FCC Draft IP CTS Rate Cuts May Concern Providers; Deaf Advocates Cite ASR Service Quality

IP CTS compensation needs to move closer to costs to control program funding, now approaching an annual $1 billion, blogged Chairman Ajit Pai May 16 (see 1805160051). The draft order says a multistate average rate structure (MARS) "is no longer an effective methodology to ensure that IP CTS compensation rates correlate to actual reasonable costs." The 2017 MARS rate of $1.95 per minute is well above an average IP CTS expense of $1.23, it says.

Instead of a "flash cut," the draft proposes to begin a "glide path," with 10 percent reductions in the next two funding years, to $1.75 starting July 1, and to $1.58 starting July 1, 2019, saving an estimated minimum of $399 million over two years. It cites a "need to take immediate action to align the IP CTS rate more closely" with service costs "while recognizing that there are a number of issues" to be addressed through the FNPRM. Aides to Commissioners Mike O'Rielly, Brendan Carr and Jessica Rosenworcel declined comment.

ClearCaptions warned a $1.75 rate "would negatively impact competition and impact the ability for smaller IP CTS providers to invest in new technology that could be beneficial to consumers" and the telecom relay service fund, said the provider's filing Monday in docket 13-24 on discussions with aides to Commissioners Jessica Rosenworcel and Brendan Carr May 17, the day the draft was released. ClearCaptions was commenting on the proposal of TRS fund administrator Rolka Loube Associates in projections for FY 2018-19 (see 1805080021), which the FCC put out in docket 03-123 for comment due Tuesday.

Sprint "strongly urged" the FCC "to refrain from adopting an interim, reduced rate." It recognized the agency's desire to restructure IP CTS, but it should do so "carefully and holistically," said Sprint's Nov. 30 filing on a meeting with commissioner aides. "Aside from legal/procedural concerns," an interim reduction "could be highly disruptive to both providers and users of IP CTS," Sprint said. "Promising [ASR] technologies could be a casualty of rate reduction if IP CTS providers either exit the business altogether or are unable to conduct research and development and make capital investments to improve the service. ... [C]onsumers could see a drastic reduction in the quality of service -- possibly at levels below functional equivalency." Sprint "noted the IP Relay market collapsed through similar regulatory interdiction and hopes lessons learned there will be applied to IP CTS."

The record is inadequate to impose "any cost-based rates, including an interim rate," said Hamilton Relay in a May 15 filing on a meeting with a Pai aide. CaptionCall, a Sorenson Communications subsidiary, encouraged the FCC to "evaluate a variety of market-based mechanisms for setting [IP CTS] rates," said its May 15 filing on a meeting with the Pai aide. It argued Oct. 30 for using "historical MARS data to initialize a price cap," which the commission "has long recognized is superior to rate of return regulation, because of its incentives for efficient operations and innovation." While preferring the FCC examine all rate issues in an NPRM, if the FCC seeks transitional rates, CaptionCall Sept. 7 urged incremental changes. Mezmo (InnoCaption), the fifth provider, doesn't appear to have engaged in rate advocacy.

The FCC did accede to various requests by releasing the draft. Providers and consumer advocates said they wanted to review it and provide feedback before a vote. We're told some providers have had meetings in recent days, but their related filings have not been posted.

"Deaf and hard of hearing consumer groups and accessibility researchers are concerned about a number of issues," emailed Blake Reid, counsel to Telecommunications for the Deaf and Hard of Hearing, who also spoke for the Hearing Loss Association of America, National Association of the Deaf and the Gallaudet Technology Access Program. They're particularly concerned the declaratory ruling would approve the use of ASR technology "without soliciting comment or considering in any detail on how to apply minimum standards -- which were designed with human communications assistants in mind -- to machine learning technology," Reid said. "This raises serious concerns about how the Commission will verify that automated IP CTS are at the level of quality necessary to ensure consumers’ civil right of access to functionally equivalent communications and have the necessary safeguards in place to protect the sensitive content of consumers’ private communications." They're also concerned about the FCC's "proposed approach to eligibility assessment, which is short on details and could risk disenfranchising those who need access to IP CTS to communicate."

ClearCaptions cited "the inadequacy" of a possible ASR rate of 49 cents per minute. Integrating ASR into IP CTS "must never result in reduced quality" or "reduced accuracy."

FCC "rules contain a number of safeguards to ensure that TRS is provided to people with disabilities in a way that is functionally equivalent to voice telephone services," emailed a spokesman. "As discussed in the draft item, these same safeguards will apply to IP CTS using ASR. Beyond that, we will review the record."

The draft would take further steps to examine costs, restrict "unnecessary" IP CTS use and attempt to improve the program. The FNPRM would propose to expand the interstate and international telecom revenue contribution base "for IP CTS to include a percentage of annual intrastate revenues from telecommunications carriers and VoIP service providers," a more targeted version of IDT Telecom's proposal for assessing intrastate telecom revenue for the entire TRS fund.