by law to address noncompliance, including but not limited to the Commission's forfeiture procedures.

110. The Commission adopts complaint procedures for unauthorized changes of a default provider that are similar to the complaint procedures used for unauthorized changes of telecommunications carriers. The rules the Commission adopts provide for consumers to file informal complaints with the Commission in writing, including via the Commission's web-based complaint filing system via the option “Disability Access to Communications Services and Equipment.”

111.

Legal Authority.

The Commission's statutory authority to apply anti-slamming safeguards to VRS and IP Relay derives from section 225 of the Act, which directs the Commission to prescribe regulations to ensure that telecommunications relay services are available in the most efficient manner to enable communication in a manner functionally equivalent to voice telephone services.

See

47 U.S.C. 225(a)(3), (b)(1). Because voice telephone users enjoy the protections of the Commission's anti-slamming regulations, the Commission finds that applying these same protections to VRS and IP Relay users advances the Act's mandate of functional equivalency. Such protections will improve the efficiency of VRS and IP Relay by reducing wasteful “churning” of the customer base for those services. The Commission establishes slamming prohibitions for VRS and IP Relay pursuant to the specific mandate of section 225(d)(1)(A) of the Act to establish “functional requirements, guidelines, and operations procedures” for TRS. 47 U.S.C. 225(d)(1)(A).

Consumer Privacy

112. In this section, the Commission adopts rules to protect the privacy of customer information relating to all relay services authorized under section 225 of the Act and to point-to-point video services offered by VRS providers. The Commission sought comment on the adoption of such privacy rules for TRS in general in 2008 in the

TRS Numbering FNPRM,

and more recently for VRS with respect to certain issues in the

2011 VRS Reform FNPRM.

113. Commenters generally agree that the Commission should apply Customer Proprietary Network Information (CPNI) protections to all forms of TRS, as well as to point-to-point video services provided over the VRS network, with minor modifications to account for the unique nature of TRS. The Commission now adopts rules that are modeled after part 64, subpart U of the Commission's rules, for the purpose of applying the protections of the CPNI rules to TRS and point-to-point video calls handled over the VRS network. For TRS to be functionally equivalent to voice telephone services, consumers with disabilities who use TRS are entitled to have the same assurances of privacy as do consumers without disabilities for voice telephone services. Further, because upwards of 80-90 percent of all calls made by ASL users on the VRS network are point-to-point, the Commission finds that it is just as

important, if not more important, to apply the CPNI protections to point-to-point video calls handled over the VRS network as it is to apply these safeguards to calls that are relayed.

114. The rules the Commission adopts are not identical to the CPNI rules for telecommunications carriers in subpart U of part 64 of the Commission`s rules. Modifications have been made to reflect the differences between TRS providers and telecommunications carriers. For example, the use of sign language is contemplated by the rules. Other modifications have been made to make the rules more explicit so as to improve enforcement and administration of the rules. Although the Commission does not address herein every variance between the subpart U rules that apply to telecommunications carriers and the subpart EE rules that apply to TRS, the Commission describes the main differences below.

115. As with telecommunications services, a TRS provider may access CPNI for the purpose of marketing services to its registered users within the same category of service (meaning same type of TRS) that its registered users already receive from that provider. However, just as a wireless carrier may not access CPNI for the purpose of marketing to a roaming service user (because the roaming service user is not a subscriber of the serving carrier), a TRS provider may not use CPNI for the purpose of marketing to a dial-around user. Similarly, just as a telecommunications carrier may not use CPNI to market services to a party on the other end of its subscriber's voice call because such party may not be a subscriber of that carrier, the Commission does not permit a TRS provider to use CPNI for the purpose of marketing services to a party on the other end of its registered user's point-to-point call.

116. The Commission agrees with the Consumer Groups that due to certain inherent differences between voice telephone services and TRS, certain additional protections should apply to TRS. As the Commission has repeatedly emphasized, because the TRS Fund, and not the consumers, pay for TRS calls, TRS providers may not, with or without using CPNI, engage in marketing communications that offer improper financial incentives to existing or potential customers or that suggest, urge, or tell a TRS user to make more or longer TRS calls. To make clear that, in adopting CPNI rules to cover TRS providers, the Commission is not relieving TRS providers of their obligations under the Commission's prior rulings regarding prohibited marketing communications, the rules adopted explicitly provide that when CPNI is used for marketing purposes, it may only be used for lawful marketing activities. To the extent that the Consumer Groups advocate restrictions on political speech by TRS providers, the Commission believes that a more developed record is necessary to evaluate the potential merits of adopting new requirements in that regard, and consequently the Commission seeks comment on those issues in the document FCC 13-82 FNPRM.

117. Because the administrator of the TRS Fund requires call data information and other CPNI to administer the Fund and to investigate and prevent waste, fraud, and abuse of TRS, the Commission is adding provisions to the rules requiring TRS providers to use, disclose, or permit access to CPNI upon request by the administrator of the Fund. The Commission further notes that, because consumers generally are not billed for TRS, the concerns about access to customer financial information that underlie the subpart U provisions requiring password protection of CPNI to obtain access to call data information over the telephone are less applicable here, and this provision has been replaced with a simpler customer authentication provision in subpart EE.

