Site Commission Treatment Key Dispute in FCC's Proposal to Raise ICS Rate Caps
Securus joined Pay Tel Communications in asking the FCC to clarify a proposal to raise inmate calling service (ICS) rate caps by ensuring the increases would account for correctional facility ICS costs and no site commission would be allowed. But Inmate Calling Solutions said it supported the agency's proposed rate caps only if site commission payments to prisons and jails aren't restricted. CenturyLink asked the FCC to equalize the rate caps for prisons and large jails and allow for state-mandated site commissions. Michael Hamden, the criminal defense attorney whose petition for reconsideration helped spark the agency's latest proposal, continued to press for curbing site commissions.
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Parties were making final arguments before lobbying restrictions took effect a week before a planned Thursday FCC vote on a draft order (see 1607140087). The draft proposes raising the rate caps for debit and prepaid ICS service in prisons and jails from 11-22 cents per minute to 13-31 cents per minute, with rate caps the lowest for federal or state prisons and ascending for large jails, midsize jails and small jails. The increases are intended to account for the "legitimate costs" of facilities, said an agency fact sheet. Pay Tel recently urged the FCC to modify its draft order to make clear "that a per-minute fee, not to exceed the additive, may be collected by ICS providers and remitted to facilities in lieu of other payments" (see 1607260038).
Securus and Pay Tel noted Hamden had petitioned the FCC to replace site commissions with a "modest, mandated cost-recovery mechanism," and recently had said "meaningful, lasting reform cannot be achieved without the prohibition or strict limitation on site commission payments" (see 1607250027). But "the commission, appears poised to take neither course and thus will not grant any of the relief Mr. Hamden sought," the two ICS providers said in a filing posted Friday in docket 12-375. They backed Hamden's call for a specific cost-recovery rate element to replace site commissions, which he said would encourage increased minutes of use, drive down ICS rates over time and stimulate ICS business. "This concept, as Mr. Hamden noted, has been endorsed not only by ICS providers but also by a state regulator, some inmate advocates, and representatives of correctional facilities," they wrote.
Securus and Pay Tel said the FCC draft order effectively would add 2-9 cents/minute to the ICS rate caps the agency adopted in 2015, but the fact sheet didn't make clear the additional amounts would specifically address Hamden's proposed cost-recovery element. "Accordingly, we urge the Commission to effectuate the intent of the petition for reconsideration by making clear in the forthcoming Order that the rate cap additive takes into account reasonable and legitimate costs that jails and prisons may incur in providing access to ICS and that ICS providers are authorized to remit amounts not to exceed the respective additives to correctional facilities as compensation for such costs," they wrote.
For instance, Securus and Pay Tel said the proposal to raise the rate cap for debit/prepaid calls in prisons from 11 cents/minute to 13 cents/minute should be amended to clarify that the cap includes "up to a maximum of 2 cents per minute for facility cost recovery fees" or site commissions. "No other site commission payment can be remitted to any facility other than the funds obtained via the cost recovery mechanism proposed herein," they recommended as language. They noted they didn't agree the proposed rate caps were lawful but said the mechanism at least would provide some certainty and uniformity. ICS providers convinced a court to stay the current rate caps of 11-22 cents/minute pending further review of their underlying legal challenges (see 1603070055).
Inmate Calling Solutions opposed efforts to curb site commissions. It backed the proposed rate caps "so long as the new rules do not limit how investors utilize their profits, such as sharing profits with facilities in the form of site commissions or providing other technologies beyond what is necessary to provide secure inmate calling," said an ICSolutions filing on meetings with FCC officials. It said any FCC effort to regulate such decisions would be "infeasible, unsupported by precedent" and exceed its authority. Providers seeking to curb site commissions or other technologies "are likely doing so for the purpose of eliminating competition," it said.
CenturyLink again said the FCC's proposed prison rate caps would be unlawful, given the "demonstrated costs of providing service at some institutions, even without applying commissions that may be required by state law or contract." In a filing on an FCC meeting, the telco added that "a cap for prisons should be no lower than for large jails, and any rules should provide a waiver for higher rates due to commissions mandated by state law."
Hamden responded to previous filings, including from CenturyLink (see 1607270047). No reliable data on facility ICS costs was publicly submitted in the docket, he said in a letter. He said there's no question the FCC can regulate ICS contracts, and the FCC has clear authority to pre-empt state requirements that are inconsistent with its regulations. Hamden also responded in detail to various criticisms by Network Communications International and repeated his call for prohibiting or strictly regulating site commissions.