Client Advisory | General Regulatory & Legal Advisory

MachineGenius Settles with FCC for $400K Over Non-Compliant TRS User Eligibility Self-Certifications

MachineGenius— a conditionally certified Internet Protocol Captioned Telephone Service (“IP CTS”) provider — has recently entered into a Consent Decree with the Federal Communications Commission (“FCC” or the “Commission”), ending an investigation into the company’s violations of the Commission’s IP CTS user eligibility certification rules. In collecting the required eligibility self-certifications, the company neglected to warn registrants, as required by FCC regulations, that when they sign the self-certification form, they certify that they are eligible for IP CTS “under penalty of perjury.” MachineGenius then unlawfully collected from the Interstate Telecommunications Relay Services (“TRS”) Fund compensation for calls made by these improperly verified users. To resolve the matter, MachineGenius agreed to pay a $400,000 civil penalty, as well as to several specific remedial measures.

The Consent Decree shows that it is imperative that TRS providers obtain complete eligibility self-certifications from users during the registration process. Otherwise, they face significant monetary penalties and other administrative sanctions, up to the revocation of their FCC certification.


IP CTS is a form of TRS that permits the user to simultaneously listen to other callers and read the captions of what they are saying. It is designed for persons with hearing loss who can speak and have some residual hearing.

Before seeking compensation from the TRS Fund for calls made by an IP CTS user, IP CTS providers must register the user and obtain from the user a signed self-certification attesting to the user’s need for IP CTS due to a qualifying disability. This certification must be signed “under penalty of perjury.”

MachineGenius’s Certification Mistake

Two years after becoming conditionally certified to provide IP CTS, MachineGenius notified the FCC that the form the company provided to register users for the purpose of certifying their need to use IP CTS never contained language that the users were signing the form “under penalty of perjury.” As a result, the form violated the Commission’s IP CTS user eligibility self-certification requirements.

Although MachineGenius eventually updated its certification form to add the required “under penalty of perjury” language, the damage was already done. Various users with hearing loss had already registered for the company’s IP CTS using the old, non-compliant form. And the company not only allowed those registrants to use the service, but also, significantly, improperly reported call minutes incurred by those users to the TRS Fund Administrator, and collected TRS Fund compensation for those ineligible calls.

Legal Consequences of MachineGenius’s Non-Compliance

MachineGenius’s oversight in designing its IP CTS user self-certification will significantly burden the company. In addition to paying a $400,000 civil penalty, the company must now implement a number of specific remedial measures, including:

  • seeking new self-certifications from existing subscribers who registered for its IP CTS using the old, non-compliant form;
  • establish, and submit to the FCC for approval, a TRS compliance plan that, among other things, must include:
    • detailed operating procedures all covered MachineGenius employees must follow;
    • a compliance manual explaining the FCC’s TRS rules that must be distributed to all company employees; and
    • a self-certification remediation plan

MachineGenius has also consented to various remediation reporting obligations, including:

  • compiling and filing with the TRS Fund Administrator a list of all users who registered with the company using the old form, along with certain personally identifying information for each of these users;
  • detailed periodic updates to the Commission on its remediation progress; and
  • extensive compliance reports, as well as reports of any specific instances of non-compliance.

Contact Us for Help

The MachineGenius Consent Decree reinforces the FCC’s unwavering commitment to protecting the TRS Fund from fraud, waste, and abuse. It sends a strong message that the Commission will not tolerate any  provider deviations from its TRS regulations.

Failure to obtain proper user eligibility documentation from users, or to satisfy other minimum service requirements applicable to TRS providers, could not only subject your company to fines and remedial responsibilities, but could even result in the suspension or cancellation of its TRS certification. And without FCC certification, your company will be ineligible for critical federal funding. Do not put your business in such an unpleasant spot.

Our experienced attorneys can advise your company on every aspect of its TRS compliance obligations, including TRS user eligibility self-certification requirements. If you have any concerns about your company’s compliance with the FCC’s TRS minimum service standards, please contact Michal J. Nowicki, Esq., at (703) 714-1311 or Mr. Nowicki routinely counsels TRS providers on compliance with applicable FCC regulations. He also prepares FCC certification applications for new providers who wish to be compensated from the TRS Fund.


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