118. The rules adopted for TRS CPNI require records to be maintained for three years, compared with one year in subpart U, to ensure that the underlying records supporting a TRS provider's annual compliance certification are maintained and available to the Commission for review. For example, § 64.5109 (e) of the Commission's rules requires an officer of a TRS provider to file with the Commission an annual CPNI compliance certification. A TRS provider must provide a statement explaining, among other things, how its operating procedures ensure compliance with the CPNI rules and include an explanation of any actions taken against data brokers, a summary of all consumer complaints over the reporting period that assert a breach of the consumer's CPNI rights, and report all instances of non-compliance. The three-year record retention will assist the Commission in any investigation it may undertake based on the annual compliance filing or in response to consumer complaints by ensuring that relevant documents are not destroyed in the ordinary course before the Commission has an opportunity to secure their retention through issuance of a letter of inquiry or subpoena.

119.

Legal Authority.

The Commission's statutory authority to apply customer privacy requirements to TRS derives from section 225 of the Act, which directs the Commission to prescribe regulations to ensure that telecommunications relay services are available to enable communication in a manner that is functionally equivalent to voice telephone services.

See

47 U.S.C. 225(a)(3), 225(b)(1). Because voice telephone users enjoy the privacy protections of the Commission's CPNI regulations, the Commission finds that applying these same protections to TRS users advances the Act's mandate of functional equivalency. The Commission establishes customer privacy requirements for TRS pursuant to the specific mandate of section 225(d)(1)(A) of the Act to establish “functional requirements, guidelines, and operations procedures” for TRS. 47 U.S.C. 225(d)(1)(A). In addition, extending the Commission's CPNI regulations to TRS users also is ancillary to the Commission's responsibilities under section 222 of the Act to telecommunications service subscribers that place calls to or receive calls from TRS users, because TRS call records include call detail information concerning all calling and called parties.

120. The Commission also has ancillary authority to apply the CPNI requirements to point-to-point video services provided by VRS providers over the VRS network. First, the provision of point-to-point video services is “communication by wire or radio” within the general jurisdictional grant of section 2 of the Act. 47 U.S.C. 152. Second, the application of CPNI protection to point-to-point video services is ancillary to the Commission's responsibilities under sections 222 and 225 of the Act. As discussed above, the Commission has direct authority under section 225 to adopt privacy requirements for VRS service. Point-to-point services are provided by VRS providers to their VRS customers by virtue of the Commission's requirement that VRS providers facilitate such functionality. Consequently, VRS providers have access to CPNI regarding point-to-point services by virtue of their section 225 of the Act-regulated role as the VRS provider for the caller and/or recipient of a point-to-point call. In addition, the Commission concludes that there is a risk that consumers will not readily recognize or anticipate regulatory distinctions between VRS services and the point-to-point services at issue here, which rely on the same access technology and are routed and transmitted over the same network as the VRS services provided by that same provider. Consequently, to the extent that users' privacy is not adequately

protected with respect to point-to-point calls, this risks undermining their expectation of privacy as to VRS services, as well. Thus, the Commission finds that adopting privacy protections for point-to-point services is reasonably ancillary to the Commission's oversight of the VRS provider-user relationship in general, and the privacy protections adopted in that context in particular, regulated under the Commission's section 225 of the Act authority. Further, for a VRS user whose primary means of communication is ASL, a point-to-point video call is akin to a telephone call. Specifically, for such an individual, a point-to-point video call transmitted over the Internet is the primary means by which that person can communicate with another person whose primary means of communication is also ASL. In essence, then, from a privacy perspective, point-to-point video calls between ASL users are “virtually indistinguishable” from VoIP calls between hearing persons, and thus users must have the same expectation of privacy. Thus, analogous to the Commission's exercise of ancillary authority to extend CPNI requirements to interconnected VoIP, the Commission concludes it is reasonably ancillary to the Commission's section 222 of the Act authority to extend privacy requirements to point-to-point services.

Certification Under Penalty of Perjury for Certification Application and Annual Reports

121. In the

2011 iTRS Certification Order,

the Commission found the interim certification to be “a necessary and critical component of the Commission's efforts to curtail fraud and abuse.” The Commission affirms this finding and concludes that this attestation is essential to the Commission's efforts to ensure that only qualified providers become and remain eligible for compensation from the Fund. Having received no comment opposing the interim certification, and because of its continued necessity, the Commission permanently adopts the following requirements:

The chief executive officer (CEO), chief financial officer (CFO), or other senior executive of an applicant for Internet-based TRS certification under this section with first hand knowledge of the accuracy and completeness of the information provided, when submitting an application for certification under paragraph (a)(2) of this section, must certify as follows: I swear under penalty of perjury that I am _ (name and title), _ an officer of the above-named applicant, and that I have examined the foregoing submissions, and that all information required under the Commission's rules and orders has been provided and all statements of fact, as well as all documentation contained in this submission, are true, accurate, and complete.

