In December 2019, the Federal Communications Commission (FCC) revised the contribution rules associated with the federal Telecommunications Relay Service Fund (TRS or Fund). Specifically, the FCC expanded the contribution base for IP captioned telephone service (IP CTS) to include intrastate only providers. As a result, every carrier providing interstate or intrastate telecom services (including both interconnected and non-interconnected VoIP service providers) will contribute to the TRS Fund: (1) for the support of TRS other than IP CTS on the basis of interstate end-user revenues; and (2) for the support of IP CTS on the basis of BOTH interstate and intrastate revenues. The FCC said that the total contributions needed to support the TRS Fund will not be affected, but the percentage of interstate end-user revenues on which TRS Fund contributions are based will decline substantially. The new rules will take effect starting with TRS Fund Year 2020-21.
To implement the inclusion of intrastate end-user revenues in the funding for IP CTS, the FCC adopted a single contribution factor for IP CTS that will be applied to all the end-user revenues of each TRS Fund contributor. The single-factor approach will ensure that each contributor pays the same percentage of its total interstate and intrastate end user revenues for support of IP CTS. The FCC said this is “far more equitable than the current system, which requires that 100% of the contributions be based on interstate revenues, even though it is likely that less than half of IP CTS minutes are interstate.”
In May 2020, the FCC sought comment on the proposed TRS contribution factors for the period July 1, 2020, through June 30, 2021. For support of non-IP captioned telephone service (CTS) TRS, the FCC is proposing a carrier contribution factor of 0.01381, to be applied to contributors’ interstate end-user revenues. For support of IP CTS, pursuant to the recent rule modification requiring TRS Fund contributions supporting IP CTS to be based on contributors’ interstate and intrastate end-user revenues delineated above, the FCC is proposing a carrier contribution factor of 0.00941.
But what does this mean for you? With the upcoming TRS filing you will be required to include your intrastate VoIP revenues in your TRS payment calculation. For those carriers not prepared for this change you will probably see an impact to your company’s profits. Initial filed comments on the issue were due at the FCC on May 29, 2020 with reply comments due June 5, 2020. As you can see the window for discussion on this issue is short and we are keeping our clients abreast of these issues.
The next question that probably came to mind was “how can I quantify what this change is going to mean to my company?” We have been getting quite a few calls from our compliance customers asking us to assist them in quantifying the financial impacts of these changes.
Click here to download the calculation tool we have been using to assist our clients in calculating this change. Once you have completed the tool feel free to reach out to sales@inteserra to discuss how we can assist you through this process.
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