CommLaw Monitor https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor News and analysis from Kelley Drye’s communications practice group Wed, 12 Jun 2024 02:44:48 -0400 60 hourly 1 FCC Sets New Rates for IP CTS Compensation and Proposes New Minimum Service Standards https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-sets-new-rates-for-ip-cts-compensation-and-proposes-new-minimum-service-standards https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-sets-new-rates-for-ip-cts-compensation-and-proposes-new-minimum-service-standards Tue, 13 Oct 2020 11:39:18 -0400 At its September 30 Open Meeting, the FCC took new steps to address costs and service quality related to its IP Captioned Telephone Services (IP CTS) program in a Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking. IP CTS, a form of telecommunications relay service (TRS), allows individuals who have difficulty hearing but are speech-capable to use a telephone with an IP-enabled device to communicate over the Internet by simultaneously listening to and reading real-time captions of what th other party is saying.

The item adopted by the Commission builds on its earlier efforts to promote sustainability of the TRS fund, address potential waste, fraud, and abuse in the IP CTS program, and improve IP CTS service quality for users. These efforts began in a June 2018 order where the FCC adopted a new methodology to set compensation rates for IP CTS services based on a calculation of the costs to provide the services and new measures to limit incidents of unnecessary IP CTS use. At the same time, the Commission adopted a Notice of Inquiry (NOI) seeking comment on potential new standards for the provision of those services. The FCC’s reforms continued in a November 2019 order, where the Commission expanded the TRS Fund contribution base for IP CTS to include intrastate, in addition to interstate, end-user revenues. Following that, in February 2019, the FCC created new rules requiring IP CTS providers to submit user registration information to the existing video relay service (VRS) Database to limit program access to only those determined to be eligible to use IP CTS. The instant Report & Order extends the compensation methodology adopted in June 2018 and the FNPRM proposes new standards to measure and test the quality of captioning based of the NOI responses and input from the Disability Advisory Committee.

Report & Order Setting IP CTS Compensation Rates

In the June 2018 order, the Commission took action to address IP CTS costs after finding that IP CTS had grown to represent nearly 80 percent of the costs covered by the TRS fund, presenting challenges for the viability of the fund, which has also been experiencing a shrinking contribution base. The Commission concluded that the difference between the amount of compensation paid out to IP CTS providers and the average reasonable costs of providing service had ballooned with the growth in demand for the service, resulting in industry profits of 50 percent over provider expenses. To reign in these costs, the June 2018 order eliminated the existing contribution calculation methodology and established interim compensation rates, with reductions of 10 percent each year for funding years 2018-2019 and 2019-2020, to get closer to what the FCC determined are the actual average costs to provide the service. The Commission determined average provider costs – similar to how it determines costs for other internet-based relay services – by using the weighted average of all providers’ projected and historical costs, as reported for the current and immediately preceding calendar years, respectively, plus a reasonable operating margin. The FCC released an FNPRM alongside the June 2018 order seeking input on potential replacement methodologies that would better determine compensation amounts after the interim rates expired on June 30, 2020. On May 29, 2020, the Commission extended the current rate through September 30, 2020, to give itself time to determine whether the COVID-19 pandemic had a significant effect on IP CTS costs and demand for rate setting purposes.

The FCC ultimately decided to retain the weighted average cost methodology, rather than adopting any of the alternatives proposed by the Commission and commenters, because, according to the Report & Order, it has developed a reasonably reliable and consistent approach to determining the reasonable costs for TRS using the methodology, no party identified a more reliable alternative that would produce more accurate results, the average cost methodology provides incentives for TRS providers to increase their efficiency to capture profits, and maintaining the methodology provides stability while IP CTS using automatic speech recognition (ASR) technology is being further deployed. However, the Commission left open the possibility that it would revisit alternative compensation methodologies, such as a separate compensation rate for fully automatic IP CTS, a reverse-auction approach, and price-cap adjustments, when it becomes clearer how fully automatic captioning methods will affect provider costs.

