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Federal Register / Vol. 86, No. 106 / Friday, June 4, 2021 / Proposed Rules alignment with the weighted-average cost of providing VRS.
5. In 2017, the Commission reassessed its VRS compensation policy in light of intervening developments. The neutral VRS platform had proved to be impracticable. To the extent that the 2013 reforms had been implemented, they had not changed market conditions sufficiently to justify adoption of a single compensation rate. Accordingly, the Commission chose to defer consideration of major changes in the compensation system. Instead, to preserve choice among suppliers for VRS users, the Commission decided to maintain tiered compensation rates for the next four years. The Commission adopted a 3-tier rate structure for the four-year period and added an emergent rate to the tiered rate structure applicable to VRS providers with no more than 500,000 total monthly minutes.
6. In setting VRS compensation for Fund Year 202122 and beyond, the Commission proposes to continue using a tiered rate structure. The Commission seeks comment on the costs and benefits of this proposal and on the underlying rationale, discussed below.
7. First, developments over the last four years do not appear to warrant reconsideration of the Commissions 2017 assessment that the expectations and assumptions underlying the 2013
proposal to transition away from tiered compensation rates have not been borne out by experience. The reforms introduced in 2013 appear to have run their course, and further competitive improvements resulting from their implementation do not seem likely.
8. Second, certain fundamental facts also appear unlikely to change. VRS
addresses a limited segment of the communications marketplace. As a result, there are built-in limitations on total demand for VRS, which appears to have stabilized relative to the high growth rates that occurred 1015 years ago. Further, the Commission is unaware of any innovations substantial enough to cause a major change in the economics of providing VRS in the foreseeable future.
9. Third, in light of the above, there appears to be little reason to expect major changes in most VRS providers relative per-minute costs. Today, there are only four certified VRS providers.
No new entrants have sought certification to provide VRS since 2011.
The current providers continue to operate at dramatically different scales, and there continues to be vast differences in the per-minute costs of VRS providers.

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10. Notwithstanding the foregoing limitations, the Commission sees no reason to change the VRS compensation policy objectives the Commission has long pursued: 1 To continue bringing total TRS Fund payments into closer alignment with allowable costs, and 2
to preserve and promote quality-ofservice competition among multiple providers. By offering VRS users a choice among multiple providers, the Commission has found, it can most effectively carry out the statutory mandate to ensure that functionally equivalent VRS is available to all eligible individuals, to the extent possible and in the most efficient manner, in accordance with the Commissions minimum TRS standards and subject to rules that do not discourage or impair the development of improved technology. Enabling multiple VRS providers to compete for customers based on service quality, the Commission has found, will best ensure that: 1 Diverse service offerings are available, analogous to those afforded voice service users; 2 niche services are provided to meet the needs of certain segments of the sign languageusing population, such as individuals who speak Spanish or are deafblind;
and 3 VRS providers have incentives to maintain high standards of service quality and improve their VRS offerings.
It might be less costly in the short run to set TRS Fund compensation in such a way that only the lowest-cost VRS
provider can continue offering service.
However, the Commission continues to believe that in the long run, the removal of competitive choices risks degradation of service quality and elimination of diverse offerings, both of which are needed for functionally equivalent service to all eligible users. And, because efficient service is not just about cost but also quality, Sorenson Communications, LLC v. FCC, 897 F.3d 214, 228 D.C. Cir. 2018, the Commission also believes that a policy of maintaining a choice of service offerings can be pursued consistently with the mandate that TRS be made available in the most efficient manner. 47 U.S.C. 225b1. As the D.C. Circuit has explained, competition promotes efficiency by preventing subpar service from a monopolist who has no fear of losing customers; i.e., it promotes compliance with the service quality required by the mandatory minimum standards.
Sorenson at 229. The Commission seeks comment on these beliefs.
11. Accordingly, in setting compensation policy for the next period, under the current regulatory
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structure, the Commission tentatively concludes that it will best serve the purposes of section 225 of the Act if it structures VRS compensation to continue supporting an ecosystem in which multiple VRS providers can compete for minutes of use based on quality of service. The Commission seeks comment on this tentative conclusion and the premises set forth above, as well as any relevant data. The Commission also seeks comment on how best to set VRS compensation to promote the above benefits of allowing consumers a choice of VRS providers.
Which past measures have succeeded or failed in this regard? What should the Commissions role be, if any, in supporting more effective quality-ofservice competition?
12. The Commission invites commenters to suggest alternatives to retaining a tiered-rate compensation methodology. The Commission urges commenters advocating alternatives to explain their proposals in detail, including how such proposals can deliver the benefits that the Commission has found are achievable through VRS
competition i.e., making functionally equivalent TRS available to all eligible individuals in the most efficient manner, in accordance with minimum TRS standards, without discouraging or impairing the development of improved technology.
Alternative Approaches for Setting Tiered Compensation Rates 13. The Commission seeks comment on two overarching issues. First, should it adopt modified VRS compensation rates at this time, or freeze the current rates until a reliable, post-COVID19
pandemic baseline for cost and demand has been established? Second, if the Commission decides to move forward with rate-setting at this time, should the Commission retain the current setup, with an emergent rate and the current tier structure, or should it eliminate the emergent rate and adopt a modified tier structure, to improve provider incentives and move expenditures closer to costs?
Deferring Rate Changes to After the Pandemic 14. In light of the protracted duration of the COVID19 pandemic, the significant demand changes associated with it, and the consequent increase in uncertainty as to future costs and demand, the Commission seeks comment about the feasibility of setting new VRS compensation rates at this time. In 2020, following the outbreak of the COVID19 pandemic and efforts to reduce its spread, VRS providers
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