CPUC Defends Inmate Calls Rate Cap; Bill Advances to Make Them Free

The California Public Utilities Commission stood by a 7-cent cap on intrastate per-minute rates for incarcerated person calling services (IPCS) in state court Wednesday. The Prison Policy Initiative (PPI), also named in a May lawsuit by Securus, said the CPUC’s interim order was “well-reasoned and provides desperately needed relief” to IPCS users. Meanwhile, a California bill to make IPCS calls free and require a CPUC service-quality rulemaking cleared another Assembly committee despite continuing opposition from sheriffs.

Securus’ petition for writ of review at the California 2nd District Court of Appeals claimed the CPUC’s 7-cent cap wasn’t based on data and departed from FCC decisions (see 2205120037). The CPUC answered Wednesday that its record showed “most present rates are too high and there is ample support for setting the interim rate at seven cents.”

California had jurisdiction and Securus didn't show legal error, answered the CPUC in case B320207. "Where appropriate, the Commission relied on reasoning and findings propounded by the FCC,” but “certain IPCS issues are unique to California and, therefore, the Commission was justified in taking more aggressive steps in IPCS regulations.” The interim cap doesn’t violate contract clauses in California or U.S. constitutions because the CPUC previously regulated telecom and has a legitimate and public interest to regulate, said the agency: Nor is the interim rate unconstitutionally confiscatory.

"Petitioner’s fallacy is in suggesting that only actual costs and present rates may be used as a metric of rate recovery," said the CPUC: But costs aren't "a reliable indicator of appropriate caps" because providers have an incentive to overstate them. Securus didn't provide any cost data for county or local jails, the commission noted. The CPUC didn't err in concluding IPCS providers "operate as locational monopolies" and exercise market power, it said.

“The CPUC is on solid ground with respect to federal law governing IPCS,” and the court should “reject Securus’s ill-crafted invocation of federal law and summarily dismiss the Petition,” said think tank Prison Policy Initiative. "Many of Securus’s complaints raise contestable issues of public policy but none point to a valid reason for this court to invalidate any component of the Interim Order.”

The CPUC order didn't contradict FCC rules and the state commission is allowed to "make its own findings," said PPI. "The CPUC may rely in part on the FCC’s record while ultimately promulgating policies that differ from the FCC’s.” California is free to set its own ancillary fee limits, the think tank added. PPI disagreed the order unconstitutionally impairs contracts: "This avenue of attack falters both because Securus advances an overly broad application of the Contracts Clause and because the company has failed to lay an adequate evidentiary foundation.”

IPCS is a unique market, noted PPI. “Unlike virtually all consumer telecommunications service today, IPCS customers have no choice in providers,” it said. “"Monopoly service providers receive their franchises from correctional facilities that often have a direct financial interest in maximizing revenue, which in turn puts upward pressure on rates.” Telecom service in correctional facilities is essential to keeping incarcerated people connected with their families, said PPI: Before the CPUC order, sheriffs often used the calling revenue to augment facilities' operating budgets rather than cover communications costs.

The California Assembly Communications Committee voted 7-3 Thursday to advance a free IPCS calling bill (SB-1008) to the Appropriations Committee. The bill earlier passed the Senate and the Assembly Public Safety Committee (see 2206140062). The committee amended the bill to revise definitions for IPCS and IPCS providers.

Contact between incarcerated people and their loved ones is critical to successful reentry, testified Danica Rodarmel, an attorney and inmate advocate. “SB-1008 is not only sound public policy, it's humane.”

“This bill will be nearly logistically impossible to implement,” countered California State Sheriffs' Association Legislative Director Cory Salzillo. It’s too difficult for jails, especially larger ones, to give every inmate an hour a day on the phone, as SB-1008 would require, he said. IPCS revenue is required by law to go into an inmate welfare fund that pays for rehabilitative programs, said Salzillo. “If this bill goes into effect, those funds won’t be available.” And SB-1008 wouldn’t provide funding to backfill lost revenue, he said.

Assemblymember Suzette Valladares (R) agreed with concerns that jails won’t have funding or capacity to follow the proposed law. But SB-1008 sponsor Sen. Josh Becker (D) responded that Connecticut and San Francisco are providing free calls without problem. "Telecommunications is pretty inexpensive these days.” Becker is asking for budget support, he added. Rodarmel said welfare funds, on average, comprise 1% of a sheriff’s budget, which seemingly “could be absorbed in many places if there was the will to do it.”

A CPUC administrative law judge directed IPCS providers last week to file “all contracts for provision of such services in California, including video calling services, on an ongoing basis.” Providers including Securus, Global Tel*Link, Inmate Calling Solutions and NCIC Inmate Communications must file documents by July 26, ALJ Cathleen Fogel said in the June 22 ruling in docket R.20-10-002. Fogel asked providers to “use restraint in their claims of confidentiality when submitting the contracts.”