Using the existing methodology, the Commission set new compensation rates through the end of the 2021-22 Funding Year by extending the “glide path” created in the 2018 Order to complete the process of bringing expenditures in line with the average reasonable costs of providing IP CTS service as determined by the Commission. Rather than doing a flash cut from the current $1.58 per minute rate to the reasonable cost rate of $1.30, the Commission reduced the rate to $1.42 beginning on December 1, 2020, followed by a reduction to $1.30 beginning July 1, 2021 through June 30, 2022. The FCC predicts these new rates will save roughly $200 million for the TRS Fund over the term. It opted to retain a two-year cycle, rather than extending the rate out to a longer time frame, because it anticipates that the further deployment of ASR technology is likely to change industry cost structures significantly, requiring the Commission to revisit compensation rates sooner to avoid recreating a major gap between TRS Fund expenditures and actual IP CTS costs.

Consistent with the FCC’s plans to continue reducing compensation rates, the Order on Reconsideration denied a request by Sprint to overturn the interim compensation rates set in 2018, which the Commission said has already saved the TRS Fund more than $350 million.

FNPRM on Quality of Service Standards and Testing

The FNPRM proposes to amend the minimum TRS standards applicable to IP CTS and CTS to provide quantifiable, measurable standards and rules on how to test the quality of telephone captioning services. Specifically:

  • Caption Delay – The FNPRM proposes to adopt a minimum standard for caption delay by defining “caption delay” as “the difference in time (in seconds) between when a word can be heard in the audio and when that word appears in the stream of captions on the caption user’s primary display” and seeking comment on the average number of seconds that should be considered the maximum acceptable delay for any form of captioning.
  • Accuracy – The FCC’s existing rules require that calls be transcribed “verbatim” and that typing, grammar, and spelling be “competent.” The FNPRM proposes to amend its rules to combine accuracy with completeness in a single metric – “Word Error Rate” – which is the number of words that are incorrectly inserted, omitted, or substituted compared to the total number of words in a captioned voice communication. It seeks comment on the maximum Word Error Rate that should be permitted.
The FNPRM proposes a set a requirements to test whether providers are meeting the standards, seeks comments on the consequences for failure to meet the standards, and asks whether testing should be conducted by the Commission or an external entity selected and supervised by providers. The Commission decided not to make proposals on a number of ideas raised in the NOI, saying responses to those ideas were mixed.

The Commission has not signaled that other significant IP CTS reforms should be expected before it revisits compensation rates for Funding Year 2022-23. We will continue to monitor the Commission’s IP CTS proceeding. Please reach out to us or your usual Kelley Drye attorneys if you have any questions.

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Spectrum Sharing and Caller ID Authentication Top Jam-Packed FCC September Meeting Agenda https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-sharing-and-caller-id-authentication-top-jam-packed-fcc-september-meeting-agenda https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/spectrum-sharing-and-caller-id-authentication-top-jam-packed-fcc-september-meeting-agenda Thu, 24 Sep 2020 17:16:46 -0400 The FCC announced a jam-packed agenda for its penultimate meeting before the 2020 general election, with a focus on long-awaited spectrum sharing and caller ID authentication actions. At its meeting scheduled for September 30, 2020, the FCC plans to clear the way for eventual sharing of 3 GHz spectrum between commercial wireless providers and federal incumbents. The FCC announced earlier this year its intention to auction flexible use licenses in the 3.45-3.55 GHz band in December 2021. The Department of Defense, as a primary user of the band, has already devised a sharing framework for the spectrum. The FCC also plans to allow commercial wireless providers to lease spectrum in the 4.9 GHz band, which currently is allocated to public safety operations. The agency claims the band remains underutilized and that leasing arrangements could free up to 50 megahertz of mid-band spectrum to support commercial 5G services. In addition, the FCC plans to hold firm on its June 30, 2021 deadline for most voice providers to implement the STIR/SHAKEN caller ID authentication framework for IP networks and to extend such requirements to intermediate providers that neither originate nor terminate calls. Rounding out the major agenda items, the FCC plans to streamline executive branch foreign ownership reviews of certain applications formerly handled by “Team Telecom,” adopt a phase down in IP Captioned Telephone Service ("IP CTS") compensation and impose IP CTS service standards, and launch an inquiry into state diversion of 911 fees.