The chief executive officer (CEO), chief financial officer (CFO), or other senior executive of an Internet-based TRS provider under this section with first hand knowledge of the accuracy and completeness of the information provided, when submitting an annual report under paragraph (g) of this section, must, with each such submission, certify as follows: I swear under penalty of perjury that I am _ (name and title), _ an officer of the above-named reporting entity, and that I have examined the foregoing submissions, and that all information required under the Commission's rules and orders has been provided and all statements of fact, as well as all documentation contained in this submission, are true, accurate, and complete.

122. The Commission believes that this attestation requirement will provide an added deterrent against fraud and abuse of the Fund by making senior officers of providers more accountable for the information provided.

Other Issues

CA Qualifications

123. The Commission's rules direct that VRS CAs must be qualified interpreters, i.e., capable of interpreting “effectively, accurately, and impartially, both receptively and expressively, using any necessary specialized vocabulary.” 47 CFR 64.601(a)(17) of the Commission's rules. The Commission sought comment in the

2011 VRS Reform FNPRM

on whether specific training requirements or qualifications for VRS CAs were needed beyond the general requirements set forth in § 64.604(a)(1) of the Commission's rules, as well as the effect that imposing such requirements would have on the current pool of CAs and on the ability of VRS providers to comply with the speed of answer requirement.

124. There is no record in this proceeding to indicate a lack of high VRS CA quality, and Commission records indicate that few consumers have complaints regarding VRS CA quality in the last 12 months. Further, VRS providers compete for users primarily on the basis of quality of service, including the quality of their VRS CAs; a user dissatisfied with the quality of a given provider's VRS CAs can switch to another provider on a per call or permanent basis. VRS providers thus have developed their own internal methods designed to ensure compliance with the Commission's “qualified interpreter” requirement. For these reasons, the Commission sees no need to modify that requirement at this time.

125. There is no doubt that high quality VRS CAs are critical to the provision of effective VRS, and the Commission will revisit this issue if it becomes apparent that the Commission's current rules are insufficient to ensure the availability of qualified VRS CAs. The Commission will continue to carefully monitor consumer complaints related to the quality of VRS CAs and will look for patterns of complaints regarding individual CAs or providers. The Commission encourages callers who encounter a VRS CA that they believe is unable to interpret effectively, accurately, and impartially, both receptively and expressively, using any necessary specialized vocabulary, to make note of the CA's identification number, notify the VRS provider handling the call, and file a complaint with the Commission. Finally, the Commission reminds VRS providers that their annual complaint log summaries (submitted to the Commission) must include, among other things, a listing of complaints alleging a violation of any of the TRS mandatory minimum standards, including violations of the requirement for CAs to be qualified, as well as the manner in which such complaints were resolved.

Skill-Based Routing

126. Commenters have asked that VRS providers be allowed, or required, to offer “skill-based routing,” which would allow a VRS caller to select preferred VRS CAs according to the CAs' skill sets—in particular their interpreting, transliteration, and signing styles, and/or areas of knowledge (

e.g.,

medicine, law, or technology). The Commission is concerned that allowing skill-based routing would increase the incentive of VRS users to substitute VRS for in-person sign language interpreting services, including video remote interpreting (VRI)—a practice that is not permitted. Even if that critical issue were resolvable, skill-based routing poses a number of implementation issues. The Commission therefore declines to require or allow skill-based CA routing—or any type of routing to a particular interpreter or interpreter pool—at this time.

VRS Compensation Rate Structure and Rates

Per-User Compensation Mechanism

127. The

2011 VRS Reform FNPRM

sought comment on a proposal to transition VRS from the existing per-minute compensation mechanism to a per-user compensation mechanism in order to better align the compensation methodology with the providers' cost structure, increase efficiency and transparency in the rate setting process, and reduce incentives to conduct common and difficult-to-detect forms of fraud. The record reflects broad opposition to a per-user compensation mechanism.

128. It is difficult to assess, on the basis of the existing record, the validity of commenters' objections to a per-user compensation mechanism or the ultimate impact a per-user mechanism would have on VRS providers and consumers; the reforms that are a predicate to implementation of a per-user mechanism would both alter the nature of the VRS program and provide data that will help determine the need for additional reforms. The Commission therefore declines to adopt a per-user compensation mechanism at this time.

Short-Term Rate Methodology Pending Implementation of Structural Reforms

129. As discussed in the Further Notice, the Commission proposes that, once structural reforms are implemented, the Commission will set VRS compensation rates based largely if not entirely on competitively established pricing,

i.e.,

prices set through a competitive bidding process. During the transition to structural reforms, however, in order to satisfy the Commission's “obligation to protect the integrity of the Fund and to deter and detect waste,” the Commission concludes to continue to move rates closer to actual cost using currently available ratemaking tools. While the interim rates set in 2010 began to close the gap between rates and costs, those rates have remained in effect for almost three years, during which average provider costs have declined significantly. Therefore, the Commission will reduce rates further to bring them closer to average provider costs, as calculated by the Fund administrator, beginning with the 2013-14 Fund year.

