Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission adopts new cost recovery methodologies regarding compensation for the provision of Telecommunications Relay Services (TRS) from the Interstate TRS Fund (the Fund). Those cost recovery methodologies will result in fairer, more predictable rates that better reflect the actual costs and market realities of providing TRS. The Commission also: adopts new per-minute compensation rates for the various forms of TRS; clarifies the nature of certain cost categories and extent to which they are compensable from the Fund; reaffirms the role that the TRS Advisory Council is to play in the oversight of TRS; and announces its intent of additional and more comprehensive auditing of TRS providers to ensure Fund integrity.

DATES:

47 CFR 64.604 (c)(5)(iii)(C) contains information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a separate document in the Federal Register announcing the effective date for the amendment and information collection requirements. Interested parties (including the general public, OMB, and other Federal agencies) that wish to submit written comments on the PRA information collection requirements must do so on or before March 17, 2008.

ADDRESSES:

Interested parties may submit PRA comments identified by OMB Control Number 3060-0463, by any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
• Federal Communications Commission's Web Site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
• E-mail: Parties who choose to file by email should submit their comments to PRA@fcc.gov. Please include CG Docket Number 03-123 and OMB Control Number 3060-0463 in the subject line of the message.
• Mail: Parties who choose to file by paper should submit their comments to Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street, SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Thomas Chandler, Consumer and Governmental Affairs Bureau, Disability Rights Office at (202) 418-1475 (voice), (202) 418-0597 (TTY), or e-mail at Thomas.Chandler@fcc.gov. For additional information concerning the PRA information collection requirements contained in this document, contact Cathy Williams at (202) 418-2918, or via the Internet at PRA@fcc.gov.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities, Report and Order and Declaratory Ruling (2007 TRS Cost Recovery Order), document FCC 07-186, adopted October 26, 2007, and released November 19, 2007, in CG Docket No. 03-123. Document FCC 07-186 addresses issues arising from the Commission's Further Notice of Proposed Rulemaking, Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities (2006 TRS Cost Recovery FNPRM), CG Docket No. 03-123, FCC 06-106, published at 71 FR 54009, September 13, 2006. The full text of document FCC 07-186 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. Document FCC 07-186 and copies of subsequently filed documents in this matter also may be purchased from the Commission's duplicating contractor at Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Customers may contact the Commission's duplicating contractor at its Web site http://www.bcpiweb.com or by calling 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 fcc504@fcc.gov or call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY). Document FCC 07-186 can also be downloaded in Word or Portable Document Format (PDF) at: http://www.fcc.gov/cgb/dro/trs.html.

Paperwork Reduction Act of 1995 Analysis

Document FCC 07-186 contains modified information collection requirements subject to the PRA of 1995. It will be submitted to OMB for review under section 3507 of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the modified information collection requirements contained in this proceeding. Public and agency comments are due March 17, 2008. In addition, the Commission notes pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506 (c)(4), that the Commission previously sought specific comment on how it may “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

Synopsis

1. In the 2006 TRS Cost Recovery FNPRM, the Commission sought comment on four issues concerning the compensation of relay providers from the Fund. First, the Commission sought comment on the adoption of an alternative cost recovery methodology for traditional TRS, STS services, and IP Relay services based on the Multi-state Average Rate Structure (MARS) plan, under which the compensation rate would be based on a weighted average of competitively bid intrastate rates. The Commission sought comment on whether adoption of the MARS plan would result in a more efficient provision of service and a fairer, more reasonable compensation rate, as well as on how the MARS plan would be implemented and whether the rates for those TRS forms should continue to be set for a one-year period or for longer.

