The Order requires inmate phone providers to charge cost-based rates to inmates and their families and establishes “safe-harbor” rates at or below which rates will be treated as lawful unless the FCC issues a finding to the contrary. A provider’s rates will be presumptively lawful if: (1) none of the provider’s rates for collect calling exceed $0.14 per minute at any correctional institution, and (2) none of the provider’s rates for debit calling, prepaid calling, or prepaid collect calling exceed $0.12 per minute at any correctional institution. A provider’s rates will be considered consistent with this requirement if the total charge for a 15-minute call, including any per-call or per-connection charges, does not exceed the appropriate rate in (1) or (2) for a 15-minute call. In addition, the FCC set an interim hard cap on ICS providers’ rates of $0.21 per minute for interstate debit, prepaid calling and prepaid collect calls, and $0.25 per minute for collect interstate calls. A provider’s rates will be considered consistent with this requirement if the total charge for a 15-minute call, including any per-call or per-connection charges, does not exceed $3.75 for a 15-minute call using collect calling, or $3.15 for a 15-minute call using debit calling, prepaid calling, or prepaid collect calling.
The safe harbor rate levels and rate caps were based on data and cost studies presented by parties and/or taken directly from ICS provider service contracts in the record, without exclusions for unrecoverable costs or adjustments to any inputs. A 15-minute call was used as the basis for the calculations. The FCC said the cap levels were a “conservative estimate of the levels under which all ICS providers could provide service.” A wavier process will also be available “to account for any unique circumstances.”
In addition to the immediate rate reform, the FCC found that site commission payments and other provider expenditures that are not reasonably related to the provision of ICS are not recoverable through ICS rates and may not be passed on to inmates and their friends and families. The FCC also required that charges for services ancillary to the provision of ICS be cost-based and prohibited special charges levied on calls made using teletypewriter (TTY) equipment or other technologies used to access TRS. Ancillary charges include fees to create, maintain, or close an account with a provider; fees in connection with account balances, including fees to add money to an account; and fees for obtaining refunds of outstanding funds in an account. The FCC will evaluate whether rates are cost-based by relying on historical costs.
FCC WCB Ruling
In a separate order, the FCC’s Wireline Competition Bureau issued a Declaratory Ruling finding that Inmate calling service providers are not allowed to unilaterally block innovative call routing services offered in the broad marketplace. The call routing service at issue is called ConsCallHome (CCH). CCH provides pre-paid VoIP service to customers who wish to communicate with an incarcerated friend or family member. Each CCH customer is assigned a telephone number that is local in the community where the inmate with whom the customer wants to communicate is incarcerated. When an inmate dials the local number assigned to a CCH customer, it is routed to the CCH customer’s designated location via an IP-based network. CCH service thus allows families to avoid the expense of a high-cost long-distance call.
The ruling was issued in response to a petition filed by Securus Technologies, an inmate operator service provider, which argued that CCH was a call diversion scheme and a form of dial-around calling which could lawfully be blocked. It sought a ruling from the FCC on the issue. The FCC said that CCH was a call routing service, not an operator service that could be blocked.
Watch for a TMI Regulatory Bulletin with more details on these issues.