05-6814. Provision of Improved Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities

AGENCY:

Federal Communications Commission.

ACTION:

Final rule; petition for reconsideration.

SUMMARY:

In this document, the Federal Communications Commission (Commission) grants petitions filed by Sprint Corporation (Sprint) and WorldCom, Inc. (MCI) seeking reconsideration of the Commission's March 14, 2003, Order on Reconsideration (IP Relay Reconsideration Order). This matter derives from the April 2002 IP Relay Declaratory Ruling and Further Notice of Proposed Rulemaking (IP Relay Declaratory Ruling & FNPRM), which recognized IP Relay as a form of telecommunications relay service (TRS), authorized compensation for IP Relay providers from the Interstate TRS Fund, and waived certain mandatory minimum standards as they apply to the provision of IP Relay.

DATES:

The petitions were granted as of March 9, 2005.

ADDRESSES:

Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Thomas Chandler, Consumer & Governmental Affairs Bureau at [phone] (voice), [phone] (TTY), or e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order on Reconsideration, CC Docket No. 98-67, FCC 05-48, adopted March 1, 2005, released March 9, 2005. The full text of the Order on Reconsideration and copies of any subsequently filed documents in this matter will be available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The complete text of this Order on Reconsideration and copies of subsequently filed documents in this matter may also be purchased from the Commission's duplicating contractor, Best Copy and Printing Inc. (BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI at their Web site: http://www.bcpiweb.com or call 1-800-378-3160.To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to [e-mail] or call the Consumer & Governmental Affairs Bureau at [phone] (voice), [phone] (TTY). The Order on Reconsideration can also be downloaded in Word or Portable Document Format (PDF) at: http://www.fcc.gov/​cgb/​dro. On April 22, 2002, the Commission released the IP Relay Declaratory Ruling & FNPRM, CC Docket No. 98-67, FCC 02-121; published at 67 FR 39386, June 11, 2002 and 67 FR 39929, June 11, 2002, finding that IP Relay is a form of TRS and that on an interim basis the cost of providing all IP Relay calls could be compensated from the Interstate TRS Fund. On March 14, 2003, the Commission released the IP Relay Order on Reconsideration, CC Docket No. 98-67, FCC 03-46; published at 68 FR 18826, April 16, 2003, which granted an extension of the waivers granted in the IP Relay Declaratory Ruling & FNPRM for a period of five years. The Commission also granted the requested waiver of the requirement to provide one-line hearing carry over (HCO) for a period of five years. This document does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see U.S.C. 3506(c)(4).

Synopsis

On April 14, 2003, Sprint filed a petition for “limited reconsideration” of the IP Relay Reconsideration Order, requesting that the Commission reconsider its decision not to make the waivers granted in the IP Relay Reconsideration Order retroactive, and therefore not to compensate providers of IP Relay (Sprint) during the time period in which they offered the service but may not have been complying with the then non-waived HCO and pay-per-call requirements.

Sprint makes numerous arguments in support of its petition. It argues that there is no legal bar to providing payment for services rendered before the grant of the HCO and pay-per-call waivers, distinguishing the cases cited by the Commission for the proposition that the retroactive application of waivers is not favored. Sprint asserts, for example, that the waivers it seeks are “merely to correct mistakes made by the Commission in the [IP Relay Declaratory Ruling & FNPRM] as of the date of that ruling.” Sprint also argues that the IP Relay Declaratory Ruling & FNPRM was not “final” because of the pendency of the petitions for reconsideration, and that therefore the risk Sprint took was that the Commission might deny its petition for waiver of the 900 pay-per-call and HCO requirements on the merits (which, had that occurred, would have precluded it from reimbursement), but not that the Commission might grant the petition but disallow reimbursement.

Sprint also argues that “rigid adherence to all TRS requirements is inconsistent with other TRS precedent.” Sprint asserts that the Commission has found in other contexts that TRS providers are eligible for compensation even if they do not meet every requirement of the Commission's rules, stating that “absolute compliance with each component of the rules may not always be necessary to fulfill the purposes of the statute and the policy objectives of the implementing rules, and that not every minor deviation would justify withholding funding from a legitimate TRS provider.” In this regard, Sprint emphasizes that the Commission has recognized that HCO and pay-per-call services are infrequently used, and that therefore IP Relay providers, like Sprint, have substantially complied with the TRS mandatory minimum standards.

Sprint also contends that the Commission “cannot lawfully single out Sprint for non-payment” of compensation, asserting that the Commission's conclusion in the IP Relay Reconsideration Order that it is not technically feasible to provide HCO and pay-per-call services via IP Relay means that no IP Relay provider could have been providing these services in compliance with the rules during the period between the release of the April 2002 IP Relay Declaratory Ruling & FNPRM and the waiver grant in the March 2003 IP Relay Reconsideration Order. Therefore, according to Sprint, it is improper to refuse to compensate Sprint for its provision of IP Relay when the Commission has compensated other providers during that period for providing the same service. (AT&T received compensation for its provision of IP Relay beginning in June 2002. MCI received compensation for its provision of IP Relay beginning in April 2002.) Sprint notes that there are two ways to cure this inequity: compensate Sprint for the service it provided during the period, or institute enforcement actions against other IP Relay providers to require them to return compensation received during the period. Sprint favors the first approach, which it argues is in the public interest.

On May 16, 2003, MCI filed a petition styled “Petition for Clarification and/or Reconsideration.” See WorldCom, Inc. d/b/a MCI, Petition for Clarification and/or Reconsideration, filed May 16, 2003. MCI requests that the Commission reconsider its apparent decision to eliminate two-line HCO as a means of satisfying the HCO mandatory minimum standard, asserting that the HCO requirement “only made sense as two-line HCO,” and clarify the meaning of the now-waived pay-per-call mandatory minimum standard and whether it was satisfied by attempting to have the pay-per-call service accept alternate billing information, i.e., a billing method other than automatic billing to the caller's telephone bill. MCI also asserts that providers should be compensated for providing IP Relay service even if they did not meet the pay-per-call and HCO standards. Although MCI does not expressly support Sprint's position, it argues that absolute compliance with all mandatory minimum standards is not the standard the Commission has used, that the Commission in the past has issued retroactive waivers to promote the public interest, and that in the circumstances of this matter—including the fact that new technologies are involved—the public interest supports compensating the providers for the IP Relay services provided.

On May 22, 2003, Sprint's and MCI's petitions were placed on public notice. See Petitions for Reconsideration of Action in Rulemaking Proceedings, Public Notice, Report No. 2608, released May 22, 2003. Hamilton and consumer groups (filing jointly) filed comments, and both Sprint and MCI filed reply comments. Hamilton filed comments on both the April 28, 2003, and June 16, 2003 petitions. TDI, the National Association of the Deaf (NAD), SHHH, and the Deaf and Hard of Hearing Consumer Advocacy Network (collectively, the Joint Commenters) filed a joint comment on the Sprint petition on May 16, 2003. On July 1, 2003, Sprint and MCI filed reply comments. Hamilton asserts that the Commission was correct in denying retroactive compensation for the provision of IP Relay during the time period in which the service was offered but was not in compliance with the non-waived mandatory minimum standards and, further, that the providers that were compensated for such service should be required to return the compensation received. Hamilton had earlier filed comments on April 28, 2003, which were resubmitted on June 16, 2003. Hamilton states that the Commission's decision to deny retroactive compensation treats all IP Relay providers equally, and that all compensation paid to IP Relay providers prior to the IP Relay Reconsideration Order was improper because no IP Relay provider was capable of meeting the HCO and pay-per-call standards. Hamilton further argues that the public interest is best served by competition in the IP Relay market. It notes that it did not begin providing IP Relay until after the HCO and pay-per-call waivers were granted in the IP Relay Reconsideration Order, and asserts that only large IP Relay providers can provide service before a waiver is granted and gamble on retroactive compensation. Finally, Hamilton emphasizes that maintenance of the high quality of service demanded by TRS users, including IP Relay users, depends on enforcement of the mandatory minimum standards, and that allowing retroactive compensation would give IP Relay providers an incentive to ignore the TRS mandatory minimum standards and provide lower quality service. Hamilton cautions that reliance on the Publix Show Cause Order could lead to a “slippery slope” with the Commission authorizing compensation for ever-greater departures from the TRS mandatory minimum standards.

The Joint Commenters support Sprint's petition and request that the Commission compensate all providers of IP Relay service even if they did not provide HCO and 900 call services. They assert that “the unique circumstances of this case justify reimbursing Sprint and other similarly-situated carriers for the IP Relay services they rendered to deaf and hard-of-hearing individuals.” They further assert that it would be unjust to penalize Sprint for not providing services that the Commission has found to be “technically infeasible to provide.” Finally, they assert that in light of “these unique circumstances, where deaf and hard-of-hearing individuals benefited from a wider range of service alternatives and the FCC ultimately determined that it was technically infeasible to provide the minimum requirements at issues, the best way for the Commission to accomplish th[e] objective [of encouraging new services] and promote the future deployment of innovative TRS services is to grant Sprint's Petition.”

In its reply, Sprint asserts that Hamilton's assertion that it would be harmed by allowing Sprint and others retroactive compensation is inaccurate because by not providing IP Relay service, Hamilton incurred no costs. Sprint also states that competitive harm would be more likely to occur if the Commission refuses to provide retroactive compensation, because potential providers of new TRS services will be deterred from beginning service until all uncertainties about standards are completely resolved. In its reply, MCI asserts that, in fact, it complied with the HCO and pay-per-call standards as articulated in the IP Relay Declaratory Ruling and FNPRM by providing two-line HCO and pay-per-call standards to the extent possible. MCI also states that retroactive waivers and compensation will benefit the public by compensating IP Relay providers for costs they actually incurred in providing service, and that the Commission supports reimbursement where the mandatory minimum standards have been substantially complied with. Finally, MCI denies that retroactive waivers will encourage rule violations, asserting that the circumstances that gave rise to the initiation of IP Relay service were unusual and unlikely to recur.

We conclude that, in the unique circumstances of this proceeding, Sprint is entitled to compensation for its provision of IP Relay prior to the March 2003 IP Relay Reconsideration Order. At the same time, we take this opportunity to again remind providers that, as a general matter, they must offer TRS services in compliance with all non-waived mandatory minimum standards to be eligible for compensation from the Interstate TRS Fund.

First, based on our review of this proceeding as a whole, we find that we cannot conclude that Sprint was in fact offering IP Relay service in violation of our rules. We recognize that the initial IP Relay Declaratory Ruling & FNPRM was not entirely clear in describing what providers had to do to meet the requirements to provide HCO and pay-per-call service. As MCI has noted, for example, the HCO requirement could reasonably be read to mean that providers must provide 2-line HCO (given the reference to the “text leg” of the call and the need for appropriate customer premises equipment). Similarly, the discussion of the pay-per-call requirement expressly notes that the CA can make such a call by passing along the caller's credit card number. MCI maintains that it satisfied these two requirements in those ways. We do not find that that is an unreasonable interpretation of those requirements as they were spelled out in the IP Relay Declaratory Ruling & FNPRM. At the same time, however, Sprint asserted it could not meet those requirements based, as is now apparent, on its interpretation of what meeting those requirements entailed (i.e., one-line HCO and providing 900 service by passing along the ANI of the calling party into the signaling stream). If, however, the HCO and pay-per-call requirements could be met by means other than those understood by Sprint, then Sprint may not, in fact, have been offering IP Relay in violation of the mandatory minimum standards. In other words, Sprint was offering the service in violation of the mandatory minimum standards, and therefore could have been ineligible for compensation on that basis, only if its interpretation of what the HCO and pay-per-call requirements entail was the only reasonable interpretation of those requirements as described in the IP Relay Declaratory Ruling & FNPRM.

Upon our review of the record in these proceeding as set forth above, we cannot conclude that Sprint's interpretation of the HCO and 900 call requirements is the only reasonable interpretation of those rules, and therefore we cannot conclude that Sprint was in fact offering IP Relay service in violation of the rules. Sprint's interpretation of those requirements as described in the IP Relay Declaratory Ruling & FNPRM is not necessarily correct because those requirements were not made sufficiently clear, and therefore that we cannot conclude that its assertions that it was offering the service in violation of our rules is necessarily true. In this regard, we note that we recently granted Sprint's petition on 711 access to pay-per-call services, stating that we “do not require that pay-per-calling be available through TRS in any particular manner or via a particular technology.” We further stated that “Sprint's solution provides pay-per-call functionality to TRS users, and * * * there can be multiple ways to provide this particular functionality.” Therefore, in the absence of a specific directive on how a particular functionality must be offered, we cannot conclude that a provider is violating a service requirement simply because that functionality is offered one way rather than another.

