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Provision and Marketing of IP Captioned Telephone Service Order

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Released: August 26, 2013

Federal Communications Commission

FCC 13-118

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Misuse of Internet Protocol (IP) Captioned
)
CG Docket No. 13-24
Telephone Service
)
)

Telecommunications Relay Services and Speech-
)
CG Docket No. 03-123
to-Speech Services for Individuals with Hearing
)
and Speech Disabilities
)
)

REPORT AND ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING

Adopted: August 26, 2013

Released: August 26, 2013

Comment Date: [45 days after date of publication in the Federal Register]
Reply Comment Date: [75 days after date of publication in the Federal Register]

By the Commission:

TABLE OF CONTENTS

Heading
Paragraph #
I.
INTRODUCTION .................................................................................................................................. 1
II. BACKGROUND .................................................................................................................................... 5
III. REPORT AND ORDER....................................................................................................................... 11
A. Legal Authority.............................................................................................................................. 11
B. Prohibition of Referrals for Rewards and Other Incentives........................................................... 16
C. Registration, Certification, Equipment, and Eligibility.................................................................. 30
1. Distribution of Equipment....................................................................................................... 36
2. New Users ............................................................................................................................... 60
3. Existing Users.......................................................................................................................... 66
4. Confidentiality of Registration and Certification .................................................................... 74
5. Provider Compliance with Eligibility Requirements............................................................... 76
6. Eligibility Thresholds .............................................................................................................. 78
D. Notification Label .......................................................................................................................... 83
E. Default Captions Off...................................................................................................................... 91
F. Extension of Interim Rules .......................................................................................................... 109
IV. FURTHER NOTICE OF PROPOSED RULEMAKING ................................................................... 111
A. Rate Methodology Used for IP CTS ............................................................................................ 111
B. Centralized Registration and Verification of IP CTS Users ........................................................ 128
C. Migration to State TRS Programs ................................................................................................ 131
D. Mandatory Minimum Requirements............................................................................................ 141
E. Low Income Consumers .............................................................................................................. 144
F. IP CTS Software and Applications .............................................................................................. 145
G. Default Caption Off Requirement................................................................................................ 146
H. Website, Advertising, and Educational Information Notifications .............................................. 151
I.
General Prohibition of Providing Service to Users Who Do Not Need the Service .................... 153

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V. PROCEDURAL MATTERS.............................................................................................................. 154
A. Comment Filing Procedures......................................................................................................... 154
B. Ex Parte Presentations.................................................................................................................. 154
C. Regulatory Flexibility Act ........................................................................................................... 157
D. Paperwork Reduction Act Analysis ............................................................................................. 159
E. Congressional Review Act........................................................................................................... 161
F. Materials in Accessible Formats .................................................................................................. 162
VI. ORDERING CLAUSES..................................................................................................................... 163
APPENDIX A List of Commenters
APPENDIX B Final Rules
APPENDIX C Final Regulatory Flexibility Certification
APPENDIX D Initial Regulatory Flexibility Analysis

I.

INTRODUCTION

1.
In this Report and Order and Further Notice of Proposed Rulemaking, the Commission
takes the next steps in addressing practices related to the provision and marketing of Internet Protocol
Captioned Telephone Service (IP CTS). IP CTS, a form of telecommunications relay service (TRS),
permits people who can speak, but who have a hearing loss and have difficulty hearing over the
telephone, to speak directly to another party on a telephone call and to use an Internet Protocol-enabled
device to simultaneously listen to the other party and read captions of what that party is saying.1 The
steps the Commission takes today will ensure that this service continues to be available to those who need
it, while protecting the service and the Telecommunications Relay Services Fund (TRS Fund, or Fund)
from certain improper practices that, if left unaddressed, will adversely impact both the service and the
Fund.
2.
In the Report and Order, we adopt permanent rules (1) prohibiting referrals-for-rewards
programs and other forms of direct or indirect incentives, financial or otherwise, to register for or use IP
CTS or for referral of IP CTS customers, as described below; (2) requiring each IP CTS provider, in order
to be eligible for compensation from the Fund for providing service to new IP CTS users, (i) to register
each new IP CTS user, and, (ii) as part of the registration process, to obtain from each consumer a self-
certification regarding the consumer's need to use IP CTS and the consumer's understanding that
captioning services are provided by a live communications assistant (CA) and that these services are
supported by a federal fund; and (3) requiring IP CTS providers to ensure that equipment and software
used in conjunction with their service have a default setting of captions off at the beginning of each call,
so that the consumer must take an affirmative step to turn on the captions each time the consumer wishes
to use IP CTS, while allowing IP CTS users to obtain an exemption from this provision upon a showing
of hardship.2
3.
These permanent rules amend and/or replace the interim IP CTS rules the Commission
adopted in January 2013.3 For example, we modify the IP CTS Interim Order's self-certification


1 Generally, IP CTS uses a connection via the public switched telephone network (PSTN) or voice over Internet
Protocol (VoIP) for the voice portion of the call, while the connection carrying the captions between the relay
service provider and the relay service user is via the Internet. See 47 C.F.R. 64.601(12); Telecommunications
Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No.
03-123, Declaratory Ruling, 22 FCC Rcd 379, 385, 14 (2007) (2007 IP CTS Order).
2 We also provide an exception for mobile and web applications, provided that users must log into such applications
and the default switches to captions on only for the limited session while the user is logged on.
3 See Misuse of Internet Protocol (IP) Captioned Telephone Service; Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket Nos. 13-24 and 03-
123, Order and Notice of Proposed Rulemaking, 28 FCC Rcd 703 (2013) (IP CTS Interim Order), review pending
(continued....)
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language for new users and require providers to obtain an additional certification from consumers that
they will not permit non-registered persons to use their devices for IP CTS. In addition, we amend the
rules to require IP CTS providers to register and take specified steps to establish the eligibility of existing
unregistered IP CTS users, as a condition of continuing to offer service to such individuals. We also add
provisions: (1) requiring IP CTS equipment to have labels informing consumers that IP CTS may be used
only by the person(s) registered to use the equipment; (2) prohibiting all providers from receiving
compensation from the Fund for minutes of use generated by consumers using IP CTS equipment,
software, and applications that consumers received at no charge or purchased for less than $75 on or after
the effective date of this rule; and (3) requiring applicants seeking to become certified IP CTS providers
to submit a compliance plan indicating, among other things, that they will not seek reimbursement from
the Fund for service to consumers that do not satisfy our registration or certification requirements.
4.
In the accompanying Further Notice of Proposed Rulemaking (Notice), we seek comment
on whether and how to revise the current rate methodology for IP CTS. Additionally, the Notice seeks
comment on: (1) the extent to which the funding and responsibilities for overseeing and determining
eligibility for IP CTS should be shifted to state TRS programs; (2) use of the TRS User Registration
Database for IP CTS; (3) the need for mandatory minimum standards specific to IP CTS, including
standards on speed and accuracy; (4) requirements for the dissemination of additional educational
information about IP CTS on provider websites and in written materials; (5) whether to adopt any low
income exceptions to the rule restricting the provision of IP CTS equipment for less than $75; (6) whether
to modify the $75 minimum price for software and applications; (7) concerns raised in the comments
about the default caption-off requirement, for example, relating to volume pre-sets, access to 911 services,
and incoming calls; and (8) whether to adopt a general prohibition of providing service to users who do
not need IP CTS.

II.

BACKGROUND

5.
Section 225 of the Communications Act of 1934, as amended (Act), requires the
Commission to ensure that TRS is available, to the extent possible and in the most efficient manner, to
people with hearing or speech disabilities.4 The Act defines TRS as services that enable an individual
with a hearing or speech disability to communicate with other individuals "in a manner that is
functionally equivalent" to a hearing individual's ability to communicate using voice communications
services.5 This requirement is currently accomplished through TRS facilities staffed by communications
assistants (CAs) who relay conversations between persons using various types of assistive communication
devices and persons using end user telephone equipment, such as a standard phone, smartphone, or
computer.
6.
Captioned Telephone Service (CTS) is one type of TRS that works by having a person
who is hard of hearing dial the number she or he wishes to call. The CTS user's phone is automatically
connected to a captioned telephone CA at the same time she or he reaches the called party. Once
connected, the CA re-voices everything the called party says into a voice recognition program that
automatically transcribes those words into captions. The captions then are transmitted directly to the
caller and are displayed on a captioned telephone device, a computer, or a smartphone. The service also
provides captions for incoming calls that are placed using designated phone numbers. The Commission
approved compensation for CTS, which allows calls to be made over wireless or wireline devices using
the public switched telecommunications network (PSTN) or voice over Internet protocol (VoIP), in
(Continued from previous page)


sub nom. Sorenson Communications, Inc. and CaptionCall, LLC v. FCC (D.C. Cir., No. 13-1122, filed Apr. 8,
2013).
4 47 U.S.C. 225(b)(1).
5 Id. 225(a)(3).
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2003.6 IP CTS, by which the consumer utilizes an Internet protocol-enabled device or Internet-enabled
software to simultaneously listen to the other party and read captions of what that party is saying, was
approved in 2007.7 Since that time, this service has been subject to the mandatory minimum standards
that apply to all TRS.
7.
Section 225 of the Act,8 and its implementing regulations, require that the costs caused by
CTS be shared by all subscribers to telecommunications and VoIP services.9 TRS users are to pay rates
no greater than those for functionally equivalent voice service.10 Interstate relay calls and all calls made
via Internet-based forms of TRS, including IP CTS, are funded through mandatory contributions made by
certain providers to the TRS Fund, overseen by the Fund administrator, currently Rolka Loube Saltzer
Associates (RLSA).11 Providers of compensable TRS are then eligible to recover their reasonable costs
of providing service from the Fund in compliance with the Commission's service rules.12 Compensation
rates for IP CTS and interstate CTS providers are determined using a methodology known as the Multi-
state Average Rate Structure Plan (MARS Plan), which calculates the compensation rate for IP CTS using
a weighted average of the state rates for intrastate CTS.13 In the accompanying Notice, we ask whether
use of the MARS plan as the rate methodology for this service remains appropriate, given the unusually
rapid growth of IP CTS in 2012 and early 2013, the declining minutes of use of CTS upon which the
MARS rate is based, and concerns about the accuracy of provider forecasts of IP CTS demand.
8.
IP CTS Interim Order and NPRM. In 2012, the Commission witnessed an unusually
steep increase in the growth of IP CTS minutes. This sudden and unprecedented escalation raised serious
concerns for the Commission that threatened to overwhelm and, therefore, jeopardize the Fund for all
forms of TRS if not immediately addressed.14 In particular, data indicated that there was a sudden and


6 Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities,
Declaratory Ruling, CC Docket No. 98-67, 18 FCC Rcd 16121 (2003) (CTS Declaratory Ruling).
7 See 2007 IP CTS Order. The Commission has received an application for a new form of IP CTS that proposes to
use stenographers to transcribe the oral content of the call instead of using CAs to revoice the oral content into a
speech recognition program. This application is pending. See Application of Miracom USA, Inc. for Certification
to Provide IP Captioned Telephone Service (filed Nov. 23, 2011).
8 47 U.S.C. 225. Section 225 was originally enacted as Title IV of the Americans with Disabilities Act (ADA) and
was amended by the Twenty First Century Communications and Video Accessibility Act (CVAA). See Pub. L. No.
111-260, 103; Pub. L. No. 111-265 (making technical corrections to the CVAA).
9 See 47 U.S.C. 225(d)(3); 47 C.F.R. 64.604(c)(5).
10 47 U.S.C. 225(d)(1)(D).
11 See id. 225(d)(3); 47 C.F.R. 64.604(c)(5) (requiring contributions by providers of telecommunications and
voice over Internet protocol services).
12 See id. 64.604(c)(5)(iii)(E).
13 See Telecommunications Relay Services and Speech- to-Speech Services for Individuals with Hearing and Speech
Disabilities
, CG Docket No. 03-123, Report and Order and Declaratory Ruling, 22 FCC Rcd 20140 (2007) (2007
TRS Rate Methodology Order
).
14 For example, from January to June 2012, the number of minutes increased by 30% and the average monthly rate
of growth doubled for the period June to October 2012. Additionally, in October 2012 alone, minutes reported by
providers exceeded the minutes that the Fund administrator budgeted for this service by 38%. As a result, the total
requested payout also exceeded the budgeted amount by 38%, almost $4 million. See IP CTS Interim Order, 28 FCC
Rcd at 706, 6.. After that, IP CTS usage continued to climb until March 2013, the month in which the interim
rules took effect. Call data submitted by providers to RLSA for March, April, May, and June 2013 indicate that
usage of IP CTS is no longer climbing.
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sharp departure from a trend of declining rates of growth in IP CTS usage over the three prior years.15
The Commission found that absent immediate action, this trend was likely to lead to insufficient funds
being available in the 2012-13 Fund year, triggering a violation of the Anti-Deficiency Act, and
threatening the availability of all forms of relay services upon which consumers rely.16 In order to
prevent this from occurring, on January 25, 2013, the Commission took swift and immediate action, in the
IP CTS Interim Order, to prohibit, on an interim basis, provider practices that appeared to be directly
causing the sharp increase in IP CTS usage by individuals who did not need this service to communicate
in a functionally equivalent manner.17 Specifically, after meeting with and receiving input from interested
consumer and industry stakeholders, the Commission adopted the following interim requirements to
ensure that, going forward, IP CTS would be used only by individuals who needed the service: (1)
consistent with the broad prohibition on a TRS provider's use of any kind of financial incentives or
rewards to use TRS, a specific prohibition against all referrals for rewards programs and any other form
of direct or indirect inducements, financial or otherwise, to subscribe to or use, or encourage subscription
to or use of, IP CTS; (2) a requirement for each IP CTS provider, in order to be eligible for compensation
from the Fund for providing service to new IP CTS users, (i) to register each new IP CTS user, (ii) as part
of the registration process, to obtain from each consumer a self-certification that the consumer has a
hearing loss that necessitates IP CTS to communicate in a manner that is functionally equivalent to
communication by conventional voice telephone users, and the requirements of such self-evaluation form,
and (iii) where the consumer accepts IP CTS equipment free of charge or at a price below $75 from any
source other than a governmental program, to also obtain from the consumer a certification from an
independent, third party professional attesting to the same; and (3) a requirement to ensure that equipment
and software used in conjunction with their service have a default setting of captions off at the beginning
of each call, so that the consumer must take an affirmative step to turn on the captions each time the
consumer wishes to use IP CTS. These interim rules became effective on March 7, 2013, with a
scheduled expiration date of September 3, 2013.
9.
On May 9, 2013, the Consumer and Governmental Affairs Bureau granted limited
waivers of the default caption-off requirement of the interim rule to three providers in response to waiver
petitions that had been filed by four providers.18 The Bureau found that the three providers granted
limited waivers were in substantial compliance with the order, and were making diligent efforts to come
into full compliance.19 The Bureau denied a waiver to the fourth provider, which was found not to have
made a good faith effort to comply with the interim rule.20
10.
The IP CTS Interim Order was accompanied by a Notice of Proposed Rulemaking
(NPRM) in which the Commission sought comment on whether to make permanent, revise, or eliminate
the interim rules. In addition, the NPRM sought comment on a range of additional matters pertaining to


15 The IP CTS Interim Order explained that TRS provider documentation, submitted in monthly requests for
compensation from the Fund, showed that the average monthly growth rates in total IP CTS minutes over the three
prior fund years were 14 percent in 2009-10; 9 percent in 2010-11 and 7 percent in 2011-12. IP CTS Interim Order,
28 FCC Rcd at 707, 7, n.19.
16 The Anti-Deficiency Act provides that an officer or employee of the federal government may not make or
authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure
or obligation. 31 U.S.C. 1341(a)(1)(A).
17 IP CTS Interim Order, 28 FCC Rcd at 706-709, 6-9.
18 Misuse of Internet Protocol (IP) Captioned Telephone Service; Telecommunications Relay Services and Speech-
to-Speech Services for Individuals with Hearing and Speech Disabilities,
Order, CG Docket Nos. 13-24, 03-123, 28
FCC Rcd 6454, 6457-63, 6-18 (CGB 2013) (IP CTS Waiver Order)
19 Id.
20 Id. at 6463-68, 19-27.
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the provision of IP CTS, including whether to extend the self-certification requirements to existing users;
whether to adopt quantitative threshold requirements for IP CTS eligibility; whether professional
certification by individuals attesting to their eligibility in order to get a free IP CTS device should be
made under penalty of perjury; whether to prohibit the free or significantly subsidized distribution of end
user equipment by IP CTS providers; whether to adopt a labeling requirement for end user equipment
restricting its use to eligible persons with hearing disabilities; whether the Commission should amend its
speed of answer rules for IP CTS in light of the default-off rule; whether to require potential IP CTS
providers to describe how they will ensure compliance with the self-certification rules as a pre-condition
to receiving certification; and whether the Commission should link provider compensation to compliance
with the Commission's new rules on certification and restrictions on rewards and free equipment.21

III.

REPORT AND ORDER

A.

Legal Authority

11.
Section 225 of the Act empowered the Commission to adopt the interim rules for IP CTS,
and we conclude that it likewise authorizes the rules we adopt in this order. In short: TRS enables an
individual with a hearing or speech disability to communicate with other individuals "in a manner that is
functionally equivalent" to a hearing individual's ability to communicate using voice communications
services.22 Section 225(b) directs the Commission to ensure that relay services are available to persons
with hearing and speech disabilities "to the extent possible and in the most efficient manner."23 Further,
section 225(d) instructs the Commission to adopt regulations implementing section 225, including
regulations "establish[ing] functional requirements, guidelines, and operations procedures for [TRS],"24 as
well as mandatory "minimum standards" governing the provision of TRS.25
12.
We disagree with Sorenson's claim that the Commission must consider whether "a
regulation is needed because it will eliminate misuse that is `clearly disproportionate' to the burden
placed on hard-of-hearing individuals."26 Sorenson draws that standard by reference to courts'
interpretation of different provisions of the ADA other than section 225, arguing that it should apply here
by analogy.27 To the extent Sorenson suggests that the adoption of section 225 as part of the ADA creates
a heightened burden on the Commission to justify its rules implementing that provision, we disagree for
several reasons. As a threshold matter, section 225 was incorporated in Title II of the Act, and directs the
Commission to prescribe rules to implement that section.28 Thus, the Commission's implementation of its
statutory authority is governed by the Communications Act and the Administrative Procedure Act
(APA),29 which, among other things, specify the purposes and objectives for which the Commission was
created30 and the scope of and standards for review of Commission actions.31


21 IP CTS Interim Order, 28 FCC Rcd at 724-31, 38-55.
22 See 5, supra.
23 47 U.S.C. 225(b)(1).
24 Id. 225(d)(1)(A).
25 Id. 225(d)(1)(B).
26 Sorenson, Ex Parte Letter at 3 (filed Aug. 12, 2013) (Sorenson August 12, 2013 Ex Parte).
27 Id. at 2-3.
28 See generally 47 U.S.C. 225.
29 See generally 5 U.S.C. 551 et seq.
30 See generally 47 U.S.C. 151.
31 5 U.S.C. 706.
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13.
Further, the precedent cited by Sorenson involved the application of ADA requirements
to the entities governed by those requirements, rather than addressing the standard an agency must meet
to adopt rules implementing the ADA. Nor does the text of section 225 itself impose a burden on the
Commission of the sort Sorenson suggests.32 Section 225(b)(1) directs the Commission, "[i]n order to
carry out the purposes established under section 151," to ensure the availability of TRS "to the extent
possible and in the most efficient manner."33 Congress thus qualified the objective of making TRS
"available" by using the caveats "to the extent possible" and "in the most efficient manner," granting the
Commission discretion in implementing that provision. Moreover, the Commission has authority to
balance the goals of section 225 when implementing that provision.34
14.
Similarly, Sorenson asserts that "the text of Title IV of the ADA [incorporating section
225 in the Communications Act] is less protective of telephone companies than the analogous text in
other titles [of the ADA] are to employers, bus systems, and building owners."35 Even if true, its
argument neglects to acknowledge that the requirement of carriers under section 225(c) is to provide TRS
"in compliance with the regulations prescribed under this section"36 rather than under other provisions of
the ADA or on an unqualified basis. Moreover, the scope of functional equivalency is ambiguous, and
thus subject to definition by the Commission under the general administrative law principles governing
agency actions.37 Likewise, in "establish[ing] functional requirements, guidelines, and operations
procedures"38 and mandatory "minimum standards"39 for TRS, the Commission must act, consistent with
its mandate, to ensure that TRS is made available "in the most efficient manner."40 In this regard, the
Commission can take steps to ensure that federal funding for usage of a particular relay service is limited
to users that genuinely need that funded relay service, and preclude federal funding for users that do not
have such a need--whether because they can use ordinary voice telephone service or because an


32 See, e.g., Wheeler v. Hurdman, 825 F.2d 257, 262 (10th Cir. 1987) ("In our review of the antidiscrimination laws
we must be mindful of their remedial purposes, and liberally interpret their provisions to that end. . . . Such
interpretation, however, cannot be used as a justification for rewriting the statutes. Legislative ends are
circumscribed by statutory means. Thus, while the case before us deals with a charge of discrimination, the root of
our inquiry is one of statutory interpretation."). Cf. Ober United Travel Agencies, Inc. v. U.S. Dept. of Labor, 135
F.3d 822, 825 (D.C. Cir. 1998) ("[W]e have recognized that in a post-Chevron era such policy-oriented canons of
statutory construction" as "the old maxim of statutory interpretation that remedial statutes are to be liberally
construed" "may not be used to evaluate agency interpretations of ambiguous statutes").
33 47 U.S.C. 225(b)(1).
34 Sorenson Communications, Inc. v. FCC, 659 F.3d 1035, 1045 (10th Cir. 2011) (Sorenson II) ("The FCC has
discretion to balance the objectives of 225 when they conflict.").
35 Sorenson Aug. 12, 2013 Ex Parte at 3.
36 47 U.S.C. 225(c) (emphasis added).
37 See, e.g., Telecommunications Relay Services and Speech-To-Speech Services For Individuals With Hearing and
Speech Disabilities
, CG Docket No. 03-123, Order on Reconsideration, 21 FCC Rcd 8050, 8057, 15 (2006) ("As
the Commission explained, TRS providers are obligated to provide functionally equivalent service, and that
functionality is defined by the applicable mandatory minimum standards."); Sorenson II, 659 F.3d at 1042 ("Section
225 does not define `functionally equivalent' and therefore leaves the definition to the FCC. . . . Consistent with this
authority, the FCC has determined that `functional equivalency is met when the service complies with the mandatory
minimum standards applicable to the specific service.'") (citing Chevron U.S.A. v. NRDC, 467 U.S. 837, 843-44
(1984); Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005) ("[A]mbiguities in
statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory
gap in a reasonable fashion.")).
38 47 U.S.C. 225(d)(1)(A).
39 Id. 225(d)(1)(B).
40 Id. 225(b)(1).
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alternative (such as amplification) would meet their needs. The Commission's actions in this order do
just that, reflecting its evaluation of the relative advantages and disadvantages of the identified
alternatives in that regard.41 So long as providers satisfy their obligations under the Commission's
regulations implementing section 225, their obligations under section 225(c) are met.
15.
As discussed in greater detail below, our evaluation of the relative advantages and
disadvantages of particular regulatory approaches to IP CTS is informed by the Commission's
experiences with TRS generally, and under the IP CTS Interim Order more specifically. In particular,
some alternative regulatory approaches that arguably might place somewhat fewer burdens on users
would be subject to potential circumvention and abuse by providers--something the Commission has
found to be a recurring problem in the TRS context.42 For example, after initially addressing restrictions
on the provision of financial incentives in exchange for signing up for or using TRS, the Commission
ultimately had to reiterate and expand that holding based on providers' evolving practices attempting
similar actions that (at least arguably) were not squarely addressed by the holdings that had come
before.43 The Commission likewise has cataloged other types of abusive practices, which it has taken


41 This evaluation includes, among other things, the Commission's predictive judgments about certain issues for
which the record does not provide a definitive answer. We disagree with Sorenson's suggestion that BellSouth v.
FCC
stands for the proposition that the Commission cannot rely on predictive judgments where there is (in
Sorenson's view) a lack of evidence of "misuse" of IP CTS. Sorenson August 12 Ex Parte at 2 (citing BellSouth v.
FCC
, 469 F.3d 1052, 1060 (D.C. Cir. 2006)). Rather, in BellSouth, the court found that the record included
evidence that affirmatively contradicted elements of the Commission's analysis, which the Commission had not
adequately addressed. BellSouth, 469 F.3d at 159-60 (discussing evidence that several large purchasers had not been
harmed by the relevant provision in BellSouth's special access tariff, and stating that although an agency's
predictive judgments within its expertise are entitled to particularly deferential review, "the deference owed
agencies' predictive judgments gives them no license to ignore the past when the past relates directly to the question
at issue"). Here, by contrast, the Commission is not ignoring the past, but is instead analyzing the available
evidence and making predictive judgments only where justified.
42 See, e.g., Structure and Practices of the Video Relay Services Program: Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,
CG Docket No. 10-51, CG Docket
No. 03-123, Report and Order and Further Notice of Proposed Rulemaking, 28 FCC Rcd 8618, 8668-69, 130-31
(2013) (VRS Structural Reform Order) ("[r]egarding waste, fraud, and abuse, recent experience confirms that, in
adopting rules aimed at curbing existing abuses, the Commission cannot foresee the specific forms that waste, fraud,
or abuse may take in the future," and thus "in furtherance of our mandate under section 225(b)(1) to ensure that TRS
is available `in the most efficient manner' and the goals underlying the provision and regulation of TRS, we adopt 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"). See also
id
. at 8623, 6 ("providers' self-interest in maximizing their compensation from the Fund may make them less
effective at carrying out the Commission's TRS policies"). Although the Commission sought to address this issue in
the VRS context in part through a general rule prohibiting VRS providers from engaging in fraudulent, abusive, and
wasteful practices, it is unclear whether the types of waste, fraud, or abuse likely to arise in the context of IP CTS--
such as provision of service to users that do not genuinely need the service--would be as readily-identifiable based
on available data alone. Nonetheless, we seek comment in the FNPRM on whether to adopt a similar rule in the IP
CTS context.
43 See, e.g., Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities
, CC Docket No. 98-67, CG Docket No. 03-123, Declaratory Ruling, 20 FCC Rcd 1466 (CGB
2005) (2005 Financial Incentives Declaratory Ruling) (prohibiting a provider's "Brown Bag" program, as it was
called, which allowed customers to receive five points for every minute of VRS placed through the company, with
the customer being able to cash in the points for high speed Internet service); Federal Communications Commission
Clarifies That Certain Telecommunications Relay Services (TRS) Marketing And Call Handling Practices Are
Improper And Reminds That Video Relay Service (VRS) May Not Be Used As A Video Remote Interpreting Service
,
CC Docket No. 98-67, CG Docket No. 03-123, Public Notice, 20 FCC Rcd 1471 (CGB 2005) (2005 TRS Marketing
(continued....)
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steps to address as they emerged.44 As discussed in greater detail below, under the IP CTS Interim Order
there likewise is evidence of providers acting contrary to the policies underlying the rules.45 Although the
Commission has taken other actions to address these issues, such as adopting provider certification
requirements and other regulations, this backdrop nonetheless informs our evaluation of the viability of
various alternative regulatory approaches here.

B.

Prohibition of Referrals for Rewards and Other Incentives

16.
For the reasons noted below, consistent with the existing broad prohibition on a TRS
provider's use of any kind of financial incentives or rewards to use TRS services, we adopt on a
permanent basis a rule specifically prohibiting IP CTS providers from providing referrals for rewards
programs and certain other forms of direct or indirect incentives, financial or otherwise, for the purpose of
getting consumers to register for or use IP CTS. As discussed below, we revise the language of this
prohibition from the rule adopted on an interim basis to ensure that the rule cannot be construed to
prohibit advertising and noncommercial speech--something the Commission never intended to prohibit.
We also adjust the terminology to prohibit direct or indirect "incentives" rather than "inducements" to
register for or use IP CTS. We believe that the term "incentives" is more consistent with the 2005
Financial Incentives Declaratory Ruling
46 and better captures our intent to prohibit any kind of reward for
signing up such consumers or getting them to use the service, rather than prohibit advertising and
outreach conducted to simply educate consumers about this service. Finally, this prohibition now refers
to rewards that provide incentives to a consumer to "register," rather than "subscribe" to use IP CTS
because we believe this more accurately describes the way that consumers sign up to use this service.
17.
Background. In the IP CTS Interim Order, the Commission described various marketing
practices by which an IP CTS provider had been offering monetary rewards for the referral of customers
who signed up for the installation of the provider's IP CTS equipment.47 These rewards were being given
by the provider to its customers, members of the general public, and to hearing and health care
(Continued from previous page)


Public Notice) (prohibiting direct and indirect financial or other tangible incentives to make relay calls and
prohibiting financial incentives or rewards to register with the provider, and emphasizing that financial incentives
are prohibited, even when the benefit goes to a third party rather than the consumer); Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No. 03-
123, Order, 20 FCC Rcd 12503, 12505-06, 6 (CGB 2005) (concluding that offering free or discount long distance
service to TRS consumers constitutes an impermissible financial incentive, and that the programs "directed at giving
the consumer an incentive to make a TRS call in the first place . . . are prohibited"); Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No. 03-
123, Report and Order, and Declaratory Ruling, 22 FCC Rcd 20140, 20173-75, 89-94 (2007) (2007 TRS Rate
Methodology Order
) ("clarify[ing] that providers may not offer consumers financial or other incentives, directly or
indirectly, to make TRS calls" and "set[ting] forth in greater detail the kinds of incentives that are impermissible
under our rules"); VRS Structural Reform Order, 28 FCC Rcd at 8669, 133 (codifying a rule in the VRS context
that will "encompass, but not be limited by, the Commission's numerous prior declaratory rulings describing
wasteful, fraudulent, and abusive practices that violate section 225").
44 See, e.g., Structure and Practices of the Video Relay Service Program, CG Docket No. 10-51, Report and Order
and Further Notice of Proposed Rulemaking, 26 FCC Rcd 5545, 549-51, 4 (2011) (detailing the results of
investigations finding illicit VRS activities).
45 See, e.g., section III.C.1, infra (discussing evidence of potential abuse of and/or efforts to circumvent the
requirement for third-party certification of a user's need for IP CTS as required under the interim rules).
46 See Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities
, CC Docket No. 98-67 and CG Docket No. 03-123, Declaratory Ruling, 20 FCC Rcd 1466 (CGB 2005)
(2005 Financial Incentives Declaratory Ruling).
47 IP CTS Interim Order, 28 FCC Rcd 710-12, 13-14. These were described in detail in the IP CTS Interim
Order
, and so we do not repeat them here.
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professionals, such as audiologists.48 The Commission found good cause to justify the immediate
adoption of an interim rule prohibiting these referrals for rewards programs and any other form of direct
or indirect inducements, to subscribe to or use, or encourage subscription to or use of, IP CTS.49 In an
accompanying NPRM, the Commission sought comment on whether to make permanent, revise, or
eliminate this interim rule, as well as on any alternatives or additional proposals, weighing the potential
benefits of the proposed rule against the potential costs.50
18.
The record contains overwhelming support for the referrals for rewards prohibition, with
nearly all consumer groups and providers agreeing on the need for this rule.51 For example, CTIA states
that not only do such rewards encourage consumers to enroll who do not otherwise need TRS, but the
monetary incentives themselves also add to the costs of providing IP CTS, in turn necessitating higher
TRS Fund contributions.52 The Consumer Groups agree that reward programs "have the potential to
indirectly encourage consumers to use IP CTS regardless of whether they actually need the service to
communicate in a functionally equivalent manner," and that permanently prohibiting such programs will
help "ensure that IP CTS is used only by those with a legitimate need for the service."53 Others suggest
that this prohibition should come as no surprise to providers because a ban against financial incentives for
relay calls has been in place for several years.54 While supporting the ban, Hamilton raises concerns
about the intended scope of the prohibition, seeking clarification that it does not restrict all
wholesale/retail business arrangements.55 Only one commenter, Sorenson, argues against this prohibition,
maintaining that referral fees to audiologists and other hearing loss specialists provide the "most efficient
form of outreach" to consumers who require IP CTS.56 It further suggests that it is "highly implausible"


48 Id. at 710-11, 13. In a variation of these referral programs, the provider was also making donations to charities
on behalf of consumers, contingent on the consumer signing up for the provider's IP CTS phone and service. Id.
49 Id. at 708-09, 9, 710-16, 13-18.
50 Id. at 724-25, 39.
51 See, e.g. Comments of Telecommunications for the Deaf and Hard of Hearing, Inc., Association of Late-Deafened
Adults, Inc., National Association of the Deaf, Deaf and Hard of Hearing Consumer Advocacy Network, Cerebral
palsy and Deaf Organizations, California Coalition of Agencies Serving the Deaf and Hard of Hearing, and
American Association of the Deaf-Blind (collectively "Consumer Groups") at 4, 5; Purple Comments at 4 (referral
fees create "perverse incentives," and may encourage people to sign up for the service even if they do not need it for
effective communications); CTIA Comments at 5 (make rule permanent to "protect the integrity and sustainability
of the TRS Fund"); USTelecom Comments at 6-7 (agreeing that a ban on referral fees is a way for the Commission
to ensure that only qualified users benefit from the provision of IP CTS and noting that referral programs "diminish
the availability of limited TRS resources by encouraging consumers who would not qualify for IP CTS to order the
service" just to gain the benefit); HLAA Comments at 6 (noting that "[f]inancial or other rewards or incentives tend
to shift the focus from the service to the reward"); Sprint Comments at 4-5 (supporting a permanent rule prohibiting
referrals for rewards and suggesting that the Commission take enforcement action for its violation).
52 CTIA Comments at 5.
53 Consumer Groups Comments at 4-5 (adding that businesses and relay vendors "should not be stimulating business
for their monetary benefit by creating a consumer need for the service").
54 See, e.g., Miracom Comments at 68 (the Commission has prohibited any kind of financial incentive to place TRS
calls for eight years, since the Commission's 2005 Financial Incentives Declaratory Ruling).
55 Hamilton Comments at 2. Hamilton notes that wholesale arrangements should not constitute a direct or indirect
inducement because they do not encourage subscription to or use of IP CTS. See also Hamilton Ex Parte Letter,
August 15, 2013, at 3 (Hamilton August 15, 2013 Ex Parte) (arguing that so long as the retailer charges $75 or more
for the equipment, wholesale/retail arrangements are acceptable).
56 Sorenson Reply Comments at 6. Sorenson maintains that locating eligible subscribers in other ways "more than
doubles the cost per customer acquisition." Sorenson Comments at 11.
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that audiologists are behaving unethically by referring individuals who do not require the service. 57
Finally, Sorenson finds the language of the prohibition against all "direct or indirect inducements" to be
too broad, claiming it could be read to encompass any form of outreach or advertising,58 as well as
ordinary wholesale and dealer arrangements.59 Sorenson adds in an ex parte letter that it believes that a
prohibition on advertising would be a violation of First Amendment rights.60 While insisting that the rule
is unnecessary, Sorenson nevertheless recommends that, if a ban is adopted, it be limited to payments to
end users, charities or professionals who certify that end users require IP CTS.61
19.
Discussion. The Commission adopts on a permanent basis the interim proscription
against IP CTS referrals for rewards, as well as any other provider programs that offer or provide
payments or incentives to sign up for or use this service. We agree with the vast majority of commenters
that this prohibition will reduce the risk that IP CTS will be used by ineligible users. The Commission
found in the IP CTS Interim Order that such incentive programs, the growth of which appears to have
coincided with the sudden and unexpected spike in IP CTS usage,62 may well have been incenting
consumers to use the service whether or not it was actually needed.63 More specifically, by enabling
potential customers and third parties to earn money or any other reward either directly or for their friends
or charitable organizations, these incentive programs would, if not prohibited, continue to encourage IP
CTS use by individuals who do not need it to obtain functionally equivalent telephone service.64
20.
Sorenson argues that this type of incentive is the "most efficient means of outreach to
hard-of-hearing consumers who require IP CTS."65 This approach may well help providers to reach some
legitimate, eligible users, but it also tends to encourage enrollment in and use of IP CTS simply to obtain
the incentive. Sorenson further suggests that it is "highly implausible" that audiologists are behaving
unethically and referring ineligible users.66 In fact, as noted in the IP CTS Interim Order, an audiologist's
referral of any consumer, eligible or not, in exchange for a fee would appear to be unethical conduct.67
However, whether an audiologist is behaving ethically or not does not resolve our overall concern. As
explained in the IP CTS Interim Order, the offering or provision of a reward for recommending a specific
brand of IP CTS may influence an audiologist to recommend this service even when a client does not


57 Sorenson Comments at 13.
58 Sorenson Reply Comments at 7.
59 Sorenson Comments at 14.
60 See Sorenson Ex Parte Letter, CG Docket No. 03-123 (July 3, 2013) (Sorenson July 3, 2013 Ex Parte).
61 Sorenson Comments, at 14, 15.
62 IP CTS Interim Order, 28 FCC Rcd at 710, 13 & n. 35. As noted above, after the Commission adopted the
interim rules banning such programs, the unusual growth in IP CTS usage appears to have ceased.
63 Id. at 711-13, 14.
64 Id. at 711-13, 14. For example, the Interim Order cites one advertisement that urged users to "get a high-quality
captioned phone for free while you raise money for CHC!," giving users the opportunity to contribute to a favorite
charity simply by acquiring an IP CTS device, even if the user did not need the service to communicate in a manner
that is functionally equivalent to communication by voice telephone users. Id.
65 Sorenson Comments at 10.
66 Id. at 13.
67 As we noted in the IP CTS Interim Order, accepting such financial reward would appear to be contrary to the
American Academy of Audiology's Code of Ethics, which prohibits members from giving or receiving benefits or
items of value for receiving or making referrals. IP CTS Interim Order, 28 FCC Rcd at 713-14, 15 (citations
omitted).
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need this service, or could benefit more from other assistive devices or hearing technologies.68 As we
also noted, the patient-professional (or client-professional) relationship is likely to prompt patients to give
considerable weight to recommendations made by their health care and hearing professionals, resulting in
the use of IP CTS by individuals who do not truly need the service to communicate by phone. The IP
CTS Interim Order
specifically sought to minimize any inadvertent encouragement of IP CTS use when
other telephone accessibility solutions (e.g., phones with hearing aid compatibility and/or amplification
required by Commission rules)69 could offer persons with hearing loss a better telephone experience, i.e.,
greater functional equivalence to conventional voice telephone use.70
21.
The rules we adopt are consistent with the types of actions the Commission previously
has taken to restrict financial incentives in exchange for signing up for or using TRS.71 In these prior
orders, the Commission consistently has maintained that rewards or incentives offered or provided either
directly to consumers or to third parties, in exchange for a consumer's registration for or increased use of
TRS, are expressly included in the prohibition against financial incentives.72 This prohibition includes a
provider's payments to consumers for using the service or, in this instance, for signing up for the
service.73 Offering financial incentives to consumers, the Commission has said, transforms the TRS
program from a means of achieving functionally equivalent communications service for persons with
disabilities into "an opportunity for their financial gain."74
22.
Further, registration incentives raise particular concerns for IP CTS due to the unique
characteristics of this service. As we explained in the IP CTS Interim Order, IP CTS is unlike other
forms of TRS because it does not require special skills such as sign language, is generally automated and


