FCC Approves Inmate Calling FNPRM, Despite Concerns

Neither Pai nor O'Rielly denied the importance of making it easier for inmates to communicate with friends and family, in remarks at the commission’s meeting. But O'Rielly said Section 276 of the Telecommunications Act deals only with the agency's authority over payphones. O’Rielly also said he couldn't back rate regulation without evidence greater competition wouldn't produce lower rates.

The commission decided to seek comment, at O'Rielly's suggestion, on what measurers could be taken to promote competition among ICS providers. He also praised the more “neutral” tone of the final FNPRM. The initial draft had proposed making permanent the interim interstate rate caps approved in last year's ICS reform order, as well as setting intrastate rate caps, barring the payment of commissions by ICS providers to facilities, and putting caps on ancillary fees. The FNPRM's final version only sought comment on those ideas. Attorneys involved in the debate did not see the shift as significant. Pai said he was thwarted from seeking comment on the commission’s legal authority as well as on data showing the costs of providing calling services are higher for jails than for prisons.

Calling the final version a “balanced approach," Commissioner Mignon Clyburn said she would have preferred the item seek comment on even lower rate caps than those mentioned in the FNPRM. The final version was not made public on Friday. The item seeks a response on among other things, rate caps proposed by Global Tel*Link, Securus Technologies and Telmate, and an alternative proposal by Pay-Tel, a commission official told us. Despite agreeing to the change and adding O’Rielly’s question, Clyburn said she couldn't support including a question about the agency's legal authority.

Pai said he could not “support rules that lack a solid legal foundation,” and said he dissented to last year’s order as well because he could not "countenance its legal flaws.”He noted that U.S. Court of Appeals for the D.C. Circuit in January stayed portions of the 2013 order. Pai said he was "shocked and disappointed” at having his request to seek comment on legal authority denied, and said, “if we refuse to consider the limits of our authority, how can we possibly agree on a solution that comports with the law.” Kalpak Gude, formerly the head of Wireless Bureau’s pricing policy division and now Media Bureau associate chief, told reporters that the outcome of the court case should not affect any further reforms approved by the commission. He also said there is opportunity in the FNPRM to comment on the agency’s legal authority.

The agency said in last year’s FNPRM that Section 276 directs the commission to regulate the rates for intrastate and interstate payphone services and defines such services to include "the provision of inmate telephone service in correctional institutions, and any ancillary services.” Clyburn and FCC Chairman Tom Wheeler on Friday expressed confidence in the agency’s authority. “Congress’s directive could not be more clear here,” Clyburn said. Wheeler said the “mandate is clear.”

Pai and O'Reilly's concerns over legal authority echoed those by NARUC and the Alabama Public Service Commission that it does not provide the agency authority, including the ability to pre-empt state intrastate rates.

The FNPRM would build on the 2013 reforms, Clyburn said. The interim interstate rate cap, which was not stayed by the D.C. Circuit, led to a 70 percent increase in calls at some locations as it “brought scores of families closer to parity with other Americans, who are able to call anywhere in our country without making critical economic trade-offs,” she said. More regular contact between inmates and families “can make a real difference when it comes to maintaining community ties, promoting rehabilitation, and reducing recidivism,” Clyburn said. “Two point seven million children, who have committed no crime, are being punished by an unjust and unreasonable inmate calling structure.” Clyburn said, “I believe that when history is written, we will be able to say we did good and cleaned up questionable charges and usurious rates,” said Commissioner Jessica Rosenworcel.

Still, Clyburn said she’s been disappointed more states haven’t followed the FCC lead and set intrastate rate caps. Intrastate calls, which make up a majority of inmates calls, have become more expensive, as have ancillary charges and commission payments. “In my 16 years as a regulator, this is the clearest, most egregious case of market failure that I have seen. Instead of getting better, rates and fees for consumers are getting more onerous,” Clyburn said

Parties in the debate have staked out differing positions, with ICS providers and inmate advocates divided over where to set the rate caps. “It is gratifying after all these years to see the FCC continuing the push to eliminate the exorbitant rates and fees that prisoners’ families must pay to stay in touch during times of incarceration,” said Paul Wright, executive director of the Human Rights Defense Center, in a statement. “We encourage the FCC to take all steps necessary to ensure that inmate calling services are accessible for all prisoners and their families, by ordering permanent rate caps on prison and jail phone calls, eliminating per-call connection fees, prohibiting site commissions, and eliminating ancillary fees that must be paid to maintain inmate calling accounts." Pay-Tel is “pleased to see that the matter is moving forward,” said Brooks Pierce attorney Marcus Trathen, who represents the company. Other ICS providers did not comment Friday.