Sorenson Faults FCC IP Captioned Phone Service Rulemaking, at D.C. Circuit Hearing

The FCC violated the Americans with Disabilities Act and the Administrative Procedure Act when it created rules last year meant to curb misuse of the Internet Protocol Captioned Telephone Service (IP CTS), Sorenson and subsidiary CaptionCall said, urging a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit Tuesday to strike down the rules. The agency contends it acted within the bounds of ADA and APA, though at least two of the three judges said they had concerns.

The FCC adopted “emergency” interim rules in January 2013 to deal with what its brief said was a “dramatic and unexpected surge” in usage of the IP CTS system, meant to serve people who are deaf or hard of hearing via specialized phones that display captions along with the audible call. The commission said it suspended the notice-and-comment process for the interim rules because it needed to quickly curb what it believes was abuse of the IP CTS system by people the system was not meant to serve, which it said qualifies under APA’s “good cause” exception (http://bit.ly/1iJepq6).

The interim rules and final rules the FCC adopted in August required IP CTS equipment to operate with a default setting that has the caption functionality turned off. The final rules also prohibited an IP CTS provider from seeking compensation through the FCC Telecommunications Relay Services (TRS) Fund for IP CTS equipment it provides free or at a charge of less than $75. The interim rules had allowed providers to seek compensation on free or discounted IP CTS phones when the user supplied certification from a healthcare professional.

The FCC “fundamentally misapplied” ADA in its rules by requiring providers to charge at least $75 for IP CTS equipment, contrary to ADA language that disabled people do not have to pay for an accommodation, said Sorenson counsel Christopher Wright of Harris, Wiltshire. The FCC believes the $75 threshold is a fair barrier that only people who need the service would be willing to pay, but is substantially lower than the market price of IP CTS equipment, said FCC counsel Grey Pash. A $75 fee is a reasonable alternative, but the FCC should allow proof of serious hearing loss via professional certification, Wright said.

Judge Thomas Griffith said he thought Sorenson had a stronger argument on APA grounds than on ADA, though Wright argued that the ADA case was also “very strong.” Griffith and Judge Patricia Millett asked questions that appeared critical of the FCC approach to creating the IP CTS rules. The FCC agrees its process for creating the interim rules was unusual, but it also faced an “unusual situation,” Pash said. The IP CTS system is “uniquely susceptible” to misuse and abuse, and posed a potential to significantly drain the TRS Fund, he said. Griffith called the FCC decision to bypass the standard notice-and-comment process in APA in its drafting of the interim rules “extraordinary in a bad way” and “an extreme thing” since the emergency did not involve health or safety issues. Sorenson and CaptionCall have suggested the FCC should have considered raising its fees instead of promulgating the IP CTS rules. Raising fees was an option, but the FCC believed the TRS Fund would have exceeded its budgeted amount for the 2012-2013 cycle by $75 million had the commission not acted, Pash said.

Griffith and Millett questioned what they felt was a lack of concrete evidence that there was significant abuse of the IP CTS system. Pash acknowledged the commission did not point to any particular numbers to justify the interim rules, but compiled “what it thought was an adequate record.” The FCC meant for the interim rules to be “prophylactic rules” to guard against a potential trend, he said. It appears the FCC “went on a hunch” but “there needs to be some evidence” of misuse, Griffith said. Sorenson believes “there is absolutely no reason to think that anyone who doesn’t have a serious hearing problem has ever received a [IP CTS] telephone, certainly not from my client,” Wright said. Almost 100 percent of the people who have received IP CTS phones from Sorenson have a cochlear implant and have certification from a medical professional, he said.

Pash said “this is not going well.” Millett later questioned whether Wright “actually need[s] any rebuttal time.” Wright said in his response that Griffith had “better phrased the problem here than I had. For each of these sets of rules, the FCC hypothesized misuse.” Wright declined to comment on how the oral arguments went during a subsequent interview, but noted that he felt “the court was very well prepared.”