TRS Fund Support for internet Protocol Captioned Telephone Service Compensation

<RULE> FEDERAL COMMUNICATIONS COMMISSION <CFR>47 CFR Part 64</CFR> <DEPDOC>[CG Docket Nos. 22-408, 03-123, and 13-24; FCC 24-81; FR ID 241645]</DEPDOC> <SUBJECT>TRS Fund Support for internet Protocol Captioned Telephone Service Compensation</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Communications Commission. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> In this document, the Federal Communications Commission (Commission or FCC) adopts a revised, five-year plan for support of internet Protocol Captioned Telephone Service (IP CTS) by the Interstate Telecommunications Relay Services Fund (TRS Fund). To ensure that IP CTS providers have the appropriate incentive structure to support captioning with communications assistants (CAs) and with only automatic speech recognition (ASR), the Commission establishes separate compensation formulas for CA-assisted and ASR-only IP CTS. In addition, this compensation plan will give providers certainty regarding the applicable compensation levels, provide an incentive to improve efficiency, and allow the Commission an opportunity to timely reassess the compensation formulas in response to potential unanticipated cost changes and other significant developments. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Effective October 4, 2024. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Michael Scott, Consumer and Governmental Affairs Bureau, 202-418-1264, <E T="03">Michael.Scott@fcc.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> This is a summary of the Commission's Report and Order and Order ( <E T="03">Report and Order</E> ), in CG Docket Nos. 22-408, 03-123, and 13-24; FCC 24-81, adopted and released on July 31, 2024. The Commission previously sought comment on these issues in a notice of proposed rulemaking, released on December 22, 2022, and published at 88 FR 7049, February 2, 2023 ( <E T="03">NPRM</E> ). The full text of this document can be accessed electronically via the FCC's Electronic Document Management System (EDOCS) website at: <E T="03">https://docs.fcc.gov/public/attachments/FCC-24-81A1.pdf</E> or via the FCC's Electronic Comment Filing System (ECFS) website at: <E T="03">www.fcc.gov/ecfs.</E> To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to: <E T="03">fcc504@fcc.gov</E> or call the Consumer and Governmental Affairs Bureau at: (202) 418-0530 (voice). <HD SOURCE="HD1">Synopsis</HD> 1. Section 225 of the Communications Act of 1934, as amended (the Act), 47 U.S.C. 225, requires the Commission to ensure that telecommunications relay services (TRS) are available to persons who are deaf, hard of hearing, or deafblind or have speech disabilities, “to the extent possible and in the most efficient manner.” TRS are defined as “telephone transmission services” enabling such persons to communicate by wire or radio “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.” IP CTS, a form of TRS, permits an individual who can speak but who has difficulty hearing over the telephone to use a telephone and an internet Protocol (IP)-enabled device via the internet to simultaneously listen to the other party and read captions of what the other party is saying. IP CTS is supported entirely by the TRS Fund, which is composed of mandatory contributions collected from telecommunications carriers and Voice over internet Protocol (VoIP) service providers based on a percentage of each company's annual revenue. IP CTS providers receive monthly payments from the TRS Fund to compensate them for the reasonable cost of providing the service, in accordance with a per-minute compensation formula approved by the Commission. 2. Before 2020, IP CTS captions were produced by a CA, usually with the CA repeating (“revoicing”) a caller's speech into an ASR program, which then converted the CA's speech to text. In 2018, the Commission ruled that IP CTS also could be provided on a fully automatic basis, using only ASR technology to generate captions, without the participation of a CA. 3. Before 2018, compensation for IP CTS providers was determined by a proxy method, known as the Multistate Average Rate Structure (MARS) methodology, in which compensation was set equal to the average per-minute payment by state TRS programs to providers of an analogous service, Captioned Telephone Service (CTS). In 2018, the Commission determined that this approach had resulted in providers receiving compensation substantially higher than the industry average cost to provide IP CTS. Therefore, the Commission adopted a different methodology, setting compensation based on the weighted average of the actual allowable costs reported by providers (that is, total allowable expenses of all providers divided by total IP CTS minutes). In the <E T="03">2020 IP CTS Compensation Order,</E> published at 85 FR 