FCC Commissioners Ajit Pai and Mike O’Rielly dissented today from the Commission’s decision to set caps on charges for interstate and intrastate inmate calling services (ICS), arguing that the agency’s action exceeds its legal authority. In a change from the draft ICS items as originally circulated (TRDaily, Sept. 30), the Wireline Competition docket 12-375 order and third further notice of proposed rulemaking (FNPRM) adopted at today’s Commission meeting do not apply the rate caps to international ICS calls, and instead seek further comment on the possibility.
Similarly, mandatory data collections from ICS providers that were in the draft order have become proposals for further comment in the third FNPRM. In addition, while the new rate caps would take effect for ICS providers at prisons 90 days after publication in the “Federal Register,” as the original draft order would have required, ICS providers at jails have additional time under the order as adopted. The rate caps would not take effect at jails until six months after the “Federal Register” notice.
The ICS item follows a 2013 order setting an interim cap of 21 cents per minute on interstate ICS rates, which then acting Chairwoman Mignon L. Clyburn and Commissioner Jessica Rosenworcel adopted over the dissent of Commissioner Ajit Pai. At the time, the nominations of Tom Wheeler and Mike O’Rielly were pending before the Senate.
The text of the order and FNPRM was not available at TRDaily’s news deadline. The Commission granted staff editorial privileges to make minor changes over the objection of Commissioner O’Rielly.
Last year, with only partial agreement by Commissioners Ajit Pai and Mike O’Rielly, the FCC voted to seek input on additional ways it could address high ICS rates, including a permanent rate cap for intrastate as well as interstate ICS services and a prohibition on payments by providers to prisons and other facilities for the privilege of providing services to inmates and their families, known as site commissions.
Today, Chairman Wheeler gave credit to Commissioner Clyburn for pushing ICS reform action forward and said that he expected she would “keep my feet to the fire” on addressing the issues raised in today’s FNPRM. Commissioner Clyburn, in turn, said that the Chairman had kept his pledge to her that he would move forward on the ICS proceeding, and said with respect to today’s FNPRM that she likes to finish what she starts. During her statement, she also thanked Commissioner Rosenworcel for her support on the 2013 order, when the two formed a majority on that item over the dissent of Commissioner Pai.
In most respects the order and FNPRM reflect the fact sheet released when the draft item went on circulation (TRDaily, Sept. 30).
The tiered rate cap structure for debit and prepaid calls adopted today mirrors the structure set out in the fact sheet: 11 cents per minute for calls at state or federal prisons; 14 cents per minute for calls at jails with 1,000 or more inmates; 16 cents per minute for calls at jails with 350 to 999 inmates; and 22 cents per minute for calls at jails with 349 or fewer inmates. As previously stated, rate caps for collect calls are slightly higher to start and will be phased down to the same caps as debit and prepaid calls over a two-year transition period.
Restrictions on ancillary fees are as previously announced: $3 for automated payment by phone or website; $5.95 for payment through a human agent; and $2 for receiving a paper bill. All other ancillary service charges are prohibited, but mandatory taxes and regulatory fees may be passed through with no mark-up.
The order deals with site commissions paid by ICS providers to jails or prisons by excluding them from the costs the agency considered in setting rate caps, while not prohibiting the payment of site commissions.
Flat-rate calling is banned, and the order “requires providers to offer discounted rates for telephone relay service (TRS) calls for inmates with communications disabilities,” reminds correctional institutions that they have an “obligation to make TRS available to people with communications disabilities,” and “encourages jails and prisons to allow commonly used forms of TRS and requires them to report service quality issues.”
As the draft item would have done, the adopted order commits the FCC to a review in two years to consider if additional changes are needed.
The third FNPRM seeks comment on rate caps for international ICS; ways to promote ICS competition that would reduce the need for regulation; video visitation and other advanced ICS offerings; “revenue-sharing agreements” (or site commissions) and possible additional reforms; and mandatory data collections and submissions of contracts by ICS providers.
Asked by a reporter after the meeting whether he was concerned that arguments the agency had exceeded its authority could mean a court challenge, Chairman Wheeler said, somewhat mockingly, “Oh golly. The rule at the FCC is ‘make a decision, go to court.’ Everybody sues us about everything.”
In his dissenting statement, Commissioner O’Rielly opined that the two statutory provisions on which the FCC relies for authority in the order—sections 201 and 276 of the Communications Act, as amended—do not support its action. Section 276, which was added by the 1996 Telecommunications Act, was intended “to protect payphone providers that had been unable to receive fair compensation for their service from long distance carriers, or IXCs. It was not meant to give the Commission authority to cap end-user rates,” he said.
And “since Congress addressed inmate calling, however briefly, in section 276—and intentionally chose not to address end-user rates—I do not believe that the Commission can fall back on the general ‘just and reasonable’ language of section 201. We’ve seen this maneuver in other Commission items, including Net Neutrality and various enforcement actions, and it needs to stop. If section 201 were as powerful as the Commission seems to believe, then why did Congress spend so much effort enacting the provisions of the 1996 Act? The Commission continues its mockery of the principles of legislative construction to achieve its end goals,” Commissioner O’Rielly added.