130. The use of providers' actual, historical costs continues to provide a valuable point of reference for setting VRS compensation rates, pending implementation of the Commission's structural reforms. Historical costs are an especially useful reference point where, as here, prior submissions of projected costs have proven to be higher than actual costs subsequently determined for the Fund year.

131. The Commission agrees that a multi-year plan, with built-in rate level adjustments, is an appropriate means to provide stability and predictability for the transition period pending implementation of structural reforms. However, the Commission declines to use the interim rates currently in effect as the starting point for a new multi-year rate plan. When the current interim rates were adopted, the Commission specifically determined that those rates were substantially in excess of actual costs. Balancing the need for cost-based rates with concerns about carrier stability in the short term, the Commission decided to allow providers to continue to collect VRS compensation from the TRS Fund at above-cost rates for a limited period, in order to spare providers from a precipitous rate drop and to allow them to continue providing high quality service pending the Commission's consideration of an appropriate rate methodology and other reforms. As a consequence, providers have benefitted for several additional years, at the expense of the TRS Fund and the general body of ratepayers who contribute to the Fund, from VRS compensation rates substantially in excess of costs. Moreover, given that, as noted above, provider costs are declining, the disparity between the existing interim rates and actual provider costs is even greater than it was when the rates were initially set. In effect, in the interests of preserving industry stability pending the adoption of structural reforms, VRS providers have already had the opportunity to provide VRS under a multi-year rate plan, lasting from July 2010 to the present, with above-cost interim rates as both the starting point and the end point. The Commission can no longer justify maintaining VRS rates at these interim levels.

132. While the Commission recognizes that efficiency disincentives can be generated when rates are annually recalculated based on historical costs, in this instance the Commission utilizes RLSA's historical cost analysis for a different purpose, namely, as the reference point for establishing a multi-year rate plan. The Commission agrees with those commenters who urge that multi-year rate plans can offer salutary, efficiency-promoting and rate-predictability benefits and the Commission adopts such a plan below. Multi-year rate plans, however, must have a defensible cost-based reference point from which to proceed. The Commission finds that RLSA's cost analysis, which actually uses a combination of providers' projected costs and actual historical costs, provides an appropriate reference point in this instance for establishing a multi-year rate plan that enables the VRS industry to transition towards cost-based rates, which the Commission proposes to determine in the future using competitively established pricing. Thus, the Commission finds that the cost basis calculated by RLSA, based on a combination of historical and projected costs, is an appropriate reference point for the rates the Commission adopts, which are described in section IV.D below. In the remainder of this section, the Commission addresses several questions raised in the

2011 VRS Reform FNPRM

regarding allowable categories of costs and the handling of rate tiers both during and after the transition to structural reforms.

Outreach

133. The Commission has decided to establish a coordinated nationwide outreach program for VRS and IP Relay, handled by an independent entity. This change removes the need for VRS and IP Relay providers to incur expenses to conduct their own outreach activities. Therefore, in the future the Commission will preclude such providers from including outreach expenses in their annual cost submissions to the TRS Fund administrator. The elimination of this obligation for IP Relay providers will be taken into account in determining future IP Relay per minute rates. The Commission therefore directs the Fund Administrator to submit a revised rate recommendation that treats outreach as a non-compensable cost for IP Relay providers and direct the Chief, Consumer and Governmental Affairs Bureau, to adopt or revise IP Relay rates for Fund year 2013-2014 as appropriate after consideration of that recommendation. To be clear, however, providers remain free to conduct outreach; the Commission decides here only that the Commission will not consider the expense of such activities in setting rates for these services.

User Equipment

134. The Commission has consistently held that costs attributable to the user's relay hardware and software, including installation, maintenance, and testing, are not compensable from the Fund. The Commission has explained that expenses for which providers are compensated “must be the providers' expenses in making the service available

and not the customer's costs of receiving the equipment. Compensable expenses, therefore, do not include expenses for customer premises equipment—whether for the equipment itself, equipment distribution, or installation of the equipment or necessary software.”

135. The Commission declines to alter the Commission's policy against the use of monies from the TRS Fund to support VRS providers' distribution of user equipment or access technology, whether as part of generally applicable rates or through direct payments to VRS providers. A better approach is to fund the development of open source VRS access technology, and to contract for the development and deployment of a VRS access technology reference platform. After implementation of a VRS access technology reference platform and the other reforms adopted herein, there will be another opportunity to assess the extent to which additional measures are necessary and appropriate to promote the availability of iTRS access technology.

Capital Costs and Income Taxes

136. In the

2010 VRS NOI

and the

VRS Structure and Rates PN,

the Commission sought comment on the current process for allowing providers a rate-of-return on capital investment. With respect to the types of capital costs that are recoverable, the Commission finds it would be irresponsible and contrary to the Commission's mandate to ensure the efficient provision of TRS and to preserve the integrity of the TRS Fund, to simply reimburse VRS providers for all capital costs they have chosen to incur—such as high levels of debt—where there is no reason to believe that those costs are necessary to the provision of reimbursable services. The Commission's application of the 11.25% rate of return to TRS compensation rates is a longstanding practice that was affirmed by a federal court of appeals and the Commission declines to alter the Commission's current approach to Fund support for VRS providers' recovery of capital costs, except that the Commission accepts RLSA's recommended adjustment to account for corporate income taxes.