64971, October 14, 2020, the Commission considered whether to adopt a separate compensation formula for calls captioned without CA involvement, to address what appeared to be the substantially lower average cost of ASR-only captioning. However, the Commission concluded it did not yet have sufficient data from the provision of fully automatic IP CTS to accurately estimate the relevant costs. <HD SOURCE="HD1">The 2022 Notice of Proposed Rulemaking</HD> 4. On December 22, 2022, the Commission released an <E T="03">NPRM</E> seeking comment on establishing a revised IP CTS compensation plan. The Commission proposed to apply different compensation formulas to the provision of CA-assisted and ASR-only IP CTS and sought comment on additional issues potentially affecting the compensation formulas, including the appropriate application of such formulas; identifying the costs attributable to ASR-only captioning; whether to adjust certain allowable-cost criteria and the allowed operating margin; calculation of average per-minute cost and compensation level(s); the duration of the compensation period; adjustment factors for inflation or productivity; and alternatives to reasonable-cost-based compensation. <HD SOURCE="HD1">Separate Rates for CA-Assisted and ASR-Only IP CTS</HD> 5. <E T="03">The Need for Separate Rates.</E> The Commission amends its rules to establish separate rates for CA-assisted and ASR-only IP CTS. Historically, while the Commission has applied separate compensation rates to different relay <E T="03">services,</E> the Commission has rarely applied separate rates to different <E T="03">methods</E> of providing a <E T="03">single</E> relay service. In this instance, however, the record supports the Commission's initial view that special considerations warrant the application of different compensation formulas to the CA-assisted and ASR-only modes of providing IP CTS. The record also supports the concern that continued application of a single formula may lead to waste of TRS Fund resources and increase the risk of fraud and abuse. Deferring the adoption of separate formulas would prolong the adverse effects of the single rate and discourage providers from continuing to offer CA-assisted captioning, reducing the availability of a service mode that continues to be preferred for some calls. 6. <E T="03">Cost Difference.</E> The updated cost reports confirm that there is a substantial cost difference between ASR-only and CA-assisted IP CTS. For 2023, historical allowable expenses reported by providers average approximately $0.60 per minute for ASR-only IP CTS and $1.04 per minute for CA-assisted IP CTS, a cost difference of $0.44 per minute. For 2024, providers' projected allowable expenses average approximately $0.65 per minute for ASR-only IP CTS and $1.32 per minute for CA-assisted IP CTS, a cost difference of $0.67 per minute. 7. <E T="03">Benefits of CA-Assisted Service.</E> The record also confirms that, while consumers increasingly select ASR-only captioning when offered a choice, CA-assisted captioning continues to be preferred for some portion of IP CTS calls. Further, some research indicates that ASR technology may show algorithmic bias in the accuracy with which it transcribes voices and that the participation of CAs may improve the accuracy of captioning for a substantial portion of calls. Establishing separate formulas that better reflect the cost difference between ASR-only and CA-assisted service will strengthen the incentive for providers to continue providing CA-assisted captions when preferred by the consumer or needed for high-quality service. Conversely, maintaining a single rate is likely to reinforce what appears to be a substantial incentive for providers to limit the use of the CA-assisted mode, even where a consumer would prefer it. Once ASR-only service was introduced by most providers, it quickly became the most commonly used service mode—averaging 43.5% of compensable minutes in 2022, 74.6% in 2023, and a projected 84.5% in 2024. Although the percentage of ASR-only use is different for each provider, as of December 2023, average CA-assisted usage (as a percentage of total minutes) is substantially higher for providers that offer consumers a choice of service mode than for providers that unilaterally determine the service mode. 8. <E T="03">TRS Fund Stewardship Concerns.</E> The current single rate of $1.30 per minute became effective July 1, 2021, when approximately 15% of IP CTS minutes were ASR-only. As the volume of ASR-only service has increased, the average per-minute cost of IP CTS has declined, resulting in excessive compensation at the current single rate. In 2023, compensation for ASR-only minutes produced an operating margin of $0.70 per minute—116.7% above expenses. Mo ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 93k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━