2. Second, the Commission sought comment on the adoption of an alternative cost recovery methodology for VRS. The Commission emphasized the need for a cost recovery methodology that would result in more predictable rates that more closely approximate the reasonable actual costs of providing VRS services. Accordingly, the Commission sought comment on whether changes should be made to the existing cost recovery methodology, or whether a new methodology should be adopted. The Commission proposed various new methodologies, including compensating each provider based on the provider's actual, reasonable costs, seeking competitive bids, or using a “true-up” based on each provider's reasonable actual costs. The Commission also sought comment on whether the VRS compensation rate should be set for a two-year period, rather than a one-year period.

3. Third, the Commission sought comment on the extent to which certain types of costs—including marketing and outreach expenses, overhead costs, legal and lobbying expenses, start-up expenses, and executive compensation—are compensable from the Fund. Finally, the Commission sought comment on the steps it might take to ensure the integrity of the Fund and that compensation is paid consistent with the statute. Specifically, the Commission sought comment on the oversight of the Fund administrator, presently the National Exchange Carrier Association (NECA), the oversight of the providers, and ways to deter waste, fraud, and abuse.

4. The 2007 TRS Cost Recovery Order resolves the issues on which the Commission sought comment in the 2006 TRS Cost Recovery FNPRM. First, the Commission adopts the MARS plan as the cost recovery methodology for interstate traditional TRS, interstate STS, interstate CTS, and interstate and intrastate IP CTS. Presently, the compensation rates are based on a weighted average of the providers' projected minutes of use of the service, and their projected costs of providing these minutes, for a future two-year period. Because the current methodology is based on projections only, it does not result in rates that satisfactorily correlate to the providers' actual costs. Adopting the MARS plan, in contrast, will produce a rate that better approximates actual costs, and therefore will promote the efficient recovery of all costs. It also will eliminate the costs, burdens, and uncertainties associated with evaluating, correcting, and re-evaluating provider data.

5. The Commission will calculate one MARS rate applicable to both interstate traditional TRS and interstate STS based on state rates for intrastate TRS and STS, and adopt a separate MARS rate for interstate CTS and IP CTS based on state rates for intrastate CTS. Regardless, for both rates, the rate calculation mechanism will be the same. Generally, each January, the Fund administrator will request that the following information be filed on a per-state basis for the previous calendar year: (1) The per-minute compensation rate(s) for intrastate traditional TRS, intrastate STS, and intrastate CTS; (2) whether the rate applies to session or conversation minutes; (3) the number of session and conversation minutes for intrastate traditional TRS, intrastate STS, and intrastate CTS, (4) other amounts paid to the provider(s) for the relevant calendar year, if the per-minute compensation rate does not reflect the total costs paid by the state to the provider(s) for the relay service(s); and (5) other factors bearing on the rate averages, such as mid-year rate changes.

6. The Fund administrator will multiply each state's respective intrastate traditional TRS and intrastate STS, and intrastate CTS, rates by the number of either intrastate session minutes or conversation minutes, whichever the state rates are based upon, and then total each state's total dollar amount for each rate. The Fund administrator will then divide the total dollar amount(s) for all the states (including costs not reflected in the rate) by the applicable total of all states' intrastate conversation minutes (even if some states do not base their rate on conversation minutes) for each service (e.g., intrastate traditional TRS and intrastate STS in one calculation, intrastate CTS in the other).

7. The Fund administrator will file the MARS plan rate(s), as calculated, with the Commission by May 1st of each year, and the proposed MARS rate for each service and an explanation of how it was calculated will be placed on public notice. The Commission will then release by June 30 of each year an order adopting the compensation rate for the following July 1st to June 30th Fund year. The Commission will monitor the implementation of the MARS plan and, if necessary, take further steps to ensure that the MARS rate compensates providers for their reasonable costs of providing service.

8. Beginning March 1, 2008, and for the remainder of the 2007-08 Fund year, the MARS plan per-minute rate of $1.592 shall apply for interstate traditional TRS and interstate STS. This rate is a result of the calendar 2006 intrastate TRS and STS data filed by 49 states and Puerto Rico, which show that a total of $100,738,030 was spent to pay for 63,275,205 conversation minutes, which translates to $1.592 per minute.