Rate Tiers

137. No party has presented a valid reason why the TRS Fund should support indefinitely VRS operations that are substantially less efficient. Therefore, to encourage the provision of VRS in the most efficient manner, the gap between the highest and lowest tiered rates will be reduced over time, in accordance with the schedule set forth in Table 2 below.

138. The Commission also believes that the Commission's structural reforms, once implemented, will eliminate any residual need for tiered rates. Prior to implementation of restructuring, however, there are good reasons to retain rate tiers and no compelling reasons to eliminate them. With only six providers currently providing VRS, eliminating the rate tiers immediately could force out some of the smallest remaining providers, unnecessarily constricting the service choices available to VRS consumers during the period prior to implementation of structural reforms. The Commission concludes that it is worth tolerating some degree of additional inefficiency in the short term, in order to maximize the opportunity for successful participation of multiple efficient providers in the future, in the more competition-friendly environment that the Commission expects to result from the Commission's structural reforms. Therefore, the Commission will allow tiered rates to remain in effect during the transition to structural reforms, but with a gradually reduced gap between highest and lowest tiers, in order to allow smaller providers an opportunity to increase the efficiency of their operations so as to maximize their chances of success after structural reforms are implemented.

139. The Commission also concludes that the tier boundaries should be adjusted during the transition, so as to ensure that smaller providers have a full opportunity to achieve efficient operations. As noted above, VRS rates are currently structured in three tiers: Tier I rates apply to a provider's first 50,000 VRS minutes each month; Tier II rates apply to a provider's monthly minutes between 50,001 and 500,000; and Tier III rates apply to a provider's monthly minutes in excess of 500,000. As adjusted in this order, Tier I rates will apply to a provider's first 500,000 monthly VRS minutes; Tier II rates will apply to a provider's monthly minutes between 500,001 and 1 million; and Tier III rates will apply to a provider's monthly minutes in excess of 1 million.

140. Regarding the configuration of tiers, the critical question concerns whether and how to adjust the boundary between Tier II, for which the rate is currently $6.23 per minute, and Tier III, for which the rate is currently $5.07 per minute. The Commission finds that, regardless of whether the existing cost differences between the largest provider and its smaller competitors—including providers currently handling call volume levels greater than 500,000 minutes per month —are due to economies of scale or to other efficiency differences among the existing providers, their actual existence is undisputed and is supported by historical data.

141. Further, given the Commission's decision to reduce the gap between the highest and lowest tiered rates and its expectation that tier classifications ultimately will be eliminated upon the implementation of structural reforms, the main question is not whether the Commission can pinpoint the exact level where the greatest economies of scale are achieved, but rather how it can best balance, during the transition to structural reforms, the competing concerns of (1) maintaining sufficient incentives for smaller providers to improve the efficiency of their operations, and (2) ensuring that smaller providers have a reasonable opportunity to compete effectively during the transition and to achieve or maintain the necessary scale to compete effectively after structural reforms are implemented. In this regard, the Commission finds that significant potential harm to competition could result if the Commission sets rate tier boundaries at levels that are too low to allow smaller competitors to remain in the market pending implementation of structural reforms. The Commission concludes that the harm to the public interest will be greater if the Commission set the rate tier boundary for the transition period lower than the optimum level, than if the Commission set it higher than the optimum level. Therefore, in setting the boundary between the highest and next-highest tiers, the Commission concludes that the Commission should err on the side of setting the boundary too high.

142. In order to ensure that VRS competition is preserved pending the implementation of structural reforms, therefore, the Commission will redraw the Tier II/III boundary at 1 million monthly minutes. Setting the Tier II/III boundary at the 1 million minute level will serve to offset the potential competitive impact of lowering per minute reimbursement rates and thus will allow relatively well established but currently less efficient providers to operate within compensation rate categories that reflect their currently higher costs.

143. In addition, the Commission adjusts the boundary between Tiers I and II, currently at 50,000 monthly minutes, up to 500,000 monthly minutes. The Commission agrees with the Fund administrator that the rates for all monthly minutes up to 500,000 should be merged, inasmuch as the rates applicable to these minutes are already virtually equal and the historical record

does not reflect significant cost differences between smaller and larger companies operating within these ranges.

144. In summary, for purposes of setting rates applicable to the transition period prior to implementation of structural reforms, the Commission will merge existing Tiers I and II into a new Tier I, and carve out a new Tier II, applicable to the range of 500,001—1 million monthly minutes, from the lower portion of existing Tier III. The existing and new tiers are shown in Table 1 below.

Table 1—Reconfigured Rate Tiers for VRS Compensation

Tier numbers

Existing tier definition (The range of a provider's monthly VRS minutes to which the Tier is applicable)

New tier definition (The range of a provider's a monthly VRS minutes to which the Tier is applicable)

I

0-50,000

0-500,000

II

50,001-500,000

500,001-1 million

III

Over 500,000

Over 1 million

145. To minimize any unintended consequences from the adjustment of the Tier II/III boundary, the Commission will phase in the divergence of the rates applicable to Tier II and Tier III over time, as VRS compensation rates in general are being moved closer to actual costs. This is shown below in Table 2.

