Inmate Calling Service Providers Against FCC Regulation of Intrastate Rates

The commission already adopted “arbitrarily low” per-minute rates for interstate calling, creating “an unworkable one-size-fits-all” nationwide framework, Global Tel*Link said (http://bit.ly/1idXn8q). Its additional proposals, making the rate structure permanent and extending that structure to intrastate ICS rates, “would further perpetuate the problems inherent in the commission’s interim rate structure,” GTL said. Security needs vary by size and location of facility, level of security needed, and length of incarceration, GTL said. “Both the FCC’s previous and proposed actions will affect every contract between GTL and its correctional facility customers regardless of whether the FCC intends to interfere with these individual customer arrangements or not."

The FCC already overstepped its authority when it adopted rules capping interstate rates, said Securus. “But the Commission now proposes to go further, by prohibiting exclusive contracts, overwriting correctional policies about inmate telephone usage, and interfering in the ability of correctional agencies to block calls,” Securus said. “The Communications Act in no way empowers the Commission to take these actions."

Then there are pending lawsuits, which ICS providers say complicate matters. “The rate caps, safe harbors and cost-based rules that the Commission has already adopted are presently subject to at least four appeals,” including a challenge in the U.S. Court of Appeals for the D.C. Circuit, said CenturyLink (http://bit.ly/1d4c4Hh). CenturyLink said it believes the prison calling order may be overturned because it failed to adhere to requirements of the Administrative Procedure Act. “Extending comparable new rules to intrastate ICS calling would pose an even greater overreach of Commission authority.” Securus called the FNPRM a “hasty follow-on proceeding” that “seems ready to run headlong into the same jurisdictional problems and errors that have made the previous rules vulnerable to reversal” (http://bit.ly/JZb4Kt).

Notwithstanding the lawsuit, the commission lacks authority over all intrastate calling services, including inmate services, said Securus. “The Supreme Court has been clear and consistent in prohibiting the FCC from setting rates on intrastate items, and Section 276, a provision devoted solely to the provision of payphone equipment, cannot elevate the Commission’s authority to something beyond Sections 201 and 202.”

Even if the commission had “theoretical authority” to regulate intrastate rates more broadly under Section 276, it would be “highly imprudent” for the commission to do so, said CenturyLink. The likely consequence of such an action would be less communication between inmates and their families, the telco said: ICS providers could be unable to recover the cost of site commissions in their rates, and might stop offering service to correctional institutions that charge site commissions.

Pay-Tel was the only ICS provider to say the commission has jurisdiction over intrastate ICS rates (http://bit.ly/1jBzJUQ). Section 276 gives the FCC broad authority to preempt state requirements and regulate unfair intrastate rates and practices, it said. “Not only can the Commission regulate intrastate ICS rates, insofar as necessary to ensure that ICS providers are fairly compensated, it must do so in order to fulfill its statutory mandate and comply with federal law,” Pay-Tel said. “Continued Commission failure to preempt below-cost, state-imposed rate caps -- notwithstanding its authority to do so -- would result in a scheme in which Pay Tel and other ICS providers exclusively serving jails fail to recover their aggregate costs, in violation of Section 276’s ‘fair compensation’ requirement."

Like most of the ICS providers, NARUC rejected the idea of the FCC setting intrastate rates. “Individual States are in the best position to oversee and investigate matters relating to ICS INTRAstate rates and service quality,” the association said, emphasis included (http://bit.ly/1eAIP1W). “Any additional federal orders are unlikely to survive judicial review and are likely to undermine existing State actions to address this issue.” State authority in this context is clear, NARUC said, and many states have already addressed the issue by limiting local calling rates, commissions and connection fees. Continued FCC proceedings focused on intrastate rates could slow recently opened dockets in states like Alabama, Louisiana, Massachusetts and Minnesota, NARUC said.

Public interest and prisoners’ rights groups uniformly supported the commission’s proposed entry into local ICS rate regulation. “In our experience, the cost of local telephone calls to jails, prisons, and immigration detention centers are just as problematic as long-distance rates,” said a letter signed by the ACLU, NAACP, Public Knowledge, National Consumer Law Center and more than two dozen other organizations (http://bit.ly/1d4gjTl). “Much of the record which supported lowered rates for long-distance calls also support lower local rates: the unjustness of the extreme financial burden on friends and family members who have transgressed no laws, the flaws in the market system which do not permit competition to bring down prices, and negative impact on recidivism and reentry when inmates are deprived of the relationships they require to thrive once they are released into society."

The deaf and hard of hearing community in particular faces unique challenges, the public interest groups said. “People with hearing and other disabilities have the same rights to communicate as hearing people,” they said. “For an inmate who has communication disabilities, connection with the outside world can be critical.” The groups asked the FCC to ensure disabilities communities are directly involved in any decisions the commission makes in regard to their needs. The ACLU’s National Prison Project submitted its own letter with 28,000 signatures of people “who support an affordable in-state cap on prison phone calls” (http://bit.ly/1fVRPMv).

The attorney for Martha Wright, the Washington, D.C., grandmother who asked the FCC a decade ago to regulate high ICS rates, urged the commission to “take the next step” and apply its regulations to intrastate ICS calls (http://bit.ly/1fVXJNv). “In light of the technology used to route all ICS calls to out-of-state centralized calling centers, there is no practical difference between a call made to an address across the street from the prison, or to someone across the country,” said Wright’s attorney, Lee Petro of Drinker Biddle.