9. The Commission believes that this rate is reasonable because it is based on competitively bid state rates. For interstate STS, however, the Commission will add an additional $1.131 per minute, resulting in a total of $2.723, because of concerns that outreach efforts toward the STS community have not been effective. Each STS provider must allocate this additional $1.131 per minute toward outreach efforts directed at the STS community. For interstate CTS and interstate and intrastate IP CTS, the Commission adopts a 2007-2008 compensation rate of $1.629 per minute. This rate is based on calendar 2006 intrastate captioned telephone service data from the 39 states that provided this service in 2006, which shows that $15,867,338, was spent to pay for 9,739,138 conversation minutes, which translates to $1.629 per minute.

10. Second, for IP Relay, the Commission declines to adopt a cost recovery methodology based on the MARS plan because there are no state rates for this service. Instead, the Commission adopts a cost recovery methodology based on price caps. As a general matter, the price cap plan adjusts a base rate upward for inflation and other, additional costs not reflected in the inflation adjustment, then downward for improved efficiencies. In so doing, the price cap plan applies three factors—an Inflation Factor, an Efficiency (or “X”) Factor, and Exogenous Costs—to a base rate. The Inflation Factor will be the Gross Domestic Product—Price Index (GDP-PI)). The Efficiency Factor will be set as a figure equal to the Inflation Factor, less 0.5 percent (or 0.005) to account for productivity gains.

11. The Exogenous Costs will be those costs beyond the control of the IP Relay providers that are not reflected in the inflation adjustment, such as additional costs that they incur to satisfy new, Commission-adopted service requirements. As a result of the basic price cap plan formula, which multiplies the base rate by a factor that reflects an increase due to inflation, and then offsets it by a decrease due to efficiencies, the rate for a particular year generally will equal the rate for the previous year, reduced by 0.5 percent (i.e., Rate_{Year Y} = Rate_{Year Y −1} (1−0.005)). Adopting this methodology for IP Relay will encourage IP Relay providers to become more efficient in providing the service.

12. The Commission adopts the price cap plan for three years, with the first rate period being the 2007-2008 Fund year. The rates will then continue, with annual adjustments for productivity gains, through the 2009-2010 Fund Year. The Commission will then assess what the base rate should be for the following three year period.

13. Beginning March 1, 2008, the per-minute rate of $1.293 shall apply for inter- and intrastate IP Relay. NECA presented IP Relay rates ranging between $1.16 and $1.28, the latter reflecting both 2006 actual costs adjusted for inflation and a rate based on providers' projected minutes of use and costs, unadjusted. The Commission believes that the current rate reasonably compensates providers based on the cost data and the rates proposed by NECA, and that adopting the base rate for a three year period will add additional stability and predictability to the IP Relay rates. This rate shall continue through the 2009-2010 Fund year, subject to annual adjustment under the price cap plan.

14. Third, for VRS, the Commission adopts a tiered-rate cost recovery methodology which compensates VRS providers at different per-minute rates for monthly call minutes that fall within predetermined total call volume ranges. The VRS rates will be based on the providers' projected costs and minutes of use, and other data the VRS providers submit to the Fund administrator, subject to appropriate review and, where necessary, disallowances. Specifically, this tiered-rate approach is intended to reflect likely cost differentials between small providers (including new entrants); mid-level providers who are established but who do not hold a dominant market share; and large, dominant providers who are in the best position to achieve cost synergies.

15. This tiered-rate approach will allow providers that handle a relatively small amount of minutes and therefore have relatively higher per-minute costs to receive compensation on a monthly basis more likely to accurately correlate to their actual costs. Conversely, providers that handle a larger number of minutes, and therefore have lower per-minute costs, will also receive compensation on a monthly basis more likely to accurately correlate to their actual costs. Furthermore, under the tiered approach, all providers would be compensated on a “cascading” basis, such that providers would be compensated at the same rate for the minutes falling within a specific tier. In other words, all providers will be compensated at the highest rate for those minutes falling within the first tier; at the middle rate for those minutes falling within the middle tier, and at the lower rate for all additional minutes.

