FCC commissioners, despite partisan divisions, approved as expected (see 1410160055) issuing a Further NPRM Friday, seeking comment on a number of inmate calling services (ICS) reforms. Republicans Ajit Pai and Mike O’Rielly concurred in part, and questioned whether the agency has the legal authority to enact rate caps and other reforms.
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Inmate calling service providers battled over the impact of the ICS reforms being considered by the FCC. Securus said in a letter to the commission, made available to us Thursday, that rival Pay-Tel’s reform proposal “is simply an attempt to advance the business objectives of one carrier.”
Pay-Tel Communications submitted an “Ethical Proposal for Reform of Inmate Calling Rates and Fees” to the FCC calling for lower interstate and intrastate calling rates for state and federal prisons than the proposal submitted by Global Tel*Link, Securus Technologies and Telmate, but higher rates for local, county and regional jail calls, according to a comparison of the proposals posted as an ex parte notice Wednesday in docket 12-375 (http://bit.ly/1nd1aXJ). Pay-Tel would cap prison calls at 8 cents per minute, compared with 20 cents per minute under the proposal from other ICS providers, the filing said. The two ICS proposals were submitted as a Further NPRM circulates at the FCC (CD Sept 26 p10). Rates would be capped at 26 cents per minute for jails with an average population of less than 350 inmates, and 22 cents/minute for larger jails, Pay-Tel said. The proposal from the other ICS providers had the same 20 cents/minute cap for jails as prisons. While the Global Tel*Link, Securus and Telmate’s proposed rate caps and ban on commission payments to facilities would take effect 90 days after adoption by the FCC, Pay-Tel would grandfather contract rates and commissions for a minimum of 18 months, the filing said. Among other differences, Pay-Tel called for lower caps on transaction, money transfer and validation fees, said the comparison. Prisons and jails have different costs, so “it doesn’t make sense to have a single cap that applies without regard to the type of facility,” said Brooks Pierce attorney Marcus Trathen, representing Pay-Tel. Grandfathering current contracts would allow facilities to “get beyond the current budget before they are impacted by the new rules,” Trathen said. Securus is evaluating the proposal, said Stephanie Joyce, an Arent Fox communications lawyer representing the company.
Global Tel*Link asked for a 60-day extension on data collection on inmate calling rates, which are due July 17, said a motion posted in docket 12-375 Tuesday (http://bit.ly/1kjjrvp). CenturyLink also requested a 60-day extension, in a motion posted Thursday (http://bit.ly/1lCKEcb). Global Tel*Link “does not routinely maintain the data requested by the Commission, and does not keep its books and records in the format of the Commission’s template spreadsheet or detailed instructions for categorizing and classifying the data,” the company’s motion said. The data collection “calls for extensive, highly detailed information organized in a very specific way, and compiling it will require an enormous amount of work,” said CenturyLink.
The largest inmate calling service (ICS) providers submitted Paperwork Reduction Act (PRA) challenges in response to the FCC inmate calling order. That order required all ICS providers to submit information about their costs to provide interstate, intrastate toll and local service, and associated costs for interconnection fees, equipment investment and forecast data. Annual reporting requirements would add 101 hours per year for each ICS provider to respond, said the FCC. In comments to the Office of Management and Budget, ICS providers called the estimate unrealistically low.
An appeals court granted a partial stay of the FCC prison phone order (CD Aug 12 p1) Monday. The U.S. Court of Appeals for the D.C. Circuit kept in place the interim rate cap of 21 cents per minute for debit and prepaid calls, and 25 cents a minute for collect calls. It put on hold three other sections of the FCC’s rules: the requirement that rates and ancillary services be “cost-based”; low safe-harbor rates that presume charges are reasonable; and the annual reporting requirement.
Inmate calling service providers generally rejected in comments filed Friday the FCC’s proposed foray into regulating intrastate prison calls. They called it an impracticable plan to implement a uniform, national rate structure, in the face of complex security requirements that vary by location. The National Association of Regulatory Utility Commissioners (NARUC) was also against the plan, which it said overstepped agency authority. Public interest groups were for the idea, arguing unjust rates occur just as frequently within state borders as across them.
The FCC Wireline Bureau declined to stay the FCC inmate calling reform order Thursday. Global Tel*Link and Securus, top-two inmate calling service (ICS) providers, had asked the bureau to stay the decision pending judicial review. Bureau Chief Julie Veach said the ICS providers were unlikely to succeed on the merits of their challenge, rejecting arguments that the FCC didn’t provide adequate notice that it contemplated a cost-based rate cap structure (http://fcc.us/17NNM4z). Contrary to their characterization, “the adopted regulatory framework does not constitute traditional rate of return regulation,” which uses a “complex tariff filing process,” Veach said. Generally, the ICS providers also failed to prove the public interest supports grant of their stay petitions, the bureau chief said. Commissioner Mignon Clyburn said she was “pleased that the Wireline Competition Bureau denied requests to indefinitely stay or hold in abeyance reforms to provide just, reasonable and fair rates to inmates and their families.” Clyburn, who was acting chairwoman when the original order was approved, said she looks forward to working with the other commissioners “to adopt permanent rate caps to ensure that inmate calling service phone calls are just and reasonable as required by the statute."
The nation’s two largest inmate calling service (ICS) providers asked the FCC to delay implementation of the prison calling order until they can seek judicial review. Global Tel*Link and Securus argued that in requiring ICS rates to be cost-based, the order imposes what is essentially rate-of-return regulation without warning. That’s contrary to administrative rules that require public notice and comment, they say. Reducing high per-minute calling rates to and from prisons was a major priority for acting Chairwoman Mignon Clyburn, who had been pushing for action since long before she became interim head of the agency.
Securus is coming out swinging in response to the FCC order Thursday (CD Sept 27 p20) requiring phone rates to and from correctional institutions be cost-based. “We're well beyond the letter writing stage,” CEO Richard Smith told us Friday. “This is the ‘file a lawsuit’ stage.” The No. 2 U.S. inmate calling service (ICS) provider hopes to file by mid-November. That would give the court time to consider injunctions and restraining orders with respect to the implementation date -- which, barring judicial action, would be 90 days after publication in the Federal Register.