FCC regulatory activity likely will slow in the immediate lead-up to and aftermath of the 2020 general election. As a result, the September agenda may represent the FCC’s last big push on major reforms for the year. You will find more details on the significant September meeting items after the break:

Repurposing 3 GHz Band Spectrum: The draft Report and Order and Further Notice of Proposed Rulemaking would eliminate the non-federal radiolocation and amateur allocations from the 3.30-3.55 GHz band as a first step toward future sharing of the spectrum between federal incumbents and commercial wireless providers. However, the FCC would allow incumbent non-federal licensees to continue in-band operations until it finalizes its plans to reallocate the spectrum operations to below 3.0 GHz. The FCC would propose making 100 megahertz of spectrum in the 3.45-3.55 GHz band available for flexible use wireless service throughout the contiguous United States. To facilitate such wireless operations, the FCC would propose adding a co-primary, non-federal fixed and mobile (except aeronautical mobile) allocation to the band. It would also seek input on the appropriate licensing, auction, spectrum sharing, and technical rules for the band, and on relocation procedures for the non-federal relocation operators.

Commercial Access to the 4.9 GHz Band: The draft Sixth Report and Order and Seventh Further Notice of Proposed Rulemaking would allow one statewide 4.9 GHz band licensee per state to lease some or all of its spectrum rights to third parties, including commercial users. Lessees would be required to comply with the same spectrum coordination procedures as public safety licensees in the band. In addition, the FCC would seek comment on establishing a Band Manager in each state to coordinate and authorize new operations in the 4.9 GHz band. The agency also would request input on how to ensure robust use of the 4.9 GHz band, including through dynamic spectrum sharing technologies and cross-state collaborations.

Implementing STIR/SHAKEN Framework: The draft Second Report and Order would require voice service providers to either upgrade their non-IP networks to IP and implement the STIR/SHAKEN framework or develop a non-IP caller ID authentication solution by June 30, 2021. The FCC would adopt extensions of the June 30, 2021 deadline for: (1) small providers (two-year extension); (2) providers that currently cannot get a digital certificate necessary to implement STIR/SHAKEN because they do not obtain direct access to telephone numbers or other technical issues (indefinite extension); (3) services scheduled for discontinuance (one-year extension); and (4) non-IP network services (indefinite extension). The Commission would require all providers subject to an extension to implement a robocall mitigation plan for the parts of their networks where STIR/SHAKEN is not implemented and certify that they implemented such mitigation measures with the FCC. Moreover, the FCC would require intermediate providers to either pass along caller ID authentication information for authenticated calls or authenticate the caller ID information for unauthenticated calls they receive by June 30, 2021. Intermediate providers would be relieved of the independent authentication requirement if they register with the industry traceback consortium or respond to all traceback consortium information requests. Finally, the FCC would prohibit providers from adding line item charges to subscribers for providing caller ID authentication.

Streamlining Foreign Ownership Reviews: The draft Report and Order would establish rules and timeframes for the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector (Committee) to complete its review of certain applications posing potential foreign ownership concerns (i.e., the applicant has a 10% or greater direct or indirect foreign investor). Specifically, the Committee would be required to complete its initial application review within 120 days and, if necessary, its supplemental application review within 90 days. Affected applicants would be required to provide responses to a standardized set of national security and law enforcement questions regarding: (1) corporate structure and shareholder information; (2) relationships with foreign entities; (3) financial condition; (4) compliance with applicable laws and regulations; and (5) business and operational information. The standardized questions would be developed in a subsequent proceeding following public notice and comment. The new rules would apply to applications: (1) for international Section 214 authorizations or to assign/transfer control of such authorizations; (2) for submarine cable landing licenses or to assign/transfer control of such licenses; and (3) to exceed the foreign ownership limits under Section 310(b) of the Communications Act.

Reforming IP CTS Rates and Standards: The draft Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking would establish a compensation rate of $1.30/minute for IP CTS providers through a two-step transition process. The first step would transition from the current $1.58/minute rate to a $1.42/minute rate for the remainder of fund year 2020-21 (effective December 1, 2020), while the second step would transition the rate to $1.30/minute for fund year 2021-22. The FCC would also propose to adopt service standards for IP CTS captioning delay and accuracy, and seek comment on appropriate metrics. The Commission would request input on appropriate IP CTS service standard testing procedures, including sample size and call methodology. In addition, the FCC would ask whether it or a third-party organization should be responsible for such testing.

Reviewing 911 Fee Diversion: The draft Notice of Inquiry would request input on the effects of 911 fee diversion, specifically from states, on the provision of 911 services and the transition to next-generation 911 services. The FCC also would seek comment on how it can use its regulatory authority to discourage 911 fee diversion, including by conditioning state eligibility for FCC licenses, programs, or other benefits on the absence of fee diversion. The FCC would further ask about measures it can take to discourage fee diversion under the Commission’s authority, and how it can encourage states to pass legislation or adopt rules that would prohibit 911 fee diversion.