16. The Commission will set the tiers and their corresponding per-minute rates for a three-year period, and will reduce the rates annually by 0.5 percent while allowing providers to seek exogenous cost adjustments for new costs imposed that are beyond the providers' control. The 0.5 percent annual downward adjustment will reduce Fund expenditures and encourage VRS providers to gain efficiencies in providing VRS services. The Commission believes that these tiers are appropriate to promote competition, and ensure that the newer providers are compensated for their actual costs and that the larger, more established providers are not overcompensated.

17. Beginning March 1, 2008, the three following call volume tiers and their corresponding per-minute rates shall apply for VRS: For the first 50,000 monthly minutes, $6.77; for monthly minutes between 50,001 and 500,000, $6.50; and for monthly minutes exceeding 500,000, $6.30. Those tiers, the number and size of which will be reevaluated every three years, are based on the data regarding total monthly VRS minutes that the various providers have submitted to NECA. That data indicates, first, that the newer providers generally provide less than 50,000 minutes per month. For those providers offering a relatively small number of minutes, it is appropriate to base the rate on the providers' projected costs and minutes of use. As NECA's filing data reflects, the rate based on the providers' projected demand and cost data, without any disallowances, is $6.77.

18. The Commission believes that this rate fairly reflects the actual reasonable costs of the newer or smaller providers offering VRS in compliance with all non-waived mandatory minimum standards. Second, the NECA filing data indicates that more established providers provide monthly minutes ranging in the low hundreds of thousands. For those established but non-dominant providers, the Commission believes it is appropriate to base the rate on the $6.77 rate noted above, less marketing and certain undisputed cost disallowances. The resulting rate is $6.50. Finally, the NECA filing data shows that the dominant provider provides minutes ranging in the millions. Such call volumes lead to economies of scale that result in lower per-minute costs. Accordingly, the Commission adopts a rate of $6.30 for this third and final tier. This rate will encourage providers with large numbers of minutes to become more efficient.

19. Fourth, in addition to adopting new cost recovery methodologies and compensation rates, the Commission clarifies the extent to which certain cost categories are compensable from the Fund. Specifically, the Commission concludes that indirect overhead costs are not reasonable costs of providing TRS; accordingly, to be compensable, overhead costs must be directly related to, and directly support, the provision of relay service. The Commission also concludes that, to encourage competition in the VRS market, entry costs or start-up expenses of new entities seeking to provide VRS are compensable, but must be amortized in accordance with generally accepted accounting principles so that they are recovered over time and will not skew the rate in a particular year. Also, executive compensation is compensable to the extent that it is reasonable and is for services that “directly support the provision of TRS.” In determining what constitutes reasonable compensation, the Commission will consider bonuses, stock options, and other forms of compensation.

20. With respect to other, miscellaneous costs, financial transaction costs or fees unrelated to the provision of relay service, such as those relating to the sale or change in ownership or structure of a relay service entity, are not compensable expenses. Also, costs attributable to consumer premises equipment such as relay hardware and software used by the consumer, including installation, maintenance costs, and testing, are not compensable. The Commission will scrutinize the providers' submitted costs to ensure that such consumer premises equipment costs are not directly or indirectly included.

21. Finally, with respect to management and oversight of the Fund, the Commission reaffirms the role that the TRS Advisory Council may play in the oversight of TRS—including in the development of new cost recovery guidelines and compensation rate proposals, and further addressing of the compensability of certain cost categories—and expresses that the Council also can address other matters as assigned by the Commission. In addition, the Commission announces its intention of additional and more comprehensive auditing of TRS providers to ensure Fund integrity, by, for example, reviewing the underlying documentation supporting submitted cost and demand data, as well as minutes submitted for compensation.

