New Factor to Fund IP CTS / TRS Services Becomes Effective July 1

Applies to Intrastate, Interstate & International End-User Revenues

Currently, the Universal Service Administrative Company (USAC) collects funds to support the Telecommunications Relay Services (TRS) Fund using a factor that is assessed only on interstate end-user revenues of telecommunications carriers and VoIP providers. In November 2019, the FCC amended its rules to provide for a second factor to be assessed on interstate, intrastate, and international end-user revenues for the purpose of funding Internet Protocol Captioned Telephone Service (IP CTS). This second factor applies to interstate, intrastate, and international end-user revenues of all telecom and VoIP providers, even if they do not offer IP CTS, and becomes effective July 1, 2020.

In its order, the FCC reasoned that a second factor designed specifically to fund IP CTS was needed because IP CTS was not being adequately funded under the current factor. The FCC also noted that even where states have funding programs for TRS, those programs do not cover IP CTS because that service has both interstate and intrastate components.

In a Public Notice released in mid-May, the FCC set forth proposed factors that apply for the 2020 Funding Year (July 1, 2020 – June 30, 2021). The factor that funds non-IP CTS services and applies only to interstate and international end-user revenues is 0.01381, while the factor that funds IP CTS services applies to interstate, international, and intrastate end-user revenues is 0.00941. According to the November Order, the new factor will apply equally to interstate and intrastate revenues.

If you would like to know the estimated impact this new assessment methodology has on your company or have any questions regarding the new factor, please contact your cost consultant or Ryan Denzel in our Minnesota office at 651-452-2660.