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D.C. Circuit Court Partially Stays FCC Order Capping Prison and Jail Phone Rates

Over 1.5 million families with loved ones in state and federal prisons will experience significant financial relief with respect to the costs of Inmate Calling Services (ICS) beginning March 17, 2016, despite the best efforts of several major ICS providers, including Global Tel*Link, Securus and Telmate, and a court-ordered partial stay on rate caps.

The Federal Communications Commission (FCC) voted on October 22, 2015 to enact reforms to protect families that rely on phone calls to stay in touch with incarcerated loved ones. [See: PLN, Dec. 2015, p.40]. ICS providers wasted no time in appealing to the U.S. Court of Appeals for the D.C. Circuit in an attempt to invalidate the FCC’s order, so they can continue to prey on prisoners’ families through inflated phone rates and exorbitant fees.

Historically, the cost of prison phone calls has been extremely high – more than $1.00 per minute in many cases. Under the leadership of Commissioner Mignon Clyburn as Acting Chair, the FCC took the first step in reforming the prison phone industry with a historic vote in August 2013 to cap interstate (long distance) ICS calls with interim rates of $0.25/min. for collect calls and $0.21/min. for debit and prepaid calls. [See: PLN, Dec. 2013, p.1].

In its October 2015 order the FCC issued lower rate caps scheduled to go into effect on March 17, 2016, including caps of $0.11/min. for debit and prepaid calls and $0.14/min. for collect calls, both interstate and intrastate, made from state and federal prisons. Caps on calls from local jails were set to go into effect several months later.

However, on March 7, 2016 the D.C. Court of Appeals stayed implementation of the lower rate caps – though the FCC’s limits on ancillary fees charged in addition to per-minute phone rates will go into effect as scheduled. This will provide substantial relief to prisoners’ families, as ancillary fees represent up to 40% of the cost of a call. Pursuant to the FCC’s order, ICS providers can charge only three ancillary fees: up to $3.00 for automated payments by phone or online, $5.95 for payments made through a live agent and $2.00 to receive paper bills. The FCC also banned flat-rate calls.

Further, the stay by the appellate court means that the FCC’s initial interim rates of $0.21/min. for debit and prepaid, and $0.25/min. for collect interstate calls, will remain in effect. Prisoners’ families will also benefit from the elimination of connection fees and minimum account balance requirements, in addition to a regulatory requirement that all ICS providers must publicly disclose their phone rates. Additional reforms ordered by the FCC target phone services for the deaf and hard of hearing, including the rates for calls made through TTY devices.

The State of Oklahoma, Oklahoma County Sheriff John Whetsel and the Oklahoma Sheriffs’ Association have intervened in the appeal challenging the FCC’s order, in an effort to continue receiving lucrative commission kickbacks from revenue generated from prisoners’ phone calls. [See: PLN, March 2016, p.22]. Eight other states have also sought to intervene, including Arizona, Arkansas, Indiana, Kansas, Louisiana, Missouri, Wisconsin and Nevada, led by Wisconsin Attorney General Brad Schimel. The states contend the rate caps imposed by the FCC would not cover necessary security-related costs for prison phone services. That is a red herring, though, as 11 state DOCs currently charge phone rates below the $.11/min. cap in the FCC’s order, which indicates that low rates are possible without sacrificing security needs.

The issue is really about money, not security.

“We’ve looked at the impact of the [FCC rate cap] rule, and the department stands to lose $3,000,000 a year,” said Oklahoma Department of Corrections spokesperson Terri Watkins. “We will work through the appeal process because, with budget constraints, we can’t make it up any other way.”

Close attention should be paid to the profound conflict of interest demonstrated by the state Attorneys General seeking to challenge the FCC’s order. Elected to represent the interests of all taxpayers, they are apparently only interested in price gouging some of their poorest citizens in exchange for continued kickbacks from ICS providers. These efforts to oppose prison phone reforms serve to underscore the need for regulatory action by the FCC, since very few public officials are willing or able to stop the financial exploitation of prisoners’ families – and at least nine states have clearly indicated they will spend taxpayer dollars to ensure that such exploitation continues, by challenging the FCC’s order.

“While it is disappointing that the Court’s initial ruling did not allow the FCC’s lower rate caps to go into effect as scheduled, we are confident that victory will be achieved despite the legal challenge filed by hedge fund-owned ICS providers to delay drastic cuts to their obscene profit margins,” said Paul Wright, executive director of the Human Rights Defense Center, PLN’s parent non-profit organization. “There should be no mistake that the provisions of the FCC order that will go into effect in state and federal prisons [on March 17], and later in jails nationwide, represent a significant step forward for millions of families, which will see immediate financial benefits,” he added.

“Ultimately, we believe the court will uphold the new rates set by the Commission,” FCC Chairman Tom Wheeler and Commissioner Clyburn said in a joint statement.

The FCC’s order as applied to local jails is scheduled to go into effect on June 15, 2016 except for the rate caps, ranging from $0.14/min. to $0.22/min. for debit and prepaid calls, which were included in the partial stay issued by the D.C. Court of Appeals. See: Global Tel*Link v. FCC, U.S. Court of Appeals for the D.C. Circuit, Case No. 15-1461.

Sources: HRDC press release (March 10, 2016);;;

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