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TRS Fund Contributors to Pay on Intrastate Revenues to Support IP Captioned Telephone Service https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/trs-fund-contributors-to-pay-on-intrastate-revenues-to-support-ip-captioned-telephone-service https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/trs-fund-contributors-to-pay-on-intrastate-revenues-to-support-ip-captioned-telephone-service Tue, 03 Dec 2019 10:14:50 -0500 At its November Open Meeting, the FCC approved a Report and Order (“Order”) that expands the contribution base for IP captioned telephone service (“CTS”), supported by the telecommunications relay service (“TRS”) Fund, to include intrastate voice communications services. Currently, only interstate voice providers (telecommunications and VoIP) are required to contribute a portion of their end-user revenues to support the TRS Fund. The Order extends that responsibility to providers with intrastate revenues. This rule change, which will be effective for the TRS Fund Year 2020-21, is intended to address an imbalance in the financial obligation on interstate versus intrastate voice providers to support IP CTS costs, which has experienced an approximately $745 million increase from 2013 to the current funding year.

IP CTS allows individuals who have difficulty hearing but are speech-capable to use a telephone with an IP-enabled device to communicate over the Internet by simultaneously listening to and reading captions of what the other party is saying. The FCC established the TRS Fund specifically to fund the costs of interstate TRS and contributions were limited to the interstate revenues of telecommunications service providers as well as interconnected and non-interconnected VoIP providers. However, to encourage development of emerging forms of TRS, like IP CTS, the FCC adopted an interim measure that allowed for providers of IP CTS (and other Internet-based TRS) to receive compensation for providing the service (whether interstate or intrastate) through the TRS Fund.

In recent years, there has been a significant increase in IP CTS use and similarly, the amount paid to reimburse service providers, which the FCC projects will account for 64.5% of all TRS Fund payments for the 2019-2020 fund year. As a result, the FCC has taken a number of actions aimed at curbing costs for the service. In 2018, the FCC adopted a reform package that included (1) revising the rate methodology used to compensate IP CTS providers and (2) imposing interim compensation rates to bring compensation closer to the FCC-determined actual average provider costs. Earlier this year, the FCC approved additional reforms to address waste, fraud, and abuse by requiring IP CTS providers to submit user registration information to the existing video relay service database to limit program access to only those determined to be eligible to use IP CTS.

With this new Order, the FCC responds to concerns raised by some telecommunications providers about the unfair burden IP CTS support puts on TRS Fund contributors that provide mainly interstate services. Now, the FCC adjusts the contribution mechanism for IP CTS to establish a more permanent approach and make the responsibility for IP CTS support more equitable amongst voice service providers. The FCC explains that IP CTS is available to consumers in every state and captions are provided for interstate as well as intrastate calls. Therefore, the Order expands the required TRS Fund contribution base for IP CTS to include the total interstate as well as intrastate end-user revenues for telecommunications and VoIP service providers. While the total contributions needed to support the TRS Fund is not expected to change, the FCC estimates that this change will result in a 59% decrease in the percentage of interstate end-user revenues on which TRS Fund contributions will be based.

The FCC grounded its authority for this decision in section 225 of the Communications Act, which directs the agency to make sure both intrastate and interstate TRS is available. In the Order, the FCC explains that a state’s decision to offer funding for only some TRS (excluding IP CTS) does not affect the FCC’s authority to direct intrastate funds to the service. To implement the change, the FCC will adopt a single IP CTS contribution factor to be applied to TRS contributors’ revenues. Intrastate telecommunications and VoIP providers must contribute revenue to fund intrastate IP CTS beginning with the TRS Fund Year 2020-21.

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FCC to Address Public Safety Concerns at November Meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-to-address-public-safety-concerns-at-november-meeting https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-to-address-public-safety-concerns-at-november-meeting Sun, 03 Nov 2019 04:00:16 -0500 The FCC plans to prohibit the use of Universal Service Fund (“USF”) support to purchase equipment or services from foreign entities that it determines pose national security risks at its next meeting scheduled for November 19, 2019. As we previously reported, the ban may severely impact participants in all federal USF programs and involve a costly “rip and replace” process to remove foreign-made equipment from domestic telecommunications networks. The FCC also expects to move forward on its heavily-anticipated E911 vertical accuracy (i.e., z-axis) proceeding and adopt new requirements for wireless carriers to better identify caller locations in multi-story buildings. Rounding out the major actions, the FCC anticipates proposing new rules for suspending and debarring entities from participating in USF and other funding programs; removing longstanding unbundling and resale requirements for certain telecommunications services; and widening the contribution base for the Internet Protocol Captioned Telephone Service (“IP CTS”) to include intrastate revenues.

