Providers Say Calif. ICS Rate Cap Illegal

Inmate calling service providers rejected proposed California limits on intrastate rates and some fees. The California Public Utilities Commission received comments Monday on an interim order, up for a possible Aug. 19 vote, that would include a cap of 7 cents per minute on intrastate rates for debit, prepaid and collect calls (see 2107130047). Consumer groups supported the plan and urged the CPUC to next seek ways to reduce video call and text-messaging costs. Also, the CPUC teed up implementation of the state’s $6 billion broadband law.

The interim ICS plan “constitutes an abuse of discretion, is contrary to law, and is not supported by the findings,” commented Global Tel*Link in docket R.20-10-002. Proposed intrastate rate and fee limits “are the result of arbitrary ratemaking based on incomplete data and incorrect assumptions” about the market “and would prevent providers from being able to recoup their costs.”

GTL said there's no monopoly and providers don’t exert market power. The proposed decision incorrectly used the rate from GTL's contract with the California Department of Corrections and Rehabilitation as a benchmark to assess the entire market, it said. “The CDCR’s large state prison system, which houses half of California’s inmates, is not representative of the more than 260 other correctional facilities in California.”

The proposal has “substantial errors,” and the proposed cap isn't supported by costs, the record or “reasoned decision-making,” said Securus: it could drive away smaller providers. Limiting site commission cost recovery “is arbitrary and contravenes the state's Penal Code,” which places no limits on commission amounts local authorities may seek, said Securus: CPUC lacks "authority to limit their discretion." Securus urged the CPUC to instead adopt FCC new interim rates and a waiver process so ICS providers can show the CPUC "that its reasonably-incurred costs to provide service at a facility exceed those rates."

Former ICS provider Verizon said California’s plan would give relief. The carrier recognizes "the fundamental fact that incarcerated people and their families are paying unconscionably high phone rates just to stay connected, often before any prosecutorial decisions have been made, and with significant adverse impacts.”

Look next at non-voice services like SMS and video calls, CPUC’s Public Advocates Office, Center for Accessible Technology and The Utility Reform Network each said. They and other consumer groups supported the interim proposal but seek further changes later to make communications cheaper.

The CPUC could reduce the cap to 4 cents by tackling site commissions in the next phase, commented the Californians for Jail and Prison Phone Justice Coalition. The FCC is "constrained by the 2017 DC Circuit Court decision in GTL v. FCC, [but] California is not,” so the CPUC should “deviate from the FCC recommendations as it already has with the base rate and reject the notion that site commissions are a fair component of calling charges.”

Require ICS providers get certificates of public convenience and necessity (CPCNs) or explain why they're exempt, said the Prison Policy Initiative. The proposed decision treats ICS providers as telcos that exert monopoly power, and those are required to hold CPCNs, it said.

The CPUC added a third phase to its broadband docket on implementing the $6 billion broadband bill signed last month by Democratic Gov. Gavin Newsom (see 2107200056). The CPUC will collect comments in Q3 to “assist with the development of the locations for the statewide open-access middle mile network” and make rules for the federal funding account, said Monday’s scoping memo by Commissioner Martha Guzman Aceves in docket R.20-09-001. The law requires a staff report on recommended locations to the California Department of Technology, so there won’t be a proposed decision on that, it said. Staff will propose, and the commission will seek comment on, rules to fund last-mile network in Q4. A proposed decision is expected December-March.

The CPUC set a schedule extending into October for an AT&T petition to discontinue residential service in Frontier Communications territory and relinquish its eligible telecom carrier designation. AT&T asked May 14 for a Sept. 23 decision so it can migrate about 2,700 customers to Frontier by Sept. 27. A Monday scoping memo in docket A.21-05-007 from Commissioner Darcie Houck has the deadlines. She wrote that the proceeding will consider “continuity of voice service and preventing double migration in disadvantaged communities and on Tribal Lands.”