Determination of a Cost-Based Rate and a Transitional Rate Plan

146. In the 2012 VRS Rate Filing, RLSA stated that VRS providers' weighted average actual per-minute costs were $3.5740 for 2010 and $3.1900 for 2011, and that VRS providers' weighted average projected per-minute costs were $3.4313 for 2012. RLSA proposed that rates be based on the average of these three numbers, or $3.396 per minute, with appropriate adjustments to reflect rate tiers. Implementing the proposed cost-based rate, however, would require per minute rate reductions of $2.844 ($6.24-$3.396) in the Tier I rate, $2.834 ($6.23-$3.396) in the Tier II rate, and $1.674 ($5.07-$3.396) in the Tier III rate. To avoid such dramatic immediate reductions, RLSA proposed that the $3.396 cost based rate be phased in over a multi-year time period, with the rates restructured in two tiers instead of the current three tiers. Based on equal yearly rate reductions over a three-year phase-in period, RLSA proposed that rates be set initially by reducing each tier by about one-third of the foregoing amounts, resulting in initial rates of $5.2877 per minute for Tiers I and II (applicable to a provider's first 500,000 minutes each month) and $4.5099 per minute for Tier III (applicable to a provider's monthly minutes in excess of 500,000).

147. In its May 1, 2013 TRS compensation rate filing, RLSA updated the VRS cost information presented in the 2012 VRS Rate Filing. The administrator reported that the weighted averages of the actual per-minute costs reported by providers are $3.2477 for 2011 and $3.0929 for 2012, and that weighted averages of providers' per-minute projected costs are $3.3894 for 2013 and $3.7102 for 2014.

148. As noted above, the Commission finds that RLSA's use, in this instance, of a combination of provider's projected costs and actual, historical costs is appropriate for the purpose of setting rates for the transition period. Although the Commission remains concerned about the accuracy of provider projections in general, in this instance the inclusion of projected costs does not appear to inject a significant bias. Indeed, had the Fund administrator excluded 2012 projected costs from the calculation, and simply taken an average of the two historical cost figures (from 2010 and 2011), the result would have been virtually the same. The Commission also approves RLSA's use of weighted averages in calculating actual and projected costs. The Commission finds reasonable RLSA's determination that a rate based on providers' reasonable costs, if adopted, would be $3.396 per minute, the average of three figures representing providers' historical costs for 2010, historical costs for 2011, and projected costs for 2012. RLSA's estimate is also within the range of provider cost figures presented in RLSA's most recent TRS rate filing.

149. The Commission concurs with RLSA that taking a step-by-step transition from existing, tiered rates toward a unitary cost-based rate is appropriate. Immediate imposition of a unitary cost-based rate would represent a significant and sudden cut to providers' compensation with potentially negative consequences for consumers. Rather than RLSA's proposed three-year transition, however, the Commission concludes that a somewhat longer “glide path” towards a unitary cost-based rate strikes the correct balance. As discussed in the Further Notice, as the Commission implements structural reforms, the Commission proposes to transition to a new ratemaking approach that uses competitive bidding to establish market-based rates. The Commission's structural reform plan will take a period of years to implement fully. Accordingly, until then, the Commission adopts a multi-year “glide path” towards cost-based rates. In addition, rather than RLSA's proposed yearly rate adjustments, the Commission finds that smaller six-month rate adjustments will provide a less disruptive “glide path” for providers. To improve the predictability of reimbursements and assist providers in planning efficiently for this transition, the Commission now determines the rates that will be in effect for the next four years, subject to exogenous cost adjustments, unless implementation of structural reforms and/or related changes in methodology supports revision of the rates prior to that time.

150. The Commission finds it appropriate to “jump-start” the transition to cost-based rates by setting a uniform $0.25 rate reduction for the initial rate period. The effective date of the initial rates set herein will be the later of July 1, 2013, or August 5, 2013. Those initial rates, which will remain in effect through December 31, 2013, will be $5.98 per minute for new Tier I (applicable to a provider's first 500,000 minutes each month), and $4.82 per minute for new Tier II (applicable to a provider's minutes between 500,001 and 1 million each month) and new Tier III (applicable to a provider's monthly minutes in excess of 1 million). These rates are each about $0.25 lower than the existing rates applicable to the corresponding ranges of minutes.