The draft items cover the gamut of telecommunications issues, affecting everything from the construction of next-generation 5G networks to legacy intercarrier competition rules, and should be closely watched. You will find more details on the most significant November FCC meeting items after the break:

USF National Security Ban: The draft Order and Further Notice of Proposed Rulemaking seeks to fortify the United States’ communications infrastructure from potential foreign surveillance and denial of service attack and would prohibit the use of USF support to purchase any equipment or services provided by a “covered company” that the FCC determines poses a national security threat to the integrity of domestic communications networks. The initial ban only would apply prospectively, but would include spending related to any maintenance or upgrades to existing equipment and services. The FCC would preliminarily designate Chinese equipment manufactures Huawei Technologies Company and ZTE Corporation as covered companies and seek comment on whether the designation should be made permanent. The FCC also would establish a process to designate other covered companies in the future. In addition, the FCC would propose: (1) requiring all USF recipients to stop using existing equipment and services provided by covered companies and (2) creating a reimbursement program to offset the “reasonable” transition costs associated with this requirement. In order to determine the scope of this potential “rip and replace” project, USF recipients would be required to report to the FCC on whether they use equipment and services from covered companies and the estimated costs of transitioning to new suppliers.

E911 Vertical Location Accuracy Requirements: The draft Order and Further Notice of Proposed Rulemaking is designed to push carriers to better identify 911 callers’ locations within buildings and would adopt an E911 vertical location accuracy standard of +/- 3 meters for 80 percent of E911 calls from z-axis location capable handsets. The nationwide wireless carriers would be required to deploy z-axis location capable technology that meets the new standard in the 25 largest markets by April 3, 2021, and in the 50 largest markets by April 3, 2023. Non-nationwide wireless carriers would have an extra year to meet each of these deadlines. The FCC also would seek comment on tightening the E911 vertical location accuracy standard over time and whether carriers eventually should be obligated to report a caller’s floor number.

New Suspension and Debarment Rules: The draft Notice of Proposed Rulemaking would request input on whether the FCC should adopt new suspension and debarment rules to cover a wider range of misconduct, in accordance with federal guidelines adopted by many other federal agencies. The FCC’s current rules generally only allow the FCC to suspend and/or debar individuals from the USF programs after they are convicted or receive a civil judgment involving fraud or certain criminal offenses. The proposed rules would allow the FCC to suspend and/or debar individuals without a conviction or final judgment and for repeat violations of FCC rules, failures to pay regulatory fees, or other offenses “indicating a lack of business integrity.” The proposed rules would apply not only to USF participants, but also to participants in the Telecommunications Relay Service and National Deaf-Blind Equipment Distribution programs. Participants in these programs would be subject to new disclosure obligations and would be required to verify that they do not work with suspended or debarred entities. The FCC also plans to establish a system of reciprocity, in which entities suspended or debarred from participation in funding programs administered by other agencies would be similarly suspended or debarred from participating in the FCC programs. The FCC further asks whether it should be able to apply the new suspension and debarment rules retroactively to cover conduct occurring before their adoption, significantly increasing the potential liability for program participants.

Eliminating Unbundling/Resale Obligations: The draft Notice of Proposed Rulemaking proposes relieving incumbent local exchange carriers of their longstanding obligations to make certain network elements available on an unbundled basis and offer certain telecommunications services on a wholesale basis to competitive carriers. The draft item would address the few remaining unbundling and resale obligations left over from the Commission’s broad forbearance order adopted earlier this year. Specifically, the FCC would propose removing the unbundling requirements for: (1) DS1 and DS3 loops in competitive areas, with an exemption for DS1 loops providing residential broadband and telecommunications services in rural areas; (2) DS0 loops in urban census blocks; (3) narrowband voice-grade loops; and (4) dark fiber transport for wire centers within a half mile of alternative fiber. The FCC also would propose eliminating resale obligations for services offered in non-price cap incumbent carrier service areas. The FCC would argue that such unbundling and resale obligations are no longer necessary in light of increased competition. The FCC anticipates phasing in the reforms over a three-year period.

