NARUC Joins FCC Push to Lower Inmate Calling Rates

The FCC applauded NARUC's asking members to review inmate calling service rates (see 2007230041) Thursday. FCC Chairman Ajit Pai asked state utility regulators Monday to reduce intrastate ICS prices (see 2007200058), with federal commissioners to vote Aug. 6 on lowering interstate rates (see 2007160072).

State-level change could be challenging. NARUC cautioned not all commissions have jurisdiction. Several state commission representatives said the same, as we surveyed chairmen of the agencies that received Pai’s letter. Some said their state previously reduced rates.

“If a particular state commission doesn’t have authority over these rates, then they should work with their state legislature, which presumably has authority," an FCC spokesperson emailed Thursday. “We welcome NARUC's support and their planned outreach on this important work.” Pai wrote in his Monday letter that the FCC lacks jurisdiction to reduce intrastate rates itself.

“These exorbitant rates discourage family engagement, communication and hamper the successful reentry of incarcerated persons,” NARUC President Brandon Presley said. States should review rates “where they have jurisdiction or influence,” and “take action where warranted,” he said. “Due to the varying nature of state jurisdictions, many of our members do not have authority over these rates," including Presley's state Mississippi. "In many cases, state-level corrections officials hold and negotiate these contracts outside the purview of state public service commissions.”

NARUC plans to ask governors and state corrections officials to review contracts in places its members lack jurisdiction, said Presley, asking Pai to co-sign . The Democratic Mississippi commissioner said he will ask his Republican U.S. senator, Commerce Committee Chairman Roger Wicker, to support legislation on ICS rates. Presley praised FCC actions to cap interstate rates.

South Dakota Public Utilities Commissioner Chris Nelson appreciates Pai “wanting the dialogue” with states, the NARUC Telecom Committee member said in a Tuesday interview. “Each state will take that and determine how they need to apply what he’s asked for.” Nelson consulted with PUC attorneys and doesn’t think his agency has authority, he said. The PUC hasn’t had any complaints about ICS in about five years, he added. “It appears it’s just not an issue here.”

Jurisdiction

Other states lacking jurisdiction to change ICS prices include the Colorado PUC, Florida Public Service Commission, Texas Public Utility Commission, New Hampshire PUC, and Wisconsin PSC, their spokespeople said.

The Texas PUC representative pointed us to the Texas Department of Criminal Justice. A department spokesperson shared an Aug. 24, 2018, announcement on its board clearing a contract with CenturyLink to cut per-minute rates by 20 cents to 6 cents. Ohio's PUC requires operators have rates consistent with federal rules, said a spokesperson, citing a 2018 code. Maryland PSC technical staff is reviewing, a spokesperson said Thursday.

Alabama and most states probably will “adopt a ‘wait and see approach’ to any future intrastate ICS rate proceeding,” emailed John Free, a director at the Alabama PSC. The agency will participate in future FCC rate-making proceedings, and if resulting interstate rate caps withstand “inevitable court challenges,” his agency would consider starting an intrastate ICS rate proceeding, he said. The PSC issued an order in 2014 to base intrastate ICS rates on the FCC’s interim interstate rate caps, and the FCC in 2015 adopted ancillary charges based on Alabama’s caps, he said.

“It is impractical, if not impossible, to isolate provider costs at the intrastate level,” noted Free. “ICS providers operate in multiple state, interstate, and international jurisdictions over common facilities using shared platforms, personnel, and support structures. States would need revenues and costs from each provider, across all the jurisdictions wherein the provider operates to attempt any such an allocation. Because the jurisdiction of state commissions is limited, providers have and will likely continue resisting any attempts to provide multi-jurisdictional data to state commissions.”

ICS provider CenturyLink declined comment. Securus didn’t comment, nor did ICS lawyers.

Our Monday coverage of Pai's request to NARUC is in front of our pay wall here. (As is some other coverage of diversity issues, including on ICS.)

Congress

Consumer advocates want Pai to ask Congress to clarify the FCC has jurisdictional authority over intrastate ICS rates. Legislation passed in the House and pending in the Senate would do so (see 2006290057); Pai has testified that he would support Congress giving the FCC that authority.

Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman called Pai's letter political "grandstanding" because it didn't mention the pending legislation. He said Pai could have asked state commissioners "to reach out to Congress to support legislation or issue his express support."

Pai "can call on Congress to restore the FCC's authority to regulate interstate and intrastate rates within the inmate calling industry," said MediaJustice Executive Director Steven Renderos. Otherwise, he said, the letter to NARUC is "an empty gesture," especially because many state utility commissioners lack authority over ICS rates. He said there's an opportunity for Pai to step in and take leadership, "but he hasn't yet." Pai's letter to NARUC signaled he was willing to work with Congress, said Worth Rises legal associate Connor McCleskey. Without authority over intrastate calls, about 80% of inmates and their families wouldn't get a reduction in ICS costs even if FCC lowers interstate rates, he said.

"It's long past due for someone to address this issue," said Al Kramer, Public Knowledge senior fellow. Encouraging states to review intrastate rates is no substitute for Congress taking action, he said. A few have tackled the issue, but more than 40 haven't, he noted. He said there's not enough time to wait for those utility commissioners to act. "We hope it happens fast," Kramer said.

Tejas Narechania, associate professor of law at the University of California, Berkley School of Law, agreed intrastate rates "are egregious, but asking the states to do something here is a bit like asking the fox to watch the henhouse." Some states benefit from high ICS rates when contracts provide kickbacks, he said, "so states have very little incentive to do anything." That's why it's so important for the FCC to step in and oversee intrastate rates, he said. Under Chairman Tom Wheeler, the FCC claimed authority over intrastate ICS rates, but when Pai became chairman, he didn't defend it (see 1708240005). Narechania said "the FCC should bite the bullet and say it got it wrong when it said fair compensation only applied to providers."

Some states and localities want to go further and make inmate calls free, said United Church of Christ policy adviser Cheryl Leanza. New York City and San Francisco are bright spots, she said. When states and localities pay for inmate calls themselves, "it changes the way you negotiate those contracts," Renderos said: There's no longer an incentive to choose the provider that generates the most revenue, but to negotiate the least expensive.