22. The Commission also concludes that there should be more transparency to the rate setting process. The Commission realizes, however, that the interest in transparency must be balanced against the providers' interest in the confidentiality of their cost and demand data, an interest reflected in the Commission's rules. The Commission believes the MARS plan will make more transparent the determination of the traditional TRS, STS, CTS, and IP CTS rates. Not only does the Commission anticipate listing the State rates used in calculating the MARS rates and setting forth the final calculation that divides total costs by total minutes to determine the rate, but there are no cost adjustments to provider specific data in the determination of these rates, which furthers the goal of transparency.

23. In the Declaratory Ruling portion of the 2007 TRS Cost Recovery Order, the Commission reiterates its prior rulings that a TRS provider may not offer any direct or indirect, financial or other tangible, incentive to a TRS user or third party to encourage TRS users to make TRS calls that they would not otherwise make, including calls designed to elicit customer feedback on quality of service. Nor may a relay provider condition a user's ongoing use or possession of relay equipment, or the receipt of different or upgraded equipment, on the user making relay calls through its service or the service of any other provider. In other words, providers cannot give consumers equipment as part of outreach efforts or for other purposes, and then require that the equipment be relinquished if the consumer fails to maintain a certain call volume. Not only do such practices likely require the impermissible use of the providers' call database, and the impermissible monitoring of consumers' calls, they also constitute impermissible financial incentives.

24. In addition, relay providers may not use a consumer or call database to contact relay users for lobbying or any other purpose. The Commission has made clear that TRS customer profile information cannot be used for any purpose other than handling relay calls. Therefore, for example, a provider may not contact its customers, by an automated message, postcards, or otherwise, to inform them about pending TRS compensation issues and urge them to contact the Commission about the compensation rates. Similarly, a provider may not use call data to monitor the TRS use by its customers (or the customers of other providers) and to determine whether they are making a sufficient number of calls to warrant further benefits from the provider.

Final Regulatory Flexibility Certification

25. The Regulatory Flexibility Act of 1980, as amended (RFA), requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, 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. 601(6). 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). 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). Small Business Act, 15 U.S.C. 632.

26. The 2007 TRS Cost Recovery Order addresses issues related to cost recovery methodologies for various forms of TRS. The 2007 TRS Cost Recovery Order adopts a single cost recovery methodology based on the “MARS” plan for interstate traditional TRS, interstate STS, interstate CTS, and interstate and intrastate IP CTS. Beginning with the 2007-2008 Fund year, a single MARS rate will be calculated and will apply to interstate traditional TRS and interstate STS, interstate CTS, and IP CTS. Because states generally negotiate and pay separate rates for captioned telephone service, a separate MARS rate will be calculated and will apply to interstate captioned telephone service.

27. The Commission concludes that the MARS methodology, as proposed, cannot be applied to IP Relay because there are no state rates for these services. The Commission, therefore, continues to use a cost recovery methodology for IP Relay based on the providers' projected demand and cost data that reasonably compensates the providers for the provision of IP Relay service. The Commission also concludes that adopting the proposed price cap plan for IP Relay will encourage IP Relay providers to become more efficient in providing the service. The Commission believes that the price cap plan for IP Relay will not have a significant economic impact on a substantial number of small businesses.

28. The Commission concludes that adoption of the MARS plan for Interstate Traditional TRS, Interstate STS, Interstate CTS, and IP CTS for setting the rate eliminates the need to file the much more voluminous cost and demand data that providers presently must submit under the current cost recovery methodology to the Fund administrator. The Commission, therefore, concludes that the effect of the adoption of the MARS plan would be to lessen the reporting burden on small businesses. Accordingly, the Commission does not believe that these actions will have a significant economic impact on a substantial number of small businesses.

