At its Open Meeting this morning, the FCC voted to cap interstate inmate calling rates. As we understand it, the Order will:
- Require that all interstate inmate calling rates, including ancillary charges, be based on the cost of providing the inmate calling service.
- Adopt an interim rate cap of $0.21 per minute for debit and prepaid calls and $0.25 per minute for collect calls.
- Adopt a safe-harbor, under which rates of no more than $0.12 per minute for debit and prepaid calls ($1.80 for a 15-minute call) and $0.14 cents per minute for collect calls ($2.10 for a 15-minute call) will be presumed just, reasonable, and cost-based.
The costs of providing inmate service will include the costs of modern security features such as advanced mechanisms that block calls to victims, witnesses, prosecutors, and other prohibited parties; biometric caller verification; real-time recording systems; and monitoring to prevent evasion of restrictions on call-forwarding or three-way calling. They WILL NOT include site commissions, and site commissions may not be included in any interstate rate or charge.
The FCC appears to contemplate that carriers will file some sort of rate case to justify that rates above the cap or between the cap and the safe harbor are in fact cost justified. The intention is to allow ICS providers to recover their costs of providing service plus a reasonable rate of return.
The Order will also:
- Clarify that inmates or their loved ones who use Telecommunications Relay Services because of hearing and speech disabilities may not be charged higher rates and cannot be charged additional fees to be connected to the relay service;
- Require a mandatory data collection;
- Include an annual certification filing; and
- Contain enforcement provisions to ensure compliance.
The Order will be accompanied by a Notice of Proposed Rulemaking seeking comment on a number of issues, including reforming intrastate rates and practices and call blocking.
Commissioner Pai voted against the Order. While he agreed there was a market failure and that some form of rate caps were needed, he said that the Order would be difficult to administer and would impose rate of return regulation on ICS providers. He favored a different approach that would adopt two rate caps: one for prisons and one (apparently higher) for jails. (At the Open Meeting, he did not specify the rates he had in mind.)
Commissioner Pai was also concerned that, as adopted, the safe harbor was not really a safe harbor because it will only be available if the rates charged at all facilities served by a single ICS provider are at or below the safe harbor rates. If the rates at even one facility were above the safe harbor, a provider would not be able to have any of its rates, even those at or below the safe harbor, considered just and reasonable. Moreover a provider could still be subject to FCC complaint proceedings that would require it to cost justify rates that are at or below the safe harbor through some type of rate case.
TMI will provide more details once the text of the Order is available. Link to FCC News Release