He also criticized the Commission for trying “to mash together bits and pieces of different provisions in an attempt to create a new unsubstantiated legal standard: just, reasonable, and fair rates” by combining the “just and reasonable” requirement of section 201 and the “fair compensation” requirement of section 276. “The Commission is governed by a statute, not an optional menu. We don’t get to order a la carte and make substitutions at will,” he added.
Commissioner Pai did not release the written dissent that will accompany the text of the order. In his oral statement, he said briefly that he believed the regulations adopted in today’s order are “unlawful.” He focused instead on the issue of contraband cellphones in prisons (see separate story).
In her statement, Commissioner Clyburn said that “each of us is paying a heavy price for what is now a failed, predatory pricing regime.” She cited the increased rates of recidivism associated with inmates’ lack of contact with the outside world during their incarceration.
Commissioner Clyburn said that some may question why the rate caps are not lower, given that some states have implemented lower rates on their own. She said that the caps adopted reflect information in the docket and that states are still free to impose lower rates.
She also said that she is “suffering heartburn” over site commissions, which today’s order does not eliminate, but, she added, “this too is an area where states must do their part and take a hard look at their site commission practices and how such payments impact prices, service and the reverberating impact on the community.”
In her statement, Commissioner Rosenworcel also cited the societal costs of incarceration, both in direct maintenance and operation of prisons and in the impact on 2.7 million children with a parent in prison.
The National Sheriffs’ Association said it was “shocked and disappointed” by the FCC’s action.
“The FCC has ignored the very real concerns of sheriffs who operate more than 80% of jails across this country. Criminals who are incarcerated sometimes continue their criminal enterprises from jail or prison. Anything from organized crime to gang affairs to harassment or intimidation of witnesses. All of those things contribute to the security measures and costs necessary to ensure the safety of the facility and the public,” said Jonathan Thompson, executive director and chief executive officer of the National Sheriffs’ Association. “The rate caps established by the FCC will force many jails to limit, or eliminate altogether, access to phones because they simply cannot afford the cost of the service.”
ICS solutions provider Securus Technologies also criticized the FCC’s action, saying it might seek a stay and appeal the decision to the U.S. Court of Appeals for the District of Columbia Circuit.
Richard Smith, chief executive officer of Securus Technologies, Inc., said, “The order announced, if implemented, will cause smaller and medium-sized prisons and jails to lose the ability for inmates to communicate with friends and family. The lives of witnesses, judges, victims and others will be lost due to the inability to provide the technology that prisons and jails need to keep us safe. In addition, the financial stability of the Inmate Telephone Systems (ITS) sector is clearly threatened.”
Some Democrats in Congress, consumer advocates, and Verizon Communications, Inc., however, welcomed the decision. Sen. Cory Booker (D., N.J.) said, “Extreme phone rates that exponentially exceed regular market rates seriously burden the recovery and rehabilitation process, and end up costing us all more in the long run. I applaud Commissioner Clyburn and Chairman Wheeler for their leadership on this important issue at the federal level and commend my state, New Jersey, which has already taken measures to curb phone rates for incarcerated individuals. While today’s action marks meaningful and important change, there must be continued oversight over our prisons to ensure inmates can maintain ties with critical services and with their families.”
Harold Feld, senior vice president at Public Knowledge, said, “Congress created the FCC in part to protect all Americans—particularly the poor and the vulnerable—from the power of abusive telecommunications monopolies.” Mr. Feld said that the FCC’s action “testifies to the power of the people to demand—and achieve—social justice. It testifies to the power of government and federal agencies to protect the vulnerable. We commend the FCC for completing this proceeding in the face of lawsuits and political pressure from those who profit from these abusive prison phone rates. In particular, we commend Commissioner Clyburn’s undaunted courage and determination to bring this process to a close and bring relief to the families of the millions of Americans currently incarcerated.”
House Energy and Commerce Committee ranking minority member Frank Pallone Jr. (D., N.J.) said, “Today, the FCC continued its efforts to curb the costs to families of prison inmates that often have to pay too much to stay in touch. My home state of New Jersey has led the way on this, and I am pleased that the Commission has taken another important step today to ensure fair phone rates for prisoners across the country.”
Sen. Patrick J. Leahy (D., Vt.), the ranking minority member of the Senate Judiciary Committee, said, “We know the toll it takes on children when they are denied regular contact with incarcerated parents. We also know that regular contact with family and loved ones reduces recidivism. Today’s FCC action will help ensure that families are not forced to choose between their basic needs and a phone call with their loved ones.
“I applaud the tireless leadership of Commissioner Clyburn on this issue. She understands that this is about families who are trying to make the best of a difficult situation. She has given a voice to those who need it most. I am proud to stand in support of Commissioner Clyburn’s work to reduce extortionate inmate calling rates,” Sen. Leahy added.
Donna Epps, VP–public policy and strategic alliance at Verizon, wrote in a blog post that “the FCC came to the aid of millions of families struggling to maintain contact with incarcerated loved ones. By capping inmate calling rates and limiting fees, the FCC took another important step toward easing the burden on families to sustain supportive relationships with inmates. There are some issues that transcend traditional political and public/private divides. This is one of them. While Verizon strongly believes that competition and flexible policies lead to better outcomes for consumers than proscriptive regulation, in this case the market is broken. Inmates’ families lack any choices for service.” —Lynn Stanton, lynn.stanton@wolterskluwer.com
Courtesy TRDaily