151. Subsequently, the Tier III rate will be reduced in $0.19 increments every six months, so that at the end of four years (unless the rate has been adjusted by then to take account of implementation of structural reforms) it will reach $3.49, a level approaching RLSA's estimate of the weighted average of actual per-minute VRS costs. The

rates for the other tiers will be reduced at a slower pace relative to current levels, in order to ensure that smaller VRS providers have a reasonable opportunity to improve the efficiency of their operations and to reach the optimum scale to compete effectively after the implementation of structural reforms. Thus, after the initial $0.25 drop, the Tier I rate will be reduced by $0.23 (a larger absolute reduction, but a smaller percentage reduction than for Tier III) every six months until January 1, 2016, when (unless the rate has been adjusted by then to take account of implementation of structural reforms) the reductions will begin to accelerate. As to Tier II, while the Commission has determined in section IV.C above that it is appropriate to carve out a new Tier II in order to allow smaller competitors a full opportunity to improve efficiencies and achieve scale, the Commission will not initially differentiate the rates for new Tiers II and III. Rather, the rates for new Tiers II and III are initially set equal to each other, at $4.82 per minute, to avoid any sudden, unintended consequences from the reconfiguration of tiers. In subsequent periods, as the rates for Tiers I and III are reduced further, the Tier II rate will remain stable for several periods at $4.82, so that it becomes differentiated from the Tier III rate and so that the gap between the rates for Tiers I and II will progressively diminish until the rates for those two tiers are equal. The Tier I and Tier II rates will then remain equal to each other while incrementally declining until the end of the transition. Despite these individual variations in the rate of change for the rates in each tier, all rates are progressively reduced over the four-year plan, and all rates reach levels approaching, but higher than, actual costs at the end of the four-year period.

152. The progressive adjustment of rates for each tier is illustrated in Table 2 below, which shows: (1) The current interim compensation rates, (2) average provider costs as calculated by RLSA, (3) RLSA's proposed first-year rates, and (4) the rates the Commission adopts for Fund years 2013-14, 2014-15, 2015-16, and 2016-17.

Table 2—Average VRS Provider Costs, Current VRS Compensation Rates, RLSA's Proposed Rates, and the Rates Adopted for Fund Years 2013-14 Through 2016-17

[Footnotes omitted]

Tiers (as reconfigured by this order)

Weighted average provider costs

FY 2012-13 Rates

RLSA's Proposed first-year rates

FY 2013-14 Rates

FY 2014-15 Rates

FY 2015-16 Rates

FY 2016-17 Rates

Tier I

(0-500,000 minutes/month)

$3.396

$6.24/$6.23

$5.2877

$5.98 (Jul.-Dec. 2013)

$5.75 (Jan.-June 2014)

$5.52 (Jul.-Dec. 2014)

$5.29 (Jan.-June 2015)

$5.06 (Jul.-Dec. 2015)

$4.82 (Jan.-June 2016)

$4.44 (Jul.-Dec. 2016)

$4.06 (Jan.-June 2017).

Tier II (500,001-1 million minutes/month)

$3.396

$5.07

$4.5099

$4.82 (Jul.-Dec. 2013)

$4.82 (Jan.-June 2014)

$4.82 (Jul.-Dec. 2014)

$4.82 (Jan.-June 2015)

$4.82 (Jul.-Dec. 2015)

$4.82 (Jan.-June 2016)

$4.44 (Jul.-Dec. 2016)

$4.06 (Jan.-June 2017).

Tier III (over 1 million minutes/month)

$3.396

$5.07

$4.5099

$4.82 (Jul.-Dec. 2013)

$4.63 (Jan.-June 2014)

$4.44 (Jul.-Dec. 2014)

$4.25 (Jan.-June 2015)

$4.06 (Jul.-Dec. 2015)

$3.87 (Jan.-June 2016)

$3.68 (Jul.-Dec. 2016)

$3.49 (Jan.-June 2017).

153. The rates established in document FCC 13-82 will apply as scheduled to all VRS providers absent further action by the Commission. During the “glide path” period, however, the Commission may adjust the compensation rate to reflect exogenous cost changes, including the shedding of service responsibilities by VRS providers as VRS components begin to be provided by neutral entities. The Commission reserves the right to revisit the rates adopted in document FCC 13-82 if provider data shows that, notwithstanding the Commission's actions, the rates remain substantially in excess of actual provider costs.

Final Regulatory Flexibility Certification

154. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the

2011 VRS Reform FNPRM

in this proceeding. The Commission sought comment on the possible significant economic impact on small entities by the policies and rules proposed in the

2011 VRS Reform FNPRM,

including comment on the IRFA. No comments were received on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

155. Under Title IV of the Americans with Disabilities Act (ADA), the Commission must ensure that telecommunications relay services (TRS) “are available, to the extent possible and in the most efficient manner” to persons in the United States with hearing or speech disabilities. Section 225 of the Communications Act of 1934, as amended (Act) defines TRS as a service provided in a manner that is “functionally equivalent” to voice telephone services and directs the Commission to establish functional requirements, minimum standards, and other regulations to carry out the statutory mandate. In addition, the Commission's regulations must encourage the use of existing technology and must not discourage the development of new technology. Finally, the Commission must ensure that TRS users “pay rates no greater than the rates paid for functionally equivalent voice communication services.” To this end, the costs of providing TRS on a call are supported by shared funding mechanisms at the state and federal levels. The federal fund supporting TRS is the Telecommunications Relay Services Fund (TRS Fund or Fund), which is

managed by the TRS Fund administrator, subject to the oversight of the Commission. Video relay service (VRS) is a form of TRS that allows persons with hearing or speech disabilities to use sign language to communicate in near real time through a communications assistant (CA), via video over a broadband Internet connection.

