CenturyLink became the latest inmate calling service provider seeking a stay of the FCC’s rate caps on domestic ICS calls, pending judicial review on the merits of an underlying legal challenge. “A stay is warranted because the rate caps will prevent CenturyLink from recovering its reasonable cost of providing ICS to multiple facilities in several jurisdictions,” the company said in a petition to the commission in docket 12-375. The caps thus violate Communications Act requirements, including that ICS providers be “fairly compensated,” and will cause the CenturyLink irreparable harm, the company said. The Martha Wright Petitioners asked the FCC to give parties until Wednesday to respond to the stay request. The CenturyLink petition was dated Jan. 22 but not received by the FCC and posted electronically this week until Wednesday. CenturyLink said expeditious review is particularly important because the commission could rule soon on the stay petitions of other ICS providers; in fact, the Wireline Bureau denied those petitions Jan. 22 (see 1601220040). Global Tel*Link and Securus Technologies have since asked the U.S. Court of Appeals for the D.C. Circuit for a stay of various ICS rules, including the rate caps (see 1601220040). Separately, Customer Teleconnect, a wholesale telecom provider, asked the FCC to reconsider its order to the extent it "purports to rely on" the company's cost data as an example of an "efficient" ICS provider. "The cost information submitted in good faith by Custom Teleconnect represents the costs that the company incurs to provide a limited number of wholesale calling functions that may be used by ICS providers, but these functions ... do not represent a complete end-to-end ICS service," the company said in a letter posted in the docket. The FCC's "extensive reliance" on the cost information "is in error and misconstrues" the data, which doesn't reflect the full cost to provide inmate calling services, it said.
Global Tel*Link and Securus Technologies sought a court stay of certain FCC inmate calling service (ICS) rules, pending further judicial review of a recent order, which the agency refused to stay (see 1601220040). The commission imposed “rate caps that the FCC admits are below providers’ lawfully incurred costs,” GTL said in a motion Wednesday to the U.S. Court of Appeals for the D.C. Circuit (Global Tel*Link v. FCC, No. 15-1461 and consolidated cases). GTL asked that the rate caps be stayed before their effective dates -- March 17 for prisons and June 18 for jails. It said it was likely to prevail on the merits of the underlying case, an initial prong in stay reviews. The rate caps don’t allow ICS providers “to recover the cost of site commissioners they are required to pay [to correctional authorities] -- even though the FCC recognized that those payments are both a substantial cost incurred by ICS providers and permitted by federal law,” GTL said: The FCC "acknowledged that, if commissions are taken into account, the rate caps are below cost.” The company said the rate caps were below cost even without factoring in the site commissions, and it said the agency lacked authority to cap intrastate ICS calls. GTL said the balance of equities also favors a stay because, first, it would otherwise suffer irreparable harm from being forced to charge “unlawful, confiscatory rates" and "the revenues lost cannot be recovered.” The public would also be harmed if the rate caps lead to the loss or reduction of service, it said, while there will be “no cognizable harm” if a stay is imposed. “The court will now set a calendar for briefing the matter, perhaps a month, and then a decision will be issued,” said a GTL spokesperson. “Briefing on the merits of the appeal will occur sometime after, once the court sets a calendar, probably spring into early summer, then oral arguments will take place in the fall and a decision to follow." In its motion, Securus sought a stay of various FCC fee restrictions, its site commission definition and certain reporting requirements. "This new regime will dramatically reduce Securus's rates for several services and may prevent their continued provision," said Securus, which also made detailed arguments in favor of a stay. Others may join the stay effort, GTL said.
Global Tel*Link targeted FCC exclusion of site commission costs as central to its court challenge to the agency's inmate calling service rate restrictions (see 1510220059). The commission order "(i) imposed tiered rate caps for ICS in prisons, jails, and other correctional facilities based on the FCC’s calculation of the cost of providing ICS; (ii) excluded from its calculation of the cost of providing ICS the site commissions ICS providers are required to pay correctional facilities for the right to provide service; (iii) applied its rate caps to both interstate and intrastate ICS calls," GTL said in a statement of legal issues filed Monday with the U.S. Court of Appeals for the D.C. Circuit (Global Tel*Link v. FCC, No. 15-1461 and consolidated cases). GTL said the issues include whether the decision to exclude site commissions from its calculations caused the FCC to set rate caps at levels that (1) prevent ICS providers from recovering their acknowledged costs, (2) are confiscatory and (3) are arbitrary and capricious and otherwise unlawful. GTL also questioned the legality and constitutionality of the rate caps notwithstanding the exclusion of site commission calculations, and whether the FCC had the authority to reduce and cap intrastate ICS rates. In a separate statement, GTL asked for more time to propose a briefing format, since two other parties, Securus and Telmate, have filed legal challenges and the time for filing hasn't closed. The FCC recently denied ICS provider requests for a stay of the order; the providers have said they will seek a court stay (see 1601220040).