29. The Commission further believes that the decision to set a standard for how “reasonable” costs should be compensable under the present cost recovery methodology for all forms of TRS, as well as a standard for what “reasonable” costs should include, will provide guidance for the providers, and therefore, benefits small businesses in two ways. This includes setting a standard for whether, and to what extent, marketing and outreach expenses, overhead costs, and executive compensation are compensable from the Fund. First, it provides predictability, and secondly, it eliminates uncertainties with whether the costs submitted would be compensable or not. Eliminating uncertainties will lessen the reporting burden on small businesses. The Commission therefore concludes that the requirements of the 2007 TRS Cost Recovery Order will not have a significant economic impact on a substantial number of small entities.

30. The Commission expressed concern, based on comparisons of VRS providers' cost and demand projections with their actual historical data, that some VRS providers have received compensation significantly in excess of their actual costs. The Commission has also observed that providers' demand forecasts for VRS generally have been lower than actual demand, resulting in overcompensation to providers for completed minutes under the current per-minute cost recovery scheme.

31. The Commission, therefore, adopts three compensation rate tiers for VRS. These tiers are intended to reflect likely cost differentials between small providers; mid-level providers who are established but who do not hold a dominant market share; and large, dominant providers who are in the best position to achieve cost synergies. As a general matter, the three-tiered approach is based on market data reflecting the number of monthly minutes submitted to NECA by the various providers. The data reflects that the newer providers generally provide less than 100,000 minutes per month; that other, more established providers (with the exception of the dominant provider) generally provide monthly minutes ranging in the low hundreds of thousands; and that the dominant provider provides minutes ranging in the millions. The Commission, therefore, believes that using three tiers is appropriate to ensure both that, in furtherance of promoting competition, the newer providers will cover their costs, and the larger and more established providers are not overcompensated due to economies of scale.

32. By adopting a tiered approach, providers that handle a relatively small number of minutes and therefore have relatively higher per-minute costs will receive compensation on a monthly basis that will likely more accurately correlate to their actual costs. Conversely, providers that handle a larger number of minutes, and that therefore have lower per-minute costs, will also receive compensation on a monthly basis that likely more accurately correlates to their actual costs. Furthermore, the Commission concludes that under such a tiered approach, all providers will be compensated on a “cascading” basis, such that providers will be compensated at the same rate for the minutes falling within a specific tier. In other words, all providers will be compensated at the highest rate for those minutes falling within the first tier; at the middle rate for those minutes falling within the middle tier, and at the lower rate for all additional minutes. The Commission believes that using tiered rates, rather than a single, weighted average rate, will more fairly compensate all providers for their reasonable actual costs of providing service. Since fair compensation will benefit all providers equally, imposing no separate and adverse impact on smaller entities, the Commission further concludes that its tiered rates will not have a significant economic impact on a substantial number of small entities.

33. Because the Commission recognizes that potential STS users are not being made aware of the availability of STS, the Commission adds an additional amount to the STS compensation rate for outreach efforts. The Commission also requires that STS providers file a report annually with NECA and the Commission on their specific outreach efforts directly attributable to the additional support for STS outreach. Since STS providers will be compensated an additional amount for outreach, the Commission concludes that requiring STS providers to file an annual report will not have a significant economic impact on a substantial number of small entities.

34. Finally, in order to be compensated for the costs of providing TRS, the providers are required to meet the applicable TRS mandatory minimum standards as required in 47 CFR 64.604. See generally 47 CFR 64.604(c)(5)(iii)(E). Reasonable costs of compliance with the 2007 TRS Cost Recovery Order are compensable from the Fund. Thus, because the providers will recoup the costs of compliance within a reasonable period, the Commission asserts that the providers will not be detrimentally burdened. Therefore, the Commission certifies that the requirements of the 2007 TRS Cost Recovery Order will not have a significant economic impact on a substantial number of small entities.