Second, as a matter of equity, the fact that all parties agree that it was not technologically feasible to provide one-line HCO and 900 service as understood by Sprint, and that for this reason the Commission ultimately waived those requirements in the IP Relay Reconsideration Order, supports the conclusion that Sprint should not be penalized for not offering these services in the manner it described (i.e., for not doing what no one could do) prior to the IP Relay Reconsideration Order. We believe that it would be unfair to penalize Sprint for either its candor in acknowledging that these requirements could not be met (as it understood them), or for a mistaken belief as to what these services entailed, particularly when the discussion of these features in the initial IP Relay Declaratory Ruling & FNPRM is ambiguous. Further, it is implicit in the IP Relay Reconsideration Order that these requirements should have been waived in the initial IP Relay Declaratory Ruling & FNPRM.

Third, upon our complete review of the record, we believe our conclusion best comports with the public interest. Sprint provided the IP Relay service for which it now seeks compensation, and had it not handled those calls, the calls would have been handled either by other IP Relay providers or as traditional TRS calls. Further, Sprint began offering IP Relay service when it was a new service, involving, for relay, new technology that providers and consumers desired to have available as soon as possible. Consumers place great emphasis on having access to the latest TRS innovations as soon as they are technologically available in the market. For example, in response to the 2002 IP Relay Public Notice seeking comment on MCI's petition seeking clarification that IP Relay is a form of TRS compensable from the Interstate TRS Fund, the Commission received numerous comments from individuals urging the Commission to expeditiously recognize IP Relay as a form of TRS so that the new service would quickly be available to consumers. See IP Relay Declaratory Ruling & FNPRM at paragraph 6, note 12. The fact that the IP Relay Declaratory Ruling & FNPRM waived many of the mandatory minimum standards for this service shows that as new technologies develop and are applied to relay, it is not always easy to fit them into the pre-existing regulatory regime, especially a regime developed when relay calls were made entirely over the PSTN. Therefore, there may be more uncertainty as to what pre-existing requirements mean when applied to new technology. In addition, Sprint repeatedly told the Commission that it could not, in its view, offer HCO and 900 services, and repeatedly asked that we promptly waive these requirements (and compensate it for its ongoing service). Therefore, this is not a case where a provider was “caught” violating longstanding rules (indeed, as we have noted, we have not concluded that Sprint was violating the rules at all). Finally, as MCI has noted, it is unlikely that the set of circumstances that led the Commission to first deny the waivers, then to grant them upon reconsideration, and now to have to determine what the Commission initially intended in requiring those services, will occur again.

Further, although we are not unmindful that Hamilton has likely suffered some disadvantage from its decision to delay offering the service until the HCO and pay-per-call issues were resolved, Sprint and other providers that offered IP Relay during this period did incur real costs in doing so. For example, money was paid out for the salaries of CAs and managers, for the equipment necessary to provide the service, and for other ancillary costs related to providing service. Further, any harm Hamilton might have suffered from not offering the service is not dependent on whether Sprint (and the other providers) may be compensated for the service they offered, but from the fact that they offered it at all and therefore were first to the market.

Finally, as the parties have noted, we recognize that in the context of an enforcement action against a TRS provider and in determining whether the provider complied with the standards of § 64.604 and therefore was entitled to compensation from the fund, we stated that “absolute compliance with each component of the rules may not always be necessary to fulfill the purposes of the statute * * *, and that not every minor deviation would justify withholding funding from a legitimate TRS provider.” We also stated that “a TRS provider is eligible for TRS Fund reimbursement if it has substantially complied with § 64.604.” We need not address, however, whether Sprint is entitled to compensation under that standard because we have concluded that Sprint did not offer the service in violation of the rules given their initial ambiguity. At the same time, we do note that the number of HCO and 900 calls handled by the providers at that time was de minimis and that, as is now apparent, no provider could offer HCO and pay-per-call service as understood by Sprint.

Although we conclude that, in view of the unusual circumstances of this matter, payment to Sprint is warranted for the IP Relay service it provided, we caution all TRS providers, current and potential, that we expect them to offer service in compliance with all non-waived mandatory minimum standards. It bears repeating that TRS is an accommodation for persons with disabilities. As such, TRS providers are required to offer service that is functionally equivalent to voice telephone service, as defined by all non-waived mandatory minimum standards applicable to the particular form of TRS. It is therefore the consumers of TRS who suffer when the service is not provided consistent with our rules. We will remain vigilant in ensuring that providers do not offer service that short-changes the intended beneficiaries of these services. To that end, the leverage that we have is to deny compensation from the Interstate TRS Fund for the provision of service that is not in compliance with our rules. This Order on Reconsideration, therefore, should not be read to suggest that common carriers and others can provide regulated services in contravention of our rules, with the hope that they nevertheless will eventually be rewarded for providing service. We view the circumstances of this case to be unique, and trust that this will prove to be the case.