The FCC denied inmate calling service provider requests that it stay an order restricting domestic ICS charges (see 1510220059). Global Tel*Link, Securus Technologies and Telmate had asked for an FCC stay pending judicial review of the order on its merits at the U.S. Court of Appeals for the D.C. Circuit. “The Petitioners have failed to meet the test for extraordinary equitable relief,” said Wireline Bureau Chief Matt DelNero in a 40-page order defending the commission’s actions. DelNero said the FCC is likely to prevail in court on the merits because its rate caps, ancillary fee restrictions and other measures are lawful. He also said the petitioners wouldn't suffer irreparable injury without a stay while others and the public interest would be harmed by a stay. "I don't think I have ever seen an FCC stay order which is as comprehensive and thoroughly considered as this one," said Andrew Schwartzman, senior counselor at the Georgetown Institute for Public Representation, in an email Friday. "The decision is a strong defense of the Commission's action. In addition, it does a very good job of explaining why the necessary analysis of irreparable harm weighs in favor of leaving the status quo intact." The FCC denial had been expected by some ICS provider critics (see 1512300041), including Schwartzman who recently said, “They are just getting their ticket punched so they can seek a judicial stay” (see 1512230034). “Securus will move for a stay at the D.C. Circuit,” confirmed Stephanie Joyce, an Arent Fox attorney who's counsel for Securus. GTL and Telmate didn't comment Friday. Both had said that if the FCC didn't grant them a stay, they would seek relief in the D.C. Circuit, where two of the underlying legal challenges have already been consolidated (see 1601140068). Schwartzman said in his email Friday that "the usual caveats apply" to making a prediction on court action: "One never knows, especially since one doesn't know who will be on the panel. Etc."
CenturyLink asked to intervene in support of Global Tel*Link's court challenge to an FCC inmate calling service order and in cases consolidated with it. The order restricting ICS rates will require providers such as CenturyLink to operate at a loss, the telco said in a motion Friday to the U.S. Court of Appeals for the D.C. Circuit. CenturyLink said its harm would be redressed by GTL's challenge. The D.C. Circuit Thursday consolidated GTL's case with a Securus Technologies case (Global Tel*Link v. FCC, No. 15-1461, and Securus Technologies v. FCC, No. 15-1498) (see 1601140068). Both companies and Telmate have asked the FCC to stay its rules pending further judicial review.
Global Tel*Link and Securus challenges to the FCC's inmate calling service order were consolidated in a one-sentence order issued Thursday by the U.S. Court of Appeals for the D.C. Circuit on its own motion (Global Tel*Link v. FCC, No. 15-1461, and Securus Technologies v. FCC, No. 15-1498). The companies have asked the FCC to stay the order pending judicial review.
The FCC teed up a Global Tel*Link waiver petition seeking an extra 90 days to implement a "no minimum balance requirement" for prisons so it corresponds with the implementation deadline for jails -- duties that were imposed in the agency's inmate calling service order (see 1510220059). The current ICS provider deadline for implementing the requirement for prisons is March 17. "If the waiver were granted, GTL would have until June 20, 2016, to comply with rule 64.6100(a) for both prisons and jails," the Wireline Bureau said in a public notice Wednesday in docket 12-375. Initial comments on the petition are due Jan. 25, replies Feb. 1. The rule says "no provider shall institute a minimum balance requirement for a Consumer to use Debit or Prepaid calling."
Global Tel*Link took some heat after apparently collaborating with Virginia to cut inmate calling service rates well below recent FCC rate caps that the ICS company is legally challenging. The Human Rights Defense Center (HRDC) called FCC attention to GTL comments about partnering with Virginia in lowering ICS rates to four cents per minute, given ICS provider arguments that the FCC's rate caps of 11 to 22 cents per minute were set below their costs (see 1510220059). “The key thing is they’re signing a contract for 4 cents per minute, when they’re arguing to the FCC, and about to argue in court, that the FCC’s rate caps of 11 cents a minute and higher make it financially impossible for them to make a profit -- which is a lie,” HRDC Executive Director Paul Wright told us Monday.
Securus claimed two victories in recent proceedings with the Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) on patent invalidation filings by Global Tel*Link (GTL), Securus said in a news release Wednesday. The PTAB upheld the validity of Securus' patents -- one for a system of controlling inmate access to a telephone carrier network by using VoIP data packets, and another for methods for processing VoIP calls originating within a prison -- that were challenged by GTL, Securus said. Securus CEO Richard Smith said he's "pleased" the PTAB viewed the "key" patents as being valid. GTL didn't comment.
Securus claimed two victories in recent proceedings with the Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) on patent invalidation filings by Global Tel*Link (GTL), Securus said in a news release Wednesday. The PTAB upheld the validity of Securus' patents -- one for a system of controlling inmate access to a telephone carrier network by using VoIP data packets, and another for methods for processing VoIP calls originating within a prison -- that were challenged by GTL, Securus said. Securus CEO Richard Smith said he's "pleased" the PTAB viewed the "key" patents as being valid. GTL didn't comment.