Expanding IP CTS Contribution Base: The draft Order would expand the contribution base for IP CTS, which provides call captioning for individuals who are deaf or hard of hearing, to include intrastate end-user revenues from contributing telecommunications carriers and VoIP providers. When the FCC initially authorized support for IP CTS, it decided as an “interim” measure to cover the service’s costs based only on interstate telecommunications revenues. The draft item would find that the interim funding mechanism unfairly burdens providers and users of interstate telecommunications services and is insufficient to address the overall decline in contributions. The FCC would note that the statute governing IP CTS provides it with broad authority to support captioning on intrastate as well as interstate calls and the Communication Act’s general reservation of state authority over intrastate communications does not apply in this instance. The FCC also would note that it does not expect the reforms to increase or otherwise affect the total contributions needed to support IP CTS.

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FCC Further Reforms IP CTS Program https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-further-reforms-ip-cts-program https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-further-reforms-ip-cts-program Sun, 03 Mar 2019 22:43:55 -0500 In a unanimous decision at its February open meeting, the FCC adopted a Report and Order and Further Notice of Proposed Rulemaking (“FNPRM”) further reforming its IP Captioned Telephone Service (“IP CTS”) program, which is part of the telecommunications relay service (“TRS”). After the IP CTS program grew to 80 percent of the costs covered by TRS, last June the FCC approved a package of reform measures to control costs by imposing interim compensation rates to bring compensation closer to FCC determined actual average provider costs. In the instant Order, the FCC takes steps (over the objections of the IP CTS providers) to address potential waste, fraud and abuse by requiring IP CTS providers to submit user registration information to the existing video relay service (“VRS”) Database to limit program access to only those determined to be eligible to use IP CTS. The Commission also granted waivers of its emergency call handling requirements to reduce the requirements on IP CTS providers to relay certain information to PSAPs and initiate reconnection of a disconnected 911 call. The FNPRM proposes additional changes, including making permanent the emergency call handling requirement changes granted by waiver. Comments will be due 30 days after publication of the item in the Federal Register and reply comments will be due 45 days after publication.

IP CTS, which provides real-time captions for telephone conversations, is an easy and convenient service to use without special equipment, which can facilitate its improper use by those without disabilities, potentially, according to the FCC, as a result of marketing by the IP CTS providers. The FCC came to believe that this may be happening and that such improper use could be a key driver of the recent growth of the program to $892 million a year, which is 80 percent of the total TRS Fund expenditures. In June 2018, the FCC addressed what it believed were excessive rates by setting compensation rates based on actual average provider costs. In this Order, the FCC addresses potential waste, fraud and abuse of IP CTS by, for the first time, requiring service providers to pass through certain information from users to the VRS Database, which is to be matched against provider-submitted call detail records used for reimbursement. It should be noted, however, that while identities of IP CTS users are verified through the process, eligibility is verified only through a self-certification of eligibility from the user, which is passed along by the service provider to the Database.

A separate Order in the item grants temporary, partial waivers of the IP CTS emergency call-handling requirements to relay certain information to the PSAP and to initiate the reconnection of disconnected 911 calls. The waiver applies for IP CTS configurations where:

(1) a user initiates an IP CTS call by connecting to the IP CTS provider via the Internet—i.e., generally web and wireless-based forms—and (2) the IP CTS provider assigns the user a NANP telephone number that the provider can transmit with a 911 call and that enables a PSAP, designated statewide default answering point, or appropriate local emergency authority to call the user back via IP CTS.

The FCC had already granted a similar waiver to InnoCaption and three other IP CTS providers followed on with similar waiver requests. The waivers are effective until the Commission can address these issues more permanently through the FNPRM proposals discussed below.

Finally, in the FNPRM, the FCC seeks comment on additional reforms to the IP CTS program, including requiring IP CTS providers to submit a unique account identifier to the TRS Fund in monthly call detail records submitted for compensation and allowing IP CTS providers to provide service to new and porting users for up to two weeks pending the completion of identity verification by the Database administrator. (As the FCC has found in several programs, identity verification is not a perfect process and a dispute resolution or appeal process becomes necessary, which can take additional time to resolve.) The FNPRM also seeks comment on amending the FCC’s rules to modify its emergency call handling requirements consistent with the waiver granted.