35. The Commission also notes that, with specific regard to the issue of whether a substantial number of small entities will be affected, of the 13 providers affected by the ruling adopted herein, there are only three small entities that will be affected by the Commission's action. 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. 13 CFR 121.201, NAICS code 517110. Currently, thirteen providers are providing various forms of TRS and being compensated from the Interstate TRS Fund: Ameritech; AT&T Corp.; CapTel, Inc.; Communication Access Center for the Deaf and Hard of Hearing, Inc.; GoAmerica; Hamilton Relay, Inc.; Hands On; Healinc; Nordia Inc.; Snap Telecommunications, Inc.; Sorenson; Sprint and Verizon. The Commission notes that 3 of 13 providers noted above are small entities under the SBA's small business size standard. Because three of the affected providers will be promptly compensated within a reasonable period for complying with the 2007 TRS Cost Recovery Order, the Commission concludes that the number of small entities affected by the Commission's decision in the 2007 TRS Cost Recovery Order is not substantial.

36. Therefore, for all of the reasons stated above, the Commission certifies that the requirements of the 2007 TRS Cost Recovery Order will not have a significant economic impact on these small entities.

37. The Commission will send a copy of the 2007 TRS Cost Recovery Order, including a copy of this Final Regulatory Flexibility Certification, in a report to Congress pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A). In addition, the 2007 TRS Cost Recovery Order and this final certification will be sent to the Chief Counsel for Advocacy of the SBA.

Congressional Review Act

The Commission will send a copy of the 2007 TRS Cost Recovery Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

Ordering Clauses

Pursuant to Sections 1, 2, and 225 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, and 225, the 2007 TRS Cost Recovery Order IS ADOPTED.

An annual compensation rate shall apply to interstate traditional TRS and interstate STS based on the MARS plan and the intrastate traditional TRS and STS rate(s) paid by the states, as provided in the 2007 TRS Cost Recovery Order.

An annual compensation rate shall apply to interstate CTS and interstate and intrastate IP CTS based on the MARS plan and the intrastate CTS rate paid by the states, as provided in the 2007 TRS Cost Recovery Order.

A compensation rate shall apply to interstate and intrastate IP Relay based on price caps, and the rate shall be set for three-year periods, subject to adjustment, beginning with the 2007-2008 Fund year, as provided in the 2007 TRS Cost Recovery Order.

Tiered compensation rates shall apply to interstate and intrastate VRS based on minutes of use, and the rates shall be set for three-year periods, subject to adjustment, beginning with the 2007-2008 Fund year, as provided in the 2007 TRS Cost Recovery Order.

Effective March 1, 2008, the following per-minute compensation rates shall apply, as provided herein: for interstate traditional TRS: $1.592; for interstate STS: $2.723; for interstate CTS and interstate and intrastate IP CTS: $1.629; for interstate and intrastate IP Relay: $1.293; and for interstate and intrastate VRS: (1) For the first 50,000 monthly minutes: $6.77; (2) for monthly minutes between 50,001 and 500,000: $6.50; and (3) for monthly minutes above 500,000: $6.30.

The amendment to section 64.604 of the Commission's rules is adopted.

The 2007 TRS Cost Recovery Order shall be effective February 19, 2008, except § 64.604 (c)(5)(iii)(C) of the Commission's rules, which contains information collection requirements that are not effective until approved by OMB. The Commission will publish a separate document in the Federal Register announcing the effective date of the rule.

The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of the 2007 TRS Cost Recovery Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 64

• Individuals with disabilities
• Reporting and recordkeeping requirements
• Telecommunications

Rule Changes

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 64 as follows:

PART 64—MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

1. The authority citation for part 64 continues to read as follows:

Authority: 47 U.S.C. 154, 254 (k); secs. 403 (b)(2)(B), (c), Public Law 104-104, 110 Stat. 56.

Interpret or apply 47 U.S.C. 201, 218, 222, 225, 226, 228, and 254(k) unless otherwise noted.

2. Section 64.604 is amended by revising paragraph (c)(5)(iii)(C) to read as follows: