Martha Wright Seeks Lower Inmate Calling Rate Caps

Wright, whose grandson was imprisoned, and the other plaintiffs also questioned the providers’ call for the agency to eliminate the practice under which correctional facilities demand that providers pay commissions. While providers now favor action on the commissions, Wright and others said the solution is for the providers to stop bidding for contracts requiring commission payments. The companies are asking the FCC “to do what the ICS providers refuse to do on their own -- simply say no to the kickback requirements imposed by the correctional facilities.” The FCC should set a low cap on calling “and let ICS providers and correctional authorities allocate the revenue in any manner they wish,” the filing by Wright, the D.C. Prisoners’ Legal Services Project and Citizens United for Rehabilitation of Errants said.

The U.S. Conference of Catholic Bishops and inmate and civil rights organizations, including the Prison Policy Initiative, backed the idea of banning commission payments raised in the agency’s October Further NPRM (see 1410170047). The rulemaking also asked about making permanent interim interstate calling rate caps, creating intrastate caps, and barring some forms of additional fees charged inmates. “Put simply, all eyes are on the FCC to adopt lasting reform of the abusive practices that have extracted billions of dollars from the poorest families in this country and have led to the self-perpetuating high recidivism rates,” Wright and others said.

The National Sheriffs’ Association and several corrections departments and sheriff’s offices, including the Tennessee and Georgia corrections departments, said eliminating or reducing the commission payments would take away funds used to provide services for inmates, including phone services. Others, including NARUC, opposed pre-empting state authority and setting intrastate rate caps (see 1501120022). ICS providers like Securus backed the rate cap levels providers proposed.

Several opponents of barring commission payments or setting intrastate caps, including the Tennessee corrections department, argued the agency doesn't have authority to act under Section 201(b) or 276(b)(1)(A) of the Telecommunications Act. The sections refer to promoting competition among payphone providers, the Tennessee corrections department said. ICS shouldn't be categorized as a payphone provider because “inmate telephones do not accept any change/coins and process all calls through a sophisticated and intelligent call processing platforms. Payphones … do not warrant all of the indispensable security protocols necessary for inmate telephones in correctional facilities,” the department said.

The FCC does have legal authority because Section 276 directs the agency to regulate “’payphone service' rates, which includes ‘inmate telephone service in correctional institutions, and any ancillary services,’” the Wright comments said. The commission’s authority to pre-empt state requirements that are inconsistent with the agency’s actions was upheld by the U.S. Court of Appeals for the District of Columbia Circuit in Illinois Public Telecommunications v. FCC, the Wright comments said.

Debate Over Payments

Restricting commission payments would “have the effect of reducing the incentive and ability to allow ICS in jails,” the Sheriffs’ Association said. The payment of commissions has "made it possible for even the smallest of jails and jails with the most limited of budgets to allow this labor intensive activity” of providing phone services, the sheriffs said.

The FCC should bar the payments, the U.S. Conference of Catholic Bishops said in a letter to Chairman Tom Wheeler. Instead of seeking “the most qualified bidder with the lowest price,” commission payments “encourage prisons, jails, and detention facilities to hire telephone companies that offer the highest payments (and consequently, the highest prices).” Sheriff’s offices and corrections departments haven't provided “any substantive cost data" showing “significant costs associated with the provisioning of ICS,” the Wright comments said.

The commission’s previous 2013 ICS order barred passing on the cost of interstate commission payments to customers through higher rates. That may lower interstate commissions in the future, Verizon said in its comments. But that could lead to correctional facilities demanding higher intrastate commissions to make up for it, Verizon said. The company said it serves the people inmates call. “It continues to be too expensive for many inmates to stay in regular contact with their friends and families. Prison calling rates need to come down,” Verizon said.

The rate cap of 20 cents a minute for prepaid calls and 24 cents a minute for collect calls, suggested by Global TelLink, Securus and Telmate, would “ensure that all carriers’ average costs are recoverable” and “is based squarely” on the cost data ICS providers submitted to the FCC, Securus said in comments posted Monday. Rates below those “would place ICS carriers in a below-cost situation,” Securus said. Jails and prisons shouldn't have different caps, Securus and Global TelLink said. Global TelLink also backed the rates it proposed in its comments. Telmate didn't file comments, an attorney representing the company said. Another ICS provider, PayTel, said rate caps should differentiate between prisons and smaller jails.

If the agency allows correctional facilities to continue collecting commission payments from ICS providers, the agency should allow the providers to recoup the costs of the payments through higher rates, Securus said. The cost of the commission payments was not factored into the rate proposal, the company said.

There’s no evidence calls cost more than 5 cents a minute to provide, the Wright comments said. Saying costs could be slightly higher for jails than prisons, Wright proposed caps of 8 cents a minute for prepaid calls, and 10 cents a minute for collect calls, for prisons and jails with more than 350 beds. Caps for smaller jails and prisons could be 18 cents a minute for prepaid calls and 20 cents a minute for collect calls, Wright said.

The American Jail Association supports “just, reasonable and fair rates, but “the FCC must assure that those rates are just, fair, and reasonable for all parties, including jails,” the association's comments said.