FCC Sets in Motion Further Expansion of TRS Fund Contribution Base; Evaluate Your Carrier’s Regulatory Cost Recovery Fee Practices to Avoid Shortfalls or Gross Over-Collection

As explained below, changes to the way the federal Telecommunications Relay Services fund (“TRS Fund”) generates the funds needed to support a variety of communications solutions to disabled persons are in the works. Historically funded based solely on contributions from interstate and international telecommunications and interconnected VoIP (“I-VoIP”) services revenue, by next year we anticipate the FCC will also tap into intrastate revenue to determine how much each service provider must contribute to fund the three types of relay services currently supported by the TRS Fund. By the time the 2022 Form 499-A (reporting 2021 revenue year) is unveiled, we anticipate providers of interstate, international AND intrastate telecommunications and I-VoIP will have their annual TRS Fund contributions based on total retail revenue from assessable services, regardless of the geographic breakdown. As it stands, providers can expect to receive TRS bills for contributions to support “IP CTS” Services which are based on the total retail revenue from assessable services as reported in their 2021 Form 499-As; which is why our firm highlighted the importance of evaluating and, possibly increasing (or in some cases, decreasing), the Cost Recovery Surcharges many service providers bill their customers in order to ensure accurate and ample recovery of anticipated TRS Fund contributions. 

There are three types of communications solutions available to persons with disabilities and which are supported by the TRS Fund, which is overseen by the Federal Communications Commission (with USAC acting as the “data collection agent” and Rolka Loube administering the billing & collections of TRS contributions):

  1. Video Relay Service (VRS) – VRS allows people who are deaf or hard of hearing to communicate with others through the use of American Sign Language (ASL);
  2. Internet Protocol Relay (IP Relay) –  Allows individuals to make text-based Relay calls using a computer, smartphone, personal digital assistant (PDA), smartphone or any other Internet-capable device; and
  3. Captioned telephone service (IP CTS) – IP CTS, is a form of telecommunications relay service that enables people with hearing loss to speak during a phone call and then read captions on a telephone or app when the other person responds.

The TRS Fund is paid for by service providers, but more often than not, the cost of the contribution is recovered from end customers through discretionary surcharges (sometimes, but not always, referred to a Cost Recovery fees). 

In 2019, the FCC decided to fund IP CTS service (Internet Protocol Captioned Telephone Service) with both intrastate and interstate (which, per the FCC, includes international) revenue. And in November of 2020, the FCC adopted a Notice of Proposed Rulemaking (NPRM) proposing to expand the contribution revenue base to include intrastate revenue for purposes of the other two types of relay services: Video Relay Service (VRS) and Internet Protocol Relay Service (IP Relay) services. 

After a lengthy delay, the FCC’s proposed expansion of the VRS/IP Relay contribution base to include intrastate revenues was finally published in the federal register. Publication opens the public comment window, with Comments on the proposed expansion due April 19, 2021 and Reply Comments due May 3, 2021.

If the proposed rules are adopted, which we anticipate will happen sometime this year, the change in contribution revenue base will necessitate taking a close look at the Cost Recovery fees service providers pass-through to their customers to ensure the amounts recouped represent a reasonable approximation of anticipated regulatory costs.

Should you have questions or concerns about the proposed expansion of the TRS Fund contribution base, wish to participate in the rulemaking, or seek guidance on your company’s Cost Recovery fee policies and practices, please contact the attorney assigned to your account or reach out to Allison D. Rule at adr@commlawgroup.com.  


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