68 IP CTS Interim Order, 28 FCC Rcd at 713-14, 15.
69 See 47 C.F.R. 20.19, 68.4, 68.300, 68.317.
70 IP CTS Interim Order, 28 FCC Rcd at 703, 15, n.45.
71 See 2005 Financial Incentives Declaratory Ruling (prohibiting a provider's "Brown Bag" program, as it was
called, which allowed customers to receive five points for every minute of VRS placed through the company, with
the customer being able to cash in the points for high speed Internet service); Federal Communications Commission
Clarifies That Certain Telecommunications Relay Services (TRS) Marketing And Call Handling Practices Are
Improper And Reminds That Video Relay Service (VRS) May Not Be Used As A Video Remote Interpreting Service
,
CC Docket No. 98-67, CG Docket No. 03-123, Public Notice, 20 FCC Rcd 1471 (2005) (2005 TRS Marketing
Public Notice
) (prohibiting direct and indirect financial or other tangible incentives to make relay calls and
prohibiting financial incentives or rewards to register with the provider, and emphasizing that financial incentives
are prohibited, even when the benefit goes to a third party rather than the consumer); Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No. 03-
123, Order, 20 FCC Rcd 12503, 12505-06, 6 (2005) (concluding that offering free or discount long distance
service to TRS consumers constitutes an impermissible financial incentive, and that the programs "directed at giving
the consumer an incentive to make a TRS call in the first place . . . are prohibited").
72 See 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20182, 92-93. That order also prohibited incentives
that result in the registration of consumers with a TRS provider, as well as incentives that increase a subscriber's
usage of TRS noting that providers seeking compensation from the Fund "may not offer consumers financial and
similar incentives, directly or indirectly, to use their service." Id. at 20182, 92, 20183, 96. The Commission
explained that a "financial incentive program is not permissible even in circumstances where the benefit goes to a
third party" (id. at 20182, 93), adding that contributions made to charitable organizations, e.g., based on the
number of calls made by a consumer or based on a provider's failure to meet specific performance standards, are
among the prohibited incentives (id. at 20182, 92).
73 Id. (prohibited actions include "offering financial incentives or rewards to register with the provider, add the
provider to the consumer's speed dial list, or to become a provider's `VIP' customer").
74 2005 Financial Incentives Declaratory Ruling, 20 FCC Rcd at 1469, 8. See also HLAA Comments at 6
("[f]inancial or other rewards or incentives tend to shift the focus from the service to the reward").
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invisible to the calling parties, and allows a conversation to flow without interruption.75 And since IP
CTS phones offer many, if not all, of the same features and functions available on conventional phones,
consumers can subscribe to and use IP CTS without sacrificing the availability of any ordinary voice
communication functionality, should they be able to use it. As a result, we believe that consumers are
less likely to "self-screen" in choosing whether to subscribe to IP CTS than in choosing whether to
subscribe to other forms of TRS.76 And since IP CTS, like other Fund-supported relay services, is costly
to provide,77 ensuring that IP CTS is made available "in the most efficient manner"78 to those consumers
who actually need it requires us to pay special attention to the manner in which this unusually transparent
service is marketed to consumers.
23.
Consistent with the Commission's earlier financial incentives rulings, and for the
additional reasons discussed above, we prohibit all referrals for rewards programs and any other form of
direct or indirect consumer incentives, financial or otherwise, that are initiated, sponsored or operated by
TRS providers, to register for or use IP CTS. For the reasons stated above, we also prohibit the offering
or provision of incentives to third parties, such as audiologists and other hearing health professionals, to
increase consumer registration for or use of IP CTS. We find that these incentives are likely to waste the
Fund's resources on payments for services used by individuals who may not need the service and
therefore are inconsistent with the goals and objectives of section 225 of the Communications Act.
24.
As noted above, although supporting the general prohibition of referrals for rewards,
Hamilton is concerned that a literal interpretation of the rule could be construed to prohibit legitimate
marketing and outreach practices. Specifically, Hamilton seeks clarification that the rule would not
prohibit (1) wholesale/retail business arrangements wherein a third party contracts with an IP CTS
equipment distributor to buy IP CTS equipment at wholesale and sells that equipment for a profit at a
retail price of $75 or more; and (2) wholesale/ retail arrangements where the retailer is an audiologist or
other independent hearing professional who purchases the phone from an IP CTS equipment distributor or
wholesaler and sells the phone at retail for a price of $75 or more. Hamilton believes that such
arrangements are benign because they represent an outsourcing of advertising and marketing by the IP
CTS provider, and there is no benefit to the IP CTS user in connection with such wholesale/retail
arrangement. Hamilton adds that in the case of an audiologist, when the audiologist is acting in the same
capacity as any other wholesale of IP CTS equipment, and is not issuing eligibility certifications to
consumers at the time of the retail sale, there does not appear to be the same policy concern that the
audiologist is being improperly compensated by the provider.79 Likewise, Sorenson asks the Commission
to make clear that any prohibition on referrals for rewards only applies to end users, charities, or hearing
health professionals responsible for certifying the particular end user of IP CTS, and not to advertising or
wholesale arrangements. Sorenson also alleges that the language prohibiting referrals for rewards could
be interpreted to prohibit noncommercial speech in violation of the First Amendment.80 Finally, Sorenson
argues that when the consumer pays $75 or more for the equipment, that serves as an independent check
on the eligibility of the individual to receive service, and that advertising is an important method of
informing consumers of the usefulness and availability of the service.81


75 See IP CTS Interim Order, 28 FCC Rcd at 716, 20.
76 See id.
77 The current compensation rate for IP CTS is $1.7877 per minute.
78 47 U.S.C. 225(b)(1).
79 See Hamilton Comments at 2-4.
80 See Sorenson July 3, 2013 Ex Parte at 2-5.
81 See Sorenson Comments at 13-16.
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25.
We acknowledge that advertising is a legitimate way for providers to market their
specific IP CTS offerings to consumers and note that neither the interim rules nor the rules proposed in
the IP CTS Interim Order82 bar providers from conducting such advertising or otherwise informing
consumers and the general public about their services. Rather, as noted above, the Commission's
prohibition against provider activities that directly or indirectly offer or provide incentives or rewards is
consistent with the previous prohibitions imposed by the Commission with respect to incentives and
rewards for the registration or use of all forms of TRS.83 Nevertheless, to address the concerns raised by
Hamilton and Sorenson and to clarify our intent, we modify the language of this prohibition to explicitly
prohibit IP CTS providers from (1) offering or providing to any person or entity any form of direct or
indirect incentive, financial or otherwise, to register for or use IP CTS and (2) offering or providing to a
third party hearing health professional,84 any direct or indirect incentive, financial or otherwise, that is
tied to a consumer's decision to register for or use IP CTS.85
26.
Similarly, with regard to the distribution of IP CTS equipment, we clarify that the
incentives prohibition does not apply to the relationship between an IP CTS provider or equipment
distributor and an equipment retailer,86 where the retailer is not a hearing health professional. Where the
retailer is not a professional on whom a consumer may rely for objective advice on solutions for hearing
loss, we believe that consumers are less likely to be unduly influenced to purchase equipment that they do
not need. On the other hand, hearing health professionals tend to be perceived by consumers as reliable
sources of neutral, objective advice on assistive technology, and their codes of ethics encourage such
reliance by consumers.87 Therefore, where the retailer is a professional on whom a consumer may rely for
objective advice on solutions for hearing loss, we believe that consumers will be less likely to question
advice that they need or should use IP CTS. And where provider practices enable a professional to earn
greater profits from the sale of IP CTS equipment than from, e.g., enhanced amplification phones, that
opportunity to earn greater profits may influence the nature of the advice given to the patient or client
(who should otherwise be able to expect objective advice from that professional).88 In that respect, an
enhanced profit offered to a retailing professional is akin to a reward for referral, which is prohibited for
all the reasons discussed above.89


82 IP CTS Interim Order, 28 FCC Rcd at 745, Appendix E.
83 See generally 2005 Financial Incentives Declaratory Ruling.
84 The term "hearing health professional" refers to any professional, both medical and non-medical, that advises
consumers with regard to hearing disabilities.
85 See Sorenson, Ex Parte Letter, Exhibit A (filed July 18, 2013) (Sorenson July 18, 2013 Ex Parte) (proposing
modified language for section 64.604(c)(8) of the rules).
86 Commenters refer to this as an ordinary "wholesaler or dealer" relationship. Sorenson Comments at 14.
87 See, e.g., American Academy of Audiology, Code of Ethics, Principle 4 (rev. April 2011) (AAA Code) ("Members
shall provide only services and products that are in the best interest of those served"); id., Rule 4c ("Individuals shall
not participate in activities that constitute a conflict of professional interest"), Principle 5 ("Members shall provide
accurate information about the nature and management of communicative disorders and about the services and
products offered"). The code of ethics is available at
<http://www.audiology.org/resources/documentlibrary/Pages/codeofethics.aspx>; (last visited Aug. 16, 2013).
88 For example, a professional with a financial incentive to do so may inadvertently tout the benefits of using IP CTS
to a patient or client over other readily available options, even if it is not needed or not the best choice for the patient
or client.
89 As noted above, such practices appear to contravene the AAA Code. See AAA Code, Rule 2b ("Individuals . . .
shall not give or accept benefits or items of value for receiving or making referrals").
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27.
Sorenson argues further that there is no evidence in the record to support the assumption
that hearing health professionals will sell equipment to patients who do not need the equipment in order to
make a profit.90 Sorenson's argument misses the mark. The concern is not whether an individual needs
some form of assistive technology; the concern is whether the availability of a profit91 may result in more
advice from professionals to their patients or clients to use IP CTS, even where it would not be the best
assistive technology for the individual, which could result in the unnecessary expenditure of funds from a
federal program. In other words, offering a free or low-price IP CTS phone to a retailing hearing health
professional is not materially different from the other types of professional rewards prohibited by the IP
CTS Interim Order
and by the permanent rules adopted today.92 We therefore retain our prohibition on
referrals for rewards where a provider sells or gives away equipment to a hearing health professional or
any other professional on whom a consumer may rely for objective advice on solutions for hearing loss,
and the professional makes a profit on the sale of the equipment to his or her patients or clients.
28.
Likewise, we remain concerned about joint marketing arrangements between IP CTS
providers and hearing health professionals and other professionals upon whom consumers rely for advice
to address their hearing health needs. Sorenson urges permission to conduct such "co-operative
marketing practices, where an IP CTS provider and audiologist jointly fund marketing campaigns to
shared bases of potential customers and patients that are not tied to the number of referrals made."93
However, such joint marketing arrangements can benefit hearing health professionals in many ways, for
example by providing additional patient or client opportunities.94 Thus, these joint marketing
arrangements are also akin to a reward for a referral because they benefit the hearing health professional
e.g., through opportunities for cross-referrals, promotional cost sharing, and the like. Moreover, the joint
marketing campaigns themselves could be perceived by the consumer as an endorsement of the IP CTS
provider by his or her hearing health professional, even if there is no individualized recommendation from


90 Contra Sorenson Ex Parte Letter, August 5, 2013, at 4 (Sorenson August 5, 2013 Ex Parte).
91 For example, professionals could make a significant profit of $75 or more per phone if a provider (who previously
gave away phones to consumers for free) decided to give away phones to professionals, who could then sell the
phones for $75 or more.
92 See also Hamilton August 15, 2013 Ex Parte at 3 (arguing that to the extent the Commission adopts a general
requirement that IP CTS users must purchase equipment for $75 or more, then there would no longer be a need to
prohibit third party professionals from participating in wholesale/retail arrangements). Although Hamilton is correct
that the Commission would no longer be concerned about undue influence on third party certifications if there were
no third party certifications, the Commission is still concerned about how the opportunity to make a profit on the
sale of IP CTS equipment would influence a hearing health professional to recommend the use of a product that
could result in the unnecessary expenditure of funds from a federal program.
93 Sorenson July 3, 2013 Ex Parte at 3.
94 See, e.g., EarTech Audiology web page promoting CaptionCall, found at
http://www.eartechaudiology.com/caption-call-utah (last visited August 15, 2013) ("Call our office today on how to
get a "Free Caption Call'"). Because this advertisement is using the inducement of a free phone to encourage the
consumer to come to the audiologist's office, this does not appear to be an objective audiologist attempting to
determine what assistive technology best satisfies the consumer's needs. See also New England Hearing
Instruments, Inc. web page promoting CaptionCall found at http://www.newenglandhearing.com/captioncall-phone/
(last visited August 15, 2013) ("CaptionCall is the ideal phone for hearing-impaired people featuring closed-
captioning of your conversation!"). Calling the CaptionCall phone the "ideal phone" does not appear to be an
objective recommendation of assistive technologies. See also Hear Now web page promoting CaptionCall found at
http://hearnowllc.com/caption%20call.htm (last visited August 15, 2013) ("Trouble Hearing on the Telephone?
Then you really want this! And the cost is right. ABSOLUTELY FREE!") Again, this promotion of a free phone
does not appear to reflect an objective professional recommendation.
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the hearing health professional to the patient or client.95 In short, a joint marketing arrangement between
an IP CTS provider and a hearing health professional rewards the professional for encouraging the
consumer to register for or use the IP CTS provider's service, whether or not the consumer needs such
service to communicate by telephone. We therefore find that joint marketing arrangements between IP
CTS providers and hearing health professionals upon whom consumers potentially rely for advice in
regard to their hearing loss violate our prohibition of referrals for rewards and other incentives.
29.
Sorenson asks that the prohibition on compensation for violations of our incentives rule
be limited to denial of payment for services provided to the specific consumers influenced or affected by
such incentives, until such time that the IP CTS provider stops providing such incentives and the
consumer obtains third party certification of his or her eligibility to use IP CTS.96 We decline to make a
general determination at this time regarding the scope of withholdings, because we would need to
examine the facts of each arrangement on a case-by-case basis to determine the appropriate amount of
withholding for each violation. Moreover, we decline to allow third party certification to serve as a
means of curing a provider's failure to comply with our prohibition of referrals for rewards and other
incentives. We also note that once all existing IP CTS users who paid less than $75 for IP CTS
equipment are registered for service, our rules will no longer require third party certifications. The
potential for abuse of third party certifications by IP CTS providers was one of the reasons for eliminating
third party certification as part of the registration process.97 There is no public interest reason for
allowing IP CTS providers who have not been in compliance with our rules to cure such noncompliance
through use of a process that has the potential to be subject to abuse. Finally, we remind IP CTS
providers that, in addition to the remedies discussed herein, violations could result in other remedies
available by law to address noncompliance, including but not limited to, forfeitures,98 and revocation of
certification to provide IP CTS.99

C.

Registration, Certification, Equipment, and Eligibility

30.
In the period preceding the promulgation of the IP CTS Interim Order, some providers
had initiated programs to give away end user IP CTS equipment to IP CTS users who registered for their
services.100 Concern that the recent spike in IP CTS usage may have been the direct result of these
equipment giveaways, and that there was no process in place to determine whether such consumers
actually needed IP CTS to communicate over the phone, the Commission adopted an interim rule
expressly requiring that providers that give away, or sell at a cost of less than $75, equipment to potential
or existing IP CTS users, must require such users to submit to the provider a certification from a
professional that the user needs IP CTS in order to achieve functionally equivalent telephone service.101


95 The issue here is the consumer perception caused by a joint marketing arrangement, regardless of whether the
professional is in fact endorsing the IP CTS provider, although the advertisements cited in the preceding footnote are
all clear endorsements of a particular provider's IP CTS phones.
96 Sorenson, Ex Parte Letter at 4, Exhibit A (filed July 18, 2013).
97 See section 35, infra.
98 See 47 C.F.R. 1.80.
99Id. 64.606(e)(2).
100 For example, prior to the IP CTS Interim Order, Sorenson had the following ad on its Sorenson website: "Free!
Limited time offer! Sign up today and get Sorenson for Free--regularly $149."
<http://Sorensonphone.com/?gclid=CIXPytHR8rMCFcqY4AodkVwAdQ>; (last viewed Nov. 28, 2012).
Apparently, this limited time offer had been in effect for at least several months, with no announced termination
date. In addition to the general concerns we raise about the free equipment distribution program, we note that the
specter of a limited time offer may encourage consumers to quickly take advantage of an offer they believe is about
to end.
101 IP CTS Interim Order, 28 FCC Rcd at 717-18, 21-22.
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The Commission further noted that while some state equipment distribution programs provide IP CTS
devices to their residents at no charge, these state programs generally have a screening process that
ensures that those receiving the equipment do not have the financial resources to purchase it on their own
and need such devices to be able to communicate by phone.102 By contrast, the Commission had no
evidence that providers distributing IP CTS equipment were effectively screening users of their service
for eligibility prior to giving away the equipment or registering new users for the service.103
31.
On the other hand, the Commission found that if the consumer has to invest a significant
amount in IP CTS equipment, the equipment price will generally screen out individuals who do not need
IP CTS.104 When a consumer is required to make a significant investment in an IP CTS phone, the
Commission reasoned, the individual must first consider whether he or she needs the service, i.e., the
purchaser is more likely to evaluate whether the benefit from the service is worth the cost of the
specialized phone. Concluding that a professional certification of need should not be required if the
provider charges an amount that is sufficient to affect most consumers' purchasing decisions, but is not so
high as to make the purchase of equipment infeasible, the Commission set the threshold amount for this
purpose at $75 on an interim basis.105
32.
Despite the adoption of the third-party certification requirement, the Commission
continued to be concerned that by giving away devices at no cost, providers were encouraging consumers
to obtain and use the free equipment whether or not they had a hearing disability that necessitated the use
of IP CTS. Therefore, in addition to seeking comment on the interim rule requiring third party
certification when phones are provided for less than $75,106 the Commission sought comment on a
proposal to simply prohibit all provider programs that give away or loan equipment to potential or
existing IP CTS users at no cost or at a de minimis cost.107
33.
The Commission also found good cause to adopt an interim rule requiring each IP CTS
provider, in order to be eligible for compensation from the Fund for providing service to new IP CTS
users, to register each new IP CTS user.108 As part of this registration, the Commission directed IP CTS
providers to obtain a self-certification of eligibility from each new IP CTS user stating that: (1) the
consumer has a hearing loss that necessitates IP CTS to communicate in a manner that is functionally
equivalent to communication by conventional voice telephone users; (2) the consumer understands that
the captioning service is provided by a live CA; and (3) the consumer understands that the cost of the IP
CTS calls is funded by the TRS Fund.109 The Commission explained that these requirements were


102 For example, the Pennsylvania equipment distribution program requires applicants to meet income eligibility
criteria, specified as having gross income equal to or less than 200% of the federal poverty guidelines, as well as
have professional certification that an applicant has "a disability or disabilities that prevents him/her from making or
receiving telephone calls independently."
<http://disabilities.temple.edu/programs/assistive/tddp/docs/TDDP_application_2012-07.pdf>; (last visited July 1,
2013).
103 IP CTS Interim Order, 28 FCC Rcd at 718, 23, n.71.
104 Id. at 717, 22.
105 IP CTS Interim Order, 28 FCC Rcd at 717, 22. The Commission noted that many IP CTS devices sell for $99,
a price point which is comparable to several off-the-shelf telephones used by the general public and which providers
claim allow for such consumers to assess whether the benefits of purchasing the equipment outweighs its cost. Id.
at 717-18, 22.
106 Id. at 726-27, 42.
107 Id. at 725-26, 40-41.
108 Id. at 717-19, 21-24.
109 Id. at 719, 25.
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intended to highlight important information that may be relevant to the consumer's decision to use the
service.110 In addition, the Commission directed that self-certification be made on a form separate from
any other user agreement (such as on a separate page), and required a separate signature specific to the
self-certification. This requirement, distinguishable from the method that had been used by some
providers of adding a check box to a lengthy service agreement, was found by the Commission to be
necessary to ensure that consumers are alerted to the importance of providing a true and accurate
certification.111 The Commission solicited comment on making these interim rules permanent, on
whether registration and self-certification should be extended to existing users, and on whether the latter
should be required to be made under penalty of perjury.112
34.
We now adopt on a permanent basis the interim rule requiring IP CTS providers to
register each new IP CTS user, and adopt a new rule requiring providers to register all existing IP CTS
users within specified timelines. We amend slightly the language needed for self-certification from that
in the interim rule, to ensure that IP CTS users fully understand the certification, and to have the
consumer certify that he or she will not permit individuals who are not registered to use the service.
35.
We also adopt a rule prohibiting TRS providers from receiving compensation from the
Fund for any IP CTS minutes of use generated by IP CTS equipment that they distribute, directly or
indirectly, for free or for less than $75 to consumers after the effective date of the rule, except for
equipment distributed through an equipment distribution program administered by a state or local
government. For existing users who had received their equipment for free or at a price below $75 from
any source other than an equipment distribution program administered by a state or local government, we
require that the IP CTS provider obtain from the consumer either a $75 payment (provided that the
consumer received the equipment from the provider) or a certification from an independent, third party
professional, made under penalty of perjury. In addition, we require that the providers require their users
to obtain from the third party professional the professional's name, title, address, telephone number, and
e-mail address. We also make permanent our interim rule requiring each IP CTS provider to maintain the
confidentiality of registration and certification information.113
1.

Distribution of Equipment

36.
Background. Many providers support a prohibition against the provider distribution of
free or low-cost equipment. For example, Purple agrees that the distribution of free equipment is
problematic, as it can result in the distribution of equipment to non-eligible users.114 Although in its
opening comments, Hamilton asserts that "there is no better indication that a user legitimately needs the
service than a user's decision to pay his or her own money for the specialized equipment needed to use
the service,"115 Hamilton adds in a subsequent ex parte letter that the Commission "should be sensitive to
the concerns raised in recent consumer group ex parte filings about a blanket requirement that all users


110 Id.
111 Id.
112 Id. at 727-28, 43.
113 As noted in the next subsection, because we now prohibit the distribution of equipment to consumers for free or
at a de minimis price, we do not need to make permanent the interim requirement for new users who receive
equipment for free or at a price below $75 from any source other than a governmental program to obtain a
certification from a third party professional. See id. at 718-19, 24.
114 Purple Comments at 5 ("Growth of IP CTS can also be attributed to irresponsible marketing practices by certain
providers. Examples of such practices are offering free phones without any meaningful check on whether the
recipient is hard of hearing.") See also id. at 6 ("A user who receives free equipment from a provider may not
necessarily be eligible for relay service").
115 Hamilton Comments at 5.
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pay at least $75 for IP CTS equipment."116 USTelecom concurs with the Commission's conclusion that
because IP CTS devices are modern, attractive, and offer sound amplification, they are likely to entice
consumers with and without hearing loss, and contribute to "heightened usage by the broader public."117
Likewise, Miracom opposes the free distribution of equipment usable only on one provider's service,
which practice it claims "has contributed to a host of marketing and competitive abuses which are
injurious to consumers' interest in a competitive marketplace and the Commissions' interest in ensuring
the absence of waste, fraud and abuse in the TRS program."118
37.
Sorenson opposes such a prohibition,119 insisting that there is no evidence that this
practice is driving up improper usage, arguing that giving away phones increases "overall usage because
some users might not be able to afford phones if they were required to pay full price," and stating that a
proscription on the distribution of free equipment would reduce availability of IP CTS to consumers who
need the service.120 Sorenson argues that imposing an additional $75 payment for equipment violates the
functional equivalence standard and inverts the certification rule as contained in the interim rules, which
Sorenson argues was set up as an alternative to third party certification.121
38.
The Consumer Groups acknowledge that giveaway programs may have the potential to
encourage misuse of IP CTS because "consumers without a legitimate need for the service are more likely
to use IP CTS if they can obtain the necessary equipment with little or no out-of-pocket cost."122
However, they express concern about the impact that the proposed prohibition will have on ensuring the
availability of affordable equipment for those in need, explaining that not all states have equipment
distribution programs.123 Consumer Groups recommend that the Commission permit providers to provide
IP CTS equipment to consumers at no cost or at de minimis cost if they meet certain income eligibility
criteria, which the Consumer Groups recommend be set at 400% of the federal poverty guidelines.124

Similarly, HLAA urges the Commission to ensure a "provision for people of low income or modest
means [because] [t]he Commission cannot depend on state programs to deliver the equipment to all
consumers who are eligible."125 In addition, the Consumer Groups propose that the Commission continue


116 Hamilton August 15, 2013 Ex Parte at 2.
117 USTelecom Comments at 7.
118 Miracom Comments at 11. Although Sprint believes that tying a professional certification to the acceptance of a
free phone should obviate the need for the FCC to set a minimum price for these phones, it acknowledges that the
"provision of free IP CTS equipment especially when coupled with a rewards program is likely a major reason why
there has been a spike in IP CTS usage recently" (Sprint Comments at 5), and opines that such practices "place[] the
provision of IP CTS service on a slippery slope that could lead to the same types of questionable and outright
fraudulent activities that have plagued the VRS segment of the market for years" (Id. at 4).
119 Sorenson Comments at 16-18; Sorenson Reply Comments at 18-19.
120 Id. at 18.
121 Sorenson August 5, 2013 Ex Parte at 2.
122 Consumer Groups Comments at 6. The Consumer Groups also note that providers could abuse such programs by
reclaiming equipment, not responding to service requests, or penalizing customers who do not generate a certain
number of relay minutes. See also NASRA Comments at 2 (supporting FCC's prohibition against providers
disseminating IP CTS equipment and software at no cost); HLAA Comments at 7 (distributing phones for a very
low cost will have the same impact as giving them away for free).
123 Consumer Groups Comments at 5-7.
124 Id. at 6-8.
125 HLAA Comments at 7. HLAA recommends that the Commission create a federal program for free or reduced
cost IP CTS phones to income eligible consumers along the lines of the National Deaf-Blind Equipment Distribution
(continued....)
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to allow providers to provide IP CTS equipment at no or de minimis cost to consumers who obtain third
party professional certification of their need for the service. In a recent ex parte letter, Consumer Groups
argued that an absolute prohibition on the provision of equipment for less than $75 violates section 225 of
the Act, which mandates that "users of telecommunications relay services pay rates no greater than the
rates paid for functionally equivalent voice communications services."126
39.
As to the price threshold for triggering some form of restriction on equipment
distribution, the Consumer Groups agree with the Commission's proposed definition of the threshold
price level as an amount that is small enough so as generally not to be a factor in the consumer's decision
to acquire IP CTS equipment.127 HLAA agrees with the Commission's tentative conclusion that
distributing phones for a very low cost will have the same impact as giving them away for free.128
Likewise, HLAA approves setting the price threshold at $75, but raises concerns about the need for
further market research to learn, "with certainty at what point the consumer will determine the benefits of
purchasing captioned telephone equipment outweigh the cost."129
40.
Most commenters believe that any restriction on free or low-cost distribution of
equipment should not apply to software, software updates, or applications for mobile users or computer
users.130 HLAA further urges that software for mobile use of IP CTS be modestly priced, and that
consumers only be required to self-certify to acquire such software131 because downloadable applications
typically are available to the general public for free or at low cost, and add a variety of needed functions
to mobile devices.132 HLAA further expresses skepticism that individuals who do not need the service
would download this software onto their mobile device.133 Consumer Groups agree, and note that
"[b]ecause free software support is currently available for VRS and IP Relay services, such prohibitions
should not be imposed on IP CTS software."134 Sprint argues that it has offered free mobile applications
and software for over a year, and this has not created any unusual growth patterns in its number of usage
(Continued from previous page)


Program (NDBEDP - which distributes free communications equipment to people who are deaf-blind) mandated by
the CVAA. Id. at 8. See also ALOHA Ex Parte Letter, August 12, 2013, at 2-3.
126 Consumer Groups Ex Parte Letter, August 9, 2013 at 2 (Consumer Groups August 9, 2013 Ex Parte), quoting 47
U.S.C. 225(d)(1)(D).
127 Consumer Groups Comments at 6-7, citing IP CTS Interim Order, 28 FCC Rcd at 726, 41.
128 HLAA Comments at 7. See also IP CTS Interim Order, 28 FCC Rcd at 726, 41.
129 HLAA Comments at 7. Explaining that it conducted its own informal survey of the cost of retail telephones on
Amazon.com and other websites, HLAA states that a $75 threshold would be higher than the average price of
specialty phones found on Amazon, but lower than the average price of specialty phones found on other websites.
Id. at 7. Sorenson, however, suggests that any price threshold should be set at a dollar amount that is comparable to
the price of an ordinary telephone (which is considerably less than $75). Sorenson Reply Comments at 6, 19.
NASRA and TEDPA support a minimum price of $75 for IP CTS equipment. NASRA Comments at 2; TEDPA
Comments at 2.
130 See, e.g., Consumer Groups Comments at 7; Sprint Comments at 6; HLAA Comments at 9, 10; Hamilton Reply
Comments at 5 (if users have paid $75 for equipment, they should be able to download these applications or use the
web based portal for free).
131 HLAA Comments at 9-10.
132 Id. at 9-10.
133 Id. at 10 (noting that they are skeptical that people who do not need IP CTS will download an app to their mobile
device that they have purchased on their own, and that brings in a third party to create captions that they do not
need in their phone conversations).
134 Consumer Groups Comments at 9.
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minutes.135 However, NASRA, an association made up of state relay administrations across the country,
believes that software should be included in the free or de minimis equipment distribution prohibition.136
41.
Discussion. We adopt a rule prohibiting TRS providers from receiving compensation
from the Fund for any IP CTS minutes of use generated by IP CTS equipment that they distribute, directly
or indirectly, for free or for less than $75 to consumers after the effective date of the rule.137 As we
discuss below, where consumers must make an investment in an IP CTS equipment purchase, they are far
less likely to acquire such equipment if they do not need the service.138 The record shows some
agreement among commenters that setting $75 as the minimum price threshold is reasonable,139 and we
believe it represents a reasonable balancing of interests. The amount is high enough to deter a consumer
from purchasing an item if he or she does not need it for communication, but not so high as to make the
purchase of equipment overly burdensome. We apply this prohibition as well to any officer, director,
partner, employee, agent, subcontractor, or sponsoring organization or entity (collectively "affiliate") of
any TRS provider. Further, any type of arrangement by an IP CTS provider, directly or indirectly through
any third party (other than through a state or local equipment distribution program), to distribute
equipment at no charge or for less than $75 to consumers is likewise prohibited.
42.
We take this action due to our concern, based in part on the spike in IP CTS usage that
took place during the period after which consumers began receiving free equipment, that the provision of
free or minimally priced equipment increases the likelihood that IP CTS will be provided to ineligible
users. As the Commission noted in the IP CTS Interim Order, many IP CTS devices are modern and
attractive, and often provide enhanced sound amplificationfeatures that are likely to entice consumers
with or without hearing loss to seek their acquisition. In addition, IP CTS is unlike other forms of TRS
because it does not require special skills such as sign language, is generally automated and invisible to the
calling parties, and allows a conversation to flow without interruption.140 Because of the ease and
convenience of using IP CTS devices, which function much the same as a conventional telephone but for
the addition of captions, once the device is in a consumer's possession, consumers may routinely use the
device with captionsas might others in the consumer's householdeven if they do not actually need the
service for effective communication. In fact, when using the phone, the unobtrusive nature of IP CTS is
such that consumers may not even be aware that captions are turned on or that they have the ability to turn
them off. In this manner, the free distribution of such devices is likely to contribute to IP CTS usage by
persons who do not have a sufficient degree of hearing loss to require this service to understand
conversation over the phone. Offering such equipment for free or for less than $75 thus has the potential
effect of promoting registration for and use of IP CTS by customers who do not need the service for


135 Sprint Comments at 6 ("The FCC should also eschew any attempt to set a purchase price for the software
applications that are necessary for users to obtain IP CTS service using their Android-based or iOS-based wireless
devices (Wireless IP CTS) and/or using their computers (WebCapTel). Sprint, for one, has offered a downloadable
application free of charge to users who have purchased such phones and computers for a little more than a year now
and give the fact that Sprint's growth in IP CTS usage has been within historical norms, the offering of such
software is not contributing to the concerns that led to the adoption of the Interim Order and the issuance of the
instant NPRM.").
136 NASRA Comments at 2.
137 We limit this restriction, however, to provider distribution of free or de minimis cost equipment to end users;
there is no restriction on compensation for minutes of IP CTS use when providers distribute such equipment to state
or federal governmental equipment distribution programs.
138 See Sprint Comments at 5. See also IP CTS Interim Order, 28 FCC Rcd at 717, 22.
139 See NASRA Comments at 2; TEDPA Comments at 2; Hamilton Comments at 5; HLAA Comments at 7 ($75
would be acceptable if the FCC sets a de minimis amount, but market research is needed).
140 See IP CTS Interim Order, 28 FCC Rcd at 716, 20.
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effective communication, resulting in improper payments from the Fund, contrary to the purpose of the
TRS program to provide communication services to persons who have a hearing loss and who have
difficulty using conventional telephone services.141
43.
Paying at least $75 for IP CTS equipment, by contrast, provides a concrete indication
that the consumer has thought the transaction through sufficiently to have concluded that she or he needs
IP CTS for effective communication. Thus, we agree with Hamilton that "there is no better indication
that a user legitimately needs IP CTS than a user's decision to pay his or her own money for the
specialized equipment needed to use the service."142 Stated otherwise, where consumers must make an
investment in an IP CTS equipment purchase, they are far less likely to acquire such equipment if they do
not need the service.143 By establishing a threshold price level below which a provider may not directly
or indirectly distribute its equipment, we increase the likelihood that individuals who might be equally or
better served with other technologies available to persons with hearing loss, such as enhanced
amplification telephones, will not choose to sign up for IP CTS solely or primarily because they can
obtain telephone equipment that is free or is priced significantly lower than other assistive technologies.
44.
In adopting this rule, we also conclude that overall, as a practical matter, consumer self-
screening based on having to make a significant investment in equipment, is likely to be a more effective
approach to screening than is third-party certification. The Commission's interim rule, requiring
certification by an independent professional when equipment is provided for free or for less than $75, had
been designed to prevent the distribution of IP CTS equipment to individuals who do not actually need IP
CTS. Our expectation was that the professional would be able to assist the consumer in selecting among
various possible assistive technologies, including non-TRS options such as enhanced-amplification
telephones, and would be able to make a certification of eligibility, in appropriate cases, as a neutral
party, without being subject to undue influence or bias.144 However, our experience with this approach
suggests that it may not be very effective in achieving adequate screening of such individuals, for a
number of reasons.
45.
First, as we note in section III.C.6 below, at present, we have not established a specific
numeric eligibility threshold for whether a hearing-impaired individual does or does not need IP CTS for
functionally equivalent communication. Thus, under the interim rule, determining whether a person
qualifies for free or low-cost distribution of IP CTS necessarily involves the exercise of professional
judgment by numerous individuals about whom the Commission has little information. It is difficult, at
best, for the Commission to effectively oversee the performance of this important gatekeeping function by
hundreds or thousands of hearing health and other professionals.
46.
Further, we have observed that, where free IP CTS phones have been offered directly or
indirectly by a provider under our interim rules, the advertising for such phones continues to focus on the
availability of a "free" IP CTS phone, with the need for third-party certification alluded to only vaguely,
if at all.145 Thus, we believe that when consumers are drawn in initially by a provider's offer of a free


141 See IP CTS Interim Order, 28 FCC Rcd at 725, 40. 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, 15 FCC Rcd 5140, 5148, 13 (2000).
142 Hamilton Comments at 5.
143 See Sprint Comments at 5. See also IP CTS Interim Order, 28 FCC Rcd at 717, 22.
144 For that reason, we required that certification be provided by an "independent" professional, thereby seeking to
ensure that the certifier "does not have any connection to the provider, not only including employment by the
provider or any affiliate of the provider, but also anyone with a TRS-related business agreement with the provider."
IP CTS Interim Order, 28 FCC Rcd at 718, 24 n. 72.
145 See, e.g., New England Hearing Instruments, Inc. web page promoting CaptionCall found at
<http://www.newenglandhearing.com/captioncall-phone/>; (last visited August 19, 2013) ("How to Order your
(continued....)
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phone, and only subsequently seek evaluation and certification by a professional, the professional's role is
likely to change from helping the consumer select on their merits from a number of alternative assistive
technologies, to accepting or vetoing a choice already made by the consumer, based on exposure to ads
promoting the free availability of an IP CTS phone.
47.
Moreover, contrary to our clearly stated intent that the screening third party professional
be independent of any provider,146 we are aware of numerous instances in which sessions have been
arranged by a provider, to which consumers are invited to obtain a free hearing analysis and a free IP CTS
phone at the same time and location.147 We find that professionals who participate in such sessions,
whether for compensation, the prospect of meeting potential new clients, or for other reasons, are linked
to the sponsoring provider (or are so perceived by potential customers and clients), and thus are not
"independent" as contemplated by the interim rules. Therefore, certification by professionals in such
circumstances would not be permissible under those rules.
48.
There are additional issues with the professional certification process that have surfaced
under our interim rules.148 Marketing promotions continue to entice consumers by offering the
opportunity to acquire IP CTS devices "free" within a limited time period, giving such consumers the
impression that if they do not act swiftly, they will miss out on a valuable acquisition.149 We believe that
such promotions can have the effect of encouraging consumers to quickly sign up for service they may
not need. Indeed, this focus on offering a free phone150 may lead many consumers to believe they are
(Continued from previous page)


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146 See IP CTS Interim Order, 28 FCC Rcd at 718, 24 n. 72.
147 See, e.g., <http://www.adhac.com/free-captioncall-phone/>; (last visited July 9, 2013) ("If you do not have a
certification of hearing loss; we provide quick no-charge hearing screenings to establish your eligibility for the free
CaptionCall service"); <http://www.allamericanhearing.com/captioncall/ (last visited July 9, 2013) (". . . receive a
FREE CaptionCall phone . . . our hearing consultations are always free").
148 For example, we have been informed, off the record, that some of the professionals who have been used for these
certifications have specialties, such as pharmacy or podiatry, that do not qualify them to make hearing loss
assessments. We note that a certification from a professional practicing in a specialty unrelated to hearing is in
violation of the requirement that the third party professional be qualified to evaluate an individual's hearing loss in
accordance with applicable professional standards. 47 C.F.R. 64.604(c)(9)(v)(A); IP CTS Interim Order, 28 FCC
Rcd at 718-19, 24.
149 See e.g., <https://www.captioncall.com/CaptionCall/Special-Offers.aspx>; (last visited July 1, 2013) (encouraging
users to "Get Sorenson FREE! Refer to promo code MS1019 to get Sorenson absolutely free* ($149 value). To
order a free Sorenson phone now, simply click on the green `REQUEST INFO' button, complete the form with your
contact information and the promo code referenced above, and click `Submit'. . . This is a limited time offer that
includes a free Sorenson phone, free delivery and installation assistance, and ongoing free captioning service funded
by the FCC. There are no hidden charges and no out of pocket expenses."). See also
<http://www.hitec.com/productDetail.asp_Q_catID_E_130_A_subCatID_E_195_A_productID_E_433_A_Caption
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150 See, e.g., New England Hearing Instruments, Inc. web page promoting CaptionCall found at
<http://www.newenglandhearing.com/captioncall-phone/>; (last visited August 15, 2013) ("CaptionCall is the ideal
phone for hearing-impaired people featuring closed-captioning of your conversation!"); Hear Now web page
promoting CaptionCall found at <http://hearnowllc.com/caption%20call.htm>; (last visited August 15, 2013)
("Trouble Hearing on the Telephone? Then you really want this! And the cost is right. ABSOLUTELY FREE!").
23

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simply getting a free phone with great features, without realizing that they are enrolling in a service using
communications assistants whose services are paid for by a federal program.
49.
For all these reasons, we conclude that the better course of action is to prohibit
compensation from the Fund for IP CTS minutes of use generated from the distribution of IP CTS
equipment given out for free or for less than $75 by all TRS providers.151
50.
The new requirement prohibiting compensation from the Fund for IP CTS minutes of use
generated by consumers who receive equipment for free or for less than $75 applies to IP CTS provider
practices only. We find that state equipment distribution programs (EDPs) or other governmental
programs that give out or loan free or reduced cost CTS or IP CTS equipment to their residents152 do not
raise the same concerns as IP CTS provider distributed equipment, because such governmental programs
ensure that when equipment is distributed for free or for less than $75, individuals receiving this
equipment will have been screened by a completely objective third party with respect to their need for this
service, and that individuals who would be better served by other equipment will have been directed to
such equipment.
51.
We believe that continuing to set $75 as the minimum price threshold represents a
reasonable balancing of interests.153 There is record support for this amount,154 and we believe the
amount is high enough to deter a consumer from purchasing an item if he or she does not need it for
communication, but not so high as to make the purchase of equipment overly burdensome.155 As the


151 We also reject Sorenson's proposal to require that "all IP CTS users (1) have at least one hearing aid or cochlear
implant, and (2) either (i) have an independent third party medical professional certification that, even with a hearing
aid or cochlear implant, they need captions to use the telephone in a functionally-equivalent manner to a person
without hearing disabilities, or (ii) pay at least $75 for the necessary equipment." Sorenson Ex Parte Letter, August
22, 2013, at 4. We continue to have concerns, as already stated in this section, about the effectiveness of third party
certification in assuring that IP CTS usage is limited to those individuals with a legitimate need for the service.
While the fact that a consumer has a hearing aid or a cochlear implant certainly makes it more likely that he or she
may need IP CTS, it does not ensure that this is the case, and Sorenson's proposal does not assuage our concerns
about abuse of the certification process. Sorenson does address some of our concerns by proposing to specify what
types of professionals are qualified to provide the certifications, but that does not resolve our concerns about
ensuring that the certifier is completely neutral. We note, moreover, that Sorenson's proposal would make IP CTS
less available to consumers, by limiting the service to those with hearing aids or cochlear implants, and there may be
consumers who do not use either of these technologies, yet would still need IP CTS to communicate by telephone.
See Letter from Christian Vogler, Docket 03-123, December 20, 2012, Attachment at 2.
152 See generally Telecommunications Equipment Distribution Program Association,
<http://www.tedpa.org/StateProgram.aspx>; (last visited Jan. 15, 2013) (listing state programs that distribute
specialized customer premises equipment, such as IP CTS devices). In addition to these programs, the National
Deaf Blind Equipment Distribution Program provides free equipment to people who are deaf-blind in all 50 states
and three U.S. territories. See 47 C.F.R. 64.610.
153 See Hamilton Comments at 5. See also Miracom Comments at 12 (the distribution of free captioned phones has
contributed to a host of marketing and competitive abuses and may encourage persons not needing IP CTS to
nonetheless use the service).
154 See Hamilton Comments at 5 (agreeing that having to pay for a device provides the best indication of whether the
user legitimately needs the service and noting that legitimate IP CTS users should be able to purchase a device at
retail for no less than $75); Sprint Comments at 5-6 (noting that "the ability to obtain a free phone, especially when
linked [to] a bounty program is likely to be a major, and perhaps sole, reason for the spike in IP CTS usage," and
that Sprint's offering of IP CTS phones at prices less than $99 as part of state or federal government supervised
programs is consistent with the $75 price floor); NASRA Comments at 2 (encouraging the FCC to clearly define the
de minimis threshold, for example at "a set price point, such as $75.00" to avoid a loophole for continued misuse
that a vague definition would cause; TEDPA Comments at 2 (making the same point as NASRA).
155 See HLAA Comments at 7. In its comments, Hamilton asks whether combination offers constitute a legitimate
marketing practice, so long as the cost of the IP CTS phone is $75 or more. Hamilton Comments at 4. By way of
(continued....)
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Commission noted in the IP CTS Interim Order, a floor of $75 is below the listed retail prices for the
captioned telephones used with several IP CTS offerings.156 In addition, $75 may be roughly comparable
to the price of a good-quality "specialty" phone such as an enhanced amplification phone.157 The $75
minimum price is also low enough to take into account the different financial circumstances of those who
need IP CTS.158
52.
To ensure that information supporting provider compliance with this requirement is
maintained and available for Commission review, we require that providers maintain, with each
consumer's registration records, records describing any IP CTS equipment provided, directly or
indirectly, to such consumer and the amount paid for such equipment.159 Such records shall be
maintained for a minimum of five years after the consumer ceases to obtain service from the provider.160
53.
Sorenson argues that requiring a minimum payment of $75 for IP CTS equipment is a
dramatic, unjustified change from the interim rules, under which the $75 minimum payment is an
alternative to professional certification, stating that it "completely inverts the certification rules as they
were contained in the interim rules."161 Quoting a statement in the IP CTS Interim Order that the
Commission "generally believe[s] the most effective means of verifying a user's need for this service is to
(Continued from previous page)


example, Hamilton states that it offers a package of an IP CTS phone and a router for $89-$99, with the price of the
phone being $75 and the router being $14-$24, which Hamilton asserts is a reasonable price for a router.
Contrasting that to a hypothetical combination of an IP CTS phone and an iPad for a total of $99, which Hamilton
states would clearly be unreasonable, Hamilton asserts that combination offers should be evaluated on a case-by-
case basis. We agree that combination offers are acceptable, so long as the IP CTS phone is sold for $75 or more,
the other items sold in the combination package are sold at reasonable market prices, and the total combination price
fully reflects the total of each of the elements in the package.
156 IP CTS Interim Order, 28 FCC Rcd at 717-18, 22, n.67. The Clarity Ensemble telephone used with Purple IP
CTS is offered by its manufacturer, Plantronics, for $149 (see
<http://shop.clarityproducts.com/products/clarity/ensemble/?cat=amplified-captioned-phones>; (last visited, July 9,
2013)), the Captel 840i telephone used with Sprint's and Hamilton's IP CTS is listed for $595, with a discount price
of $99 (see <https://www.weitbrecht.com/product/captel-840i.html?>; (last visited, July 9, 2013)), and the
CaptionCall phone used with Sorenson's IP CTS has a suggested retail price of $149 (see <
https://www.captioncall.com/CaptionCall/CaptionCall_Solution/Pricing.aspx>; (last visited, July 9, 2013)).
157 See HLAA Comments at 7. Sorenson states that $75 is more expensive than many amplified phones that are now
on the market. See Sorenson August 12, 2013 Ex Parte at 1 and first attachment. However, many of the amplified
phones currently on the market may be inferior to the amplification quality offered by IP CTS phones. See
Consumer Groups August 13, 2013 Ex Parte at 3 (consumers do not benefit from high-gain amplified phones in the
same way that they do from IP CTS phones because the amplified phones have no required standard measurement
method to assure that they work as advertised). Recent demonstrations of IP CTS phones held at the Commission
indicate that their amplification characteristics are impressive (including, for example, on at least one model, a
capability to vary amplification by tone frequency). Thus, based on the quality of its amplification features, $75
does not appear to be an unreasonable price for a consumer to pay for a phone used solely for the purpose of
enhanced amplification.
158 See IP CTS Interim Order, 28 FCC Rcd at 718, 22.
159 IP CTS providers distributing software-based IP CTS must keep similar records, including whether the user
qualifies under the already-registered-and-purchased-equipment exemption or instead paid for the software.
160 This is consistent with other recordkeeping requirements applicable to iTRS providers. See, e.g., 47 C.F.R.
64.604(c)(5)(D)(7) (requiring that call data supporting claims for payment from the TRS Fund be maintained for a
minimum of five years), 64.631(a)(2)(requiring that records of verification of a consumer's authorization for a
change of default provider be maintained for a minimum of five years).
161 Sorenson August 5, 2013 Ex Parte at 2.
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have an independent certification for all users,"162 Sorenson contends that "[i]t stands the logic of the $75
payment exception on its head to make it the sine qua non of a demonstration of need."163
54.
Sorenson's argument fails for several reasons. First, under the rule we adopt today, $75
is not the "sine qua non of a demonstration of need." As noted above, consumers who register for IP CTS
through state or local equipment distribution programs are not required to pay $75. Thus, the rule we
adopt today does not eliminate third-party certification as an alternative; rather, it limits the circumstances
under which such certification can be used to establish eligibility, requiring that certification occur in the
relatively neutral context of a state or local equipment distribution program.164 Second, this change is
justified because, as explained above, the third party certification process has not been implemented as
the Commission expected. In adopting an interim rule providing for third party certification, the
Commission did not have the benefit of any experience of how third party certification would actually be
implemented. Given that third party certification does not appear to have worked as intended by the
Commission, it is entirely appropriate that we adopt a different approach for the final rules.
55.
We also disagree with Sprint's implication that taking this action is beyond the
Commission's jurisdiction.165 Section 225(d)(1)(A) of the Act directs the Commission to establish
guidelines and operations procedures associated with the provision of TRS.166 In order to achieve the
sustainability of this program for persons who do need it, the Commission is well within its authority to
establish requirements to ensure that the TRS Fund does not compensate for IP CTS minutes of use
generated from equipment that is distributed in a way that may facilitate ineligible users to make use of IP
CTS. In this case, we find that prohibiting compensation from the Fund for IP CTS minutes of use
generated by the distribution of equipment for free or at a price below $75 is necessary to achieve this
objective.
56.
We further reject Sorenson's and the Consumer Groups' arguments that the action we
take today is counter to principles of functional equivalence,167 and the statutory goal to achieve full
communications access by people with disabilities.168 First, as the Commission noted in the VRS
Structural Reform Order
, the Commission consistently has distinguished between the provision of relay
service, which is explicitly mandated by section 225, and the provision of equipment, which is not.169


162 IP CTS Interim Order, 28 FCC Rcd at 717, 22.
163 Sorenson August 5, 2013 Ex Parte at 2.
164 See, e.g., supra n. 102.
165 See Sprint Comments at 6 ("[A]ttempting to set a minimum price for IP CTS phones may be beyond the FCC's
jurisdiction since the FCC has long considered the telephone equipment market to be outside the FCC's Title II
regulatory authority.").
166 47 U.S.C. 225(d)(1)(A).
167 Sorenson August 5, 2013 Ex Parte at 2; Sorenson Ex Parte Letter, August 12, 2013 at 1 (Sorenson August 12,
2013 Ex Parte). Consumer Groups argue that the prohibition violates the section 225(d)(1)(D) mandate that TRS
users pay rates no greater than rates paid for functionally equivalent voice communications services. Consumer
Groups August 9, 2013 Ex Parte at 9. See 47 U.S.C. 225 (d)(1)(D).
168 See Sorenson Comments at 17-18. Sorenson claims, for example, that the free distribution of equipment
"increases usage by making the service available to those who want and need the service, as the ADA requires." Id.
at 18 (emphasis in original).
169 VRS Structural Reform Order, 28 FCC Rcd at 8696-97, 193-194, citing 2011 VRS Reform FNPRM, 26 FCC
Rcd at 17393, 49. See also 2011 VRS Reform FNPRM, 26 FCC Rcd at 17393, 51 (equipment costs are not "costs
caused by interstate telecommunications relay service"); 2006 MO&O, 21 FCC Rcd at 8071, 17; 2007 TRS Rate
Methodology Order
, 22 FCC Rcd at 20170-71, 82; Sorenson II, 659 F.3d at 1044 ("The statute only requires that
VRS be made `available' and that users pay no higher rates for calls than others pay for traditional phone services.
It does not also require that VRS users receive free equipment and training.") (citation omitted); Id. at 1044-45
(continued....)
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Second, we do not read section 225 as requiring the provision of free equipment in order to ensure
functional equivalence. Section 225(d)(1)(D), on which the Consumer Groups rely, expressly applies
only to telecommunications relay service, and there is no comparable provision in the Act that applies to
equipment used for TRS. Moreover, since users of voice communications services pay for equipment,170
there is no plausible basis for reading into the statute a restriction against requiring users of TRS to also
pay for equipment.
57.
Finally, as noted above, we are not prohibiting the free distribution of IP CTS equipment
per se. Rather, we are prohibiting compensation from the TRS Fund for IP CTS minutes of use generated
by equipment that is being given away by providers for free or provided at a price below $75 to prevent
the Fund from paying for IP CTS use that is inconsistent with the goals and purposes of section 225. We
place no such restriction on the free distribution of equipment by state or local governmental programs,
which are relatively neutral parties that can objectively screen consumers for their eligibility in the
program. We believe that the availability of such free or discounted equipment in most states will help to
fulfill Congress's and the Commission's goals of "ensuring the widespread availability of IP CTS to
individuals who can benefit from the service."171 Consumer Groups argue that there are a number of
states that do not have equipment distribution programs, and for those states that do, they limit
distribution to the phones offered by one provider only, thereby depriving low income consumers of the
benefits of competition.172 The Commission is sensitive to the concerns expressed by the consumers, and
in the Further Notice we seek comment on whether state equipment distribution programs are meeting the
needs of low income consumers, if not, how to meet those needs, and how to meet the needs of low
income consumers in states without equipment distribution programs.
58.
We also apply this restriction to software and applications (collectively, "software") that
allow individuals to use IP CTS without dedicated IP CTS equipment e.g., via mobile phones or
computers. In particular, we prohibit compensation from the TRS Fund for IP CTS minutes of use
generated by the software distributed for free or at a price below $75 unless the user previously obtained
IP CTS equipment for $75 or more or has been deemed eligible for a device from a state EDP. As
discussed below, this rule avoids creating a potentially significant loophole that could continue to expose
IP CTS to usage by ineligible users. IP CTS is unlike other forms of TRS in that it does not require
special skills such as sign language, is generally automated and invisible to the calling parties, and allows
a conversation to flow without interruption.173 As is the case with hardware, because of the ease and
convenience of using IP CTS, persons who do not have a sufficient degree of hearing loss to require this
service to understand conversation over the phone (or who do not have any hearing loss at all) could find
(Continued from previous page)


(exclusion of equipment costs does not undermine the section 225 goal of not discouraging or impairing
development of improved technology). The limited exception to this is the $10 million Fund allocation for the
distribution of free equipment by state programs certified by the Commission under the NDBEDP, added to the Act
by the CVAA. 47 U.S.C. 620.
170 Even when wireless providers distribute equipment at no charge, the consumer is still indirectly paying for the
equipment on a monthly basis as part of the wireless service contract.
171 Sorenson Comments at 18. See also CTIA Comments at 6 (The Commission should prohibit IP CTS providers
from making available equipment for no or de minimis cost, but this limitation should not apply if the equipment is
made available through government programs that subsidize equipment costs, whether or not the equipment is
actually distributed by the government program or provider; http://www.tedpa.org/StateProgram.aspx (last visited
July 1, 2013), which lists the states that run EDPs. We recognize that at the present time, not all states have EDPs
and not all EDPs distribute IP CTS devices. The Commission will continue to monitor the availability of reduced
cost equipment to users with limited income, and will explore other avenues of ensuring full access to these services
if it finds that consumers are not receiving IP CTS due to an inability to pay for IP CTS equipment.
172 See Consumer Groups August 9, 2013 Ex Parte at 2-3. See also Hamilton August 15, 2013 Ex Parte at 2.
173 See IP CTS Interim Order, 28 FCC Rcd at 716, 20.
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this service desirable for reasons such as creating a transcript or making calls in noisy locations.174 Given
the potential value and ease of use of IP CTS even for users that do not need the service, we predict that,
absent our restriction, free or de minimis cost IP CTS software would be widely promoted by IP CTS
providers in the same way as free IP CTS equipment has been. From the providers' perspective, the more
users that sign up to acquire IP CTS software, the more compensation the provider may seek to collect
from the Fund, at no cost to the user. Indeed, the elimination of the option for providers to offer free or
de minimis cost hardware could increase their incentives to turn to promoting free or de minimis cost
software in this way. We thus are not persuaded by the argument that consumers will not download and
use applications and software that they do not need,175 or that the incentive for a consumer to accept a
valuable phone for free generally does not apply to software.176 Offering IP CTS software for free or for
less than $75 has the potential effect of attracting consumers who might not need to use the service, which
is inconsistent with the purpose of the TRS program.177 Provision of service to such users should not be
compensated from the Fund, and this restriction helps guard against that result. We therefore reject the
arguments raised by some commenters that the restrictions on compensation from the Fund for IP CTS
minutes of use resulting from the distribution of equipment for free or at a low price should not apply to
software.178
59.
We understand that some providers permit consumers who are already registered users of
their service to download mobile applications or other software for free.179 This practice will not violate
the proscription against compensation from the TRS Fund for IP CTS minutes of use generated by the
distribution of equipment for free or at a price below $75. Once the user has made the initial investment
in an IP CTS device, or has been deemed eligible for the provision of a device by a state EDP, we believe
that the risk that such a user is ineligible for IP CTS is substantially reduced. Consequently, providers
will be permitted to offer such individuals additional software or applications without charge and still be
compensated from the Fund for eligible IP CTS minutes of use. As explained earlier in regard to
equipment, the $75 minimum price threshold represents a balancing of interests. In the context of
equipment, we have determined that the amount is high enough to deter a user from purchasing
equipment if he or she does not need it for communication, but not so high as to make the one-time
purchase of equipment overly burdensome. Based on the current record, we have no basis for concluding
that the minimum price for an initial purchase of IP CTS software should be different from the minimum


174 See, e.g., IP CTS Interim Order, 28 FCC Rcd at 716, 20.
175 HLAA Comments at 10; Consumer Groups Comments at 9.
176 See HLAA Comments at 9-10 (requiring self-certification of eligibility to accept IP CTS software and
applications should be enough to prevent ineligible consumers from using the service). See also Sprint Comments at
6 (has offered free mobile applications and software for over a year and that this has not created any unusual growth
patterns in its number of usage minutes). We note that HLAA appears to argue that software in general is
inexpensive, not that IP CTS software in particular would be inexpensive.
177 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, 15 FCC
Rcd 5140, 5148, 13 (2000).
178 See, e.g., Consumer Groups Comments at 7; Sprint Comments at 6; HLAA Comments at 9, 10. In response to
concerns raised by USTelecom, we clarify, however, that the rules adopted in this order pertaining to IP CTS
hardware and software are not intended to encompass all wireless devices or smartphones that are capable of
running applications or software providing accessibility features that can enhance the ability of individuals who are
hard of hearing to use those devices. Rather, these rules apply only to equipment that is primarily intended to be
used for or distributed for the use of IP CTS. See USTelecom Comments at 8-9. We note, however, that our rules
otherwise prohibit direct or indirect incentives to register for or use IP CTS. Such rules apply to the distribution of
wireless devices, smartphones, or other equipment as an incentive to register for or use IP CTS.
179 See, e.g., http://www.hamiltoncaptel.com/pc_mac/registration.html (last visited July 9, 2013).
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price for the purchase of IP CTS equipment. In the Further Notice, however, we seek comment on
whether we could accomplish our goal with some different minimum price.
2.

New Users

60.
Background. Most commenters to this proceeding agree that universal TRS registration
and certification are necessary elements in reducing waste, fraud and abuse, and in improving access to
911 services for new IP CTS users.180 In fact, it is our understanding that some providers already require
self-certification for new users.181 Parties to this proceeding also are generally supportive of the
requirement for the self-certification to be presented on a clearly identified, separate page from all other
registration documents.182
61.
To the extent that the Commission proceeds with a requirement for self-certification,
HLAA proposes plainer language, which they say is necessary to ensure that consumers understand the
form.183 Specifically, they offer the following options:

"the user has a hearing loss and needs captions to be able to fully understand phone
conversations," and

"the user understands that captioning is provided by a live communications assistant
(CA) who listens to the other party on the line and provides the text on the captioned
phone."184
62.
Similarly, Hamilton proposes simplifying the form language, as follows: "(1) the user has
a hearing loss that necessitates IP CTS to communicate in a manner that is functionally equivalent to
communication by conventional voice telephone users; (2) the user understands that the captioning
service is provided by a live communications assistant (CA); and (3) the user understands that the cost of
the IP CTS calls is funded by the federal TRS Fund."185 ALOHA suggests that the self-certification form
specifically state that "FCC rules require this Certification remain confidential, except as required by
law," out of concern that older Americans might otherwise be reluctant to sign the form and provide the
needed information.186 Finally, HLAA recommends that family members purchasing IP CTS equipment


180 See e.g. Consumer Groups Comments at 7-10; CTIA Comments at 6; Hamilton Comments at 5; Sprint
Comments at 7; HLAA Comments at 10-11.
181 Sorenson Comments at 5-6, n.15; Purple Petition for Limited Waiver, CG Docket No. 03-123, Mar. 1, 2013, at 2
(registration for Purple included a self-certification prior to adoption of the IP CTS Interim Order).
182 See Consumer Groups Comments at 9; HLAA Comments, at 12 (support use of a separate page that is clearly
identified as self-identification, which the consumer should sign and date); Sprint Comments at 7-8 (supports
requirement, including a separate page on the website).
183 HLAA claims that the Commission's proposed language that "the user has a hearing loss that necessitates IP
CTS to communicate in a manner that is functionally equivalent to communication by conventional voice telephone
users" will not be understood by many, if not most, consumers. HLAA Comments at 11.
184 Id. at 11-12.
185 Hamilton Comments at 5-6. Consumer Groups further request that self-certification forms not state that the user
understands IP CTS is provided by a live communications assistant because the FCC's definition of IP CTS does not
require a live communications assistant. Consumer Groups Comments at 9.
186 ALOHA Comments at 4. Aloha goes on to explain, "[w]e have found many ALOHA members, perhaps because
they are elderly and are frequently lectured--often by government--not to share personal information, are very
much concerned with personal privacy." Id. It further requests that no additional documents or paperwork be
required for self-certification.
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for their relatives be permitted to certify the hearing loss of that relative, or provide such certification until
that person gets the equipment and signs the self-certification form on his or her own.187
63.
Commenters have different opinions on the requirement for the self-certification to be
signed under penalty of perjury. Consumer Groups agree that the self-certification should be signed
under penalty of perjury, noting that "this requirement would . . . help to reduce the risk of fraud."188
Sorenson agrees, and notes that "[i]n the Lifeline context, this rule [penalty of perjury] does not appear to
have substantially deterred participation by eligible users."189 Other commenters, however, express
concern about adding a penalty of perjury provision to the self-certification. For example, Sprint opposes
the penalty of perjury language, because it claims this language implies that consumers are not to be
trusted, and because it raises the possibility of prison, and thus, may reduce functional equivalence, in that
some might be fearful of signing such a form.190 While HLAA also generally opposes this language, it
adds that if this requirement is adopted, the consequences of any fraudulent statements should be clearly
spelled out on the certification.191
64.
Discussion. The Commission adopts as permanent the interim rule requiring each IP
CTS provider to register each new IP CTS user, and to require, as part of the registration process, that
providers obtain from each consumer the consumer's full name, date of birth, last four digits of the
consumer's social security number, address and telephone number and a self-certification as revised
below. Specifically, the rule that we adopt today requires that such self-certification state that the
consumer: (1) has a hearing loss that necessitates use of captioned telephone service; (2) understands that
captions on captioned telephone service are provided by a live communications assistant who listens to
the other party on the line and provides the text on the captioned phone; (3) understands that the cost of
captioning each Internet protocol captioned telephone call is funded through a federal program; and (4)
will not permit, to the best of the consumer's ability, persons who have not been registered to use Internet
protocol captioned telephone service to make captioned telephone calls on the consumer's registered IP
captioned telephone service or device. The Commission further makes permanent the requirements that
such self-certification be made on a form separate from any other user agreement (such as on a separate
page); that it bear a separate signature192 specific to the self-certification; and that the signature be made
under penalty of perjury.
65.
The Commission finds that the registration required in the IP CTS Interim Order for new
users, together with the mandate that consumers self-certify under penalty of perjury their eligibility to
use IP CTS, will help prevent the registration of individuals who do not need captions in order to obtain
functionally equivalent telephone service.193 Such registration is already required of other IP-enabled
forms of TRS,194 and we view it as a logical and useful means to ensure that only those individuals who


187 HLAA Comments at 12.
188 Consumer Groups Comments at 8.
189 Sorenson Comments at 20.
190 Sprint Comments at 7-8. Sprint also claims that the requirement is unenforceable. Id.
191 HLAA Comments at 11-13.
192 As was the case with the interim rule adopted in the IP CTS Interim Order, for the purposes of this requirement,
an electronic signature, defined by the Electronic Signatures in Global and National Commerce Act, as an electronic
sound, symbol, or process, attached to or logically associated with a contract or other record and executed or
adopted by a person with the intent to sign the record, has the same legal effect as a written signature. 47 C.F.R.
64.604(c)(9)(iv); IP CTS Interim Order, 28 FCC Rcd at 719, 25 n.75.
193 See id. at 718-19, 24.
194 See 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, CC Docket No. 98-67,
(continued....)
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are truly eligible for different forms of TRS are allowed to use these services.195 These measures will also
ensure that potential users of this service fully understand how IP CTS service works, and that its costs
are supported by a federal program. In addition, these measures are consistent with the recent VRS
Structural Reform Order
requiring that each VRS user self-certify that the user has a hearing or speech
disability that makes the user eligible to use VRS and that the user understands that the cost of VRS is
paid for by contributions from other telecommunications users to the TRS Fund.196 Although HLAA
raised a concern that the requirement for self-certification under penalty of perjury might deter otherwise
eligible users,197 we believe individuals who truly have a need for this service will be willing to attest to
such language, and that this language is necessary to prevent abuse of this program.198 For this same
reason, we will not permit family members purchasing IP CTS equipment for their relatives to certify the
hearing loss of that relative, as proposed by HLAA.199 To ensure that IP CTS is not used by ineligible
users, it is important that all users themselves certify to their eligibility.200 To ensure that information
supporting the eligibility of users continues to be maintained and available for Commission review, we
require that records of consumer registration and self-certification, with all the information required to be
included in such certifications, be maintained for a minimum of five years after the consumer ceases to
obtain service from the provider.201
3.

Existing Users

66.
Background. The IP CTS NPRM proposed that providers be required to register and
obtain self-certification for their existing IP CTS users within 90 days, and sought comment on whether
this would be an appropriate amount of time to accomplish these tasks, offering commenters who
disagreed with this timeline to submit alternative proposals.202 The Commission further proposed that IP
CTS providers that fail to register existing users within this period be required to cease providing service
to any unregistered users or to any users who fail to provide the required certification immediately upon
expiration of this grace period, and sought comment on this proposal. The Commission also sought
(Continued from previous page)


WC Docket No. 05-196, Second Report and Order and Order on Reconsideration, 24 FCC Rcd 791, 808-10, 36-
38 (2008) (Second TRS Numbering Order) (requiring registration and verification of VRS and IP Relay users).
195 See VRS Structural Reform Order, 28 FCC Rcd at 8654-55, 80-83; Second TRS Numbering Order, 24 FCC
Rcd at 808-10, 36-38.
196 See VRS Structural Reform Order, 28 FCC Rcd at 8654-55, 80-83.
197 See HLAA Comments at 11; Sprint Comments at 7-8. But see Consumer Groups Comments at 9 (supporting
self-certification under penalty of perjury).
198 See, e.g., Lifeline & Link Up Reform and Modernization, WC Docket No. 11-42, Report and Order and Further
Notice of Proposed Rulemaking, 27 FCC Rcd 6656, 6709-11, 111-14, 6712, 120 (2012) (Lifeline/Link Up
Reform Order
) (amending 47 C.F.R. 54.410 to require, among other measures to reduce fraud, abuse, and waste in
the Lifeline program, that eligible telecommunications carriers obtain initial and annual self-certifications by
consumers, under penalty of perjury, establishing their eligibility for Lifeline support).
199 See HLAA Comments at 12. Where the IP CTS user is not competent to sign a legal document, such prohibition
would not apply to a spouse. In addition, a family member or other individual who is a legal custodian or has power
of attorney allowing the person to sign legal documents for the IP CTS user may sign the certification.
200 Nevertheless, we understand that family members may need to assist IP CTS users in understanding the meaning
of the self-certification form.
201 This is consistent with other recordkeeping requirements applicable to iTRS providers. See, e.g., 47 C.F.R.

64.604(c)(5)(D)(7) (requiring that call data supporting claims for payment from the TRS Fund be maintained for
a minimum of five years), 64.631(a)(2)(requiring that records of verification of a consumer's authorization for a
change of default provider be maintained for a minimum of five years).
202 IP CTS Interim Order, 28 FCC Rcd at 730, 49.
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comment on whether to require, as part of the registration and certification process for existing users that
had accepted IP CTS equipment for no charge or less than $75 from any source other than a governmental
program, that the provider obtain from the consumer a certification from an independent, third party
professional attesting that (1) the consumer has a hearing loss that necessitates captioned telephone, and
(2) the third party professional understands that IP CTS captioning is performed by a live CA and is
funded through a federal program.203
67.
Commenters are divided in their support for a registration requirement for existing
users.204 Hamilton, for example, states that it "does not object to extending these requirements to existing
users, provided that existing users may self-certify. . ."205 and that "to the extent that the new registration
and certification requirements that currently apply only to new users are extended to existing users, such
requirements use the same criteria that are applied to new users . . . ."206 Sprint "agrees that IP CTS
providers be required `to obtain registration and certification from their existing users.'"207 However,
Sorenson urges the Commission to impose certification requirements only prospectively because, it
contends, extending the self-certification requirement to existing users would be an enormous burden on
providers and consumers.208 To the extent that the Commission moves forward with a certification
requirement for existing users, Sorenson urges the Commission to compensate providers for all minutes
up to the deadline for providing existing users' registrations, and permit providers to stop service for
those who have not provided certification.209 Similarly, HLAA urges that "unless the Commission finds
overwhelming evidence that a vast number of consumers have actively engaged in fraud, the burden
would far outweigh any benefit of turning away the few who may have unintentionally signed up for a
program that they do not need."210 Consumer Groups similarly oppose extending the self-certification
requirement to existing users because doing so would "unfairly burden consumers who have come to rely
on IP CTS."211
68.
In addition, commenters have differing views on the amount of time needed to register
existing users. Sprint "believes that a 90-day window should be enough time to obtain registration and
certification, with the caveat that providers should be able to obtain a limited extension of the deadline if
they can demonstrate that such extension is in the public interest."212 Hamilton and Sorenson request that
providers be afforded up to 180 days after any effective date to effectuate registration of existing users.213
While, as noted above, Consumer Groups generally oppose requiring existing users to register, if the
Commission moves ahead with this mandate, they propose a phase-in of such registration, by which
providers would be required to register 50 percent of customers within 90 days; 75 percent within 180


203 Id. at 727, 42.
204 See, e.g., Miracom Comments at 10; USTelecom Comments at 4 (supports registration/certification for new and
existing users); Hamilton Comments at 1, 5 (supports at least self-certification, and perhaps more, for existing
users).
205 Hamilton Comments at 5.
206 Id. at 1.
207 Sprint Comments at 8, n.10 (quoting IP CTS Interim Order, 28 FCC Rcd at 730, 49).
208 Sorenson Comments at 20-21.
209 Id. at 22.
210 HLAA Comments at 10. See also CCAC Comments at 1; ALOHA Comments at 5.
211 Consumer Groups Comments at 12.
212 Sprint Comments at 8, n.10. See also Miracom Comments at 10 (supporting requirement that all existing users
register within 90 days).
213 Hamilton Comments at 6; Sorenson Comments at 21 ("providers should be given at least six months").
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days, and 100 percent within 270 days. To ensure that people who are elderly or who have mobility
disabilities have enough time to discuss the registration and certification with their family members or
professionals, Consumer Groups also propose allowing consumers a 60 day grace period to complete their
certification in the event that they receive a service termination notice.214 Finally, Consumer Groups urge
that individuals whose service is disconnected be permitted to re-certify at a later time.215
69.
Discussion. The Commission adopts a rule requiring each IP CTS provider to register
and obtain certification from all of its existing IP CTS users.216 We believe that taking such action will
help to ensure that IP CTS is as immune as possible from waste, fraud and abuse that could otherwise
threaten the long-term viability of this program. As the Commission has previously noted, provider
practices that result in waste, fraud, and abuse threaten the sustainability of the TRS Fund, and unlawfully
shift improper costs to consumers of other communications services, including local and long distance
voice telephone subscribers and interconnected VoIP subscribers.217 While much of our concern has been
focused on the unprecedented growth in IP CTS demand in recent years, we are committed to ensuring
that all IP CTS users, including those who began using this service prior to the period of substantial
growth, are eligible to use these services and that these individuals fully understand the nature of this
federal program. Without a self-certification requirement, there are no guarantees that these existing IP
CTS users ever acquired information about the way that IP CTS works for example, that a third person
is on every call to re-voice the conversation and that every minute of usage is compensated through a
federal program.
70.
Although the Commission proposed in the IP CTS Interim Order that all existing IP CTS
users must be registered within a 90-day period,218 in response to comments received, we now adopt a
rule requiring providers to register and obtain certification from their existing users within 180 days of the
rule's effective date.219 We believe that adopting a 180-day deadline will strike the appropriate balance
between removing ineligible individuals from this service and allowing eligible individuals to continue
using it. We understand that the majority of individuals who have grown accustomed to using IP CTS are
senior citizens who may require the assistance of friends and relatives to understand the new self-
certification and submit it to their provider. The longer registration period of 180 days will allow
providers the time necessary to complete the registration process and prevent the loss of eligible users
because of an inability to register on time.220 Additionally, this requirement is consistent with the
Commission's reform of the Lifeline program, in which the Commission required carriers to recertify the


214 Consumer Groups Comments at 12. But see Sorenson Comments at 22 (opposing Consumer Group's phase-in
proposal as too complex and burdensome).
215 Consumer Groups Comments at 12.
216 By "existing IP CTS users," we mean all users who are enrolled in a provider's IP CTS as of the effective date of
the amended registration and certification rule (Appendix B, 64.604(c)(9)) and who have not previously undergone
registration and certification by that provider in compliance with the interim registration and certification rule (see
IP CTS Interim Order
, 28 FCC Rcd at 743-44, Appendix D, 64.604(c)(9)).
217 VRS Structural Reform Order, 28 FCC Rcd at 8648, 64.
218 IP CTS Interim Order, 28 FCC Rcd at 730, 49.
219 Hamilton Comments at 6; Sorenson Comments at 20-21 (opposing registration of existing users, but asking for a
six month period if registration of existing users is required); Consumer Groups Comments at 12 (opposing
registration of existing users, but supporting a 180-day period if registration of existing users is required).
220 See, e.g., id. at 12 (urging longer periods for registration "[t]o ensure that elderly customers and people with
[mobility] disabilities have sufficient time . . .").
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eligibility of all existing Lifeline subscribers within seven months after the effective date of the
certification requirement.221
71.
IP CTS providers that fail to register existing users within this period will not be
compensated for service to any unregistered users, or to any users who fail to provide the required self-
certification, immediately upon expiration of this period. Given the length of time that we are allowing
for registration of existing users, we do not see a need to provide consumers with an additional 60-day
grace period as proposed by the Consumer Groups,222 because providers will have ample time to send
multiple notices and reminder notices to consumers informing them of the registration and certification
requirements and deadline. In the event there are existing users who do not meet this deadline, providers
will not receive compensation for service to these users and may discontinue service to such users.
However, the users may register at a later date,223 at which time their provider will once again be
compensated for service to these users, effective on the date of their completion of registration and
certification.
72.
We also adopt as part of the registration requirements for existing users who received
equipment for free or at a price below $75, directly or indirectly from an IP CTS provider (or from any
other source other than an equipment distribution program administered by a state or local government),
prior to the effective date of the interim rules, a mandate for providers to obtain from each user either a
payment of $75 (this option is available if the equipment was obtained directly from the IP CTS provider)
or a certification from an independent, third party professional that (1) the consumer has a hearing loss
that necessitates use of captioned telephone service, and (2) the third party professional understands that
the captions on captioned telephone service are provided by a live communications assistant and is funded
through a federal program. In addition, we require that the providers require their users to obtain from the
third party professional the professional's name, title, address, telephone number, and e-mail address. We
adopt this rule because we are concerned that prior to the effective date of the interim rules, consumers
who may not have had a hearing loss necessitating the use of IP CTS may have been induced to sign up
for service by the enticement of equipment provided for free or at a price substantially below the actual
cost of the equipment.224 We acknowledge that we found the third party certification process under the
interim rules less effective than expected,225 and that, accordingly, we do not retain this approach for new
users. However, existing users of IP CTS that received equipment for less than $75 prior to the effective
date of the interim rule did so at a time when the rules permitted providers to do so and still receive
compensation from the Fund. Thus, as an equitable matter, we find those users more similarly situated to
users registered under the framework of the interim rules.226 Accordingly, we will allow an IP CTS
provider to continue to collect compensation from the Fund for those existing users who received the
equipment for free or for less than $75 directly from the IP CTS provider and subsequently pay $75 to the


221 IP CTS Interim Order, 28 FCC Rcd at 730, 49, n.130 (citing Lifeline/Link-Up Order, 27 FCC Rcd at 6717,
130). The number of IP CTS users is smaller than the number of Lifeline subscribers, and so a slightly shorter
timeline is appropriate for registration of IP CTS users.
222 See Consumer Groups Comments at 12.
223 See id.at 12.
224 See IP CTS Interim Order, 28 FCC Rcd at 716-18, 19-22.
225 See section III.B.1, supra.
226 Further, where existing users did not obtain their equipment directly from the IP CTS provider, a retroactive
payment of $75 would be cumbersome to implement. In addition, in cases where the equipment was originally
obtained, e.g., from a spouse or other close relative of the consumer, payment of $75 to the spouse or other relative
would not necessarily be effective in signaling the consumer's willingness to make a significant investment in the
equipment.
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IP CTS provider.227 In addition, for those existing users who did not receive their equipment directly
from the provider or who do not wish to pay $75 for the equipment, we believe an alternative method of
establishing eligibility is appropriate, consistent with the protections we adopt for IP CTS more generally.
To that end, we find that requiring such users to obtain certification from an independent third party
professional is likely to provide at least some incremental benefit--even if not ideal--to help ensure that
only those individuals needing this service to receive functionally equivalent telephone service are able to
use it. As the Commission found in the IP CTS Interim Order, we continue to set the threshold for this
purpose at $75 because we believe, and the record reflects, that a consumer who pays $75 or more for IP
CTS equipment is not likely to do so if the consumer does not need IP CTS to understand telephone
conversations.228
73.
To achieve compliance with this mandate, we emphasize that the third-party professional
must be qualified to evaluate an individual's hearing loss in accordance with applicable professional
standards.229 Such professionals may include physicians, audiologists and other hearing related
professionals,230 and may not include a professional with a specialty that would not ordinarily be capable
of evaluating hearing loss.231 Additionally, we believe that a professional's certification of a consumer
could be directly or indirectly influenced by IP CTS providers through compensation, opportunities for
meeting potential clients, or otherwise, if IP CTS providers are permitted to refer certifying professionals
to consumers, arrange seminars or meetings where professionals are available to provide certifications for
consumers, or otherwise facilitate such certification or enter business relationships with certifying
professionals. Specifically, we believe that the relationships established by such activities may result in
professionals being more likely to provide certification that a consumer needs IP CTS for effective
communication, even in situations where another technology, such as an enhanced amplification
telephone, may serve the consumer better than IP CTS. Therefore, the rule we adopt provides that the
third party professional making such certification may not have been referred to the IP CTS user, either
directly or indirectly, by any provider of TRS or any officer, director, partner, employee, agent,
subcontractor, or sponsoring organization or entity (collectively "affiliate") of any TRS provider. Nor
may the third party professional making such certification have any business, family or social relationship
with the TRS provider or any affiliate of the TRS provider from which the consumer is receiving service.
Moreover, we prohibit any provider from facilitating or otherwise playing a role, in any way, in the
acquisition of such third party professional certifications through seminars, conferences, meetings or other
gatherings in community centers, nursing homes, apartment buildings, or any other location. Prohibited
arrangements include any program or activity in which a provider, its affiliates, or its affiliates of


227 Consistent with our rules, such payment shall be documented by the IP CTS provider, and the IP CTS provider
shall retain records of such payment for at least five years after the consumer stops using the IP CTS provider's
service.
228 See section 35, supra. See also IP CTS Interim Order, 28 FCC Rcd at 717-18, 22; NASRA Comments at 2;
TEDPA Comments at 2; Hamilton Comments at 5; HLAA comments at 7 ($75 would be acceptable if the FCC sets
a de minimis amount, but market research is needed).
229 47 C.F.R. 64.604(c)(9)(v)(A); IP CTS Interim Order, 28 FCC Rcd at 718-19, 24.
230 To ensure that third party professionals who are generally not qualified to evaluate hearing loss do not provide
these required certifications in violation of the Commission's rules, we are narrowing the list of professionals from
those listed in the IP CTS Interim Order. See IP CTS Interim Order, 28 FCC Rcd at 718-19, 24.
231 For example, since professionals who specialize in ophthalmology, dermatology, urology, radiology, podiatry, or
pharmacy generally would not be expected to have the familiarity needed to attest to the individual's hearing loss or
need for IP CTS, a certification from a professional practicing in one of these specialties is likely to be in violation
of the requirement that the third party professional must be qualified to evaluate an individual's hearing loss in
accordance with applicable professional standards. 47 C.F.R. 64.604(c)(9)(v)(A); IP CTS Interim Order, 28 FCC
Rcd at 718-19, 24.
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affiliates play a role in arranging, scheduling, sponsoring, hosting, conducting or promoting for the
purpose of acquiring such certifications. To ensure the reliability of the third party certification, we will
further require that it be made under penalty of perjury. To ensure that information supporting the
eligibility of users continues to be maintained and available for Commission review, we require that
records of user registration and self-certification, with all the information required to be included in such
certifications, be maintained for a minimum of five years after the consumer ceases to obtain service from
the provider.232
4.

Confidentiality of Registration and Certification

74.
In the NPRM, the Commission asked whether it should make permanent its interim rule
requiring each IP CTS provider to maintain the confidentiality of registration and certification
information obtained by the provider, and to not disclose such registration and certification information,
as well as the content of such registration and certification information except as required by law.233 All
providers and consumer stakeholders commenting on this issue agree on the need for a permanent rule
requiring confidentiality and nondisclosure.234
75.
The Commission acknowledges that data obtained for the purposes of IP CTS registration
may include sensitive personal information.235 In light of the general consensus that such information is
private, the Commission makes permanent its interim rule requiring each IP CTS provider to maintain the
confidentiality of registration and certification information that it acquires, and to not disclose such
registration and certification information except as required by law. We note that in the event that the
Commission adopts a rule requiring registration to take place in a centralized registry, as proposed in the
Notice accompanying this Report and Order,236 these confidentiality protections will likely be
supplemented with strict security safeguards protecting against the unauthorized disclosure of information
housed in that database.237 For TRS (including IP CTS) 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.238
5.

Provider Compliance with Eligibility Requirements

76.
In the IP CTS Interim Order, the Commission sought comment on a proposed
requirement that applicants seeking certification as IP CTS providers, including any applicants with
pending applications for certification to whom certification has not been granted as of the effective date of
the proposed requirement, submit to the Commission a description of how they will ensure that they do


232 This is consistent with other recordkeeping requirements applicable to iTRS providers. See, e.g., 47 C.F.R.
64.604(c)(5)(D)(7) (requiring that call data supporting claims for payment from the TRS Fund be maintained for a
minimum of five years), 64.631(a)(2)(requiring that records of verification of a consumer's authorization for a
change of default provider be maintained for a minimum of five years).
233 IP CTS Interim Order, 28 FCC Rcd at 730, 48.
234 See e.g. TDI Group Comments at 8, n.16; Sprint Comments at 8, n.9; Purple Comments at 2, 9-10 ("IP CTS
providers should be required to maintain the confidentiality of user information and the FCC should apply CPNI-
like requirements.").
235 Cf. VRS Structural Reform Order, 28 FCC Rcd at 8652, 75.
236 See section IV.B, infra. The Commission mandated use of a centralized database for VRS registration and
verification in the VRS Structural Reform Order. VRS Structural Reform Order, 28 FCC Rcd at 8647-56, 62-86.
237 See VRS Structural Reform Order, 28 FCC Rcd at 8652-53, 75-76 (noting the need for sufficient safeguards to
maintain the personal nature of the information in the database and restricting access to the database to authorized
entities and only for authorized purposes).
238 See id. at 8683-84, 164 (applying the Customer Proprietary Network Information protections to TRS users).
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not request or collect payment from the TRS Fund for service to consumers who do not satisfy the
registration and certification requirements contained in the rules proposed therein, and an explanation of
how those measures provide such assurance.239 The Commission also sought comment on a proposal that
applicants whose submissions do not adequately establish that they have adequate measures and
procedures in place to ensure that they will serve only eligible users who satisfy the registration and
certification requirements will be denied IP CTS certification.240 We did not receive any comments
specifically opposed to this proposal.
77.
We adopt the Commission's proposed rule that applicants seeking certification as IP CTS
providers, including any applicants with pending applications, must submit to the Commission a
description of how they will ensure that they do not request or collect payment from the TRS Fund for
service to consumers who do not satisfy the registration and certification requirements, and an
explanation of how those measures provide such assurance. Further, pursuant to section
64.606(b)(2)(ii),241 we will deny certification to any applicant for certification to provide IP CTS that does
not establish as part of its compliance plan that it has adequate measures and procedures in place to ensure
that it will seek payment for serving only eligible users who satisfy the registration and certification
requirements. Although we appreciate the Consumer Groups' interest in IP CTS competition and concern
that any new rules not delay action on certification applications, we believe that to prevent waste, fraud
and abuse of the TRS Fund, it is critical that applicants seeking certification to be IP CTS providers
demonstrate to the Commission that they will provide service only to consumers who have established
their eligibility through compliance with the registration and certification processes established by the
Commission. Noncompliant provider practices not only allow some providers to obtain a competitive
advantage over providers that operate in compliance with the Act and our rules, but, by resulting in
payments from the TRS Fund for unauthorized service, threaten to undermine the key goal of section 225
to ensure the provision of TRS to eligible users.242
6.

Eligibility Thresholds

78.
Background. In the NPRM, the Commission sought comment on whether to adopt a
specific quantitative threshold to determine eligibility to use IP CTS.243 The Commission explained that
levels of hearing loss are frequently classified in the following categories, defined in terms of the level of
amplification in decibels of gain (abbreviated as dB HL) that are necessary for the individual to detect
sound: mild (26-40 dB HL); moderate (41-54 dB HL); moderately severe (55-70 dB HL); severe (71-90
dB HL); profound (91+ dB HL); and totally deaf (no hearing at all).244 The Commission asked which of
these thresholds, if any, are appropriate,245 and for commenters who oppose quantitative requirements to
propose alternative eligibility requirements and to weigh the potential benefits of establishing quantitative


239 IP CTS Interim Order, 28 FCC Rcd at 730, 50.
240 Id. at 730, 50.
241 47 C.F.R. 64.606(b)(2)(ii).
242 See VRS Structural Reform Order, 28 FCC Rcd at 8648, 64.
243 IP CTS Interim Order 28 FCC Rcd at 728-30, 44-48.
244 Id. at 728, 44, citing, e.g., National Research Council, Hearing Loss: Determining Eligibility for Social Security
Benefits
, p. 59 (National Academy of Sciences, 2005) found at
http://www.nap.edu/openbook.php?record_id=11099&page=59 (last visited, Jan. 17, 2013); Hear-it.org, "Definition
of Hearing Loss," found at http://www.hear-it.org/Defining-hearing-loss (last visited, Jan. 17, 2013).
245 The Commission explained that it was aware of only three states that had established mandatory or recommended
criteria requiring that an individual's hearing loss be severe to profound in order to receive a CTS device. IP CTS
Interim Order
, 28 FCC Rcd at 728, 45 (describing requirements established by programs in North Dakota,
Washington, and Wisconsin).
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and other threshold eligibility criteria against the potential costs.246 Finally, the Commission asked
whether states that have their own eligibility threshold requirements should be allowed to use such criteria
for IP CTS calls made by their residents to the extent that these requirements exceed federal standards,
and so long as such state requirements do not conflict with federal law.247
79.
The majority of commenters, including providers, consumers, and telecommunications
carriers contributing to the Fund, express opposition to quantitative threshold eligibility requirements
based on decibel levels to determine IP CTS eligibility.248 The RERC-TA offers a comprehensive
explanation for why it believes this approach would be inappropriate:
Predicting the need for [IP CTS] with a single value derived from an audiogram belies
the complex nature of speech understanding for individuals with hearing loss. . . . While
the audibility of speech is a significant factor in explaining the deficits individuals with
hearing loss experience in understanding speech, other factors, such as auditory
distortions and susceptibility to background noise, can be responsible for further
reductions in speech understanding capabilities. . . . [S]imply providing additional sound
level through amplification . . . does not fully ameliorate the speech understanding
difficulties[,] especially in noisy situations. 249
The RERC-TA adds that the range and types of listening demands that individuals may confront in
different situations, as well as age, can also affect speech understanding. For example, they report that
the ability to understand speech has been found to decline in difficult listening situations as one's age
increases.250
80.
Similarly, both the Consumer Groups and HLAA maintain that any specified dB level of
hearing loss criteria would be arbitrary and consequently exclude from the program many persons with a
legitimate need for IP CTS.251 Citing earlier comments filed with the Commission, the Consumer Groups


246 IP CTS Interim Order, 28 FCC Rcd at 729, 47.
247 Id. at 729-30, 47.
248 See, e.g., Consumer Groups Comments at 10-12; RERC-TA Comments at 10-13; Hamilton Comments at 6;
CTIA Comments at 6; ALOHA Comments at 5; TEDPA Comments at 2; NASRA Comments at 2. But see,
Miracom Comments at 9 (supporting professional certification for all users and suggesting a hearing loss eligibility
requirement of at least 40 dB in the good ear). See also Consumer Groups, Ex Parte Letter, CG Docket No. 03-123
(filed Dec. 27, 2012); Consumer Groups, Ex Parte Letter, CG Docket No. 03-123 (filed Jan. 7, 2013) (Consumer
Groups First January 7, 2013 Ex Parte); Consumer Groups, Ex Parte Letter, CG Docket No. 03-123 (filed Jan. 7,
2013) (Consumer Groups Second January 7, 2013 Ex Parte) (arguing that any dB criteria would be arbitrary and that
there is no evidence that self-certification is not working or that users are engaged in fraud); TDI, Ex Parte Letter,
CG Docket No. 03-123 (Dec. 19, 2012); HLAA, Ex Parte Letter, CG Docket No. 03-123 (filed Dec. 20, 2012);
Ultratec, Inc., Ex Parte Filing entitled IP Captioned Telephone Best Practices Policy, CG Docket No. 03-123, at 3-5
(filed Sept. 21, 2012) (Ultratec Best Practices); Hamilton, Comments of Hamilton Relay, Inc. in Support of IP CTS
"Best Practices" Policy at 2 (Nov. 1, 2012); Sprint, Ex Parte Letter, CG Docket No. 03-123 (Dec. 21, 2012).
Miracom was the only commenter who filed in support of a threshold eligibility requirement. Miracom Comments
at 9.
249 RERC-TA Comments at 10. RERC-TA supports its position with a discussion of recent research on speech
understanding. RERC-TA Comments at 11-13. See also Linda Kozma-Spytek and Dr. Christian Vogler, Ex Parte
Letter, CG Docket No. 03-123 (Dec. 20, 2012) (explaining that imposing criteria based on a single value derived
from an audiogram would exclude people from using IP CTS whose speech recognition performance is too poor to
allow them access to alternatives) (Spytek/Vogler Ex Parte).
250 RERC-TA Comments at 11.
251 Consumer Groups Comments at 10; HLAA Comments at 13 (noting that it "firmly, adamantly and vehemently
oppose[s] any move to set a decibel level threshold requirement to be eligible to use IP CTS"). Among other things,
HLAA expresses concern that "setting a dB level certification would set a terrible precedent for people with
(continued....)
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explain that "[a]udiograms are notoriously poor predictors of speech recognition performance by people
with hearing loss,"252 and that "in addition to the dB level of hearing loss, audibility is affected by the
shape of the hearing loss in terms of the frequency spectrum, device noise and distortion, and other
variables that medical tests are unable to capture." 253 Finally, Consumer Groups oppose allowing the
states to impose any requirements that exceed those adopted by the Commission because IP CTS is a
service provided nationwide, and "eligibility should not depend on one's state of residence."254
81.
TRS providers also generally oppose determining IP CTS eligibility based on a specified
dB hearing loss threshold.255 For example, Sorenson claims that numerical thresholds are not effective in
determining need,256 points to the burdens associated with getting an audiology examination,257 and
suggests that nearly all Sorenson customers have either a hearing aid or cochlear implant, indicating their
need for assistive devices that generally are not prescribed for individuals who have a mild hearing
loss.258 Likewise, Hamilton rejects a minimum decibel hearing loss because, it claims, hearing
comprehension plays an "equally important part of the analysis" and a dB threshold, because it is
arbitrary, would exclude legitimate consumers of the service.259 CTIA concurs that, in addition to
requiring persons with hearing disabilities to undergo testing, testing an individual's ability to
discriminate speech is not flawless and a quantitative standard would impede the ability of individuals
who truly require IP CTS from obtaining this service.260
82.
Discussion. Based on the information provided by commenters to this proceeding, we
are persuaded that we should not adopt eligibility criteria for IP CTS based on a specified decibel (dB)
level of hearing loss at this time. As discussed above, with the exception of Miracom,261 all commenters
(Continued from previous page)


disabilities who have access to services and products that are protected by the Americans with Disabilities Act
[ADA]." Id. See also HLAA Reply Comments at 2.
252 Consumer Groups Comments at 10, citing Spytek/Vogler Ex Parte.
253 Consumer Groups Comments at 10 (citations omitted). Consumer Groups add that quantitative criteria could
also exclude people with hearing loss that varies over time, such as those with Meniere's disease, as well as persons
who have central auditory processing disorders, or who only are able to hear well in quiet settings. For all of these
reasons, the Consumer Groups specifically reject Dr. McBride's proposal, presented in the NPRM, for IP CTS
eligibility to be determined using a threshold of 40 dB hearing loss in the better ear. Consumer Groups Comments
at 11, citing Ingrid K. McBride, Ph.D., Director of Audiology for the Department of Speech and Hearing Science of
Arizona State University, Ex Parte Declaration, CG Docket No. 03-123 (filed Jan. 9, 2013) (McBride Declaration)
(recommending the threshold standard for defining a moderate hearing loss of 40 dB HL in the better ear,
supplemented with the alternative of the reasonable opinion of a hearing professional that the individual is not
capable of using the telephone in a manner that is functionally equivalent to telephone users without hearing loss).
254 Consumer Groups Comments at 11. Consumer Groups further urge the Commission to "preempt states from
imposing any quantitative dB hearing loss threshold requirements or other state-specific requirements" on IP CTS
users. Id.
255 See, e.g., Hamilton Comments at 6; CTIA Comments at 6; Sorenson Comments at 24-27.
256 Sorenson Comments at 25 (noting that there are "too many factors unrelated to a person's `decibels of gain' score
that impact his or her ability to use the telephone without captioning.").
257 Id. at 27 (claiming that requiring elderly, hard of hearing consumers to travel to an audiologist would present a
"significant and unreasonable burden").
258 Id. at 26. Nonetheless, if the Commission chooses to adopt a dB hearing loss threshold, Sorenson supports a
40dB threshold requirement. Id. at 27.
259 Hamilton Comments at 6. Hamilton adds that hearing comprehension cannot be easily measured using objective
criteria and is best left to audiologists and other professionals.
260 CTIA Comments at 6.
261 See Miracom Comments at 9 (supports a 40 dB hearing loss eligibility threshold).
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oppose the use of a specified decibel level of hearing loss on the grounds that it does not take into account
all other factors that may contribute to an individual's difficulty in understanding speech on a telephone.
Thus, at this time, and on this record, we are not persuaded that we can readily identify bright-line
eligibility thresholds for which the benefits in protecting the Fund outweigh the costs, including the
potential for excluding consumers for whom use of IP CTS otherwise would be consistent with section
225 of the Act and Commission policy. Nevertheless, the Commission will continue to monitor IP CTS
provider practices and usage. If the reforms we adopt today and any additional reforms that we adopt in
response to the Notice are not effective in preventing ineligible users from using IP CTS, the Commission
may revisit this issue at a future time.

D.

Notification Label

83.
For the reasons discussed below, we adopt a notification labeling requirement for IP CTS
equipment informing both new and existing users that IP CTS may be used only by registered IP CTS
users. We will not require, at this time, that a similar notice appear on the IP CTS device's screen.
84.
Background. To further prevent casual or inadvertent use of IP CTS, the Commission
sought comment on whether it should require that each piece of new IP CTS equipment have a label on its
face in a conspicuous location specifying that FCC regulations require that captions may be used only by
people with hearing loss who require captions to fully understand telephone conversations.262 The
Commission also sought comment on whether it should require, for equipment that is already in the hands
of consumers, that IP CTS providers send such labels to their registered users of this service, with specific
instructions directing consumers to affix such labels on the front of their IP CTS equipment in a
conspicuous location.263 In addition, the Commission asked whether it should require that the same
information be provided on the caption screen when the equipment is turned on and in captions-off mode,
as well as during the time period after the consumer pushes the "captions on" button (or takes some other
similar action to initiate captioning) and before captioning commences.264 The Commission asked
commenters to weigh the costs of these labeling and display requirements against the benefits of such
requirements.265
85.
While commenters generally support a notice requirement to alert consumers on the need
for only eligible user(s) to use an IP CTS device,266 they differ as to the form that this notice should take,
and the manner in which the notice can be most effective and least intrusive. Several providers seek
flexibility on how the notice is provided that is, either via a printed label that adheres to the exterior of
the IP CTS device or an electronic message that appears on the device's screen,267 as well as on the sizing
of a label so that it has a font that is large enough for people to read, but small enough to fit on the


262 IP CTS Interim Order, 28 FCC Rcd at 731, 55, 747, Appendix E (containing proposed rule).
263 IP CTS Interim Order, 28 FCC Rcd at 731, 55.
264 Id.
265 Id.
266 See e.g., Purple Comments at 9 (no objection to label on the device as long as provider is not held liable for
ensuring that label remain on after delivery to user); CTIA Comments at 8 (support label requirement); Miracom
Comments at 12-13 (support the label, but not the notice on the caption screen); TEDPA Comments at 3; NASRA
Comments at 3.
267 See, e.g., Ultratec Reply Comments at 14 (if labels are required, requests "flexibility either to print such labels for
new and existing users to affix to their CPE or to display a notice on-screen"); Purple Comments at 9; Sprint
Comments at 9-10 (supports some form of notice, but IP CTS providers should have flexibility to print labels or
have the notice on the caption screen); Sorenson Comments at 30 (if required, label options could include stickers,
permanent labeling, or a notice on the screen). Sorenson also suggests that providing notice on the screen can be
achieved at a modest cost through a software update, which can be changed with further software updates, as
needed. Sorenson Comments at 30.
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device.268 Other commenters express concern about requiring notices to appear on the caption display
screen because these can annoy consumers, cause confusion, and result in negative consumer response.269
For example, Purple maintains that an on-screen notice is burdensome and could cause confusion.270 If a
notice on the screen is required, Sorenson seeks flexibility to develop a message that is effective within
the limited screen size.271
86.
Consumer Groups believe that an added notification in the form of a label on IP CTS
devices is not necessary because adoption of the interim rules on a permanent basis will reduce the use of
IP CTS by individuals who do not need the service.272 However, if any notice is required, Consumer
Groups recommend that the notice appear on the screen at the beginning of a call.273 HLAA does not
object to using a label or a notice on the screen as one part of a larger educational effort to alert existing
and new users about the proper use of the phone, but expresses doubt about whether a notice or label
alone would be effective.274
87.
Discussion. After a careful review of the comments, we conclude that a printed label to
be adhered to the IP CTS device itself will be the best approach for supplementing other information
made available to IP CTS users on the need to limit use of the device only to users who have registered
for IP CTS. We are persuaded by commenters that a notice appearing on the device's screen before each
call might be an intrusive annoyance, delay calls, and cause confusion as to whether the notice is part of
the captioned message, especially on incoming calls.275 By contrast, for software-based IP CTS on
mobile phones, laptops, tablets, computers or other similar devices, we conclude that a printed label is
impractical. Instead, we require IP CTS providers to ensure that, each time the consumer logs into the
application, the notification language shown above appears in a conspicuous location on the device screen
immediately after log-in.
88.
Additionally, although the IP CTS Interim Order proposed a notification that "FCC
regulations permit the use of captions only by people with hearing loss who require captions to
communicate effectively using the telephone,"276 we now conclude that a shorter notice would be
preferable. Specifically, we conclude that a notice simply prohibiting persons other than registered users
with hearing loss from using the phone with captions on will best effect the purposes of the label.
Pursuant to our rules, "registered users" will have gone through the certification process. Such shorter
notice is also more likely to fit on the device in a conspicuous location. Implicit in this requirement, as
well as implicit in the requirement that IP CTS providers, in order to be eligible to receive compensation
from the Fund for providing IP CTS, must first register the user,277 is the underlying requirement that only


268 Ultratec Reply Comments at 14. See also Sorenson Comments at 30 (urging flexibility with respect to the
wording to ensure that the message fits within the space available on the equipment or on the screen).
269 Ultratec Reply Comments at 14-15.
270 Purple Comments at 9.
271 Sorenson Comments at 31.
272 Consumer Groups Comments at 13. See also Sorenson Comments at 31 (a label or notification is not needed if
the "default off" interim rule is retained).
273 Consumer Groups Comments at 13.
274 HLAA Comments at 15-16. See also Ultratec Reply Comments at 13-14 (a label will not discourage misuse and
that continued consumer education efforts would be more effective).
275 See, e.g., Purple Comments at 9; Ultratec Comments at 14, 15.
276 See IP CTS Interim Order, 28 FCC Rcd at 747, Appendix E.
277 See section III.C, supra. See also Appendix B, 64.604(c)(9).
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registered users may use IP CTS phones with the captions turned on. We codify this requirement to make
it explicit in section 64.604(c)(11) of our rules.278
89.
Accordingly, we require that each IP CTS provider ensure that its IP CTS equipment has
affixed to its face and in a conspicuous location, a label that contains the following brief statement in a
clearly legible font:
FEDERAL LAW PROHIBITS ANYONE BUT REGISTERED USERS WITH
HEARING LOSS FROM USING THIS DEVICE WITH THE CAPTIONS ON.279
Each IP CTS provider shall maintain, with each consumer's registration records, records stating whether
the required label was affixed to such equipment prior to its provision to the consumer. Such records
shall be maintained for a minimum period of five years after the consumer ceases to obtain service from
the provider.
90.
We also require any IP CTS provider that already has distributed IP CTS equipment to
consumers as of the effective date of the final rule, to distribute the above equipment labels to such
consumers, along with clear and specific instructions directing the consumer to place such labels on the
face of their IP CTS equipment in a conspicuous location.280 We direct that such labels and instructions
be provided to consumers within thirty (30) days after the effective date of the final rule. To ensure that
information supporting provider compliance with this requirement continues to be maintained and
available for Commission review, we require that records of the provision to consumers of required
labels, as well as instructions for existing equipment, be maintained for a minimum of five years after the
consumer ceases to obtain service from the provider.281

E.

Default Captions Off

91.
Background. In the IP CTS Interim Order, the Commission expressed concern that
having IP CTS devices default to "captions on" would lead to casual or inadvertent use of IP CTS by
individuals either living with, or visiting a household or office of, an eligible IP CTS user.282 Because
most IP CTS equipment at the time was programmed to a setting that defaulted captions to "on," these
devices automatically displayed captions, unless the person making the call took an affirmative step to
turn the captions off.283 That IP CTS is provided without interruption in the normal conversational flow
and in a manner that is invisible to both parties to the call, the Commission explained, increased the
likelihood that individuals who did not need IP CTS would casually or inadvertently use this service,
resulting in improper billing of the TRS Fund.284 To avoid such misuse and ensure that the Fund is used
only to support calls made by people with hearing loss who need IP CTS to communicate by phone, the
Commission required, on an interim basis, that all providers ensure that equipment and software used in
conjunction with their IP CTS have captions turned off as the default setting, and that each time a


278 Appendix B, 64.604(c)(11)(iii).
279 Appendix B, 64.604(c)(11)(iii).
280 Appendix B, 64.604(c)(11)(iii). The final rule on equipment labels, 47 C.F.R. 64.604(c)(11)(iii), shall be
effective upon publication in the Federal Register of a notice announcing the approval of such requirements by the
Office of Management and Budget under the Paperwork Reduction Act of 1995 and an effective date of the rule.
281 This is consistent with other recordkeeping requirements applicable to iTRS providers. See, e.g., 47 C.F.R.
64.604(c)(5)(D)(7) (requiring that call data supporting claims for payment from the TRS Fund be maintained for a
minimum of five years), 64.631(a)(2) (requiring that records of verification of a consumer's authorization for a
change of default provider be maintained for a minimum of five years).
282 IP CTS Interim Order, 28 FCC Rcd at 720, 27.
283 The Commission noted that some equipment required a two-step process to turn the captions off. Id.
284 Id. at 722, 33.
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consumer initiates or answers an IP CTS call, the consumer be required to affirmatively turn on the
captions.285 The Commission found that any burden imposed on consumers by requiring them to take one
or more additional steps, such as pushing a button, to receive captions, was outweighed by the substantial
public interest in preventing the misuse of this service.286 The Commission nevertheless suggested that
this burden could be minimized by prominently displaying the captioning on-off button on the IP CTS
device.287 The Commission sought comment on whether it should make this interim rule permanent, and
if so, whether it should be changed in any way.
92.
Some commenters support the adoption of a default captions-off rule on a permanent
basis.288 Miracom, an applicant for certification to provide IP CTS service, asserts that the distribution of
phones that defaulted to "captions on" was "a substantial cause of the explosion in IP CTS minutes."289
USTelecom indicates that several states have already adopted a default captions-off rule for CTS, and
comments that such a rule is a "narrowly tailored and reasonable solution" for addressing misuse of IP
CTS.290 Both USTelecom and CTIA assert that any burden on IP CTS users would be outweighed by the
significant public benefit of protecting the TRS Fund.291
93.
Current TRS providers, however, generally raise concerns about the impact of the
default-off rule on consumers or offer qualified support,292 and consumer organizations oppose
continuation of the interim rule.293 The Consumer Groups argue that "the interim default captioning-off


285 Id. Accordingly, the interim rule disallowed giving consumers the option of changing the default setting from
captions-off to captions-on.
286 Id. at 722, 33 & n. 92.
287 Id. (referencing the CapTel 840i How-to-Guide at 26, which explained that a red light is lit around the captions
button when it is on).
288 See, e.g., USTelecom Comments at 5, 6; CTIA Comments at 7 (with no different rule for work or residential);
Sprint Comments at 8-10 (although it sees no evidence that it will limit the use of IP CTS service, Sprint supports
this, but not for wireless or web users). See also Miracom Comments at 11.
289 Miracom Comments at 11.
290 USTelecom Comments at 5.
291 Id. at 5-6; CTIA Comments at 7.
292 See, e.g., Hamilton, Ex Parte Letter at 2 (Jan. 10, 2013); Hamilton Reply Comments at 6-7 (requirement is too
much of a burden, particularly on elderly consumers); Purple Comments at 5-8 (while supporting the default-off
requirement with exceptions for waivers, cites to tests it ran that shows "[a] default-off setting delays the delivery of
the call to a CA by as much as two times the delay if configured with default-on"); Sorenson Comments at 28-30
(although not opposed to equipment being shipped with a default-off setting, Sorenson wants consumers to have the
option to change the setting to default-on, and argues that the default-off setting does not take into account the
demographic that uses the service, and that there is no evidence that a default-on setting increases ineligible use,
rather it increases eligible use); Sorenson Reply Comments at 7, 8, 23, 24 (75 percent of its customers prefer a
default-on setting for captions, and users miss the first part of a call while turning on the captions, which is not
functionally equivalent service). See also ALOHA Comments at 6 (objects to the requirement, but finds that it is
better than an alternative of requiring certifications by third parties).
293 See HLAA Reply Comments at 2-3 (a default-off setting flies in the face of functional equivalency); Consumer
Groups Reply Comments at 2-5 (interim rule is unduly burdensome and in possible conflict with various provisions
of the Communications Act, including 47 U.S.C. 225, 255, 617). Although some of these commenters offered
qualified support for a captions-off default setting in their opening comments, see, e.g., HLAA Comments at 14-15;
Consumer Groups Comments at 12-13, they objected to any such requirement in their reply comments, after
receiving input from consumers on the new default-off setting. See also Consumer Groups, Ex Parte Letter at 3, 2d
Attachment (Apr. 26, 2013) (Consumer Groups April 26, 2013 Ex Parte); Consumer Groups, Ex Parte Letter at 1-2,
Attachment 2 (June 20, 2013) (Consumer Groups June 20, 2013 Ex Parte); Consumer Groups, Ex Parte Letter at 1-
2, Attachment (June 26. 2013) (Consumer Groups June 26, 2013 Ex Parte).
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rule has proven highly disruptive to many IP CTS consumers[,] . . . [and] would also contravene Section
225 of the ADA because forcing IP CTS consumers to turn captions on for every call is not functionally
equivalent to a hearing user's ability to pick up a telephone and place a call.294 They add that "[t]he
default captioning off rule is especially problematic to IP CTS users who live alone or live in a
household where everyone is hard of hearing. . . . [N]o record evidence exists that a sufficient quantity of
misuse supports the default-off rule in these circumstances."295 Ultratec reports receiving hundreds of
complaints from consumers about the new feature, and asserts that rather than being a "small burden," the
default-off setting appears to be a "major disruption to many users,"296 including "less technologically
adept individuals for whom this extra step has proven to be very challenging."297 Hamilton reports that
consumers complain that they are missing "the initial portions of incoming and outgoing calls because of
the delay in receiving captions once the captions on feature is selected. This can be particularly
problematic, for example, when accessing an interactive voice response (`IVR') menu, where key
information can be missed in the initial moments."298
94.
Various commenters urge further study before a final rule is adopted requiring a default-
off setting for captions, arguing in part that the Commission needs more information to understand the
effect that this rule has on functional equivalency.299 Ultratec insists that there is no evidence that the
default-on setting significantly contributed to IP CTS misuse, and that absent such evidence, the
Commission should not adopt a permanent default-off requirement.300 Some commenters also urge the
Commission to grant exceptions to the captions default-off rule for answering machines,301 911 calls,302


294 Consumer Groups August 9, 2013 Ex Parte at 4.
295 Consumer Groups August 9, 2013 Ex Parte at 4. See also Sorenson August 5, 2013 Ex Parte at 3; Consumer
Groups August13, 2013 Ex Parte at 2-3. Sorenson also suggests that the default off rule is not justified where the IP
CTS phone has a warning label and is sitting adjacent to a non-CTS phone. Sorenson August 5, 2013 Ex Parte at 3.
296 Ultratec Reply Comments at 5.
297 Id. at 7. Ultratec attached an appendix to its comments containing testimonies from various individuals who
describe the difficulties they or their relatives have had with using IP CTS since the captions default-off rule went
into effect. See id., Appendix A.
298 Hamilton August 15, 2013 Ex Parte at 2-3. See also Sorenson August 5, 2013 Ex Parte at 3-4 (captions default
off results in the consumer missing the" initial, critical few seconds of a call in which the context is established").
Hamilton also suggests that if the Commission requires consumers to purchase equipment for at least $75, "doing so
may have obviated the need for any captions off requirement, because casual or inadvertent use would essentially be
eliminated through the purchase of equipment." Hamilton August 15, 2013 Ex Parte at 3.
299 See, e.g., RERC-TA Comments at 2-5; Consumer Groups Comments at 2-5, 12-13 (opposes the requirement
unless the Commission shows, through usability studies, that the requirement would not unduly burden consumers).
Hamilton Comments at 6-7 ("Hamilton urges the Commission to carefully analyze consumers' needs before making
this requirement permanent").
300 Ultratec Reply Comments at 8-9. According to Ultratec the average usage per CTS phone in six states that
require these phones to be shipped with the captions defaulted off is no different than the use of this service in states
that permit phones to have the captions defaulted on. Ultratec Reply Comments at 9, n.17. However, Ultratec
acknowledges that all six states with the default off requirement allow users to adjust the default setting to "default
on" to avoid the inconvenience of switching the caption setting every time they use their phone. To the extent that
users take advantage of this permanent override feature, they have changed the phone to a default on setting,
enabling captions to automatically appear every time the phone is used by anyone in their households. In this case,
there is no real difference between the way the phones function in each of these states and so the data fails to prove
Ultratec's point.
301 See e.g., id.at 11 (answering machine and auto answer features should continue to be allowed to be in a default
on setting); Consumer Groups Comments at 13 (if default off is adopted, it should not apply to answering machine
use); HLAA Comments at 15 (use of answering machines should work as equivalent to turning on captions for an
incoming call); Hamilton August 15, 2013 Ex Parte at 3.
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and specific circumstances, such as housing arrangements where the IP CTS user lives on his or her
own,303 or has a designated phone in a work setting.304 Finally, HLAA expresses the concern that the
ability to manipulate volume or to preset the volume so that it is loud enough for the consumer to hear
other parties should not be linked to the setting for captions, so that the consumer need not turn on both
features for every call.305
95.
In addition to comments from providers and consumer organizations, numerous
individuals submitted comments to the Commission expressing their opposition to the caption-off default
setting. Many of these commenters raise concerns about the ability of older persons who are cognitively
impaired to remember to turn captions on for both incoming and outgoing calls.306 Others point to the
difficulties they have experienced when they answer incoming calls with the captions-off default feature
because of delays in when the captions appear after they press the "captions on" button. They state that
because it is during this initial period of a telephone call that key information, such as the identity of the
caller, is obtained and the purpose and tone of the conversation is established, such delays deny them
functionally equivalent telephone service.307 Consumers also report that in some instances the delays at
the start of incoming calls result in callers hanging up on them rather than waiting for the called party
(i.e., the individual utilizing the captioning) to be ready.308
96.
Discussion. We continue to believe that, given the unusual characteristics of IP CTS
relative to other relay services,309 it is reasonable and prudent to require that equipment, software, and
mobile applications used in conjunction with IP CTS have a default setting of "captions off" at the
beginning of each call, so that the consumer must take an affirmative step to turn on the captions each
time the consumer wishes to use IP CTS. Although we have limited information about the interim rules'
impact on IP CTS minutes, in part because of the largest provider's failure to come into compliance when
(Continued from previous page)


302 See e.g., Ultratec Reply Comments at 12; Sprint Comments at 9, n.11.
303 See e.g. Purple Comments at 7; Purple Reply Comments at 1-2; Ultratec Reply Comments at 11.
304 See e.g. Miracom Comments at 11; Purple Comments at 7; Purple Reply Comments at 1-2.
305 See HLAA Comments at 15.
306 See, e.g., Comments of Carolyn Brown (Mar. 14, 2013) ("[F]or people like my elderly mother, or people with
mild dementia, steps including reading small text, pressing buttons on equipment, etc. will mean they will not use
the device. It will be too intimidating; they will forget the procedure."); Comments of Timothy Geran (Mar. 22,
2013) ("My wife is disabled physically, has trouble learning new things and . . . doesn't remember that she has to
turn captioning on."); Comments of Janella Carpenter (Mar. 20, 2013) ("I am beginning to be forgetful, and your
requirements that change the way to use the captioning confuses me."); Comments of Raymond Wilcenski (Mar. 22,
2013) ("My dementia will prevent me often from being able to use the phone."); Comments of Denise Heinrich
(Mar. 8, 2013) ("[T]o a 92 year old, this is disastrous. It absolutely needs to be automatic for them! Their decline in
cognitive skills demands that everything be as simple as possible with no changes. This is crucial to their safety and
well-being."); Comments of John Strehlau (Mar. 22, 2013) (audiologist whose patients "have become confused" by
the default-off rule).
307 See, e.g., Comments of Melissa Ruth (Mar. 4, 2013); Comments of Christopher Haggerty (Mar. 21, 2013);
Comments of Thomas Wylie (Mar. 22, 2013); Comments of Dana Mulvany (Mar. 12, 2013) (suggesting a
compromise whereby incoming calls have captioning for the first two minutes, after which the user would have to
opt-in to continue the captioning). See also Purple Comments at 8 and n.7 ("A default off setting delays the delivery
of the call to a CA by as much as two times the delay if configured with default-on.").
308 See e.g. Comments of Jean Christensen (Mar. 22, 2013) ("With the caption turned off I have to fumble to get it
on and with the short delay most people hang up."); Comments of Pearl Spodick (Mar. 22, 2013) ("I already have to
adjust the volume to the highest level one button at a time (at least 3 buttons) before calling or receiving a call. . . .
Each additional step slows and handicaps the flow of conversation.").
309 See supra section III.C.1.
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the interim captions-off rule took effect, call data submitted by providers to RLSA for the three months
immediately following the effective date of the rule indicate that usage of IP CTS, which had been
growing rapidly, is no longer climbing. Specifically, although prior to the release of the interim rules in
February 2013, the IP CTS program was experiencing an average growth of 7.5 percent per month over
the previous 13 months, for a total growth of 97 percent, since publication of the interim rules, the
program has seen an average of 3.7% decline per month.310
97.
While we are unable to quantify the amount of IP CTS usage attributable to casual or
inadvertent use of captions, it stands to reason that an unregistered individual who makes casual use of an
IP CTS telephone is likely to ignore the presence of captions, or to forget, or be unable or unmotivated
or unaware of the option to turn them off.311 In addition, especially in light of the history of this service
prior to the adoption of the interim rules, it may be that some currently registered IP CTS users do not
actually need IP CTS for effective communication.312 Others may need captions in some circumstances,
but not others.313 Accordingly, and because IP CTS is provided without interruption in the normal
conversational flow and the captions do not interfere in any way with the consumer's ability to conduct a
telephone call by voice in the ordinary manner, defaulting captions to "on" would mean that IP CTS may
be provided to individuals who do not need it and the TRS Fund is inappropriately billed for the cost.
Accordingly, we continue to believe that a default captions-off requirement is necessary to reduce misuse
of the service, and help protect the viability of the Fund in the face of the recent dramatic upsurge in IP
CTS usage.314
98.
To the extent that consumers have initially found the switch to be confusing, disruptive,
or to have caused delays in the start of captioning, we anticipate that most concerns will subside over time


310 Information is based on data provided to RLSA by providers over the past several months.
311 We note the results of a study by the Rehabilitation Engineering Research Center on Telecommunications Access
(RERC-TA), which surveyed over 2,000 CTS and IP CTS users who use standalone telephones to access the
service. See Initial IP-CTS Survey Analysis by the Rehabilitation Engineering Research Center on
Telecommunications Access, CG Docket Nos. 13-24 and 03-123 at 5 (filed Apr. 12, 2013) (RERC Survey). Of
those users who acknowledged sharing their telephones with persons without hearing loss, about 50 percent reported
that those with whom the phone is shared never turn off captions, while another 25 percent said that the sharers only
sometimes turn off captions. RERC Survey at 17-18. This finding appears to support the need for a default-off rule.
On the other hand, the study also found that those who acknowledged sharing their telephones with others
comprised only a small minority (about 15 percent) of the total surveyed, but it is possible that not all users who
share their phones are willing to acknowledge such sharing. We further note that the users surveyed are not
necessarily representative of the overall population of IP CTS users. The participants in the study were recruited
solely via the Internet (RERC Survey at 4), and their median age was 69 (RERC Survey at 10), which is younger
than the median age reported by providers.
312 In addition, some consumers who needed IP CTS when they registered for it may cease to need it for example,
if they obtain an improved hearing aid. Others who could see IP CTS captions when they registered for IP CTS may
experience a deterioration of eyesight to the degree that the captions are no longer helpful.
313 For example, a consumer may be unable to have effective telephone communication only when there is too much
ambient noise, may have particular trouble hearing and understanding callers with soft voices, but not those with
loud voices, or may be able to hear and understand low-pitched voices more easily than high-pitched.
314 We intend to continue to monitor the impact of this rule, however, including evaluating the extent to which it is
causing delays at the start of incoming calls (see, e.g., Comments of Melissa Ruth (Mar. 4, 2013); Comments of
Christopher Haggerty (Mar. 21, 2013); Comments of Thomas Wylie (Mar. 22, 2013); Comments of Dana Mulvany
(Mar. 3, 2012); Comments of Dan Schwartz (Mar. 20, 2013); Purple Comments at 8 & n.7), and will gather
additional feedback on this issue in the accompanying Notice.
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as default off becomes familiar.315 We continue to believe that a requirement to push one additional
button when dialing or when receiving a call will become habit to do so promptly and will not interfere
with the functional equivalence of the IP CTS experience for most consumers.316 We further believe that
permitting IP CTS users to permanently override the default-off setting and change it to captions-on, as
suggested by some commenters,317 is not an effective solution, as it will not address the concerns we have
that persons who are ineligible to use the service will casually or inadvertently use this service when in
someone else's home or office.
99.
At the same time, we recognize that some individuals may have particular difficulty with
accessing captions when they are defaulted to off.318 To address this circumstance, adopt a process for
this unique group of consumers to obtain an exemption from the default-off requirement if the consumer
has a cognitive or physical disability that significantly impairs the ability of the consumer to turn on
captioning at the start of each call.319 To prevent abuse of this exemption, we will require applicants
seeking this exception to submit to their provider (1) a self-certification, dated and made under penalty of
perjury, that the requirement to activate captioning at the start of each call significantly impedes the
consumer's ability to make use of the captioned telephone service;320 and (2) a certification from an
independent, third party, licensed physician in good standing,321 dated and made under penalty of perjury,
that the consumer has a physical or mental disability or functional limitation that significantly impedes
the consumer's ability to activate captioning at the start of each call, including a brief description of the
basis for such statement.322 In the event that the consumer is not competent to provide the required self-


315 In this regard, it is important to note that the increased delay experienced by many consumers in the delivery of
captions on incoming calls only occurs if the consumer forgets or omits to press the captions-on button
simultaneously with or prior to picking up the receiver.
316 For those users who find pushing even one additional button to be overly-burdensome, however, we provide an
opportunity for accommodation, as discussed below.
317 See, e.g., Sorenson Comments at 28-30.
318 See, e.g., Comments of Carolyn Brown (Mar. 14, 2013); Comments of Timothy Geran (Mar. 22, 2013);
Comments of Janella Carpenter (Mar. 20, 2013); Comments of Raymond Wilcenski (Mar. 22, 2013); Comments of
Denise Heinrich (Mar. 8, 2013); Comments of Vicki Boltz (Mar. 22, 2013); Comments of John Leap (Mar. 22,
2013) ("technology needs to be simple for us"); Comments of John Strehlau (Mar. 22, 2013).
319 See Ultratec Reply Comments at 10-12; Hamilton Reply comments at 3-4; Purple Comments at 5-8; Purple
Reply Comments at 1-2 (all commenting in favor of an exemption to the general rule). We believe that the
availability of this hardship exception responds to consumer concerns that these devices be capable of providing "at
least one mode that minimizes the cognitive, memory, language, and learning skills required of the user" in
compliance with the accessibility requirements of sections 255 and 716 of the Communications Act. Consumer
Groups Comments at 3 (citing 47 C.F.R. 6.3(a)(1)(x), 7.3(a) (1)(x), 14.21(b)(1)(x)).
320 This elevated self-certification is in addition to the self-certification already required of all IP CTS users. See
section III.C, supra.
321 The physician, who may be represented by a qualified, licensed health care professional in his or her medical
practice (such as a nurse practitioner), must be either the user's primary care physician or a physician whose
specialty is such that the physician is qualified to attest to cognitive or mobility disabilities of the type that would
make it difficult to remember to push or to physically push a button to turn on captions, for example, a gerontologist,
neurologist, or psychiatrist. A certification from a physician with a specialty that would not ordinarily be capable of
evaluating cognitive or mobility disabilities of the type that would make it difficult to remember to push or to push a
button to turn on captions shall not qualify for the submission of this exemption request, unless such specialist is the
user's primary care physician. For example, physicians who specialize in ophthalmology, dermatology, urology,
radiology or podiatry generally would not be expected to have the familiarity needed to attest to the individual's
functional limitations needed for this exemption.
322 These rules shall be effective upon publication in the Federal Register of a notice announcing the approval of
such requirements by the Office of Management and Budget under the Paperwork Reduction Act of 1995 and an
(continued....)
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certification, such certification shall be made by the consumer's spouse or legal guardian or a person with
power of attorney. A third-party, independent physician certification must include the physician's name,
title, area of specialty or expertise, address, telephone number, and e-mail address. In addition, we
prohibit providers from accepting a certification from any physician who is not "independent"; that is,
who has been referred to the IP CTS user, either directly or indirectly, by any provider of TRS or any
officer, director, partner, employee, agent, subcontractor, or sponsoring organization or entity
(collectively "affiliate") of any TRS provider. In addition, the physician making such certification shall
not have any business, family, or social relationship with and shall not have received any payment,
referral, or other thing of value from the TRS provider or any affiliate of the TRS provider, with whom
the individual seeking the exemption is requesting service. Additionally, we prohibit any provider from
facilitating or otherwise playing a role, in any way, in the acquisition of such physician certifications
through seminars, conferences, meetings or other gatherings in community centers, nursing homes,
apartment buildings, or any other location. Prohibited arrangements include any program or activity in
which a provider, its affiliates, or affiliates of affiliates play a role in arranging, scheduling, sponsoring,
hosting, conducting or promoting for the purpose of acquiring such certifications. If any IP CTS provider
facilitates certification by a third party physician, such IP CTS provider shall be subject to the potential
array of consequences that arise from violations of TRS rules, including revocation of its certification to
provide IP CTS or other enforcement action.
100.
IP CTS providers must maintain detailed records of all consumers who have submitted
such individual and physician certifications, including copies of these certifications, for a period of five
years after the consumer ceases to use the provider's service.323 IP CTS providers must further report to
the Commission on a monthly basis,324 subject to confidentiality requirements, and such records shall
include a list of all newly exempted consumers (with names redacted), the dates on which each consumer
registered for IP CTS with the provider and was provided with IP CTS equipment with a default setting of
captions on, the area of specialty or expertise of the certifying physician accompanying each hardship
certification, and the basis for granting each hardship exception. We require each IP CTS provider to
maintain the confidentiality of such certification information, and to not disclose such certification
information or the content of such information, except as provided herein or as otherwise required by law.
The Commission shall also maintain the confidentiality of such information, and shall carefully review it
to ensure that this exception to the rule is not abused.
(Continued from previous page)


effective date of the rule. We note that in section 35, supra, we found that a professional certification procedure was
not sufficient to eliminate the risk that users who do not need IP CTS would begin using this service if they receive
this equipment for free. By contrast, here, the professional certification is only needed to allow users who have
already registered, provided certification on their eligibility to use IP CTS, and attested to their understanding about
how this service works to be able to effectively use the service. Having to go through the additional step to obtain
the professional certification to be able to have the captions defaulted on (when such individuals do not need this
added attestation to merely use the phones with the captions defaulted off), we believe, will screen out individuals
who do not truly need the hardship exemption. Consumer Groups argue that obtaining such third party physician
certification will be burdensome. Consumer Groups August 9, 2013 Ex Parte at 5. However, because individuals
who would qualify for this exemption are likely to already have established relationships with primary care or other
physicians who are qualified to provide a certification, and it is likely that such physicians would already be familiar
with the individual's cognitive or physical disability, we do not find this requirement to be unduly burdensome.
323 This is consistent with other recordkeeping requirements applicable to iTRS providers. See, e.g., 47 C.F.R.

64.604(c)(5)(D)(7) (requiring that call data supporting claims for payment from the TRS Fund be maintained for
a minimum of five years), 64.631(a)(2) (requiring that records of verification of a consumer's authorization for a
change of default provider be maintained for a minimum of five years).
324 We delegate to the Chief, Consumer and Governmental Affairs Bureau the authority to modify the frequency of
this reporting requirement if it appears that this exemption is not being abused.
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101.
Finally, we agree with commenters who stress the need for a simple procedure to turn the
captions on,325 and note our understanding that most, if not all current providers, have strived to make this
process as easy as possible for consumers. Therefore, for the purpose of limiting as much as possible the
delay between when a consumer answers an incoming call and pushes the button to initiate captioning, we
require providers to ensure that each IP CTS telephone they distribute includes a button, icon, or other
comparable feature that is easily operable and requires only one step for the consumer to turn on
captioning.326 In the Notice, we also seek comment on whether we should prohibit providers from linking
the ability to manipulate or preset the volume to the selection for captions, so that IP CTS users can adjust
or keep the volume defaulted to their preferred level without having to turn both features on for every
call.
102.
Web and Mobile Devices. In a waiver petition submitted in response to the
Commission's IP CTS Interim Order,327 and its comments to this proceeding, Sprint argues that a default
captions-off requirement should not be required for Wireless CapTel and WebCapTel users because, in
order to access CapTel services on a mobile device or through a computer or tablet, the eligible user must
have opened the application and entered his or her user ID and passcode.328 Sprint acknowledges that
once a consumer enables the application, the captioning stays on for each subsequent call until the
application is closed,329 and that it is unaware of any technological fix to require that the captions must be
turned on each time another call is made subsequent to the application being enabled.330 Purple also
argues that the default captions-off requirement should not be applied to exclusive users of software based


325 See, e.g., TEDPA Comments at 2 ("A single, clearly marked button should be required rather than a multi-step
menu option."); Comments of Nancy Garthwait (Mar. 22, 2013) ("work with hardware providers to make this as
easy and trouble free as possible").
326 Section 225(d)(1)(A) of the Act directs the Commission to "establish functional requirements, guidelines, and
operations procedures" for TRS. 47 U.S.C. 225(d)(1)(A). Because a critical component of a rule requiring
captions to be defaulted to off is the ability to turn them on when needed, the Commission is adopting a regulation to
ensure that is the case. We believe that this new rule, requiring providers to ensure that IP CTS devices have a
button, icon, or other comparable feature that is easily operable and requires only one step for the user to turn on
captioning, responds to consumer concerns that manufacturers of such devices provide "at least one mode that is
operable with user limited reach and strength." See Consumer Groups Comments at 3 (citing 47 C.F.R.
6.3(a)(1)(vi), 7.3(a)(1)(vi), 14.21(b)(1)(vi)).
327 Emergency Petition of Sprint Nextel for Limited Waiver and Clarification at 3-5 (filed Feb. 26, 2013) (Sprint
Waiver Petition).
328 Sprint Comments at 9-10. Sprint explains that a user must engage in multiple steps to enable these software
applications each time the user longs onto the service. Sprint Waiver Petition at 4-5. A WebCapTel user who wants
to make a captioned call through a computer must (1) open the browser and type the URL of the website, (2) enter
the user name and passcode, (3) type the number the user is calling, and (4) click on the "Place Call" button. Id. To
receive a captioned call on a computer, the user must (1) ensure that the computer is on and running and opened to
the CapTel provider's access page, (2) enter the user name and passcode, (3) enter the phone number attached to the
computer, (4) instruct the calling party to dial a toll-free number and enter the phone number of the phone attached
to the computer, and (5) answer the phone when it rings. Id. A user who has downloaded the Wireless CapTel
application to the user's mobile phone and wants to make a captioned call must (1) open up and log onto the
application by entering the user name and passcode, (2) wait until the application ensures that the mobile broadband
connection is fast enough for a captioned call, (3) enter the number the user is calling, and (4) tap the "Call" button
to dial the phone number and enable the captions. Id. To receive a captioned call on a mobile phone, the user must
(1) ensure that the application has been opened and that the user name and passcode have been entered, (2) wait until
the application ensures that the broadband connection is fast enough for a captioned call, and (3) upon receiving a
call, the user must tap the "Answer with Captions" button in order to receive captioning. Id.
329 Sprint Waiver Petition at 5.
330 Sprint Comments at 10; Sprint Waiver Petition at 5.
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IP CTS, given the nature and typical use of such services.331 In reply, Hamilton notes that mobile and
web-based IP CTS may already be compliant because a consumer must affirmatively open the application
or visit the web portal and log in before they can begin to use IP CTS.332 In response to the Sprint Waiver
Petition, the Consumer and Governmental Affairs Bureau (CGB) waived the interim default captions-off
requirement as applied to Wireless CapTel and WebCapTel on mobile phones, laptops, tablets, and
computers until the Commission issues an order addressing whether the interim rule requiring captions to
be defaulted off should be made permanent.333
103.
To the extent that a consumer must take an affirmative step each time he or she wants to
enable IP CTS on a web-enabled or mobile device in order to access IP CTS, we agree that the purpose of
the captions-off default rule is served. Moreover, as noted in the IP CTS Waiver Order, such devices,
which are typically personalized, are likely to be used only by the individual who needs captions, and are
not as likely to result in the same type of misuse as can occur with an IP CTS device that looks like a
home phone and that may be available for use by family members or visitors.334 Finally, as noted in the
IP CTS Waiver Order, we believe that it is unlikely that a hearing individual would attempt to make an IP
CTS call on one of these web or mobile devices, even if the person has access to the computer or mobile
device with the downloaded applications and knows the log-in information, because it would be easier
and more efficient to simply use the regular telephone feature of the device to make or receive calls.335
Because the underlying purpose of the captions off rule will continue to be served by the way these
software products operate and how they are likely to be used, we believe that the captions off requirement
is being met by the software applications when used on mobile phones, laptops, tablets, and computers,
provided that the following two conditions are satisfied: (1) consumers must actively set up the IP CTS
software feature by individually logging in with a unique ID and password that is provided only to the
registered user;336 and (2) the default setting switches to "captions on" only for the limited session during
which the consumer is logged on, rather than remaining on indefinitely.337 We understand that, at present,


331 Purple Comments at 6. Purple adds that "the proper measure [of whether to apply the default-off requirement]
should be an evaluation of the effectiveness of the service itself measured against the likelihood of misuse of a given
device," and explains that software based IP CTS is not likely to be used by others. Id. at 7.
332 Hamilton Reply Comments at 4-5.
333 IP CTS Waiver Order, 28 FCC Rcd at 6462, 18.
334 Id.
335 Id.
336 As discussed supra, section III.C, we are adopting an express rule stating that only registered users are permitted
to use IP CTS. Moreover, as with all forms of IP CTS, in the case of web-enabled or mobile devices, a provider
may not submit for compensation minutes of use by consumers who are not registered to use IP CTS, except for
minutes of use generated by existing consumers prior to the registration deadline. In an ex parte letter, Sprint
explained that both the WebCapTel and Wireless CapTel log-in sites have a "Remember Me" box, which if checked
will automatically enter the user's log-in information and enable the user to access the page that enables the user to
make or receive captioned calls. Sprint, Ex Parte Letter at 1, n.1 (filed Mar. 13, 2013) (Sprint March 13, 2013 Ex
Parte
). In the IP CTS Waiver Order, we found that the "Remember Me" application qualified for the limited
waiver, provided that, each time the user turns on the computer or mobile phone, the user must still go to the
WebCapTel or Wireless CapTel web page or application and follow the other steps of the multi-step procedures
described by Sprint before the consumer can make use of IP CTS. IP CTS Waiver Order, 28 FCC Rcd at 6462,
18. This ruling applies here as well.
337 In other words, a consumer must log in each time he or she uses a software-based form of IP CTS to qualify
under this exemption. If IP CTS software can be configured to load automatically upon a device's start up without
the user logging in, it would not qualify for this exemption. In the Sprint March 13, 2013 Ex Parte, Sprint
confirmed that users of WebCapTel and Wireless CapTel who have shut down their computers or mobile devices
must follow the multi-step procedures described in the Sprint Petition once they turn on their computers or mobile
(continued....)
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the number of IP CTS calls made via these types of web-enabled or mobile devices is small. In the event
that the pattern in the usage of IP CTS over these devices changes in a way that raises concerns about the
manner in which they are being used, we reserve the right to reconsider the manner in which we will
apply the captions off requirement to these devices.
104.
911 Calling. Several commenters raise concerns that in an emergency situation,
individuals may not remember to activate the caption functionality when calling 911 services.338 For
example, Ultratec states that IP CTS users may forget to take the extra step of manually enabling captions
"under the stress and panic of [an] emergency, thereby rendering them unable to communicate with first
responders."339 While we recognize that some consumers may forget to turn captions on while making a
911 call, the record does not provide sufficient data to enable us to evaluate the extent of this hazard.
Further, although one provider has told us that it can turn captions on for 911 calls while maintaining a
general setting for captions default off,340 the record is insufficient to determine the technical feasibility of
configuring equipment so that captions are defaulted to "on" solely for 911 calls. In the absence of such
data, we cannot conclude that the risks of persons being unable to communicate on 911 calls are so high
as to justify requiring providers to have their equipment default to captions-off on all calls. We believe
that the availability of an exception for those who have significant difficulty turning on captions,
combined with the requirement that IP CTS providers implement a "one touch" method of turning
captions on if technically feasible,341 addresses the concerns regarding 911 calling while we develop a
complete record.
105.
We nevertheless agree that it would be desirable if captions defaulted to "on" solely for
911 calls. We therefore clarify that IP CTS providers may automatically turn captions on solely for 911
calls and 911 call-backs to the extent it is technically feasible. We will continue to monitor this issue, and
in the accompanying Notice we seek comment on the feasibility of configuring IP CTS equipment so that
captions are automatically turned on only for 911 calls and on whether doing so should be required.
106.
Answering Machines. Several commenters also express concern about the consequences
of applying the captions default-off setting to answering machines and similar devices.342 From the
information received to date, we cannot conclude that, on balance, these concerns are significant enough
(Continued from previous page)


phones. As explained by Sprint, the WebCapTel and Wireless CapTel applications close when the user turns off the
device containing the application. Id. at 1.
338 See, e.g., Sprint Comments at 9, n.11 (a person "who is in an emergency situation such that he/she may not be
acting in [a] rational manner should not be required to remember that he/she must also . . . activate the captions
functionality when calling 911 services"); Clifford Cleary Comments (Mar. 7, 2013) ("captions were turned off
every time I stopped talking to check on my partner"); Leslie McQuilkin Comments (Mar. 7, 2013) ("I was forced to
wait and I was hung up by emergency services"); Renee Mallinson Comments (Mar. 25, 2013) ("in an emergency,
people can get flustered, especially at my age, and an added step could impair me in an emergency"); Lin Kogan
Comments (Mar. 22, 2013); Timothy Geran Comments (Mar. 22, 2013).
339 Ultratec Reply Comments at 12.
340 Hamilton, Ex Parte Letter at 1 (filed August 22, 2013).
341 We believe that providing a one-touch method is technically feasible, as the record indicates that some providers
have already implemented such a method. See Captel, Hamilton, and Sprint, Ex Parte Letter, Attachment at 20 (Feb.
28, 2013).
342 See, e.g., Consumer Groups Comments at 13; HLAA Comments at 15; Ultratec Reply Comments at 11
(explaining that Ultratec's phones previously were able to caption an incoming answering machine message and
store the information on the phone, but that under the "default off" requirement, the user has to press the captions-
on button sometimes multiple times - to "re-caption" the incoming voice message when he or she wants to get the
message).
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to outweigh the need to control potential misuse through a default-off rule. However, we remain open to
considering ways to ease these concerns and seek comment on this issue in the Notice.
107.
IP CTS Phones Available Only to Registered Users. Consumer Groups and some
providers have suggested that there is no need to require a default setting of captions off when an IP CTS
user is living alone, living only with other individuals who are hard of hearing, or is in an office setting
where no one else has access to that person's IP CTS phone.343 They posit that the chance of inadvertent
use under such circumstances is "remote."344 We remain concerned that even a consumer living alone or
working in a setting where others do not have access to the IP CTS phone may not need captioning for
every call, and that a default off setting may be needed to prevent unneeded use of the captioning. Thus,
we are not persuaded at this time that there should be a different rule for such users. At the same time,
however, we are open to revisiting this conclusion in the future, should experience show that such a
limited exception would not undermine our efforts to ensure that IP CTS is used only when truly needed.
For this reason we ask in the Further Notice whether an exemption should be provided for consumers
with IP CTS phones that are available only to registered IP CTS users. We also ask whether there should
be any other exemptions to the captions default off requirement.
108.
We reject the Consumer Groups argument that the default captions-off requirement
violates section 225 and 255 of the Act.345 We do not interpret section 225 as requiring that a relay
service with the characteristics of IP CTS must be always "on" unless consciously turned off, or as
providing that a requirement that a consumer turn on a relay service before using it deprives the consumer
of functionally equivalent service. Nor do we interpret such a requirement as rendering a relay service, or
its equipment, less "usable" under section 255. To the extent that consumers with cognitive or physical
disabilities have difficulty turning on captioning at the start of a call, we find that the exception we adopt
herein addresses any section 255 concerns.

F.

Extension of Interim Rules

109.
The interim rules adopted in the IP CTS Interim Order are set to expire on September 3,
2013.346 However, the final rules that we adopt today will not become effective until after that date. We
therefore extend the effectiveness of each interim rule until the final rule replacing it becomes effective.
Specifically, interim rule section 64.604(c)(8), the rule on referrals for rewards,347 will remain in effect
until 30 days after publication of a summary in the Federal Register348 of final rule section 64.604(c)(8);
interim rule section 64.604(c)(9); the rule on user registration and certification349 will remain in effect
until publication in the Federal Register of a notice announcing the approval of final rule section


343 See Consumer Groups August 9, 2013 Ex Parte at 4; Consumer Groups August13, 2013 Ex Parte at 2-3 and
Attachment 2; Sorenson August 5, 2013 Ex Parte at 3; Hamilton August 15, 2013 Ex Parte at 3; Purple Comments
at 7; Purple Reply Comments at 1-2; Ultratec Reply Comments at 11; Purple, Ex Parte Letter at 1-2 (August 23,
2013).
344 Consumer Groups August 9, 2013 Ex Parte at 4.
345 See id. at 4. See also Sorenson August 5 Ex Parte at 2-4 (arguing that default-off unlawfully interferes with
rights created under section 225).
346 See IP CTS Interim Order, 28 FCC Rcd at 710, 25 (setting a sunset date of 180 days after the effective date of
the interim rules on registration and certification become effective); 78 FR 14701, 14702 (2013) (announcing an
effective date of March 7, 2013 and an expiration date of September 3, 2013 for section 64.604(c)(9), the rule on
registration and certification).
347 47 C.F.R. 64.604(c)(8).
348 See 5 U.S.C. 553(d); 47 C.F.R. 1.427(a).
349 47 C.F.R. 64.604(c)(9).
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64.604(c)(9) by the Office of Management and Budget under the Paperwork Reduction Act of 1995;350
and interim rule section 64.604(c)(10), the rule on default captions off,351 will remain in effect until 30
days after publication of a summary in the Federal Register352 of final rule section 64.604(c)(10)(i).
110.
The Administrative Procedure Act (APA) provides that a substantive rule cannot become
effective earlier than 30 days after the required publication or service of the rule, except "for good cause
found and published with the rule."353 We take action to extend the effectiveness of the interim rules
before the final rules replacing them take effect in order to prevent a gap in these rules, and, consequently,
opening the door to practices that we have already determined could permit consumers who do not need
IP CTS to use this service. Such result, for the various reasons discussed in this Report and Order and the
Interim IP CTS Order, would be contrary to the purposes of section 225 of the Act,354 wasteful of the TRS
Fund, and thus contrary to the public interest. Further, we have no reason to believe that IP CTS
providers cannot comply with the extension of the interim rules because they have already been required
to comply with these rules since at least March 7, 2013.355 Accordingly, such providers do not need to
make any changes to their operating procedures to comply with the extension of the effectiveness of the
interim rules. We therefore find good cause to extend the effectiveness of each interim rule until the final
rule replacing it takes effect.

IV.

FURTHER NOTICE OF PROPOSED RULEMAKING

A.

Rate Methodology Used for IP CTS

111.
Background. Section 225 of the Communications Act of 1934, as amended (Act),356
directs the Commission to implement regulations for TRS cost recovery that provide for the
"jurisdictional separation" of TRS costs; i.e., the costs caused by interstate TRS are to be recovered from
all subscribers for interstate services, and the costs caused by the provision of intrastate TRS are to be
recovered from each intrastate jurisdiction.357 Interstate relay calls and all calls made via Internet-based
forms of TRS are funded through mandatory contributions made to the Interstate Telecommunications
Relay Service Fund (TRS Fund or Fund) by interstate telecommunications and VoIP service providers,
based on certain of their end user revenues.358 Eligible providers of interstate TRS that comply with the


350 Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995), codified at 44 U.S.C. 3501 et seq.
351 47 C.F.R. 64.604(c)(10).
352 See 5 U.S.C. 553(d); 47 C.F.R. 1.427(a).
353 5 U.S.C. 553(d). See also 47 C.F.R. 1.427(a).
354 47 U.S.C. 225.
355 Sections 64.604(c)(9) and (10) became effective on March 7, 2013. See 78 FR 8032 (2013); 78 FR 14701, 14702
(2013). Section 64.604(c)(8) became effective on February 5, 2013. See 78 FR 8032 (2013).
356 47 U.S.C. 225.
357 47 U.S.C. 225(d)(3)(B); see also 47 C.F.R. 64.604(c)(5)(ii). The Communications Act does not require a
specific funding method for intrastate TRS or state TRS programs and states generally recover the costs of intrastate
TRS either through rate adjustments or surcharges assessed on all intrastate end users, after which the states
reimburse TRS providers directly for their intrastate TRS costs. 47 U.S.C. 225(d)(3)(B) (certified state TRS
programs "shall permit a common carrier to recover the costs incurred in providing intrastate telecommunications
relay services by a method consistent with the requirements of [section 225]"). See also 47 U.S.C. 225(f).
358 See 47 C.F.R. 64.604(c)(5)(iii)(A), (B). See also Contributions to the Telecommunications Relay Services
Fund
, CG Docket No. 11-47, Report and Order, 26 FCC Rcd 14532 (2011) (VoIP Contribution Order).
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Commission's rules are entitled to seek recovery from the Fund for their "reasonable" costs of providing
such service.359
112.
The Commission uses various rate methodologies to compensate providers for the
provision of interstate and IP-based TRS. For example, the Commission determines how compensation
rates for video relay service (VRS)360 and Internet Protocol Relay Service (IP Relay) are calculated.361
Commission rules require TRS providers to submit to the Fund administrator projected cost and minutes
of use data, total TRS minutes of use, total interstate TRS minutes of use, total TRS operating expenses,
and total TRS investment, and "other historical or projected information reasonably requested by the
administrator for purposes of computing payments and revenue requirements."362 The Commission has
used these factors, including trends in historical costs, to determine rates.363 After the IP Relay rate is
initially set, however, it is adjusted over a three-year period using a price cap methodology.364 During
this period, the rate is increased annually by an inflation factor and adjusted downward by a factor that
takes into account increased efficiencies. The price cap IP Relay rate is also subject to adjustments based
on exogenous costs beyond the control of providers.365
113.
In contrast, rates for the interstate portion of traditional text-based TRS calls,366 speech-
to-speech relay services,367 PSTN-based CTS, and for all IP CTS are determined using the Multi-state
Average Rate Structure Plan (MARS Plan).368 Under the MARS Plan, the Fund administrator calculates
the compensation rates for TRS using a weighted average of competitively bid state rates. For IP CTS,
the Fund administrator uses a weighted average of competitively bid state rates for intrastate PSTN-based


359 See 47 C.F.R. 64.604(c)(5)(iii)(E).
360 VRS is a form of TRS that allows people with hearing or speech disabilities who use sign language to
communicate with others through video equipment and a broadband Internet connection. See 47 C.F.R.
64.601(27).
361 IP Relay is a form of TRS in which an individual with a hearing and/or speech disability or who is deaf-blind
connects to a CA using an IP-enabled device via the Internet. See 47 C.F.R. 64.601(17).
362 47 C.F.R. 64.604(c)(5)(iii)(D)(1). The Fund administrator reviews the submitted data, determines the average
per-minute compensation rate for the various forms of TRS, and submits the rates to the Commission by May 1st of
each year for approval. The Commission issues a rate order each year by June 30, either approving or modifying
these rates for the next Fund year, which runs from July 1 to June 30. See, e.g., Telecommunications Relay Services
and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities; Structure and Practices of the
Video Relay Service Program
, CG Docket Nos. 03-123, 10-51, Order, 27 FCC Rcd 7150, 7155, 13 n.56 (CGB
2012) (2012 TRS Rate Order).
363 See, e.g., VRS Structural Reform Order, 28 FCC Rcd at 8694-8706, 188216; Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No. 03-
123, Order, 25 FCC Rcd 8689, 869298, 620 (2010) (2010 TRS Rate Order) (using historical costs and demand
as a point of departure in revising VRS compensation rates previously set based on projected costs and demand),
aff'd Sorenson Communications, Inc. v. FCC, 659 F.3d 1035 (10th Cir. 2011) (Sorenson II).
364 See 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20161-64, 39-46.
365 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20163, 44.
366 Traditional text-based TRS is a form of TRS wherein an individual with a hearing and/or speech disability or
who is deaf-blind uses a text telephone, or TTY over the PSTN, to communicate by telephone through a CA with
other individuals. See generally 47 U.S.C. 225; Pub. L. No. 111-260, 103; 47 C.F.R. 64.601(22).
367 Speech-to-speech relay service is a form of TRS that allows individuals with speech disabilities to communicate
with other telephone users through the use of specially trained CAs who understand the speech patterns of persons
with speech disabilities and can repeat the words spoken by that person. See 47 C.F.R. 64.601(20).
368 See 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20151, 16, 20155-61, 2638.
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CTS for the prior calendar year,369 and files this rate with the Commission by May 1st of each year.370 In
addition, because some states compensate a much larger number of minutes than others, the calculation is
based on a weighted average rate by dividing total state dollars paid by total conversation minutes. In
calculating total state dollars (the numerator), the Commission makes adjustments to take into account
that some state rates are based on session minutes while others are based on conversation minutes.371
Additionally, on some occasions, the Commission has allowed the Fund administrator to exclude from the
MARS calculation rates and data from states that utilize certain compensation methodologies.372
114.
The Commission's reasons for adopting the MARS Plan methodology, laid out in the
2007 TRS Methodology Order, were largely based on the prediction that using an average of state rates in
the MARS Plan would "simplify the rate setting process and result in more predictable, fair, and
reasonable rates" for IP CTS.373 The Commission expressed concern that reliance on a weighted average
of the providers' projected minutes and costs might produce rates that were only as accurate as the
providers' projected minutes of use and costs. Specifically, the Commission explained that providers had
incentives to both overestimate costs and underestimate minutes, to ensure that the compensation rate
would be as high as possible, presumably to make a profit--all of which put into question the reliability
of a cost-based recovery mechanism.374 Likewise, the Commission rejected use of a price cap regime out
of concern that this would require the Commission's determination of an initial rate that accurately
reflected providers' historical, actual, reasonable costs.375 The 2007 TRS Methodology Order concluded
that the MARS plan's reliance on competitively bid state rates instead would produce a rate that better
approximated providers' reasonable costs because it was "the compensation rates by states for the same,


369 See id. at 20151, 16.
370 See id. at 20153, 26. Under the MARS methodology, the determination of the IP CTS rate by the Fund
administrator has included the following steps: (1) the collection of intrastate PSTN-based CTS compensation rate
data from the states and the providers for the prior calendar year, and the determination of whether any state's data
will be excluded from the calculation; (2) the calculation of each state's total dollars paid for intrastate PSTN-based
CTS services during the applicable period; and (3) the calculation of the final rate by dividing the total dollars paid
by all states by the total conversation minutes of all states. The proposed MARS rate is then placed on public notice,
and finalized by June 30th of each year for the following July 1st to June 30th Fund year, after taking into
consideration public comments received. For a complete discussion of the calculation of the MARS rate. See id. at
20155-61, 26-38. As noted above, the MARS rate is similarly used to determine interstate rates for traditional
TRS and STS. Id. at 20159, 34.
371 Id. at 20158, 32.
372 Id. at 20157, 29 (state's intrastate rate will be excluded from MARS calculation where it is based on the
interstate rate because of the circularity in such rates); id. at 20170, 58 (excluding the one state that used a flat rate
methodology at the time, i.e., Michigan); Telecommunications Relay Services and Speech-to-Speech Services for
Individuals with Hearing and Speech Disabilities; Structure and Practices of the Video Relay Service Program
, CG
Docket Nos. 03-123 & 10-51, Order, 26 FCC Rcd 9972, 9977, 13-14 (2011) (excluding data from three states that
reimbursed providers at a flat (versus a per-minute) rate and partially excluding data from one state that tied its
intrastate CTS rate to the interstate CTS rate for part of the year).
373 Id. at 20151, 16.
374 Id. at 20151, 17 (recognizing that the resulting rates under a cost-based methodology did not always correlate
precisely to the providers' actual costs).
375 The Commission explained that "the compensation rate is not a `price' that is charged to, and paid by, a service
user, but rather is a settlement mechanism to ensure that providers are compensated from the Fund for their actual
reasonable costs of providing service." Id. at 20155, 25.
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albeit intrastate, service."376 In addition, it was expected that the MARS Plan would eliminate the costs,
burdens, and uncertainties associated with evaluating, correcting, and re-evaluating provider data.377
115.
The Sorenson Petition. On February 20, 2013, Sorenson Communications, Inc.
(Sorenson) and its wholly-owned subsidiary, CaptionCall, LLC, filed a petition for rulemaking requesting
that the Commission initiate a proceeding to replace the current MARS rate methodology used for
determining the IP CTS rate with a price cap regulatory approach.378 Sorenson advises using the same
approach that we apply to IP Relay because, they argue, a price cap regime would exert downward
pressure to lower the IP CTS rate and give providers greater rate stability, incentivizing providers to offer
service more efficiently and engage in greater innovation through investments in new technologies.379
116.
On March 25, 2013, the Commission released a Public Notice seeking comment on the
Sorenson Petition.380 Only two providers commented, both of whom object to the price cap regulatory
approach in determining rates for the provision of IP CTS.381 Hamilton Telephone (Hamilton), the
original proponent of the MARS methodology,382 continues to maintain that this rate methodology is
superior to a price cap approach because a "price cap methodology for IP CTS would create a significant
risk of systematically undercompensating providers."383 Likewise, Sprint criticizes the Sorenson proposal
as one that would lead to waste in resources, requiring extensive FCC regulation and cost examination.384
Sprint also objects to Sorenson's proposal to set the initial rate for IP CTS using an average of the MARS
PSTN-based CTS rates for 2008, 2009, and 2010 because it claims that these years did not reflect more
recent rate increases.385 Finally, Sprint raises concerns about the proposal's "efficiency factor" rate
reduction to account for productivity gains,386 and the possible lack of predictability that this methodology
would present for both providers and the Commission, due to annual exogenous adjustments.387 Neither


376 Id. at 20151, 17, 20155, 25.
377 Id. at 20151, 18. See also id. at 20159, 35 (the MARS Plan "avoids the necessity of detailed analysis (and
possible disallowance) of the projected cost and demand data for each provider, as such data will no longer be
required to be filed by the providers of these services").
378 See Petition for Rulemaking of Sorenson Communications, Inc. and CaptionCall, LLC, CG Docket No. 03-123
(filed Feb. 20, 2013) (Sorenson Petition).
379 Sorenson Petition at 1-2.
380 See Request for Comment on the Petition for Rulemaking Filed by Sorenson Communications, Inc. Regarding
Coast Recovery Methodology for Internet Protocol Captioned Telephone Service
, CG Docket Nos. 13-24 and 03-
123, Public Notice, 28 FCC Rcd 2256 (CGB 2013).
381 See Comments of Sprint Nextel Corporation, CG Docket No. 13-24 and 03-123 (filed Mar. 25, 2013) (Sprint
Rate Methodology Comments); Comments of Hamilton Relay Inc., CG Docket No. 13-24 and 03-123 (filed Mar.
25, 2013) (Hamilton Rate Methodology Comments).
382 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20142 n.5.
383 Hamilton Rate Methodology Comments at 6.
384 Sprint Rate Methodology Comments at 3-4.
385 See Sprint Rate Methodology Comments at 2 ("The fact that MARS rates may have recently increased does not
make them any less valid than the MARS in effect for the years that Sorenson recommends serve as the
`baseline.'").
386 See id.at 3 (proposal would mirror the provision for IP Relay rate setting by reducing the IP CTS rate by an
"efficiency factor equal to GDP-PI (the inflation factor less .5 percent (.005) to account for productivity gains)"
(citing Sorenson Petition at 7)). Sprint claims that "there is no reason to assume that the use of the IP Relay
`efficiency factor' is valid for IP CTS." Sprint Rate Methodology Comments at 3.
387 See Hamilton Rate Methodology Comments at 5.
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commenter proposed an alternative to the MARS Plan or to Sorenson's proposed price cap approach for
determination of the IP CTS rates.
117.
Discussion. As the Commission has previously pointed out, our "mandate in determining
rates is to ensure that the rates correlate to actual reasonable costs and that the process of determining the
rates is fair, efficient, and predictable."388 To this end, when the Commission adopted the MARS Plan for
various forms of TRS in 2007, it stated that "[t]o the extent future or unforeseen circumstances suggest
that the MARS rate is not fair and reasonable, we can make adjustments as appropriate. Our objective is
to ensure that services are provided efficiently and that providers are compensated for their reasonable
actual costs of doing so."389
118.
When the Commission adopted the MARS Plan, IP CTS was a nascent service that had
been approved as eligible for compensation from the Fund only nine months earlier,390 and was provided
by only a single entity that offered service through two subcontracting companies. As such, call volume
for this service was small, with costs that necessarily reflected this low usage. During the intervening
years, and especially in the last year, the provision of this service has changed dramatically. Since
December 2011, IP CTS has been experiencing unprecedented and unusually rapid growth391 that has
signaled a sharp departure from the trend of declining rates of growth in usage of this service over three
prior years.392 According to the Fund administrator's 2013 TRS Rate Filing, this growth is expected to
continue and even accelerate.393 At the same time, provider projections for IP CTS growth have been
called into question, as minutes of use have far exceeded their projections in recent months,394 and PSTN-
based CTS minutes of use, upon which the MARS rate is largely based, have steadily fallen.
Additionally, the Fund administrator has questioned the extent to which the MARS rate takes into account
declining IP CTS costs.395 Moreover, since the MARS methodology was adopted, various new entrants


388 2007 TRS Rate Methodology Order, 22 FCC Rcd at 20153, 21 (emphasis in original).
389 Id. at 20160, 35.
390 2007 IP CTS Order, 22 FCC Rcd 379.
391 We note that growth for this service is likely to continue, given the potentially untapped market of consumers
with hearing loss who may need this service to obtain functionally equivalent communication service. For a detailed
summary of this growth from January to October 2012, see IP CTS Interim Order, 28 FCC Rcd at 706-07, 96-97.
In that Order, the Commission took immediate, interim steps to address certain practices related to the provision and
marketing of IP CTS that appeared to be contributing to this dramatic spike in reimbursement requests to the TRS
Fund. In the IP CTS Interim Order, the Commission did not address the rate for IP CTS, but it did clarify that the
Fund administrator shall not be obligated to pay any request for compensation until it has been established as
compensable. Id. at 725-26, 36-37 (amending 47 C.F.R. 64.604(c)(5)(iii)(E)).
392 According to TRS service provider documentation supporting monthly requests for reimbursement from the TRS
Fund, the average monthly growth rates in total IP CTS minutes submitted for compensation during the last three
Fund years were: 14% in 2009-10; 9% in 2010-11; and 7% in 2011-12.
393 Rolka Loube Saltzer Associates, Telecommunications Relay Services and Speech-to-Speech Services for
Individuals with Hearing and Speech Disabilities; Structure and Practices of the Video Relay Service Program
, CG
Docket Nos. 03-123 and 10-51, Interstate Telecommunications Relay Services Fund Payment Formula and Fund
Size Estimate (filed May 1, 2013) (2013 TRS Rate Filing).
394 See 2013 TRS Rate Filing at Exhibit 1-4 (showing the difference in IP CTS projections vs. actual minute
submissions).
395 Based on its analysis of the IP CTS providers' submitted cost data, the TRS Fund administrator reported an
average of projected costs for the 2013-14 Fund year to be $1.4816, which is $0.3061 below the MARS CTS rate for
the coming year or approximately 17% less than the MARS rate level of $1.7877. 2013 TRS Rate Filing at 13-14.
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have joined the IP CTS market, significantly altering the competitive landscape for this service.396
Finally, unlike traditional VRS services, which envelop a more readily definable market, IP CTS services
could be useful to a vastly larger market--virtually anyone who has hearing loss necessitating these
services to have functionally equivalent telephone communication.397
119.
All of these factors--the continued sharp growth in the use of IP CTS, the declining use
of PSTN-based CTS, concerns that not all providers are accurately forecasting demand, and the potential
for a vastly larger market and thus even larger call volumes--call into question the appropriateness of
continuing to rely on a rate methodology that relies on PSTN-based CTS rates in determining a rate for
the Internet form of this service. We are particularly determined to ensure, given the sudden and
unexpected growth in IP CTS, that the rate methodology selected for this service be one that can sustain
this service for those who need it by avoiding the payment of compensation that exceeds the reasonable
costs of providing this service. Finally, the burgeoning IP CTS market and the proliferation of new
prospective provider entrants398 may necessitate the adoption of additional mandatory minimum IP CTS
standards,399 which in turn may increase the cost of providing the service. All of these factors make it
both necessary and appropriate to revisit the rate methodology for IP CTS at this time.
120.
For these reasons, we seek comment on whether modifications should be made to the
current methodology for IP CTS, including whether an entirely different methodology would be more
appropriate. In particular, we seek to adopt a methodology that is consistent with the principle that the
process should be designed to fairly compensate providers for their "reasonable" actual costs of providing
service, and that will result in predictability for the providers.400 As an initial matter, given the rapidly
increasing demand for the IP version of this service, while demand for the PSTN version is declining, per-
minute costs for the two versions may also be diverging; therefore, we seek comment on whether the
original premise underlying the adoption of the MARS rate--that the reasonable costs of IP CTS would
be reflected in an average of the PSTN version of this service competitively bid throughout the states--
still supports use of this methodology for IP CTS. We believe that there are currently significant
differences in demand levels for PSTN-based CTS and IP CTS, such that tying rates for IP CTS to the
rates set at the state level for PSTN-based CTS may no longer be appropriate. We seek comment on this
point. Further, has the sharp increase in demand for this service resulted in a decline in costs per minute?
That is, have economies of scale reduced the costs of IP CTS? In this regard, we note that although the
TRS Fund administrator has calculated a proposed rate of $1.7877 for the 2013-14 Fund year based on the
CTS MARS calculation, aggregated provider submitted cost data results in an actual cost per minute
calculation of $1.4826 for IP CTS.401


396 At the time of its adoption, Ultratec was the sole provider of this service, offering it to the public through Sprint
and Hamilton. Since that time, Sprint and Hamilton have opened their own IP CTS call centers, and Purple and
Sorenson have entered the IP CTS market.
397 See 47 C.F.R. 64.604(c)(9)(iii)(A), (v)(B) (setting forth eligibility criteria for IP CTS).
398 In addition to Purple and Sorenson, both of whom entered in recent years, the Commission has received a petition
to enter the market from Miracom USA, Inc. See Application of Miracom USA, Inc. for Certification to Provide IP
Captioned Telephone Service, CG Docket No. 03-123 (filed Nov. 23, 2011).
399 See, e.g., IP CTS Interim Order, 28 FCC Rcd 703.
400 2006 TRS Cost Recovery FNPRM, 21 FCC Rcd at 8391, 28.
401 See 2013 TRS Rate Filing at 13. Although IP CTS providers are not required to file annual projected cost and
demand data with the Fund administrator (because the MARS Plan does not rely on projected or annual costs), this
past year, IP CTS providers voluntarily submitted their data for the 2013-14 Fund year. The Fund administrator
used these data to determine that the average reported cost for IP CTS is $1.48 per minute, as compared to the
MARS-calculated rate of $1.78 per minute.
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121.
We seek comment on, and proposals for, alternative cost recovery methodologies for IP
CTS. For example, should the Commission adopt a rate methodology similar to that for VRS and IP
Relay, i.e., based on a weighted average of actual and/or projected costs for each provider? Alternatively,
should the Commission adopt a rate methodology for IP CTS that calculates rates based on each
individual provider's costs?
122.
In this regard, we question whether the cost elements that go into a determination of the
IP Relay rate, now set at $1.0391 per minute for the 201314 Fund year,402 are demonstrably different
from the elements that go into an IP CTS minute.403 Prior to the adoption of the MARS rate for IP CTS,
this service was compensated at the same rate as IP Relay.404 We seek comment on whether the labor and
technological costs of providing IP CTS are similar to the costs of providing IP Relay, and if so, whether
the Commission should return to the original method of reimbursing for IP CTS at the same rate as IP
Relay. Should IP CTS costs be lower than IP Relay costs, given that an IP Relay CA must be trained to
read aloud the words of the IP Relay user and transcribe the words of the hearing caller, whereas an IP
CTS CA need only transcribe the words of the hearing caller? To what extent are the cost differences due
to marketing and outreach expenses? In the VRS Structural Reform Order,405 the Commission removed
outreach costs from the rate base for VRS and IP Relay. Should we consider doing the same for IP CTS?
Commenters that maintain that the costs associated with providing these two forms of relay are not
comparable should be specific in describing the differences that result in disparate costs for each service.
123.
If we adopt a methodology based on providers' submission of actual and/or projected
costs, we anticipate that the Commission will specify which expenses may be included as part of the
"reasonable" costs necessary for the provision of IP CTS. We therefore seek comment on what such
allowable costs should be. Should the cost categories be different than those used in calculating rates for
IP Relay and VRS? We note that the Commission recently removed outreach costs as an allowable
expense in setting rates for VRS providers, creating instead a national outreach plan for that service.406
Should such expenses be excluded from rate calculations for IP CTS rates? Should other expenses
currently included in the rate calculations for VRS and IP Relay be excluded from rate calculations for IP
CTS? Conversely, should any expense categories currently excluded from the rate calculations for VRS
and IP Relay be included in rate calculations for IP CTS? We specifically seek input on the extent to
which the rate should include an allowance for working capital.407
124.
Additionally, if the Commission adopts a methodology based on analysis of providers'
actual and projected costs, we seek comment on whether the Commission should require the same filings
of cost and demand data by IP CTS providers as are currently required of VRS and IP Relay providers
and on the degree of any administrative burden such filings would impose on the Commission and the
providers. Would any burden be outweighed by the benefit of having a rate for IP CTS that more
accurately reflects the true costs of providing the service?
125.
To the extent that we adopt a new rate methodology, we further seek comment on the
period that the IP CTS rate determined under this regime should remain in effect. What should the rate


402 Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech
Disabilities; Structure and Practices of the Video Relay Service Program
. CG Docket Nos. 03-123 and 10-51,
Order, 28 FCC Rcd 9219, 2 (2013).
403 See 2013 TRS Rate Filing at 16.
404 IP CTS Order, 22 FCC Rcd at 390, 26.
405 VRS Structural Reform Order, 28 FCC Rcd at 8634-39, 3139.
406 Id. at 8696, 192.
407 We note that under the MARS Plan, this was unnecessary because working capital already was built into the
various state rates that determined the MARS rate. Hamilton Ex Parte Letter at 1 (Feb. 12, 2007).
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period be? Should the Commission establish the IP CTS rate for periods longer than one year to ensure
predictability? Alternatively, should the rate be established for periods shorter than one year, in order to
provide an opportunity to adjust the rate to account for significant changes in costs or demand?408 If the
rate period is one year or longer, how should rates be adjusted during such longer period? We seek
comment on the advantages and disadvantages of using either a one-year rate period or some shorter or
longer period of time for this service category.
126.
We also seek comment on other alternatives to the current rate methodology. For
example, should the Commission seek competitive bids for the provision of IP CTS, limiting the
opportunity to provide this service in the future to one or more winning bidders?409 If we were to
transition to such a structure, in the interim, how should we set rates in order to ensure the continued
viability of the service to those who need it most? Are there ways to utilize competitive bidding or
auction-type processes to set rates for IP CTS without unduly limiting the number of ultimate providers?
127.
We also seek comment on whether, under any rate methodology for IP CTS, there should
be a "true-up" at the end of each Fund year based on actual reasonable costs of either individual providers
or, to encourage providers to seek greater efficiencies, either a weighted average or the lowest cost among
providers of the service. Under a true-up, providers would be required to reimburse the Fund for any
amount by which their payments exceed actual reasonable costs, as determined by the Administrator in
consultation with the Commission, based on filings by the providers. With such a true-up, providers'
ultimate compensation need not be contingent on estimates of costs or minutes of use.410 Providers would
receive periodic payments of estimated reasonable costs based on a particular cost methodology, and at
the end of the Fund year, or other period as determined by the Commission, the true-up would reconcile
the providers' actual reasonable costs for providing service in compliance with the Commission's rules
and the payments received. We seek comment generally on any issues relating to the use of a true-up,
including how a true-up could be implemented, what record keeping requirements might be required, and
when and how often the true-up should occur.

B.

Centralized Registration and Verification of IP CTS Users

128.
In the Report and Order, we establish registration and verification requirements for all IP
CTS users.411 In this Notice, we go a step further, to ask whether the centralized registration and
verification processes that we recently adopted for VRS should also apply to IP CTS. Specifically, in the
Commission's VRS Structural Reform Order, the Commission directed the creation of a user registration
database (TRS-URD) and implementation of centralized eligibility verification requirements to ensure
that VRS registration is limited to those who have a hearing or speech disability.412 The Commission


408 As noted above, IP CTS has experienced dramatic increases in demand during recent years.
409 We note that many states award contracts for the provision of intrastate TRS to a single provider through a
competitive bidding process. See, e.g., State of Arizona, Application for Renewal of Current Certification, CG
Docket No. 03-123 (filed Sept. 26, 2012); State of Ohio, FCC Certification Renewal and Supporting Document, CG
Docket No. 03-123 (filed Oct. 22, 2012), each containing a copy of the Request for Proposals that was used to
competitively select a vendor for the provision of PSTN-based TRS service in these states.
410 The Commission previously asked about the use of a true up in the context of establishing the mechanism for
VRS rates. At that time, it noted that the providers' demand forecasts for VRS had generally been significantly
lower than actual demand, and when demand is underestimated, the compensation rate will be higher, resulting in
potential overcompensation for actual minutes. 2006 TRS Cost Recovery FNPRM, 21 FCC Rcd at 8393, 29. See
also 2004 TRS Report & Order
, 19 FCC Rcd at 12565-66, 236 (seeking comment on whether VRS might be
compensated by "a lump sum payment or periodic payments of estimated actual costs with a `true-up' at the end of
the fund year." ).
411 See section III.C, supra.
412 VRS Structural Reform Order, 28 FCC Rcd at 8647-56, 62-86.
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indicated that such database should have capabilities to allow the Fund administrator and the Commission
to: (a) receive and process registration 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.413 The Commission concluded that a
centralized process by which users are registered and their identity is verified will help to prevent
registration and use of the service by fraudulent users, ensure that all users meet the verification standards
established by the Commission, and increase the efficiency of the VRS program.414
129.
We similarly believe that a centralized registration and verification process will reduce
fraud, waste and abuse and ensure greater efficiency in the IP CTS program. In the VRS Structural
Reform Order
, we sought comment on extending use of the TRS-URD to other forms of TRS, including
IP CTS. We specifically asked whether to require each IP CTS provider to give users the capability to
register with that provider as the user's "default provider," (citing 47 C.F.R. 64.611(a)), to populate the
TRS-URD with information about each user, and to query the database to ensure each user's eligibility
for each call.415 We now invite interested parties to submit comments on these matters in this proceeding
as well, and to generally comment on application of the centralized processes for registration and
verification that we adopted for VRS to IP CTS.416 Among other things, we ask commenters to point out
any differences between these types of services that might necessitate adjustment in the way that
information is entered into the database, the database is utilized, and the confidentiality protections that
will be needed to protect against the unauthorized disclosure of information housed in that database.417
130.
We propose to direct the Managing Director to ensure that the centralized user
registration database has the capability of performing an identification verification check when an IP CTS
provider or other party submits a query to the database about an existing or potential user.418 We further
propose that the criteria for identification verification for IP CTS (e.g., information to be submitted,
acceptable level of risk, etc.) be established by the Managing Director in consultation with the
Commission's Chief Technology Officer and the Chief of the Office of Engineering and Technology.
Finally, we propose that IP CTS providers not be permitted to register individuals who do not pass the
identification verification check conducted through the user registration database, and not be permitted to
seek compensation for calls placed by such individuals. We seek comment on each of these proposals.


413 Id. at 8650, 69, noting that the Commission recently established a National Lifeline Accountability Database as
part of its efforts to reform and modernize the Universal Service Fund's Lifeline program, and was relying on the
Commission's experience in that proceeding to establish this centralized process for VRS. See Lifeline and Link Up
Reform and Modernization Order
, 27 FCC Rcd at 6734-54, 179-225.
414 VRS Structural Reform Order, 28 FCC Rcd at 8655, 84.
415 Id. at 8714-15, 251
416 See id. at 8650-56, 69-86.
417 See id. at 8654-55, 75-76 (noting the need for sufficient safeguards to maintain the personal nature of the
information in the database and restricting access to the database to authorized entities and only for authorized
purposes).
418 Id. at 8656, 86 (noting that the National Lifeline Accountability Database has the same functionality and citing
Lifeline/Link Up Order, 27 FCC Rcd at 6743, 201).
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C.

Migration to State TRS Programs

131.
Currently, state TRS programs administer and oversee the provision of CTS,419 and the
Commission oversees the provision of IP CTS. The Commission seeks comment on whether it should
transfer the responsibilities for administering and overseeing IP CTS to state TRS programs. Among
other things, this would transfer the responsibility for registering and certifying the eligibility of new IP
CTS users from providers to the state relay programs. Taking this action may leverage the oversight
abilities of the fifty states (plus covered territories) to ensure that TRS funds are appropriately used to
serve customers in need.420 We note that there appears to be at least some initial support for this
transition. For example, NASRA, an association of state relay administrators, notes that its members
"look forward to the opportunity to partner with the FCC and RSLA to be able to analyze and monitor the
provision of all forms of TRS . . ."421 NASRA also expresses support for requiring all CTS users to be
screened or assessed, for example through a state's equipment distribution procedures or eligibility
requirements.422 Along these same lines, TEDPA, the national association of state equipment distribution
programs (EDPs), explains that most EDPs have "thorough eligibility and certification processes already
in place to ensure that IP CTS equipment is appropriately distributed to end users."423
132.
We see advantages in having the state TRS programs, which are physically closer to the
residents using this service and which, in large part, have already been undertaking the role of certifying
consumers for the distribution of CTS equipment, to take on the role of ensuring the provision of IP CTS
only to individuals who are eligible to use it, as well administering this service's operations. We seek
comment on this approach. If the state programs do become obligated to manage IP CTS, and the
centralized TRS-URD is used to register and verify all IP CTS users, we would, thus, expect the state
programs to conduct eligibility assessments of potential IP CTS users within their states. The state TRS
programs (as compared to the providers, as is the case for VRS), would then populate the TRS-URD with
the necessary data. We seek comment on this arrangement.
133.
If the states take on the responsibility of registering users, we propose that the registration
and self-certification requirements that we adopt today apply to all state IP CTS programs, understanding
that these will be amended by the final rules addressing the application of the TRS-URD for IP CTS.
Should the Commission prescribe other steps that states must take to ensure that IP CTS providers are not
seeking compensation from the Fund for calls made by ineligible individuals? For example, we note that
both NASRA and TEDPA do not support use of a minimum hearing threshold as a way of determining IP
CTS eligibility.424 To what extent should each state program be permitted to define its own eligibility


419 CTS is offered in every state and the District of Columbia. Many states also offer specialized CPE used for CTS
for free or at reduced rates for qualifying consumers. See http://www.captel.com/states (viewed July 1, 2013).
420 The Commission has not seen, for example, the same fraud and waste in the state-administered programs as it has
with Internet-based TRS such as VRS, and IP Relay. See, e.g., Twenty-Six Charged in Nationwide Scheme to
Defraud the FCC's Video Relay Service Program, Press Release (Nov. 19, 2009), available at
http://www.justice.gov/opa/pr/2009/November/09-crm-1258.html . See also Misuse of Internet Protocol (IP) Relay
Service; Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities
, CG Docket Nos. 12-38 and 03-123, First Report and Order, 27 FCC Rcd 7866 (2012).
421 NASRA Comments at 1. See also TEDPA Comments at 2 (making a nearly identical statement).
422 NASRA Comments at 2; TEDPA Comments at 2.
423 TEDPA Comments at 2.
424 NASRA Comments at 2 (Users with audiograms outside the thresholds may still have auditory discrimination
issues that can be assisted with captioning, because there are often factors including additional disabilities,
auditory processing, learning, acceptance of technology other than strictly hearing loss that impact whether CTS is
the best option for obtaining telecommunications access); TEDPA at 2 (does not support a minimum hearing
threshold because of the varying degrees of hearing loss and auditory discrimination).
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criteria for IP CTS use? In other words, should the Commission establish a mandatory minimum standard
on eligibility by which all states must comply, or should states be permitted to establish their own
eligibility criteria?425 As a third alternative, should the Commission set minimum and maximum
standards and allow the states to set their own standards within that range? If each state conducts an
individual assessment to determine the eligibility of every IP CTS user, will the captions default off rule
still be necessary? Will these assessments provide enough of a safeguard against misuse of the service by
persons who do not need it?
134.
States currently perform many registration and verification functions when providing
CTS or giving out CTS or IP CTS equipment in their states. If IP CTS is added as a service that the states
must manage and oversee, could these functions as they pertain to IP CTS be easily integrated into the
states' current operations? We acknowledge comments by NASRA and TEDPA that not all states have
EDPs that distribute IP-based equipment due to statutory limitations or restrictions.426 However, we wish
to clarify that were we to transfer responsibility for IP CTS to the state programs, the distribution of IP
CTS equipment would remain at the states' option. How is the provision of CTS currently handled by
states that do not have an EDP? Do such states nevertheless conduct assessments for participation in their
CTS programs that could be used for determining IP CTS eligibility? What new or other responsibilities,
in addition to conducting assessments of a greater number of potential users, would the states have to take
on if this transfer of responsibility is made? Generally, what are the costs and benefits of requiring the
state TRS programs to take on these responsibilities? What effect, if any, would such a shift have on the
functional equivalence of the consumer's experience? Finally, we ask states to provide recommendations
for the time period necessary for this transfer to take place, and to identify specific factors and constraints
that support their recommendations.
135.
Funding IP CTS. Section 225 of the Act directs the Commission to implement
regulations for TRS cost recovery that provide for the "jurisdictional separation" of TRS costs; i.e., the
costs caused by interstate TRS generally are to be recovered from all subscribers for interstate services,
and the costs caused by the provision of intrastate TRS are to be recovered from each intrastate
jurisdiction.427 As a result, state TRS programs arrange provider reimbursement for intrastate CTS calls
through their individual funding mechanisms.428 Notwithstanding this arrangement, in the 2007 IP CTS
Declaratory Ruling
, the Commission concluded, on an interim basis, that all IP CTS calls would be
compensated from the Fund.429 The Commission explained that this approach was consistent with the
treatment of VRS and IP Relay calls, and would provide an incentive for competition among multiple
providers to offer this service on a nationwide basis in a manner that would "enhance consumer choice,


425 Section 225(f)(2) of the Act requires that states be in compliance with the Commission's mandatory minimum
standards and other regulatory requirements. 47 U.S.C. 225(f)(2). See also 47 U.S.C. 225(d)(1) (directing the
Commission to, among other things, establish functional requirements, guidelines and operations procedures and
minimum standards).
426 NASRA Comments at 2; TEDPA Comments at 2.
427 47 U.S.C. 225(d)(3)(B). See also 47 C.F.R. 64.604(c)(5)(ii). Interstate relay calls and all calls made via
Internet-based forms of TRS, including IP CTS currently are funded through mandatory contributions made to the
Fund by interstate telecommunications and VoIP service providers, based on certain of their end user revenues. See
47 C.F.R. 64.604(c)(5)(iii)(A), (B). See also VoIP Contribution Order.
428 The Communications Act does not require a specific funding method for intrastate TRS or state TRS programs,
and states generally recover the costs of intrastate TRS either through rate adjustments or surcharges assessed on all
intrastate end users, after which the states reimburse TRS providers directly for their intrastate TRS costs. 47 U.S.C.
225(d)(3)(B) (certified state TRS programs "shall permit a common carrier to recover the costs incurred in
providing intrastate telecommunications relay services by a method consistent with the requirements of [section
225])." See also 47 U.S.C. 225(f). Interstate CTS calls are billed to and compensated by the Fund.
429 2007 IP CTS Declaratory Ruling, 22 FCC Rcd at 390, 25.
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service quality and available features."430 However, the Commission explained that this was an interim
measure only and that it intended to revisit the cost recovery methodology for this service, including the
matter of jurisdictional separation of costs, in the future.
136.
As noted in section IV.A above, since 2007, the Commission has compensated IP CTS
providers using the MARS rate methodology, by which the Fund administrator calculates the
compensation rates for TRS using a weighted average of competitively bid state rates, and is revisiting the
use of this methodology.431 We also revisit whether the Fund should continue to support the costs of all
IP CTS calls. In particular, we question whether the original incentives for having all financial support
come from the Fund still exist. For example, as compared to when this service began in 2007 when
there were only two providers under the control of a single vendor432 there are now four IP CTS
providers, with an application pending by a fifth provider that has expressed interest in offering this
service.433 In addition, a primary underlying reason for the Commission's decision to have the Fund
reimburse providers for the costs of VRS and IP Relay calls upon which part of the rationale for doing
the same for IP CTS calls is based was the difficulty in ascertaining the location of calls made using IP
transmissions. Insofar as calls associated with IP CTS are often made using the PSTN, we believe that IP
CTS providers are able to ascertain the origination and destination of IP CTS calls in a manner that would
allow for compensation for these calls to be billed to the states or the Fund, and seek comment on whether
this assumption is accurate.
137.
Given that the original reasons for having the Fund provide compensation for these calls
may no longer exist, we believe that the Commission should reconsider its prior decision to treat IP CTS
as an entirely interstate service and propose instead that this service be treated like traditional CTS,
wherein state relay programs would be required to compensate providers for intrastate IP CTS calls. As
stated earlier, the Act envisions that the funding support for TRS should be separated between the states
and the federal government, with states paying for intrastate calls and the TRS Fund covering interstate
calls. If we are incorrect in our assumption that IP CTS providers are able to discern the points of
origination and destination of IP CTS calls in a manner that would allow them to determine which calls
are intrastate versus interstate, we seek input on other ways that we can allocate IP CTS compensation for
intrastate and interstate calls between the states and the TRS Fund. For example, can we establish a
default proxy allocation between interstate and intrastate call jurisdiction that can be used if actual
measurements are not possible? What should that allocation be? We also seek comment on the proposed
jurisdictional separation, and ask below about the time period that would be needed by the states to
effectuate this change. Finally, we ask how the Commission make such a transition in a way to best
benefit consumers?
138.
Mandating CTS and IP CTS. While every state voluntarily offers CTS, the Commission
currently does not mandate the provision of either CTS or IP CTS. Given that we are now proposing to
shift some of the financial obligations associated with IP CTS to the state programs, we seek comment on
whether a mandate is needed to ensure that all states will participate in the provision of these services.
Additionally, we seek comment on whether a mandate for CTS is necessary. We note that in October
2005, the Commission received a petition for rulemaking to mandate CTS, filed by thirteen organizations


430 Id.
431 See section IV.A, supra.
432 2007 IP CTS Declaratory Ruling, 22 FCC Rcd at 390, 24.
433 See Miracom Application. In addition, AT&T previously filed an application to provide IP CTS. Although
AT&T has since withdrawn its application, it is possible that the company may develop a renewed interest in this
service in the event it is restructured with greater state participation.
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generally representing people with hearing and speech disabilities.434 Petitioners stated that, at the time,
eighteen states did not offer any CTS and those that did offer the service imposed restrictions on the
number of residents who could sign up for it, resulting in lengthy waiting lists435 and limitations on the
physical locations where residents were permitted to use CTS.436 In June of 2009, most of the same
petitioners filed a supplement with the Commission, detailing the ongoing state restrictions that they said
were continuing to deny full access to the service, including limits on the number of entrants,
jurisdictional boundaries for participants who crossed state lines, and restrictions on the operations of this
service.437
139.
Given the initial reluctance of the states to provide CTS, is a mandate of this service
necessary to ensure the ongoing provision of this service, especially if state programs will now be
required to assume the administration of intrastate IP CTS? We assume that many consumers have
become regular users of state-supported services, as well as IP CTS. What would be the consequences to
consumers were states to discontinue service or decline to participate in an IP CTS program if we were
not to make IP CTS a mandatory service?
140.
If a mandate for IP CTS were adopted, how quickly would state programs be capable of
taking on the responsibilities associated with managing IP CTS operations and funding IP CTS? We ask
commenters to provide feedback on the length of time needed to implement these changes, and the
reasons such time is needed. For example, are there states where legislation or rulemaking would be
required in order to assume these roles and, if so, how will this affect the time needed for a migration of
such obligations to the states?


434 See Self Help for Hard of Hearing People, Inc., Alexander Graham Bell Association for the Deaf and Hard of
Hearing, American Academy of Audiology, American Association of People with Disabilities, American Speech-
Language-Hearing Association, Association of Late-Deafened Adults, Deaf and Hard of Hearing Consumer
Advocacy Network, League for the Hard of Hearing, National Association of the Deaf, National Cued Speech
Association, Telecommunications for the Deaf and Hard of Hearing, Inc., California Association of the Deaf, and
California Coalition of Agencies Serving the Deaf and Hard of Hearing, Petition for Rulemaking to Mandate
Captioned Telephone and Approve IP Captioned Telephone Relay Service, CG Docket No. 03-123, filed Oct. 31,
2005. The Commission sought public comment on the petition on November 14, 2005. Petition for Rulemaking
Filed Concerning Mandating Captioned Telephone Relay Service and Authorizing Internet Protocol (IP) Captioned
Telephone Relay Service
, CG Docket No. 03-123, Public Notice, 20 FCC Rcd 18028 (CGB 2005) (2005 CTS
Petition
).
435 For example, the petition alleged that Wisconsin, Vermont and South Carolina allowed only five persons to join
the CTS program each month, and Connecticut, Kentucky, Indiana, Mississippi, Nevada and Utah limited monthly
entry to 10 individuals. 2005 CTS Petition at 17.
436 For example, California allowed participants of its program to use its services only when physically present in its
state. Petitioners reported that other states required that at least one leg of CTS calls had to be in their states,
creating a policy that was "haphazardly applied from state to state, [that] denie[d] users the portability they need[ed]
while traveling." 2005 CTS Petition at 18.
437 Hearing Loss Association of America (HLAA), Alexander Graham Bell Association for the Deaf and Hard of
Hearing, American Academy of Audiology, American Association of People with Disabilities, American Speech-
Language-Hearing Association, Association of Late-Deafened Adults, Deaf and Hard of Hearing Consumer
Advocacy Network, National Association of the Deaf, Telecommunications for the Deaf and Hard of Hearing, Inc.,
California Association of the Deaf, California Coalition of Agencies Serving the Deaf and Hard of Hearing, and
Alliance for Public Technology, Supplement to Petition to Mandate Captioned Telephone Relay Service, CG Docket
No. 03-123 (filed June 10, 2009). See also Ultratec, Supplement to Comments on Petition for Rulemaking for a
Mandate for Captioned Telephone Relay Service (July 27, 2009). On June 26, 2009, the Commission released a
new Public Notice to refresh the record in response to this supplement. Consumer & Governmental Affairs Bureau
Seeks to Refresh the Record on Petition to Mandate Captioned Telephone Relay Service
, CG Docket No. 03-123,
Public Notice, 24 FCC Rcd 8570 (CGB 2009).
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D.

Mandatory Minimum Requirements

141.
The Commission seeks comment on the need for and propriety of imposing certain
mandatory minimum requirements for IP CTS. For example, should mandatory minimum requirements
be established for the speed of captioning? If so, what would be an appropriate minimum speed and how
should it be measured? If we adopt a specified speed, should we couple this with a specified error rate,
and if so, what should this be? How would such requirements be enforced? Should we institute
recordkeeping and/or reporting requirements for effective Commission oversight?
142.
Should providers be permitted to compromise speed in favor of greater accuracy or vice
versa? For example, should a provider be given the option of having a shorter lag time between the time
that the other party to the call speaks and the captions appear, even if there is an increased error rate as a
result of maintaining such speed? Or should providers be permitted to opt for a longer lag time in favor
of greater accuracy?438 Should consumers be given these options? We ask commenters to discuss the
costs of imposing and enforcing these or other mandatory minimum requirements for IP CTS and the
benefits of such requirements.
143.
Are there other mandatory minimum standards that are needed to ensure that IP CTS
providers are offering services to the public that are functionally equivalent to voice telephone services?
For example, the Consumer Groups claim that currently, the browsers on CTS devices use Java Script,
which is not compatible with the external large print display screens or Braille readers often used by
people who have severe vision loss along with their hearing loss.439 We seek comment on the need to
address this issue, as well as any other matters necessary to ensure that consumer needs are being met by
IP CTS.

E.

Low Income Consumers

144.
In the Report and Order, we conclude that the availability of free or discounted
equipment through state and local governmental equipment distribution programs would help to fulfill
Congress's and the Commission's goals of ensuring the widespread availability of IP CTS to individuals
who can benefit from the service.440 Consumer Groups argue that not all states have equipment
distribution programs and that those states that do have such programs limit distribution to the phones
offered by one provider only, thereby depriving low income consumers of the benefits of competition.441
We are sensitive to the concerns expressed by the consumers and seek comment on whether state
equipment distribution programs are meeting the needs of low income consumers. If state equipment
distribution programs are not meeting those needs, what should the Commission do to address the needs
of low income consumers in states without equipment distribution programs as well as in states that are
not fully meeting the needs of low income consumers? Should the Commission allow for a low-income
exception to the prohibition of providing compensation for IP CTS minutes of use generated by
equipment that is distributed for less than $75? If so, who should be permitted to distribute equipment for
less than $75? For example, should charitable organizations be permitted to distribute such equipment?
If so, should we permit or prohibit charitable organizations that receive funding from IP CTS providers?
If we are to permit distribution of equipment for less than $75, how do we ensure that individuals
receiving such equipment qualify as low income? What types of thresholds should we set for low


438 We are concerned that a practice may be emerging wherein providers summarize the conversation content of IP
CTS calls. We remind providers that our rules require that all conversational content must be relayed verbatim,
unless summarization is requested by the user. Noncompliance with this rule may result in denial of compensation.
439 Consumer Groups Comments at 14.
440 See Section III.C.1, supra. See also Sorenson Comments at 18; CTIA Comments at 6.
441 See Consumer Groups August 9, 2013 Ex Parte at 2-3. See also Hamilton August 15, 2013 Ex Parte at 2. See
generally
<http://www.tedpa.org/StateProgram.aspx>; (last visited July 1, 2013) (listing states that run EDPs).
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income? Should it be four times the poverty level, as suggested by the Consumer Groups442 and applied
to the distribution of equipment under our National Deaf-Blind Equipment Distribution Program,443 or
should it be some other amount, such as 135% of federal poverty guidelines or participation in a specified
government assistance program, as in the Lifeline program?444 What type of documentation should we
require to demonstrate eligibility as a low income consumer? Should we require certification under
penalty of perjury? For consumers who qualify for the low income exemption, should we also require
that they submit third party certification under penalty of perjury of hearing loss necessitating the use of
IP CTS? To whom should the consumers submit all such documentation and certifications? Should the
documentation and certifications be submitted to the newly created TRS-URD for processing and review?
What other measures should the Commission adopt to ensure that individuals receiving such equipment
qualify as low income and require the use of IP CTS? What are the costs and benefits of adopting a low
income exception, as well as the costs and benefits of adopting measures to ensure that consumers qualify
for the low income exception and require the use of IP CTS?

F.

IP CTS Software and Applications

145.
In the Report and Order, we prohibited compensation from the TRS Fund for IP CTS
minutes of use generated by IP CTS equipment provided free of charge or at a price below $75, other
than through a state or local government equipment distribution program. We applied the same restriction
to the provision of IP CTS software and applications to IP CTS users who had not already paid $75 for IP
CTS equipment, software, or applications. With respect to software and applications, we set the
minimum price at $75 to be consistent with the minimum price for equipment. We now seek comment on
whether the purchase of IP CTS software and applications raises considerations that make it appropriate
to set a different price threshold for software and applications. We ask commenters who believe that the
$75 price threshold should not be applicable to the context of software and applications to explain why it
should not be applicable, to propose an appropriate alternative price threshold, and to explain why such an
alternative would be sufficient to deter individuals who do not need IP CTS from using the service. We
ask commenters to also address the costs and benefits of any minimum price they propose.

G.

Default Caption Off Requirement

146.
911 Calls and Callbacks. We believe that the rules adopted today adequately address
concerns about emergency calls. Nevertheless, it might be possible to make further improvements in the
handling of IP CTS during calls to 911, as well as callbacks from emergency call centers. The
Commission, therefore, seeks comment whether it is technically feasible for all IP CTS equipment to be
defaulted to "captions turned on" for 911 emergency calls, and if so, whether we should require IP CTS
providers to so configure their equipment. If such a requirement is adopted, should individual consumers
be permitted to override such setting? Would a different default setting for captions on 911 calls hinder
or confuse consumers experiencing an emergency, if they have become accustomed to pressing captions
on only when they need them? Should a captions on default for 911 calls be able to simply override
attempts to turn the captions off? Similarly, would it be technically feasible to program an override for
incoming call backs from 911 call centers? We understand that one manufacturer of IP CTS phones is
capable of programming its devices to automatically provide captions on for incoming calls.445 Would all
IP CTS device manufacturers be capable of defaulting their devices to captions on solely for the purpose
of receiving calls from 911 call centers? Could this also be done to receive specified emergency alerts
from official authorities such as local, state and federal governmental entities? Should consumers be able
to override an automatic default-on setting for incoming emergency calls, and if so, would such override


442 See Consumer Groups Comments at 8; Consumer Groups August 9, 2013 Ex Parte at 3 n.6.
443 47 C.F.R. 64.610(d)(2).
444 47 C.F.R. 64.409.
445 Pamela Y. Holmes, Ultratec, Notice of Ex Parte Communication in CG Docket No. 03-123 (July 5, 2013).
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be technologically possible? Ultratec notes that having the captions defaulted to "on" for incoming calls
and to "off" for outgoing calls "could be very confusing to consumers."446 Would this be the case if this
arrangement applied only to emergency calls? We ask commenters to discuss the costs and benefits of
their recommendations for a "captions on" override for both outgoing and incoming 911 or emergency
calls.
147.
Volume Control. Some commenters also express concern that, with a default caption-off
setting, consumers miss critical information at the beginning of the call because of the time required to
adjust the volume of the device along with turning the captions on.447 They claim that certain IP CTS
equipment links the ability to manipulate or preset the amplification setting to the setting for the captions,
so that if the captions are set to default off, both features go off when a call ends, and the consumer must
turn both features on for every call.448 The Commission seeks further information on the features of
currently available IP CTS equipment to better understand this problem. On IP CTS phones or software
applications, do the volume control and captions functions act independently of each other? If not, what
is the rationale for making these functions dependent? Should these functions be capable of independent
activation? If the latter, the consumer would be able to adjust the volume up or down, or keep a volume
setting defaulted to a certain level, without having to first turn on the captions for the call. In this case,
we assume that the consumer might find that she or he does not need captions for the call. If we are
correct in our assumption, should IP CTS providers be prohibited from linking volume control to the
captions-on function? What are the costs and benefits of having the volume control and captions
functions act independently of one another?
148.
Answering Machines and Other Incoming Calls. Commenters also raise concerns about
the impact of the default caption-off requirement on retrieving messages from their answering machines.
For example, HLAA asks the Commission to consider the affirmative act of turning on an answering
machine as equivalent to turning the captions on for an incoming call.449 Ultratec explains that prior to
the default off rule, its IP CTS devices captured and stored captions on voice messages left on an
answering machine. Since the rule went into effect, however, it claims that users must press the captions
"on" button and "re-caption the incoming voice message each time the user wants to play (or replay) a
voice recorded message."450 As a result, Ultratec maintains, the default off setting creates inefficiencies,
in that it incurs extra costs to the Fund each time the user replays the incoming message. We seek
comment on how answering machines or other IP CTS devices capture captions, and whether we should
amend our rules to address the retrieval of messages from such machines. Are all IP CTS devices
equipped with built-in answering machines? If so, can such IP CTS devices be programmed to a captions
default on setting for their answering machine functions? How would this work for the retrieval of voice
mail that is captured in a telephone service provider's network or an off-the-shelf answering machine that
is not integrated into the IP CTS device? Are there other incoming call situations that the Commission
needs to consider? For example, some commenters claim that a captions off default requirement can


446 Id.
447 See e.g. Comments of Pearl Spodick (Mar. 22, 2013) ("I already have to adjust the volume to the highest level
one button at a time (at least 3 buttons) before calling or receiving a call. . . Each additional step slows and
handicaps the flow of conversation.")
448 HLAA Comments at 15.
449 HLAA Comments at 15; See also Consumer Groups Comments at 13 (if default off is adopted, it should not
apply to answering machine use).
450 Ultratec Comments at 11.
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result in a delay of captioning.451 How does the captions off default requirement affect the ability of a
consumer to communicate on incoming calls in a manner that is functionally equivalent to the ability of a
hearing individual who does not have a speech disability to communicate using voice communication
services?452 Ultratec notes that having the captions defaulted to "on" for incoming calls and to "off" for
outgoing calls "could be very confusing to consumers."453 Does this mean that the Commission should
either require captions default off for all calls, both incoming and outgoing (other than calls that fit within
one of the exceptions), or permit captions to default on for all calls? We also seek comment on whether
we should require that all IP CTS phones that are defaulted to captions on enable consumers to turn off
the captioning with a single step. What are the costs and benefits of such a requirement?
149.
IP CTS Phones Available Only to Registered Users. As noted in the Report and Order,454
Consumer Groups and some providers have suggested that there is no need to require a default setting of
captions off when an IP CTS user is living alone, living only with other individuals who are hard of
hearing, or is in an office setting where no one else has access to that person's IP CTS phone.455 They
posit that the chance of inadvertent use under such circumstances is "remote."456 We remain concerned
about the unintentional user of IP CTS phones in any setting where others are present, such as a
household that includes individuals who are not registered IP CTS users or a workplace station that is
available to more than one employee, as well as a consumer living alone or with a private phone in a
workplace who may not need captioning for every call. We are also concerned that consumers who live
alone or have a private phone in a workplace receive functionally equivalent service.457 We therefore
seek comment on whether an exception could be implemented, above and beyond the hardship exception
already granted, and consistent with our goal of eliminating unnecessary usage, for individuals who live
alone (or only with other registered IP CTS users) or work in a situation, such as a private office, where
no one else can use the individual's phone. We ask commenters to provide information on the type of
documentation that should be required to authenticate their living or working situation, and how we could
prevent abuses were this exception adopted. In particular, we seek comment on how to ensure that those
consumers who do not need captioning for every call will not use the captioning when it is not needed.
We also ask commenters to address the costs and benefits of adopting such an exception. In addition, we
ask whether we could safely adopt any other exceptions to the captions default off requirement, and if so,
what are the costs and benefits of adopting such exceptions. We also seek comment on whether we
should require that all IP CTS phones that are defaulted to captions on enable consumers to turn off the
captioning with a single step. What are the costs and benefits of such a requirement?
150.
State Commission Authority. In the previous section we discuss the alternative of
transferring some responsibilities for administering and overseeing IP CTS to state TRS programs. If
such a transfer of administrative responsibilities occurs, how would such a transfer affect the default-off
rule? Should state programs be authorized to decide whether and under what circumstances to allow


451 See, e.g., Comments of Melissa Ruth (Mar. 4, 2013); Comments of Christopher Haggerty (Mar. 21, 2013);
Comments of Thomas Wylie (Mar. 22, 2013); Comments of Dana Mulvany (Mar. 3, 2012); Comments of Dan
Schwartz (Mar. 20, 2013); Purple Comments at 8 & n. 7.
452 See 47 U.S.C. 225(a)(3).
453 Pamela Y. Holmes, Ultratec, Notice of Ex Parte Communication in CG Docket No. 03-123 (July 5, 2013).
454 See Section III.E, supra.
455 See Consumer Groups August 9, 2013 Ex Parte at 4; Consumer Groups August13, 2013 Ex Parte at 2-3 and
Attachment 2; Sorenson August 5, 2013 Ex Parte at 3; Hamilton August 15, 2013 Ex Parte at 3; Purple Comments
at 7; Purple Reply Comments at 1-2; Ultratec Reply Comments at 11.
456 Consumer Groups August 9, 2013 Ex Parte at 4.
457 See id. at 4.
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captions to be defaulted to on, or should that decision be made by the Commission? Would a transfer of
responsibilities render the default-off rule unnecessary?

H.

Website, Advertising, and Educational Information Notifications

151.
In the Report and Order, we adopt requirements for notification labels to be affixed to all
IP CTS telephones informing the consumer that: "FEDERAL LAW PROHIBITS ANYONE BUT
REGISTERED USERS WITH HEARING LOSS FROM USING THIS DEVICE WITH THE
CAPTIONS TURNED ON."458 HLAA states in its comments that although it is skeptical that an
equipment label requirement alone "will discourage use by people who are entitled to use the phone[,] . . .
consumers must be educated by multiple and repeated sources of information, such as provider's
websites, the self-identification statement, the contract, if there is one, brochures about the service,
manuals for the equipment, and advertisements for the phone and the service."459
152.
To ensure that consumers receive multiple and repeated sources of information regarding
legitimate use of IP CTS as proposed by HLAA, we propose that the following language be prominently
displayed on all IP CTS provider web sites, advertising brochures and other advertising and consumer
education and informational materials, including provider-supplied literature and user manuals:
"FEDERAL LAW PROHIBITS ANYONE BUT REGISTERED USERS WITH HEARING LOSS
FROM USING IP CAPTIONED TELEPHONES WITH THE CAPTIONS TURNED ON." In the case of
IP CTS provider websites, we propose that the language be prominently displayed on the home page, each
page that provides consumer information about IP CTS, and each page that provides information on how
to order IP CTS or IP CTS equipment. In addition, we propose that all IP CTS provider websites,
advertising brochures and other advertising and consumer education and informational materials,
including provider-supplied literature and user manuals, contain clear and prominently located statements
and information (1) that the captions on captioned telephone service are provided by a live
communications assistant who listens to the other party on the line and provides the text on the captioned
phone, and (2) that the cost of captioning each Internet protocol captioned telephone call is funded
through a federal program. We seek comment on these proposals and any alternative proposals to inform
consumers about the way that it works and how it is funded. We also ask commenters to address the costs
and benefits of any proposed requirements.

I.

General Prohibition of Providing Service to Users Who Do Not Need the Service

153.
In the VRS Structural Reform Order, to ensure that TRS is available "in the most efficient
manner"460 and achieves the goals underlying the provision and regulation of TRS, the Commission
adopted a general prohibition on VRS providers engaging in fraudulent, abusive, and wasteful
practices.461 We seek comment on whether the Commission should adopt a general prohibition on IP
CTS providers from providing service to consumers who do not genuinely need the service, that is,
consumers who do not need an assistive technology to understand a telephone conversation or consumers
who can understand a telephone conversation utilizing an assistive technology, such as an amplified
phone, that does not entail the expenditure of money from the Interstate TRS Fund. Are there any other
general prohibitions that should be adopted by the Commission? How else should the Commission
ensure that only those who need IP CTS actually use the service? We seek comment on the costs and
benefits of adopting general prohibitions on IP CTS providers from providing service to consumers who
do not genuinely need the service.


458 See section 35D, supra.
459 HLAA Comments at 15-16. See also Ultratec Reply Comments at 13-14.
460 47 U.S.C. 225(b)(1).
461 VRS Structural Reform Order, 28 FCC Rcd at 8668-69, 131.
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V.

PROCEDURAL MATTERS

A.

Comment Filing Procedures

154.
Pursuant to sections 1.415 and 1.419 of the Commission's rules,462 interested parties may
file comments and reply comments regarding the Notice on or before the dates indicated on the first page
of this document. Comments may be filed using the Commission's Electronic Comment Filing System
(ECFS).463

Electronic Filers: Comments may be filed electronically using the Internet by accessing the
Commission's Electronic Comment Filing System (ECFS): http://fjallfoss.fcc.gov/ecfs2/.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission's Secretary
must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325,
Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes must be disposed of
before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th
Street, SW, Washington DC 20554.
155.
Documents in CG Docket Nos. 13-24 and 03-123 will be available for public inspection
and copying during business hours at the FCC Reference Information Center, Portals II, 445 12th Street
SW, Room CY-A257, Washington, D.C. 20554. The documents may also be purchased from BCPI,
telephone (202) 488-5300, facsimile (202) 488-5563, TTY (202) 488-5562, e-mail fcc@bcpiweb.com.

B.


Ex Parte Presentations


156.
This proceeding shall be treated as a "permit-but-disclose" proceeding in accordance with
the Commission's ex parte rules.464 Persons making ex parte presentations must file a copy of any written
presentation or a memorandum summarizing any oral presentation within two business days after the
presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral
ex parte presentations are reminded that memoranda summarizing the presentations must (1) list all
persons attending or otherwise participating in the meeting at which the ex parte presentation was made,
and (2) summarize all data presented and arguments made during the presentation. If the presentation
consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's
written comments, memoranda or other filings in the proceeding, the presenter may provide citations to
such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant
page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them
in the memorandum. Documents shown or given to Commission staff during ex parte meetings are


462 47 C.F.R. 1.415, 1.419.
463 See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
464 47 C.F.R. 1.12001.1216.
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deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b).465 In
proceedings governed by rule 1.49(f)466 or for which the Commission has made available a method of
electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations,
and all attachments thereto, must be filed through the electronic comment filing system available for that
proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in
this proceeding should familiarize themselves with the Commission's ex parte rules.

C.

Regulatory Flexibility Act

157.
As required by the Regulatory Flexibility Act of 1980, as amended (RFA),467 the
Commission has prepared a Final Regulatory Flexibility Certification in which it concludes that, under
the terms of RFA, there is no significant economic impact on small entities of the policies and rules
addressed in this document. The Certification is set forth in Appendix D.
158.
As required by the RFA, the Commission has prepared an Initial Regulatory Flexibility
Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules
addressed in this item. The IRFA is set forth in Appendix E. Written public comments are requested on
this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for
comments on the Notice provided on or before the dates indicated on the first page of this Report and
Order and Notice. The Commission will send a copy of the Notice, including this IRFA, to the Chief
Counsel for Advocacy of the Small Business Administration.468 In addition, the Report and Order and
Notice and IRFA (or summaries thereof) will be published in the Federal Register.469

D.

Paperwork Reduction Act Analysis

159.
Paperwork Reduction Act of 1995 Analysis. This document contains new information
collection requirements subject to the Paperwork Reduction Act of 1995 (PRA).470 It will be submitted to
the Office of Management and Budget (OMB) for review under section 3507 of the PRA.471 Prior to
submission to OMB, the Commission will publish a notice in the Federal Register seeking public
comment on the information collection requirement. In addition, that notice will also seek comment on
how the Commission might "further reduce the information collection burden for small business concerns
with fewer than 25 employees" pursuant to the Small Business Paperwork Relief Act of 2002.472 The
information collection contained in this Report and Order will not go into effect until OMB approves the
collection and the Commission has published a notice in the Federal Register announcing the effective
date of the information collection.
160.
The Notice seeks comment on proposed new information collection requirements. If the
Commission adopts any new information collection requirement, the Commission will publish another
notice in the Federal Register inviting the public to comment on the requirements, as required by the


465 Id. 1.1206(b).
466 Id. 1.49(f).
467 5 U.S.C. 601 et. seq. The RFA has been amended by the Contract With America Advancement Act of 1996.
Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA).
468 See id. 603(a).
469 Id.
470 Pub. L. No. 104-13.
471 44 U.S.C. 3507.
472 Pub. L. No. 107-198. See 44 U.S.C. 3506(c)(4).
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PRA.473 In addition, pursuant to the Small Business Paperwork Relief Act of 2002,474 the Commission
will seek specific comment on how it might further reduce the information collection burden for small
business concerns with fewer than 25 employees.

E.

Congressional Review Act

161.
The Commission will send a copy of this Report and Order in a report to be sent to
Congress and the Government Accountability Office pursuant to the Congressional Review Act.475

F.

Materials in Accessible Formats

162.
To request materials in accessible formats (such as Braille, large print, electronic files, or
audio format), send an e-mail to fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau
at (202) 418-0530 (voice) or (202) 418-0432 (TTY). This Report and Order and Further Notice of
Proposed Rulemaking can also be downloaded in Word and Portable Document Formats (PDF) at
http://www.fcc.gov/cgb/dro/trs.html.

VI.

ORDERING CLAUSES

163.
Accordingly, IT IS ORDERED that, pursuant to the authority contained in sections 1, 2,
4(i), (4)(j) and 225 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i),
154(j) and 225, this Report and Order and Further Notice of Proposed Rulemaking is hereby ADOPTED,
effective thirty (30) days after publication of the text or summary thereof in the Federal Register, except
for those rules and requirements involving Paperwork Reduction Act burdens, which shall become
effective upon announcement in the Federal Register of OMB approval and an effective date of the rules,
and except for the extension of the rules adopted in the IP CTS Interim Order, which shall be effective
immediately publication in the Federal Register.
164.
IT IS FURTHER ORDERED that the final rules on referrals for rewards, 47 C.F.R.
64.604(c)(8), SHALL BE effective 30 days after publication of a summary in the Federal Register,
pursuant to 5 U.S.C. 553(d) and section 1.427(a) of the Commission's rules, 47 C.F.R. 1.427(a).
165.
IT IS FURTHER ORDERED that the interim rules on referrals for rewards, 47 C.F.R.
64.604(c)(8), adopted in the IP CTS Interim Order,476 SHALL CONTINUE TO BE EFFECTIVE until the
final rules on referrals for rewards adopted herein become effective.477
166.
IT IS FURTHER ORDERED that the final rules on user registration and certification, 47
C.F.R. 64.604(c)(9), SHALL BE EFFECTIVE upon publication in the Federal Register of a notice
announcing the approval of such requirements by the Office of Management and Budget under the
Paperwork Reduction Act of 1995478 and an effective date of the rules.
167.
IT IS FURTHER ORDERED that the interim rules on new user registration and
certification, 47 C.F.R. 64.604(c)(9), adopted in the IP CTS Interim Order,479 SHALL CONTINUE TO


473 Pub. L. No. 104-13. See 44 U.S.C. 3501-3520.
474 Pub. L. No. 107-198. See 44 U.S.C. 3506(c)(4).
475 5 U.S.C. 801(a)(1)(A).
476 IP CTS Interim Order, 28 FCC Rcd at 735, 743, 66, 68, Appendix D.
477 The effectiveness of the interim rules on referrals for rewards is being extended to avoid a gap in this
requirement.
478 Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995), codified at 44 U.S.C. 3501 et seq.
479 IP CTS Interim Order, 28 FCC Rcd at 735, 743-44, 66, 70, Appendix D.
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BE EFFECTIVE until the final rules on user registration and certification adopted herein become
effective.480
168.
IT IS FURTHER ORDERED that the final rules requiring a default setting of captions
off, 47 C.F.R. 64.604(c)(10)(i), (ii), (iii) and (v), SHALL BE EFFECTIVE 30 days after publication of
a summary in the Federal Register, pursuant to 5 U.S.C. 553(d) and section 1.427(a) of the
Commission's rules, 47 C.F.R. 1.427(a).
169.
IT IS FURTHER ORDERED that the interim rules requiring a default setting of captions
off, 47 C.F.R. 64.604(c)(10), adopted in the IP CTS Interim Order,481 SHALL CONTINUE TO BE
EFFECTIVE until the final rules requiring a default setting of captions off adopted herein become
effective.482
170.
IT IS FURTHER ORDERED that the final rules providing a hardship exemption to the
requirement of a default setting of captions off, 47 C.F.R. 64.604(c)(10)(iv), SHALL BE EFFECTIVE
upon publication in the Federal Register of a notice announcing the approval of such requirements by the
Office of Management and Budget under the Paperwork Reduction Act of 1995483 and an effective date of
the rules.
171.
IT IS FURTHER ORDERED that the final rules regarding compensation of IP CTS
providers in regard to minutes of use generated by consumers receiving certain IP CTS equipment and the
final rules prohibiting persons who have not registered for IP CTS from using IP CTS equipment with
captions turned on, 47 C.F.R. 64.604(c)(11)(i) and (ii), SHALL BE EFFECTIVE 30 days after
publication of a summary in the Federal Register, pursuant to 5 U.S.C. 553(d) and section 1.427(a) of
the Commission's rules, 47 C.F.R. 1.427(a).
172.
IT IS FURTHER ORDERED that the final rules on labeling and recordkeeping of IP
CTS equipment, 47 C.F.R. 64.604(c)(11)(iii) and (iv), SHALL BE EFFECTIVE upon publication in the
Federal Register of a notice announcing the approval of such requirements by the Office of Management
and Budget under the Paperwork Reduction Act of 1995484 and an effective date of the rules.
173.
IT IS FURTHER ORDERED that the final rules regarding registration and certification
compliance requirements for applicants for certification to be IP CTS providers, 47 C.F.R.
64.606(a)(2)(ii)(F), SHALL BE EFFECTIVE upon publication in the Federal Register of a notice
announcing the approval of such requirements by the Office of Management and Budget under the
Paperwork Reduction Act of 1995485 and an effective date of the rules.


480 The effectiveness of the interim rules on new user registration and certification is being extended to avoid a gap
in the requirement.
481 IP CTS Interim Order, 28 FCC Rcd at 735, 744, 66, 69, Appendix D.
482 The effectiveness of the interim rules on default captions off is being extended to avoid a gap in this requirement.
483 Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995), codified at 44 U.S.C. 3501 et seq.
484 Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995), codified at 44 U.S.C. 3501 et seq.
485 Pub. L. No. 104-13, 109 Stat. 163 (May 22, 1995), codified at 44 U.S.C. 3501 et seq.
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174.
IT IS FURTHER ORDERED that the Commission's Consumer and Governmental
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Report and Order and
Notice of Proposed Rulemaking, including the Final Regulatory Flexibility Certification and the Initial
Regulatory Flexibility Analysis, to the Chief Counsel for advocacy of the Small Business Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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APPENDIX A

List of Commenters

COMMENTERS

COMMENTS SUBMITTED

Adult Loss of Hearing Association (ALOHA)
February 26, 2013
L. Storck, President of Collaborative for
February 20, 2013
Communication Access via Captioning (CCAC)
CTIA-The Wireless Association (CTIA)
February 26, 2013
Hamilton Relay (Hamilton)
February 26, 2013
Hearing Loss Association of America (HLAA)
February 26, 2013
Miracom USA, Inc. (Miracom)
February 26, 2013
Purple Communications Inc. (Purple)
February 26, 2013
Rehabilitation Engineering Research Center on
February 26, 2013
Telecommunications Access (RERC-TA)
Sorenson Communications Inc. and CaptionCall LLC
February 26, 2013
(Sorenson)
Sprint Nextel (Sprint)
February 26, 2013
United States Telecom Association (USTelecom)
February 26, 2013

Consumer Groups consisting of:

February 26, 2013
Telecommunications for the Deaf and Hard of
Hearing, Inc.,
Association of Late-Deafened Adults, Inc.,
National Association of the Deaf,
Deaf and Hard of Hearing Consumer Advocacy
Network,
Cerebral Palsy and Deaf Organization,
California Coalition of Agencies Serving the
Deaf and Hard of Hearing, and
American Association of the Deaf-Blind

PAPERWORK REDUCTION COMMENTS

Sorenson and CaptionCall LLC (Sorenson
February 19, 2013
Paperwork Reduction Comments)

REPLY COMMENTS

Consumer Groups
March 12, 2013
HLAA
March 12, 2013
Hamilton
March 12, 2013
Purple
March 12, 2013
RERC-TA
March 12, 2013
Sorenson
March 12, 2013
Ultratec
March 12, 2013
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APPENDIX B

Final Rules

The Commission amends 47 C.F.R. part 64 as follows:
PART 64 MISCELLANEOUS RULES RELATING TO COMMON CARRIERS
1.
The authority citation to part 64 continues to read as follows:
Authority: 47 U.S.C. 154, 254(k); 403(b)(2)(B), (c), Pub. L. 104-104, 110 Stat. 56. Interpret or apply 47
U.S.C. 201, 218, 222, 225, 226, 227, 228, 254(k), 616, 620, and the Middle Class Tax Relief and Job
Creation Act of 2012, Pub. L. 112-96, unless otherwise noted.
2.
Amend section 64.604 by revising paragraphs (c)(8), (9), and (10), and by adding
paragraph (c)(11) as follows:
64.604 Mandatory minimum standards.
* * * * *
(c) * * *
(8) Incentives for Use of IP CTS.
(i) An IP CTS provider shall not offer or provide to any person or entity that registers to use IP CTS any
form of direct or indirect incentives, financial or otherwise, to register for or use IP CTS.
(ii) An IP CTS provider shall not offer or provide to a hearing health professional any direct or indirect
incentives, financial or otherwise, that are tied to a consumer's decision to register for or use IP CTS.
Where an IP CTS provider offers or provides IP CTS equipment, directly or indirectly, to a hearing health
professional, and such professional makes or has the opportunity to make a profit on the sale of the
equipment to consumers, such IP CTS provider shall be deemed to be offering or providing a form of
incentive tied to a consumer's decision to register for or use IP CTS.
(iii) Joint marketing arrangements between IP CTS providers and hearing health professionals shall be
prohibited.
(iv) For the purpose of this paragraph (c)(8), a hearing health professional is any medical or non-medical
professional who advises consumers with regard to hearing disabilities.
(v) Any IP CTS provider that does not comply with paragraph (c)(8) shall be ineligible for compensation
for such IP CTS from the TRS Fund.
(9) IP CTS Registration and Certification Requirements.
(i) IP CTS providers must first obtain the following registration information from each consumer prior to
requesting compensation from the TRS Fund for service provided to the consumer: the consumer's full
name, date of birth, last four digits of the consumer's social security number, address and telephone
number.
(ii) Self-Certification Prior to [insert effective date of this rule amendment]. IP CTS providers, in
order to be eligible to receive compensation from the TRS Fund for providing IP CTS, also must first
obtain a written certification from the consumer, and if obtained prior to [insert effective date of this
rule amendment
], such written certification shall attest that the consumer needs IP CTS to communicate
in a manner that is functionally equivalent to the ability of a hearing individual to communicate using
voice communication services. The certification must include the consumer's certification that:
(A) The consumer has a hearing loss that necessitates IP CTS to communicate in a manner that is
functionally equivalent to communication by conventional voice telephone users;
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(B) The consumer understands that the captioning service is provided by a live communications assistant;
and
(C) The consumer understands that the cost of IP CTS is funded by the TRS Fund.
(iii) Self-Certification On or After [insert effective date of this rule amendment]. IP CTS providers
must also first obtain from each consumer prior to requesting compensation from the TRS Fund for the
consumer, a written certification from the consumer, and if obtained on or after [INSERT EFFECTIVE
DATE OF THIS RULE AMENDMENT
], such certification shall state that:
(A) The consumer has a hearing loss that necessitates use of captioned telephone service;
(B) The consumer understands that the captioning on captioned telephone service is provided by a live
communications assistant who listens to the other party on the line and provides the text on the captioned
phone;
(C) The consumer understands that the cost of captioning each Internet protocol captioned telephone call
is funded through a federal program; and
(D) The consumer will not permit, to the best of the consumer's ability, persons who have not registered
to use Internet protocol captioned telephone service to make captioned telephone calls on the consumer's
registered IP captioned telephone service or device.
(iv) The certification required by paragraphs (c)(9)(ii) and (iii) of this section must be made on a form
separate from any other agreement or form, and must include a separate consumer signature specific to
the certification. Beginning [insert effective date of this rule amendment], such certification shall be
made under penalty of perjury. For purposes of this rule, an electronic signature, defined by the
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., as an electronic
sound, symbol, or process, attached to or logically associated with a contract or other record and executed
or adopted by a person with the intent to sign the record, has the same legal effect as a written signature.
(v) Third-Party Certification Prior to [insert effective date of this rule amendment]. Where IP CTS
equipment is or has been obtained by a consumer from an IP CTS provider, directly or indirectly, at no
charge or for less than $75 and the consumer was registered in accordance with the requirements of
paragraph (c)(9) of this section prior to [insert effective date of this rule amendment], the IP CTS
provider must also obtain from each consumer prior to requesting compensation from the TRS Fund for
the consumer, written certification provided and signed by an independent third-party professional, except
as provided in paragraph (c)(9)(xi) of this section.
(vi) To comply with paragraph (c)(9)(v) of this section, the independent professional providing
certification must:
(A) Be qualified to evaluate an individual's hearing loss in accordance with applicable professional
standards, and may include, but are not limited to, community-based social service providers, hearing
related professionals, vocational rehabilitation counselors, occupational therapists, social workers,
educators, audiologists, speech pathologists, hearing instrument specialists, and doctors, nurses and other
medical or health professionals;
(B) Provide his or her name, title, and contact information, including address, telephone number, and e-
mail address; and
(C) Certify in writing that the IP CTS user is an individual with hearing loss who needs IP CTS to
communicate in a manner that is functionally equivalent to telephone service experienced by individuals
without hearing disabilities.
(vii) Third-Party Certification On or After [insert effective date of this rule amendment]. Where IP
CTS equipment is or has been obtained by a consumer from an IP CTS provider, directly or indirectly, at
no charge or for less than $75, the consumer (in cases where the equipment was obtained directly from
the IP CTS provider) has not subsequently paid $75 to the IP CTS provider for the equipment prior to the
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date the consumer is registered to use IP CTS, and the consumer is registered in accordance with the
requirements of paragraph (c)(9) of this section on or after [insert effective date of this rule
amendment
], the IP CTS provider must also, prior to requesting compensation from the TRS Fund for
service to the consumer, obtain from each consumer written certification provided and signed by an
independent third-party professional, except as provided in paragraph (c)(9)(xi) of this section.
(viii) To comply with paragraph (c)(9)(vii) of this section, the independent third-party professional
providing certification must:
(A) Be qualified to evaluate an individual's hearing loss in accordance with applicable professional
standards, and must be either a physician, audiologist, or other hearing related professional. Such
professional shall not have been referred to the IP CTS user, either directly or indirectly, by any provider
of TRS or any officer, director, partner, employee, agent, subcontractor, or sponsoring organization or
entity (collectively "affiliate") of any TRS provider. Nor shall the third party professional making such
certification have any business, family or social relationship with the TRS provider or any affiliate of the
TRS provider from which the consumer is receiving or will receive service.
(B) Provide his or her name, title, and contact information, including address, telephone number, and e-
mail address.
(C) Certify in writing, under penalty of perjury, that the IP CTS user is an individual with hearing loss
that necessitates use of captioned telephone service and that the third party professional understands that
the captioning on captioned telephone service is provided by a live communications assistant and is
funded through a federal program.
(ix) In instances where the consumer has obtained IP CTS equipment from a local, state, or federal
governmental program, the consumer may present documentation to the IP CTS provider demonstrating
that the equipment was obtained through one of these programs, in lieu of providing an independent,
third-party certification under paragraphs (c)(9)(v) and (vii) of this section.
(x) Each IP CTS provider shall maintain records of any registration and certification information for a
period of at least five years after the consumer ceases to obtain service from the provider and shall
maintain the confidentiality of such registration and certification information, and may not disclose such
registration and certification information or the content of such registration and certification information
except as required by law or regulation.
(xi) IP CTS providers must obtain registration information and certification of hearing loss from all IP
CTS users who began receiving service prior to March 7, 2013, within 180 days following [insert
effective date of this rule amendment
] (registration deadline). Notwithstanding any other provision of
paragraph (c)(9) of this section, IP CTS providers shall be compensated for compensable minutes of use
generated prior to the registration deadline by any such users, but shall not receive compensation for
minutes of IP CTS use generated on or after the registration deadline by any IP CTS user who has not
been registered.
(10) IP CTS Default Settings. (i) IP CTS providers must ensure that their equipment and software
applications used in conjunction with their service have a default setting of captions off, so that all IP
CTS users must affirmatively turn on captioning for each telephone call initiated or received before
captioning is provided.
(ii) Each IP CTS provider shall ensure that each IP CTS telephone they distribute, directly or indirectly,
shall include a button, icon, or other comparable feature that is easily operable and requires only one step
for the consumer to turn on captioning.
(iii) For software applications on mobile phones, laptops, tablets, computers or other similar devices, the
requirements of this paragraph (c)(10) of this section are satisfied so long as (A) consumers must log in to
access the IP CTS software feature with a unique ID and password, and (B) the default setting switches to
captions on only while the consumer is logged in, and does not remain on indefinitely.
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(iv) Hardship Exception. If a consumer has a cognitive or physical disability that significantly impedes
the ability of the consumer to turn on captioning at the start of each call, the IP CTS provider may set that
consumer's IP CTS telephone to have a default of captions on, provided that the consumer submits, in
addition to the self-certification required under paragraphs (c)(9)(ii) or (iii) of this section, the following
to the IP CTS provider:
(A) A self-certification, dated and made under penalty of perjury, that the requirement to turn on
captioning at the start of each call significantly impedes the consumer's ability to make use of captioned
telephone service, provided that such certification shall be made by the consumer's spouse or legal
guardian or a person with power of attorney where the consumer is not competent to provide the required
self-certification; and
(B) A certification from a licensed, independent, third party physician in good standing, dated and made
under penalty of perjury, that the consumer has a physical or mental disability or functional limitation that
significantly impedes the consumer's ability to activate captioning at the start of each call, including a
brief description of the basis for such statement. Such physician shall be the consumer's primary care
physician or a physician whose specialty is such that the physician is qualified to make such certification
and shall provide his or her name, title, area of specialty or expertise, and contact information, including
address, telephone number, and e-mail address on such certification. Providers shall not accept a
certification from any physician referred to the IP CTS user, either directly or indirectly, by any provider
of TRS or any officer, director, partner, employee, agent, subcontractor, or sponsoring organization or
entity (collectively "affiliate") of any TRS provider. Nor shall the physician making such certification
have any business, family or social relationship with and shall not have received any payment, referral, or
other thing of value from the TRS provider or any affiliate of the TRS provider from which the consumer
is receiving service.
(C) Each IP CTS provider shall maintain detailed records of all consumers, who, because of a showing of
hardship under this section, have been permitted to receive IP CTS equipment with a setting of default
captions on, including the dated and signed consumer and physician certifications submitted by each such
consumer pursuant to paragraph (c)(10)(iv) of this section, for a period of at least five years after the
consumer ceases to obtain service from the provider. Each IP CTS provider shall maintain the
confidentiality of such certification information, and may not disclose such certification information or
the content of such certification information except as required by law or regulation.
(D) Each IP CTS provider shall submit, on a monthly basis and subject to confidentiality requirements, a
report to the Commission on the consumers who have received a hardship exception pursuant to
paragraph (c)(10)(iv) of this section, which shall include a list of such newly excepted individuals (with
names redacted), including the dates on which each individual registered for IP CTS with the provider
and was provided with IP CTS equipment with a default setting of captions on, the area of specialty or
expertise of the certifying physician accompanying each hardship certification, and the basis for granting
each hardship exception.
(v) 911 Calling. Each IP CTS provider may turn captions on automatically for 911 calls so long as the
provider remains in compliance with the provisions of this paragraph (c)(10) for all other types of calls.
(11) IP CTS Equipment.
(i) Any IP CTS provider, including its officers, directors, partners, employees, agents, subcontractors, and
sponsoring organizations and entities, that provides equipment, software or applications to consumers,
directly or indirectly, at no charge or for less than $75, whether through giveaway, sale, loan, or
otherwise, on or after [insert effective date of this rule] shall be ineligible to receive compensation for
minutes of IP CTS use generated by consumers using such equipment. An IP CTS provider may provide
software or applications at no charge or for less than $75 to a consumer who has already paid a minimum
of $75 for equipment, software, or applications to that IP CTS provider without affecting the IP CTS
provider's eligibility to receive compensation for minutes of IP CTS use generated by that consumer.
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This paragraph (c)(11)(i) shall not apply in instances where the consumer has obtained IP CTS equipment
from a local, state, or federal governmental program.
(ii) No person shall use IP CTS equipment or software with the captioning on, unless (1) such person is
registered to use IP CTS pursuant to paragraph (c)(9) of this section; or (2) such person was an existing IP
CTS user as of March 7, 2013, and either (a) paragraph (c)(9)(xi) of this section is not yet in effect or (b)
the registration deadline in paragraph (c)(9)(xi) of this section has not yet passed.
(iii) IP CTS providers shall ensure that any newly distributed IP CTS equipment has a label on its face in
a conspicuous location with the following language in a clearly legible font: "FEDERAL LAW
PROHIBITS ANYONE BUT REGISTERED USERS WITH HEARING LOSS FROM USING THIS
DEVICE WITH THE CAPTIONS ON." For IP CTS equipment already distributed to consumers by any
IP CTS provider as of the effective date of this paragraph, such provider shall, within 30 days of the
effective date of this paragraph, distribute to consumers equipment labels with the same language as
mandated by this paragraph for newly distributed equipment, along with clear and specific instructions
directing the consumer to attach such labels to the face of their IP CTS equipment in a conspicuous
location. For software applications on mobile phones, laptops, tablets, computers or other similar
devices, IP CTS providers shall ensure that, each time the consumer logs into the application, the
notification language required by this paragraph appears in a conspicuous location on the device screen
immediately after log-in.
(iv) IP CTS providers shall maintain, with each consumer's registration records, records describing any IP
CTS equipment provided, directly or indirectly, to such consumer, stating the amount paid for such
equipment, and stating whether the label required by subparagraph (iii) was affixed to such equipment
prior to its provision to the consumer. For consumers to whom IP CTS equipment was provided directly
or indirectly prior to the effective date of this paragraph (11), such records shall state whether and when
the label required by subparagraph (iii) was distributed to such consumer. Such records shall be
maintained for a minimum period of five years after the consumer ceases to obtain service from the
provider.
3.
Section 64.606 is amended by adding paragraph (a)(2)(ii)(F) as follows:
64.606 Internet-based TRS provider and TRS program certification.
(a) * * *
(2) * * *
(ii) * * *
(F) In the case of applicants to provide IP CTS or IP CTS providers, a description of measures taken by
such applicants or providers to ensure that they do not and will not request or collect payment from the
TRS Fund for service to consumers who do not satisfy the registration and certification requirements in
64.604(c)(9), and an explanation of how these measures provide such assurance.
* * * * *
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APPENDIX C

Final Regulatory Flexibility Certification

1.
The Regulatory Flexibility Act of 1980, as amended (RFA)1 requires that a regulatory
flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that "the rule will
not have a significant economic impact on a substantial number of small entities."2 The RFA generally
defines "small entity" as having the same meaning as the terms "small business," "small organization,"
and "small governmental jurisdiction."3 In addition, the term "small business" has the same meaning as
the term "small business concern" under the Small Business Act.4 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 Small Business Administration (SBA).5
2.
Internet protocol captioned telephone relay service (IP CTS) is a form of
telecommunications relay service (TRS) that permits people who can speak, but who have a hearing loss
and who have difficulty hearing over the telephone, to speak directly to another party on a telephone call
and to use an Internet Protocol-enabled device to simultaneously listen to the other party and read
captions of what that party is saying.6 During the spring and fall of 2012, the Commission witnessed an
unusually steep increase in the growth of IP CTS minutes.7 This sudden and unprecedented escalation
raised serious concerns for the Interstate TRS Fund (Fund) that, if not immediately addressed, threatened
to overwhelm and, therefore, jeopardize the Fund for all forms of TRS. In order to protect the Fund, on
January 25, 2013, the Commission took swift and immediate action, in the IP CTS Interim Order, to
terminate, on an interim basis, provider practices that appeared to be resulting in the use of IP CTS by
individuals who did not need this service to communicate in a functionally equivalent manner.8
3.
In this Report and Order, the Commission modifies and makes permanent certain of those
interim rules. The Commission therefore permanently prohibits all referrals for rewards programs and
any other form of direct or indirect incentives, financial or otherwise, to register for or use IP CTS or for


1 5 U.S.C. 601 et. seq. The RFA has been amended by the Contract With America Advancement Act of 1996,
Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory
Enforcement Fairness Act of 1996 (SBREFA).
2 5 U.S.C. 605(b).
3 5 U.S.C. 601(6).
4 5 U.S.C. 601(3) (incorporating by reference the definition of "small business concern" in Small Business Act,
15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies "unless an
agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such term which are appropriate to the activities of the
agency and publishes such definition(s) in the Federal Register."
5 Small Business Act, 15 U.S.C. 632.
6 See 47 C.F.R. 64.601(16); Telecommunications Relay Services and Speech-to-Speech Services for Individuals with
Hearing and Speech Disabilities
, CG Docket No. 03-123, Declaratory Ruling, 22 FCC Rcd 379, 385, 14 (2007) (IP
CTS Order
). IP CTS was approved as a compensable TRS program in 2007. Id.
7 For example, from January to June 2012, the number of minutes increased by 30% and the average monthly rate of
growth doubled for the period June to October 2012. Additionally, in October 2012 alone, minutes reported by
providers exceeded the minutes that the Fund administrator budgeted for this service by 38%. As a result, the total
requested payout also exceeded the budgeted amount by 38%, almost $4 million. See Misuse of Internet Protocol
(IP) Captioned Telephone Service; Telecommunications Relay Services and Speech-to-Speech Services for
Individuals with Hearing and Speech Disabilities
, CG Docket Nos. 13-24 and 03-123, Order and Notice of Proposed
Rulemaking, 28 FCC Rcd 703, 706, 6 (2013) (IP CTS Interim Order).
8 IP CTS Interim Order.
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referral of IP CTS customers. The Commission also adopts as a final rule its interim requirement that
each IP CTS provider, in order to be eligible for compensation from the Fund for providing service to new
IP CTS users, (a) to register each new IP CTS user, and, (b) as part of the registration process, to obtain
from each consumer a self-certification that the consumer (i) has a hearing loss that necessitates use of
captioned telephone service, (ii) understands that the captions on captioned telephone service are provided
by a live communications assistant who listens to the other party on the line and provides the text on the
captioned phone, (iii) understands that the cost of captioning each Internet protocol captioned telephone
call is funded through a federal program, and (iv) will not permit, to the best of the consumer's ability,
persons who have not been registered to use Internet protocol captioned telephone service to make
captioned telephone calls on the consumer's registered IP captioned telephone service or device. The
Commission further adopts permanent rules requiring IP CTS providers to ensure that equipment and
software used in conjunction with their service have a default setting of captions off at the beginning of
each call, so that the consumer must take an affirmative step to turn on the captions each time the
consumer wishes to use IP CTS, while allowing IP CTS users to apply for an exemption from this
provision upon a showing of hardship.9 The Commission also extends the effectiveness of each interim
rule adopted in the IP CTS Interim Order until the final rule replacing it becomes effective.
4.
The Report and Order also adopts rules: (1) requiring each IP CTS provider, as a
condition of continuing to offer service to existing IP CTS users who have not yet registered for service,
(a) to register each such user with the IP CTS provider, (b) as part of the registration process, to obtain
from each user the same self-certification that is required of new IP CTS users, and (c) for those existing
users who had obtained equipment at no cost or below $75, to pay $75 for the equipment or to obtain
certification from an independent third party professional that the user has a hearing loss that necessitates
the use of captioned telephone service and that the third party professional understands that the captioned
telephone service is provided by a live communications assistant and is funded through a federal program;
(2) requiring IP CTS equipment to have labels informing consumers that consumers who have not
registered to use IP CTS are prohibited from using the equipment with captions turned on; (3) prohibiting
all providers from receiving compensation from the Fund for minutes of use generated from IP CTS users
receiving IP CTS equipment, software, or applications at no cost or below $75 on or after the effective
date of this rule;10 and (4) making provider certification contingent on demonstrated compliance that the
provider will provide service only to eligible users. The Commission believes that none of these
requirements would impose a significant economic impact on providers, including small businesses.
Moreover, each requirement is necessary to help to ensure that IP CTS is as immune as possible from
waste, fraud and abuse that could otherwise threaten the long-term viability of this program.
5.
In analyzing whether a substantial number of small entities will be affected by the
requirements adopted in the Report and Order, the Commission notes that the SBA has developed a small
business size standard for Wired Telecommunications Carriers, which consists of all such firms having
1,500 or fewer employees.11 Four providers currently receive compensation from the Interstate TRS Fund


9 The Commission also provides an exemption for mobile and web applications, provided that consumers must log
into such applications and the default switches to captions on only for the limited session while the consumer is
logged on.
10 This prohibition does not apply to software or applications provided to consumers who already paid $75 to the
provider for equipment, software, or applications.
11 13 C.F.R. 121.201, NAICS code 517110. According to Census Bureau data for 2007, there were 31,996 firms
in the Wired Telecommunications Carrier category which operated for the entire year. U.S. Census Bureau, 2007
Economic Census, Sector 51: EC0751SSSZ2: Information: Subject Series - Estab & Firm Size: Employment Size of
Establishments for the United States: 2007 (Release Date: 11/19/2010).
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&;-
ds_name=EC0751SSSZ2&-_lang=en. Of this total, 30,178 firms had employment of 99 or fewer employees, and an
additional 1,818 firms had employment of 100 employees or more. Thus, under this size standard, the vast majority
(continued....)
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for providing IP CTS: Hamilton Relay, Inc.; Purple Communications, Inc.; Sorenson Communications,
Inc. and its wholly-owned subsidiary CaptionCall; and Sprint Nextel Corporation. In addition, Miracom
USA, Inc. has applied to the Commission for certification to be authorized to receive compensation from
the Interstate TRS Fund (Fund) to provide IP CTS. We conclude that two of the five IP CTS providers
and applicants that would be affected by the proposed rules are deemed to be small entities under the
SBA's small business size standard. Because each of the new requirements adopted in the Report and
Order will have no, or minimal, economic impact upon small entities, the Commission concludes that
there will be no significant economic impact on the small entities affected by the changes adopted in this
Report and Order, and adopts these rules as necessary to help to ensure that IP CTS is as immune as
possible from waste, fraud and abuse that could otherwise threaten the long-term viability of this
program.
6.
Specifically, certain of the Commission's rules adopted in the Report and Order do not
require any affirmative action or investment on the part of providers, including small entities, in that they
are solely proscriptive, merely forbidding certain marketing behaviors. For example, the Commission's
permanent prohibition on all referrals for rewards programs and any other form of direct or indirect
incentives will not require any financial outlay, nor cause any significant economic impact, on providers
which are small entities.
7.
Similarly, the rule adopted in this Report and Order prohibiting all providers from
receiving compensation from the Fund for minutes of use generated from IP CTS users receiving IP CTS
equipment, software, or applications at no cost or below $75 on or after the effective date of this rule, is
proscriptive in nature and will not have a significant economic impact on providers which are small
entities. In fact, small entity providers may be assisted by this rule, as it will ease competitive pressure on
them to distribute hardware and software at no cost to consumers.
8.
The Commission adopts, as a final rule, its interim requirement that each provider, in
order to be eligible for compensation for service to new IP CTS users, register each new user and obtain
from each user a self-certification that the user (i) has a hearing loss that necessitates use of captioned
telephone service, (ii) understands that the captions on captioned telephone service are provided by a live
communications assistant who listens to the other party on the line and provides the text on the captioned
phone, (iii) understands that the cost of captioning each Internet protocol captioned telephone call is
funded through a federal program, and (iv) will not permit, to the best of the user's ability, persons who
have not been registered to use Internet protocol captioned telephone service to make captioned telephone
calls on the user's registered IP captioned telephone service or device.
9.
In addition, the Report and Order adopts rules requiring each IP CTS provider, as a
condition of continuing to offer service to existing IP CTS users who have not yet registered for service,
(a) to register each such user with the IP CTS provider, (b) as part of the registration process, to obtain
from each user a self-certification that the user (i) has a hearing loss that necessitates use of captioned
telephone service, (ii) understands that the captions on captioned telephone service are provided by a live
communications assistant who listens to the other party on the line and provides the text on the captioned
phone, (iii) understands that the cost of captioning each Internet protocol captioned telephone call is
funded through a federal program, and (iv) will not permit, to the best of the user's ability, persons who
have not been registered to use Internet protocol captioned telephone service to make captioned telephone
calls on the user's registered IP captioned telephone service or device, and (c) for those existing users
(Continued from previous page)


of firms can be considered small. (The census data do not provide a more precise estimate of the number of firms
that have employment of 1,500 or fewer employees; the largest category provided is "Firms with 100 employees or
more.") Id.
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who had obtained equipment at no cost or below $75, to pay $75 for the equipment12 or obtain
certification from an independent third party professional the user has a hearing loss that necessitates the
use of captioned telephone service and that the third party professional understands that the captioned
telephone service is provided by a live communications assistant and is funded through a federal program.
10.
User registration is already required of other forms of TRS13 and is a necessary and useful
means to ensure that only those individuals who are truly eligible for TRS are allowed to use these
services.14 These measures will also ensure that users of IP CTS fully understand how the service works,
and that its costs are supported by a federal program. The new rules, which require the registration and
certification of new users prior to the commencement of service and give the providers 180 days to
register all existing users who began service prior to January 1, 2012,15 afford providers an adequate time
to comply, and extending the registration requirements to existing users is a one-time effort that, once
completed, is not ongoing. The Commission finds that the ongoing impact on providers, including small
entities of registering new users and the one-time impact of upon providers, including small entities, of
registering existing users is justified in order to protect the TRS Fund from misuse by ineligible users, and
thereby safeguard the future of IP CTS and other TRS programs. Because the requirements to register
and obtain certifications from users have an administrative-only impact on IP CTS providers, including
small entities, and the Commission has mitigated the impact of such requirements by affording providers
an adequate amount of time to register existing users, the Commission finds that these requirements will
not cause any significant economic impact on providers, including those which are small entities. The
Commission rejects the alternative of imposing the requirement for new users only, because such
alternative does not address the fact that ineligible users may have enrolled in the program at an earlier
time, especially during the period in which usage spiked.
11.
The Commission has also adopted a rule making provider certification contingent on
demonstrated compliance that the provider will provide service only to eligible users. This requirement is
essential to prevent waste, fraud and abuse by ensuring that the Commission does not certify IP CTS
providers that do not have a plan in place to prevent ineligible users from using IP CTS. Because
applicants for certification to provide IP CTS already must submit detailed applications demonstrating
their ability to comply with all Commission requirements, the additional showing required by this rule
imposes little or no additional burden upon the providers, including small entities. The Commission thus
finds that this requirement will not cause any significant economic impact on providers, including those
which are small entities.
12.
The Commission also adopts a requirement that IP CTS equipment feature labels
informing both new and existing users that consumers who have not registered to use IP CTS are
prohibited from using the equipment with captions turned on. Providers will be required to affix such
labels to new equipment before it is distributed to consumers, and to distribute the labels to existing users
along with instructions to attach the label to the equipment that the consumer is already using. The


12 The option to make a subsequent payment of $75 is available only if the consumer initially obtained the
equipment for free or for less than $75 from the IP CTS provider and the subsequent payment is made to the
provider.
13 See 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, CC Docket No. 98-67,
WC Docket No. 05-196, Second Report and Order and Order on Reconsideration, 24 FCC Rcd 791, 808-810, 36-
38 (2008) (Second TRS Numbering Order) (requiring registration and verification of VRS and IP Relay users).
14 See Structure and Practices of the Video Relay Services Program: Telecommunications Relay Services and
Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities,
CG Docket No. 10-51, CG Docket
No. 03-123, Report and Order and Further Notice of Proposed Rulemaking, 28 FCC Rcd 8618, 8654-55, 80-83
(2013) (VRS Structural Reform Order); Second TRS Numbering Order, 24 FCC Rcd at 808-810, 36-38.
15 Users who began service on or after March 7, 2013 will already have been registered under the interim rule.
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obligations imposed by this labeling requirement are minimal for new equipment, and are similarly
minimal, and a one-time expense, for existing users' equipment. The Commission finds that the small
impact upon providers, including small entities, is warranted to ensure that ineligible users are cautioned
that they may not utilize IP CTS. The Commission thus finds that this requirement will not cause any
significant economic impact on providers, including those which are small entities. Based upon the
comments filed in this proceeding, the Commission rejected the alternative of requiring this information
to be displayed on the IP CTS screen at the beginning of each call, because such alternative may have had
more of an economic impact upon providers and was likely to be potentially confusing to consumers.
13.
The Commission also makes permanent its interim rule requiring IP CTS providers to
ensure that equipment and software used in conjunction with their service have a default setting of
captions off at the beginning of each call, so that the consumer must take an affirmative step to turn on the
captions each time the consumer wishes to use IP CTS. The Report and Order adds, for the first time, a
hardship exception whereby a provider need not have a setting of default captions off for those consumers
who submit to the IP CTS provider a self-certification and an independent third party physician
certification that the requirement to activate captioning at the start of each call significantly impedes the
consumer's ability to make use of the captioned telephone service. The Commission also permits each
provider to turn captions on for 911 emergency calls so long as the provider still complies with the
general captions default off requirement.
14.
The requirement for IP CTS providers to ensure that equipment and software used in
conjunction with their service have a default setting of captions off at the beginning of each call
necessitated a one-time software change on the part of providers, including small entities. The
implementation of this requirement, however, is outweighed by the public interest need to prevent misuse
of IP CTS resulting from consumers sharing their IP CTS equipment with individuals who do not qualify
to use IP CTS. Such misuse results in greater expenses incurred by the TRS Fund, which is funded by
contributions provided by telecommunications and VoIP providers, including small entities. The
hardship exemption adopted in this Report and Order will impose new reporting and recordkeeping
obligations on all IP CTS providers, including small entities. However, the reporting and recordkeeping
requirements will not be substantial, because each IP CTS provider will have a one-time requirement for
each consumer who qualifies for the hardship exemption. Moreover, the hardship exemption was
supported by all commenters, including all IP CTS providers, who commented on the issue as a means of
ensuring functionally equivalent service for those consumers who have significant difficulty turning on
captions. Because the hardship exemption will allow those consumers who are unable to turn on captions
to have a default setting of captions on, and thereby be able to make use of the service, the hardship
exemption should result in additional legitimate compensable minutes for IP CTS providers, and thereby
benefit such providers, including small entities. The Commission also permits each provider to turn
captions on for 911 emergency calls so long as the provider still complies with the general captions
default off requirement. Therefore, the Commission finds that these requirements will not cause any
significant economic impact on providers, including those which are small entities. The Commission
rejected the alternative of returning to a system permitting default-on settings for all consumers, as it
deemed making the captions default off rule permanent to be necessary to ensure that IP CTS is utilized
only by eligible users, thereby protecting the program and the Fund. The Commission also rejected the
alternative of no hardship exception, because without the exception, certain consumers would be unable
to make use of IP CTS that is functionally equivalent to the ability of a hearing individual who does not
have a speech disability to communicate using voice communication services.16
15.
The Report and Order also extends the effectiveness of each interim rule adopted in the
IP CTS Interim Order until the final rule replacing it becomes effective. Because all IP CTS providers
are already supposed to be in compliance with each of the interim rules, the extension of the effectiveness


16 See 47 U.S.C. 225(a)(3).
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of the interim rules will impose no new requirements on any IP CTS provider, including small entities.
The Commission thus finds that these rule extensions will not cause any significant economic impact on
providers, including those which are small entities. The Commission rejected the alternative of not
extending the effectiveness of the interim rules to prevent a gap in these rules, which would open the door
to practices that the Commission has already determined could permit consumers who do not need IP
CTS to use the service.
16.
Therefore, for all of the reasons stated above, we find that the requirements of this Report
and Order will not have a significant economic impact on a substantial number of small entities.
17.
The Commission will send a copy of the Report and Order, including a copy of this Final
Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the SBA.17 This final
certification will also be published in the Federal Register.18


17 See 5 U.S.C. 605(b).
18 See id.
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APPENDIX D

Initial Regulatory Flexibility Analysis

1.
As required by the Regulatory Flexibility Act (RFA),1 the Commission has prepared this
Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in this Further Notice of Proposed Rulemaking (Notice).
Written public comments are requested on this IRFA. Comments must be identified as responses to the
IRFA and must be filed by the deadlines for comments in the Notice. The Commission will send a copy
of this Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA).2 In addition, the Notice and IRFA (or summaries thereof) will be published in the
Federal Register.3

A.

Need for, and Objectives of, the Proposed Rules

2.
Internet protocol captioned telephone relay service (IP CTS) is a form of
telecommunications relay service (TRS) that permits people who can speak, but who have a hearing loss
and who have difficulty hearing over the telephone, to speak directly to another party on a telephone call
and to use an Internet Protocol-enabled device to simultaneously listen to the other party and read
captions of what that party is saying.4 In the Notice, the Commission seeks comment on nine main issues.
First, the Commission seeks comment on whether to change the methodology for calculating the
compensation rate paid to IP CTS providers. Second, the Commission seeks comment on whether the
centralized registration and verification processes that we recently adopted for video relay service (VRS)
should also apply to IP CTS.5 Third, the Notice asks whether the Commission should transfer the
responsibilities for funding, administering and overseeing IP CTS to state TRS programs. Fourth, the
Commission asks whether there is need for mandatory minimum standards specific to IP CTS, including
standards on accuracy, speed, communications assistant (CA) connection time, volume pre-sets, and
access to 911, and if so, how such standards should be measured and enforced. Fifth, the Commission
seeks comment on whether to adopt a low income exception to the requirement that consumers must pay
a minimum of $75 for IP CTS phones. Sixth, the Commission asks whether the $75 minimum price for
IP CTS software and applications should be retained or modified. Seventh, the Commission seeks
comment on application of the default captions off requirement6 with regard to certain situations raised in


1 5 U.S.C. 601 et seq. The RFA has been amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA). Pub. L. No. 104-121, Title II, 110 Stat. 857 (1996). Title II of the CWAAA is the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA).
2 See 5 U.S.C. 603(a).
3 See 5 U.S.C. 603(a).
4 See 47 C.F.R. 64.601(16); Telecommunications Relay Services and Speech-to-Speech Services for Individuals with
Hearing and Speech Disabilities
, CG Docket No. 03-123, Declaratory Ruling, 22 FCC Rcd 379, 385, 14 (2007) (IP
CTS Order
).
5 In the Commission's VRS Structural Reform Order, the Commission directed the creation of a user registration
database (TRS-URD) and implementation of centralized eligibility verification requirements to ensure that VRS
registration is limited to those who have a hearing or speech disability. 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. 10-51 and 03-123, Report and Order and Further Notice of Proposed
Rulemaking, 28 FCC Rcd 8618, 8647-8656, 62-86 (2013) (VRS Structural Reform Order).
6 In the months prior to January, 2013, IP CTS had been experiencing unusually rapid growth. The Commission
was concerned that usage of this service by ineligible persons using IP CTS equipment was contributing
substantially to this increase in IP CTS minutes of use. See Misuse of Internet Protocol (IP) Captioned Telephone
Service; Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and
Speech Disabilities
, CG Docket Nos. 13-24 and 03-123, Order and Notice of Proposed Rulemaking, 28 FCC Rcd
703, 720, 27 (2013) (IP CTS Interim Order). On January 25, 2013, the Commission issued interim rules which
(continued....)
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the comments to this proceeding. Eighth, the Commission seeks comment on a proposal that language be
prominently displayed on all IP CTS provider websites, advertising brochures and other advertising and
consumer education and informational materials, including provider-supplied literature and user manuals,
notifying consumers that federal law prohibits anyone other than registered IP CTS users from using IP
CTS equipment with captioning turned on. Finally, the Commission asks whether it should adopt a
general prohibition on providing service to consumers who do not need IP CTS.

B.

Legal Basis

3.
The legal basis for any action that may be taken pursuant to the Notice is contained in
sections 1, 2, 4(i), 4(j), and 225 of the Communications Act of 1934, as amended.7

C.

Description and Estimate of the Number of Small Entities to Which the Proposed
Rules May Apply

4.
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.8 The RFA generally defines the term
"small entity" as having the same meaning as the terms "small business," "small organization," and
"small governmental jurisdiction."9 In addition, the term "small business" has the same meaning as the
term "small business concern" under the Small Business Act.10 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.11
5.
We believe that the entities that may be affected by the proposed rules are IP CTS
providers. Neither the Commission nor the SBA has developed a definition of "small entity" specifically
directed toward IP CTS providers. The closest applicable size standard under the SBA rules is for Wired
Telecommunications Carriers, which consists of all such firms having 1,500 or fewer employees.12 Four
providers currently receive compensation from the Interstate TRS Fund for providing IP CTS: Hamilton
Relay, Inc.; Purple Communications, Inc.; Sorenson Communications, Inc. and its wholly-owned
subsidiary CaptionCall; and Sprint Nextel Corporation. In addition, Miracom USA, Inc. has applied to
the Commission for certification to be authorized to receive compensation from the Interstate TRS Fund
(Continued from previous page)


included a requirement that providers set equipment to a default captions-off setting. Id. at 722, 33. The
accompanying Report and Order makes this interim rule permanent.
7 47 U.S.C. 151, 152, 154(i), 154(j), and 225.
8 5 U.S.C. 604(a)(3).
9 5 U.S.C. 601(6).
10 5 U.S.C. 601(3) (incorporating by reference the definition of "small business concern" in the Small Business
Act, 15 U.S.C. 632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies "unless an
agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such term which are appropriate to the activities of the
agency and publishes such definition(s) in the Federal Register."
11 15 U.S.C. 632.
12 13 C.F.R. 121.201, NAICS code 517110. According to Census Bureau data for 2007, there were 31,996 firms
in the Wired Telecommunications Carrier category which operated for the entire year. U.S. Census Bureau, 2007
Economic Census, Sector 51: EC0751SSSZ2: Information: Subject Series - Estab & Firm Size: Employment Size of
Establishments for the United States: 2007 (Release Date: 11/19/2010).
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&;-
ds_name=EC0751SSSZ2&-_lang=en. Of this total, 30,178 firms had employment of 99 or fewer employees, and an
additional 1,818 firms had employment of 100 employees or more. Thus, under this size standard, the vast majority
of firms can be considered small. (The census data do not provide a more precise estimate of the number of firms
that have employment of 1,500 or fewer employees; the largest category provided is "Firms with 100 employees or
more"). Id.
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(Fund) to provide IP CTS. We conclude that two of the five IP CTS providers and applicants that would
be affected by the proposed rules are deemed to be small entities under the SBA's small business size
standard.

D.

Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements

6.
Certain rule changes, if adopted by the Commission, would modify rules or add
requirements governing reporting, recordkeeping and other compliance obligations.
7.
If the Commission were to adopt the changes to the methodology for calculating the
compensation rate paid to IP CTS providers13 as proposed in the Notice, the compensation rate may be
lower than it is now,14 and IP CTS providers may be required to submit to the Fund administrator cost
data15 that they are not now required to provide. However, interstate TRS, including IP CTS, is funded
through a federal program in which interstate telecommunications and voice over Internet protocol (VoIP)
providers, including small entities contribute to the Fund, and the monies contributed to the Fund are used
to compensate TRS providers, including IP CTS providers. Section 225(b)(1) of the Communications
Act of 1934, as amended (Act), requires that TRS is made available "in the most efficient manner" to
individuals with hearing and speech disabilities.16 The Commission therefore has a statutory obligation to
ensure that TRS providers, including IP CTS providers, are compensated fairly and are not
overcompensated. The purpose of any change in rate methodology, if adopted by the Commission, would
be to satisfy this statutory obligation.
8.
If the Commission were to adopt centralized registration and verification processes as we
recently did for VRS, and thereby extend the use of the TRS user registration database (TRS-URD)17 to
IP CTS, providers of these services, including small entities, would be required to collect certain
information from consumers and enter that information in the TRS-URD. However, the TRS-URD
would actually reduce the regulatory and recordkeeping burden on IP CTS providers, including small
entities, because (1) the providers would no longer be required to verify user information, which would be
accomplished centrally by a single entity contracted by the Commission, and (2) the providers would have
reduced burdens when collecting information from consumers who switch providers, because the user
information of those consumers would already be in the database.
9.
If the Commission were to adopt the proposal to transfer the responsibilities for funding,
administering and overseeing IP CTS to state TRS programs, IP CTS providers, including small entities,
would need to submit compensation requests to each state and comply with the regulatory obligations,
including recordkeeping and reporting, of each state. However, the Commission is concerned about
misuse of IP CTS that may be costly to the interstate telecommunications and VoIP providers, including
small entities, that contribute to the Fund. One of the reasons for shifting regulatory oversight of IP CTS
to the states would be to provide for greater regulatory oversight to prevent such misuse. The Notice
seeks comment on the costs and benefits of shifting regulatory responsibility to the states.


13 Currently, IP CTS rates are determined using the Multi-state Average Rate Structure Plan (MARS Plan). Under
the MARS Plan, the Fund administrator calculates the compensation rates for IP CTS using a weighted average of
competitively bid state rates for intrastate captioned telephone service (CTS). See Telecommunications Relay
Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities
, CG Docket No. 03-
123, Report and Order and Declaratory Ruling, 22 FCC Rcd 20140, 20151, 16 (2007) (2007 TRS Rate
Methodology Order
).
14 Some of the methodologies under consideration may result in lower compensation rates.
15 The notice proposes, as one of the possible scenarios, that the rate for IP CTS be calculated based on cost data.
16 47 U.S.C. 225(b)(1).
17 See VRS Structural Reform Order, 28 FCC Rcd at 8649-53, 68-77.
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10.
If the Commission were to adopt changes to the mandatory minimum standards specific
to IP CTS, IP CTS providers, including small entities, would be required to comply with the changed
standards. The Commission initially believes that the costs associated with these standards would be
reasonable for the IP CTS providers, because in many cases the providers support the changes, and have
indicated that they meet some of the new standards already. The Notice seeks comment on the
recordkeeping that would be required to demonstrate compliance with the proposed standards, and
initially believes that the recordkeeping cost to providers, including small entities, would be reasonable
and in line with what is required of providers for the other forms of TRS, including many of the same
providers who offer IP CTS. The Notice seeks comment on the costs and benefits of modifying the
proposed mandatory minimum standards for IP CTS.
11.
If the Commission were to adopt a low income exception to the requirement that
providers may not receive compensation from the Fund generated by equipment provided to new
consumers for less than $75, it is proposed that the TRS-URD administrator would be required to obtain
from IP CTS users documentation and certifications demonstrating that the consumer qualifies for the low
income exemption and need IP CTS to understand telephone conversations. Because the TRS-URD
administrator, and not the IP CTS providers, would be responsible for obtaining such documentation, this
proposal is not likely to place a regulatory burden on IP CTS providers, including small entities. The
notice seeks comment on the costs and benefits of the proposal.
12.
If the Commission were to modify the minimum amount of $75 that consumers must pay
for software and applications in order for providers to be eligible to receive compensation from the Fund
for minutes of use generated by those consumers, the administrative and other burdens on IP CTS
providers, including small entities, would remain the same. The Notice seeks comment on the costs and
benefits of modifying the minimum amount.
13.
If the Commission were to change the application of the default captions off requirement
with regard to certain situations raised in the comments to this proceeding, such as whether to require the
disassociation of volume control from the use of captions, whether to permit that captions be defaulted on
for answering machines, and whether to permit captions to be defaulted on for IP CTS phones that are
available only to registered users, there may be one-time costs to IP CTS providers, including small
providers, in implementing any such changes. The Commission initially believes that such costs would
be reasonable, and the public interest in ensuring functionally equivalent service by addressing these
situations would outweigh this minimal burden. The Notice seeks comment on the costs and benefits of
these various modifications proposed in the Notice.
14.
If the Commission were to adopt a requirement to provide a notification on all IP CTS
provider websites, advertising brochures and other advertising and consumer education and informational
materials, including provider-supplied literature and user manuals, that federal law forbids anyone but
registered IP CTS users from using IP CTS equipment with captioning turned on, IP CTS providers,
including small entities, would be required to provide such information on their websites, advertising
brochures and other advertising and consumer education and informational materials. The Commission
initially believes that this requirement would impose only minimal burden on providers, including small
entities, because the changes required by this rule would simply be to add wording to web pages that
already exist and to advertising brochures and other advertising and consumer education and
informational materials that the IP CTS providers print and would not require the creation of new web
pages or new printed materials solely for the purpose of compliance with the requirement. The notice
also seeks comment on the costs and benefits of the proposal.
15.
Finally, if the Commission were to adopt a general prohibition on IP CTS providers from
providing service to consumers who do not genuinely need the service, IP CTS providers, including small
entities would be required to take steps to ensure that they are not providing service to consumers who do
not genuinely need the service. Such measures would be necessary to prevent waste of the TRS Fund and
would save contributors to the TRS Fund, including small entities from contributing unnecessary amounts
to the Fund. The notice seeks comment on the costs and benefits of the proposal.
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E.

Steps Taken to Minimize Significant Economic Impact on Small Entities and
Significant Alternatives Considered

16.
The RFA requires an agency to describe any significant alternatives, specific to small
entities, that it has considered in developing its approach, which may include the following four
alternatives (among others): "(1) the establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small entities; (2) the clarification,
consolidation, or simplification of compliance and reporting requirements under the rule for such small
entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of
the rule, or any part thereof, for such small entities."18
17.
In general, alternatives to proposed rules are discussed only when those rules pose a
significant adverse economic impact on small entities. In this context, however, one of the proposed rules
would confer benefits as explained below, and the others do not impose significant adverse economic
impact.
18.
If the Commission were to adopt the changes to the methodology for calculating the
compensation rate paid to IP CTS providers as proposed in the Notice, the compensation rate may be
lower than it is now, and IP CTS providers may be required to submit to the Fund administrator cost data
that they are not now required to provide. However, interstate TRS, including IP CTS, is funded through
a federal program in which interstate telecommunications and voice over Internet protocol (VoIP)
providers, including small entities contribute to the Fund, and the monies contributed to the Fund are used
to compensate TRS providers, including IP CTS providers. Section 225(b)(1) of the Act requires that
TRS is made available "in the most efficient manner" to individuals with hearing and speech
disabilities.19 The Commission therefore has a statutory obligation to ensure that TRS providers,
including IP CTS providers, are compensated fairly and are not overcompensated. Because the purpose
of any change in rate methodology, if adopted by the Commission, would be to satisfy this statutory
obligation, the Commission is not proposing other alternatives for small entities.
19.
If the Commission were to adopt centralized registration and verification processes, and
require IP CTS providers to transfer information to the TRS URD, IP CTS providers would transfer
information which they are already obliged to collect to the central database manager, and the TRS Fund
would compensate the database manager. Providers, including small entities, would thereby be relieved
of the obligation to maintain registration information, and would not be responsible for the cost of
maintenance of a registration database. There would be no additional reporting or recordkeeping
obligations associated with the proposed rule change, and the effect of the rule would be to reduce
recordkeeping obligations on providers, including small entities. The Commission is not proposing other
alternatives for small entities because these requirements may be needed to limit waste, fraud and abuse,
and an ineligible user can potentially defraud the TRS Fund by obtaining service from large and small
entities alike. Therefore, if the Commission were to adopt centralized registration and verification
procedures, the same requirements would need to apply to users of small entities as well as large entities.
20.
If the Commission were to adopt the proposal to transfer the responsibilities for funding,
administering and overseeing IP CTS to state TRS programs, some current IP CTS providers, including
possible small entities, would need to submit compensation requests to each state and comply with the
regulatory obligations, including recordkeeping and reporting, of each state. However, the Commission is
concerned about misuse of IP CTS that may be costly to the interstate telecommunications and VoIP
providers, including small entities, that contribute to the Fund. One of the reasons for shifting regulatory
oversight of IP CTS to the states would be to provide for greater regulatory oversight to prevent such
misuse. The Notice seeks comment on the costs and benefits of shifting regulatory responsibility to the


18 5 U.S.C. 603(c)(1)-(c)(4).
19 47 U.S.C. 225(b)(1).
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states. If regulatory responsibility were shifted to the states, it would be up to the states to consider
whether to adopt significant regulatory alternatives specific to small entities.
21.
If the Commission were to adopt changes to the mandatory minimum standards specific
to IP CTS, IP CTS providers, including small entities, would be required to comply with the changed
standards. The Commission initially believes that the costs associated with these standards would be
reasonable for the IP CTS providers, because in many cases the providers support the changes, and have
indicated that they meet some of the new standards already. The Notice seeks comment on the
recordkeeping that would be required to demonstrate compliance with the proposed standards, and
initially believes that the recordkeeping cost to providers, including small entities, would be reasonable
and in line with what is required of providers for the other forms of TRS, including many of the same
providers who offer IP CTS. The Notice seeks comment on the costs and benefits of modifying the
proposed mandatory minimum standards for IP CTS. Moreover, the Commission is not proposing other
alternatives for small entities because this proposal applies to the mandatory minimum standards for the
entire IP CTS program. Section 225(d)(1)(B) of the Act requires that the Commission establish
mandatory minimum standards,20 and section 225 (a)(3) of the Act requires that TRS be provided "in a
manner that is functionally equivalent to the ability of a hearing individual who does not have a speech
disability to communicate using voice communication services. . . ."21 In order to ensure functional
equivalency, the same mandatory minimum standards need to apply to small entities as well as large
entities.
22.
If the Commission were to adopt a low income exception to the requirement that
providers may not receive compensation from the Fund generated by equipment provided to new
consumers for less than $75, it is proposed that the TRS-URD administrator would be required to obtain
from IP CTS users documentation and certifications demonstrating that the consumer qualifies for the low
income exemption and need IP CTS to understand telephone conversations. Because the TRS-URD
administrator, and not the IP CTS providers, would be responsible for obtaining such documentation, this
proposal is not likely to place a regulatory burden on IP CTS providers, including small entities. The
notice seeks comment on the costs and benefits of the proposal.
23.
If the Commission were to modify the minimum amount of $75 that consumers must pay
for software and applications in order for providers to be eligible to receive compensation from the Fund
for minutes of use generated by those consumers, the administrative and other burdens on IP CTS
providers, including small entities, would remain the same. The Notice seeks comment on the costs and
benefits of modifying the minimum amount.
24.
If the Commission were to change the application of the default captions off requirement
with regard to other situations raised in the comments to this proceeding, such as whether to require the
disassociation of volume control from the use of captions, whether to permit that captions be defaulted on
for answering machines, and whether to permit captions to be defaulted on for IP CTS phones that are
available only to registered users, there may be one-time costs to IP CTS providers, including small
providers, in implementing such changes. As noted above, the Commission initially believes that such
costs would be reasonable, and the public interest in ensuring functionally equivalent service by
addressing these situations outweigh this minimal burden, and therefore no alternatives are proposed for
small entities. The Notice seeks comment on the costs and benefits of these various modifications
proposed in the Notice. The Commission will consider any comments received that propose alternatives
that would reduce the burden of any regulation on IP CTS providers, including specific proposals to
reduce the regulatory burden on small entities.


20 47 U.S.C. 225(d)(1)(B).
21 47 U.S.C. 225(a)(3).
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25.
If the Commission were to adopt a requirement to provide a notification on all IP CTS
provider websites, advertising brochures and other advertising and consumer education and informational
materials, including provider-supplied literature and user manuals, that federal law forbids anyone but
registered IP CTS users from using IP CTS equipment with captioning turned on, IP CTS providers,
including small entities, would be required to provide such information on their websites, advertising
brochures and other advertising and consumer education and informational materials. The Commission
initially believes that this requirement would impose only minimal burden on providers, including small
entities, because the changes required by this rule would simply be to add wording to web pages that
already exist and to advertising brochures and other advertising and consumer education and
informational materials that the IP CTS providers print and would not require the creation of new web
pages or new printed materials solely for the purpose of compliance with the requirement. The
Commission initially rejects the alternative of not adopting the proposed requirement on the grounds that
the requirement is needed to prevent consumers who are not eligible to use IP CTS from using IP CTS
equipment with the captions turned on. This is needed to avoid unnecessary Fund expenditures, which in
turn, would be paid for by telecommunications and VoIP companies that contribute to the Fund. Some of
these contributors are small entities. The Commission will consider any comments received that propose
alternatives that would reduce the burden on small entities.
26.
Finally, if the Commission were to adopt a general prohibition on IP CTS providers from
providing service to consumers who do not genuinely need the service, IP CTS providers, including small
entities would be required to take steps to ensure that they are not providing service to consumers who do
not genuinely need the service. Such measures would be necessary to prevent waste of the TRS Fund.
Since large and small entities alike are in a position to waste Fund resources by providing service to
consumers who do not genuinely need the service, the Commission initially rejects relieving small entities
of this obligation. Moreover, the requirement would save contributors to the TRS Fund, including small
entities from contributing unnecessary amounts to the Fund. The notice seeks comment on the costs and
benefits of the proposal.

F.

Federal Rules that May Duplicate, Overlap, or Conflict with Proposed Rules

27.
None.

94

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