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FCC Issues Tentative Meeting Agenda Addressing Spoofing and Disabilities Access Before Federal Government Shutdown https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-issues-tentative-meeting-agenda-addressing-spoofing-and-disabilities-access-before-federal-government-shutdown https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/fcc-issues-tentative-meeting-agenda-addressing-spoofing-and-disabilities-access-before-federal-government-shutdown Tue, 08 Jan 2019 17:08:43 -0500 Just before suspending most operations due to the ongoing partial federal government shutdown, the FCC announced its tentative agenda for its next open meeting, scheduled for January 30, 2019. While the January agenda is brief compared to the jam-packed meetings that typified 2018, the FCC plans to adopt items to advance new anti-spoofing measures combating manipulated caller ID information and take further action to address the management and handling of 911 calls for the IP Captioned Telephone Service (“IP CTS”) that aids communication by those with hearing loss. Rounding out the notable meeting items, the FCC would adopt a mechanism to phase down legacy high-cost support for price cap carriers as well as competitive carriers previously subject to the “identical support rule” and transition such support to the winners of the recent Connect America Fund (“CAF”) Phase II auction.

You will find more details on the significant January meeting items after the break:

Expanding Anti-Spoofing Enforcement: The draft Notice of Proposed Rulemaking would seek comment on adopting anti-spoofing reforms mandated by the RAY BAUM’s Act passed last year. Specifically, the FCC plans to extend its authority to punish anti-spoofing violations for communications originating from foreign points to recipients within the United States. The FCC would argue that its existing authority, which is limited to communications initiated within the country, has hampered enforcement efforts against foreign operations that generate consumer complaints. The FCC also would seek comment on amending its anti-spoofing rules to cover some of the most widely-used forms of text messaging as well as all voice services that connect to the public switched telephone network. The FCC’s proposal would maintain the exemption for IP-enabled messaging services, such as the popular iMessage, Google Hangouts, WhatsApp, and Skype, which do not rely on the traditional telephone network. Finally, the FCC would ask what other changes it should adopt to better prevent the transmission of inaccurate or misleading caller ID information.

IP CTS User Registration and 911 Calling: The draft Report and Order, Further Notice of Proposed Rulemaking, and Order would require IP CTS providers to submit user data to the FCC’s database currently used to register users of the similar Video Relay Service. The draft argues such action is necessary to reduce waste, fraud, and abuse in the program, which has seen exponential growth in spending. Over a six-month period, all IP CTS providers (there currently are five) would be required to collect and submit user information like name, address, unique IP CTS equipment identifier, last four digits of social security number, and other data. The database would conduct an identity verification check and IP CTS providers would only be able to seek compensation for providing service to verified users. The FCC also would seek comment on streamlining the transmission of 911 calls made through IP CTS by reducing the information collection requirements currently imposed on service providers. Instead of having to provide detailed caller information to the relevant public safety answering point, service providers would instead connect the 911 call, provide a callback number for the user, and ensure the user receives captions on any callback. The FCC plans to waive the caller detail requirements for IP CTS service providers while it considers the proposed rule changes.

CAF Phase-Down and Transition: The draft Report and Order would establish a schedule to end CAF Phase I support for price cap carriers and competitive carriers that provided service to fixed locations under the old “identical support rule,” transitioning such support to the winners of the CAF Phase II auction that concluded in August 2018. Phase I support currently received by price cap carriers would be eliminated beginning on the first day of the month following another provider’s authorization to receive Phase II support in an area. If the existing price cap carrier was the winning bidder in the Phase II auction, its support would be converted to Phase II support once the FCC’s Wireline Competition Bureau authorizes support distribution for the area. Meanwhile, Phase I support currently received by the competitive carriers would be phased down over the course of two years. For the first 12 months following the authorization of a new CAF Phase II service provider for the area, the carrier would receive two-thirds of its current support. The following 12 months, the carrier would receive one-third of its current support. The support then would terminate. The FCC would continue to provide Phase I support to existing service providers in areas that did not receive any winning bids in the CAF Phase II auction. The FCC would offer legacy support recipients the option to decline further support, freeing them from many (but not all) of their existing high-cost service obligations.

Note that the FCC may revise its meeting agenda to add or remove items – or reschedule the meeting entirely – depending on how long the shutdown lasts. The shutdown prevents stakeholders from meeting with FCC staff about the proposed items and, while the FCC’s comment system remains open to accept new filings, the dockets will not be updated until after the agency resumes normal operations.

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Next in the FCC’s Sights for Alleged Waste, Fraud, and Abuse: IP CTS Program https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/next-in-the-fccs-sights-for-alleged-waste-fraud-and-abuse-ip-cts-program https://www.kelleydrye.com/viewpoints/blogs/commlaw-monitor/next-in-the-fccs-sights-for-alleged-waste-fraud-and-abuse-ip-cts-program Wed, 01 Aug 2018 17:35:33 -0400 In June, the FCC approved a package of regulatory measures – Report and Order, Declaratory Ruling, Further Notice of Proposed Rulemaking (“FNPRM”), and Notice of Inquiry (“NOI”) – directed at reforming the IP Captioned Telephone Service (“IP CTS”) program to address concerns about its sustainability. IP CTS is a form of telecommunications relay service (“TRS”) that enables people with hearing loss to communicate by speaking while listening with any remaining hearing ability and reading real-time captions. IP CTS is paid for by the FCC through its TRS Fund and has experienced significant usage growth, now representing almost 80 percent of the costs covered by the Fund. The FNPRM and NOI, which propose fundamental reforms to the IP CTS program, were published in the Federal Register on July 17, 2018, which set the upcoming comment deadlines. Comments on the FNPRM are due by September 17, 2018 and replies by October 16, 2018. Comments on the NOI are due by October 16, 2018 and replies by November 15, 2018.

The growth in IP CTS use is presenting challenges for the viability of the TRS Fund which, like the universal service fund (“USF”), is experiencing a shrinking contribution base. There are key similarities between the FCC’s approach in this proceeding and the approach the FCC took to reforming the Lifeline program in 2012 when program costs had increased to well over $2 billion, however, there are also key differences between the programs. In this IP CTS proceeding the FCC embarks on a familiar path of proposing changes to the IP CTS program to minimize alleged waste, fraud, and abuse as well as to reduce costs to strengthen the future sustainability of the program.

The FCC has found that the difference between the amount of compensation paid out to IP CTS providers and the average reasonable cost of providing service has ballooned with the growth in demand for the service. The Commission also claims that the current compensation rate resulted in industry profits of 50 percent over provider expenses. In the Report and Order, the FCC eliminates the current contribution calculation method and adopts specific interim compensation rates for IP CTS service through 2020 that bring the compensation level closer to what the FCC says are actual average provider costs. The FCC simultaneously directs the TRS Fund Administrator to collect details from IP CTS providers about costs incurred to provide more transparency on the nature and validity of costs claimed by providers. By contrast, the Lifeline program has never been a cost-based reimbursement program and the FCC does not collect information regarding service provider costs. Rather, reimbursements are based on historic averages for supported services.

The Report and Order also adopts new measures to limit incidents of unnecessary IP CTS use that drain TRS funds. Specifically, the FCC

  • prohibits IP CTS providers from limiting users’ ability to use volume control to when the captions are turned on;
  • requires IP CTS providers to include specific factual information about how IP CTS works and the cost on all advertising or informational materials; and
  • prohibits IP CTS providers from practices that the provider knows or has reason to know will cause unauthorized use of TRS, false claims, or use by consumers that do not need the service.
The FCC clarifies in the Declaratory Order that the use of automatic speech recognition (“ASR”) to provide IP CTS is a valid form of relay service that is eligible for compensation. One major IP CTS provider, Sprint, petitioned for clarification or, in the alternative, reconsideration of the Declaratory Order. Sprint’s petition concerns the conditions on which providers using ASR will be certified and the equivalence of ASR-based service to traditional IP CTS.

Through the FNPRM, the FCC seeks input on fundamental reforms to the program, including the most effective way to determine contribution amounts after the interim period ends in 2020. It also seeks comments about whether it should adopt tiered rates, price cap adjustments and/or a special “emergent provider” rate for new service provider entrants to encourage growth. The FCC also proposes to expand the contribution base by including some intrastate revenues from telecommunications and VoIP providers. In addition, the FNPRM proposes advertising requirements similar to the advertising reforms imposed in the Lifeline program. However, the FCC proposes to prohibit advertising of a free phone from providers, which is a step the Commission has not taken in the Lifeline program.

The NOI is targeted at identifying objective, quantifiable performance metrics to assess the efficacy of the IP CTS program around things like functional equivalence to services used by the general public; use of technological advances; and provision of service in an efficient manner. The FCC hopes to provide statistics to inform consumer IP CTS provider choice and ensure the program is taking advantage of advancements in communications technology.

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