156. In the

2011 VRS Reform FNPRM

and subsequent

VRS Structure and Rates PN,

the Commission sought comment on a series of proposals to improve the structure and efficiency of the VRS program, to ensure that it is available to all eligible users and offers functional equivalence—particularly given advances in commercially-available technology—and is as immune as possible from the waste, fraud, and abuse that threaten the long-term viability of the program as it currently operates.

157. In document FCC 13-82, as an important first step in its reforms, the Commission has identified certain discrete areas in which it can explore a new approach of relying on the efforts of one or more non-VRS provider third parties, either in whole or in part, to carry out the Commission's VRS policies. Specifically, the Commission:

• Directs the Commission's Managing Director, in consultation with the Chief of the Office of Engineering and Technology (OET) and the Chief of the Consumer and Governmental Affairs Bureau (CGB), to determine how best to structure, fund, and enter into an arrangement with the National Science Foundation (NSF) (or cause the TRS Fund administrator to enter into such an arrangement) to enable research designed to further the Commission's multiple goals of ensuring that TRS is functionally equivalent to voice telephone services and improving the efficiency and availability of TRS;

• Directs the Managing Director in consultation with the Chief of CGB to establish a two-to three year pilot Internet-based TRS (iTRS) National Outreach Program (iTRS-NOP) to select one or more independent iTRS Outreach Coordinators to conduct and coordinate IP Relay and VRS outreach nationwide under the Commission's (or the TRS Fund administrator's) supervision;

• Promotes the development and adoption of voluntary, consensus interoperability and portability standards, and facilitate compliance with those standards by directing the Managing Director to contract for the development and deployment of a VRS access technology reference platform;

• Directs the Managing Director to contract for a central TRS User Registration Database (TRS-URD) which incorporates a centralized eligibility verification requirement to ensure accurate registration and verification of users, to achieve more effective fraud and abuse prevention, and to allow the Commission to know, for the first time, the number of individuals that actually use VRS; and

• Directs the Managing Director to contract for a neutral party to build, operate, and maintain a neutral video communication service platform, which will allow eligible relay interpretation service providers to compete as VRS providers using the neutral video communication service platform without having to build their own video communication service platform.

158. Because the Commission is not fully departing from its historical regulatory approach for VRS, in the Report and Order, the Commission accompanies the actions describe above with targeted, incremental measures to improve the efficiency of the program, help protect against waste, fraud, and abuse, improve its administration of the program, and to generally ensure that VRS users' experiences reflect the policies and goals of section 225 of the Act. Specifically, the Commission:

• Adopts a general prohibition on practices resulting in waste, fraud, and abuse;

• Requires providers to adopt regulatory compliance plans subject to Commission review;

• More closely harmonizes the VRS speed of answer rules with those applicable to other forms of TRS by reducing the permissible wait time for all VRS calls to be answered within 30 seconds, 85 percent of the time, to be measured on a daily basis;

• Adopts rules to protect relay consumers against unauthorized default provider changes, also known as “slamming,” by VRS and Internet Protocol (IP) Relay providers;

• Adopts rules to protect the privacy of customer information relating to all relay services authorized under section 225 of the Act and to point-to-point video services offered by VRS providers; and;

• Adopts permanently the interim rules adopted in the

2011 iTRS Certification Order,

requiring that providers certify, under penalty of perjury, that their certification applications and annual compliance filings required under § 64.606(g) of the Commission's rules are truthful, accurate, and complete.

159. Consistent with the Commission's incremental approach to reform of the structure of this program, the Commission initiates in document FCC 13-82 a step-by-step transition from the existing tiered TRS Fund compensation rates for VRS providers toward a unitary, market-based compensation rate. Specifically, document FCC 13-82 (1) adjusts a volume-based three-tier rate structure by modifying the tier boundaries and (2) calls for a series of incremental rate reductions, every six months, over a four-year period.

160. No party filing comments in this proceeding responded to the IRFA, and no party filing comments in this proceeding otherwise argued that the policies and rules proposed in this proceeding would have a significant economic impact on a substantial number of small entities. The Commission has, nonetheless, considered any potential significant economic impact that the rule changes may have on the small entities which are impacted. On balance, the Commission believes that the economic impact on small entities will be positive rather than negative, and that the rule changes are needed to combat waste, fraud, and abuse in the TRS program.

161. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the rules. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

162. The Commission believes that the entities that may be affected by the proposed rules are VRS providers and other TRS providers that are eligible to receive compensation from the TRS Fund. Neither the Commission nor the SBA has developed a definition of “small entity” specifically directed toward TRS providers. The closest applicable size standard under the SBA rules is for Wired Telecommunications Carriers, for which the small business size standard is all such firms having 1,500 or fewer employees. Currently, there are ten TRS providers that are authorized by the Commission to receive compensation from the Fund. Six of these entities may be small businesses under the SBA size standard.

163. Certain rule changes adopted in document FCC 13-82 modify rules or add requirements govern

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