For the reasons set forth above, we grant Sprint's Petition for Limited Reconsideration and MCI's Petition for Clarification and/or Reconsideration to the extent they seek that Sprint be compensated for its provision of IP Relay prior to the release of the March 14, 2003, IP Relay Reconsideration Order. As a result, IP Relay providers who provided service between the date of the IP Relay Declaratory Ruling & FNPRM, released April 22, 2002, and the date of the IP Relay Reconsideration Order, released March 14, 2003, are entitled to receive compensation for the IP Relay service they provided during that period notwithstanding whether, or how, they offered HCO and pay-per-call 900 services.

Final Regulatory Flexibility Certification

The Regulatory Flexibility Act of 1980, as amended (RFA), (the RFA, see 5 U.S.C. 601 et seq., has been amended by the Contract with America Advancement Act of 1996, Public Law Number 104-121, 110 Statute 847 (1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory Enforcement Act of 1996 (SBREFA)), 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.” 5 U.S.C. 605(b). The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 605(b). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 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.” 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.

The Commission concludes in this item that public interest is best served by compensating Sprint for its provision of IP Relay services prior to the March 2003 IP Relay Reconsideration Order that waived the HCO and pay-per-call requirements for IP Relay service. The Commission believes that it would be unfair to penalize Sprint and withhold compensation for the following reasons: (1) Sprint had a mistaken belief as to what constituted satisfaction of the HCO and pay-per-call requirements which may have been fostered by a discussion of the requirements in the initial IP Relay Declaratory Ruling & FNPRM that can be read to be ambiguous; (2) the IP Relay Reconsideration Order demonstrates that HCO and pay-per-call requirements should have been waived at the onset; (3) no IP Relay provider could offer HCO and pay-per-call services as understood by Sprint; and (4) Sprint acknowledged and repeatedly notified the Commission that based upon their interpretation of the mandatory minimum standards for TRS calls they could not meet the requirements for the provision of HCO and pay-per-call IP Relay calls.

This item affects IP Relay providers, but imposes no regulatory burden upon them. Currently, only four entities are providing IP Relay: AT&T, Hamilton, MCI, and Sprint. Moreover, this item imposes no significant economic impact on small entities, but in fact confers a benefit rather than an adverse impact on small entities by compensating an entity that provided a nascent service in good faith. Even if the compensation to Sprint could be hypothetically construed as a significant economic impact, the fact that only four entities provide the service, and that only one company is receiving compensation, means that no “substantial number of small entities” is affected.

Therefore, certification is in order since both prongs of the legal test—i.e., (a) no significant economic impact; and (b) no impact upon a substantial number of small entities—are satisfied. The entity affected by the item is not a small entity; and if the entity were small, there is no significant economic impact since the result of the Order is a benefit. Finally, if the economic impact were to hypothetically be construed as a significant economic impact, there are not a substantial number of small entities affected by this Order on Reconsideration. Accordingly, the Commission certifies that the requirements of this Order on Reconsideration will not have a significant economic impact on a substantial number of small entities.

Report to Congress

The Commission will send a copy of this Order on Reconsideration, including a copy of this final certification, in a report to Congress and the General Accounting Office pursuant to the Congressional Review Act of 1996. See 5 U.S.C. 801(a)(1)(A). In addition, the Order on Reconsideration and this final certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register. See 5 U.S.C. 605(b).

Ordering Clauses

Pursuant to the authority contained in sections 1, 2, and 225 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, and 225, that this Order on Reconsideration IS ADOPTED.

The Petition for Limited Reconsideration filed by Sprint IS GRANTED to the extent indicated herein.

The Petition for Clarification and/or Reconsideration filed by MCI IS GRANTED to the extent indicated herein.

The Commission's Consumer & Governmental Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Order on Reconsideration, including a copy of this final certification, to the Chief Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.

Marlene H. Dortch,

Secretary.