FCC Seen Unlikely to Curb Site Commissions in Inmate Calling Service Order

The FCC doesn't appear likely to ban or restrict site-commission payments to correctional authorities in an inmate calling service (ICS) order slated for a vote at Thursday's meeting, an agency official and others told us this week. "Nothing in the order touches the site commissions between the correctional authorities and ICS providers," an FCC official saidTuesday. "It’s still up to the private negotiations." Several parties involved in the proceeding said they didn't expect the FCC to impose site-commission restrictions, though some held out hope the agency might adopt such constraints.

A draft order proposed raising the rate caps for debit and prepaid ICS service in prisons and jails from 11-22 cents per minute to 13-31 cents per minute, with rate caps the lowest for federal or state prisons and ascending for large jails, midsize jails and small jails. The increases are intended to account for the "legitimate costs" of facilities, said an agency fact sheet (see 1607140087). Securus and Pay Tel Communications, plus Michael Hamden, the criminal defense lawyer whose petition for reconsideration helped spark the looming action, said the FCC needed to restrict site-commission payments to a specific rate element under the higher caps (see 1607290032 and 1607250027).

“Based on our review of the fact sheet, it would appear the FCC is going to decline to regulate site commissions in any form or fashion," said Lee Petro, counsel to the Wright Petitioners, who advocates for the phone rights of inmates and their families. "Instead, it will increase the rates that providers can charge their consumers, and should providers wish to share this revenue with the correctional facilities, they would be permitted to do so.”

The FCC is "doing nothing on kickbacks," emailed Paul Wright, director of the Human Rights Defense Center, another group advocating for inmates and their families. He considers ICS site-commission payments to correctional authorities to be kickbacks.

Cheryl Leanza, policy adviser for the United Church of Christ Office of Communications, said she wasn't getting the sense the FCC was going to limit site commissions. "My impression is that's not something they're going to look at in this reconsideration," she said. Leanza was one of several advocates who expressed disappointment about the FCC plans to raise the ICS rate caps, but she said she understood the agency's reasoning. ICS providers convinced a court to stay the FCC's rate caps in a 2015 order, and were figuring out ways to get around fee restrictions that were still in place, she said: "Between their actions and the court stay, immediate action seems warranted."

The FCC is "close to getting this right," but needs to rein in site commissions, said Pay Tel President Vincent Townsend. He said the FCC's proposed incremental rate cap increases of between 2 cents/minute and 9 cents/minute "are very reasonable for law enforcement" and "in line" with what the National Sheriffs' Association advocated. But the proposed increases need to be clarified to restrict site commissions, he said. "I am hopeful the FCC will approve a fixed amount for cost recovery that can be included in the rate to be collected and remitted to correctional facilities," he said. "When the amount is a fixed amount, that will ultimately motivate law enforcement to negotiate lower rates to increase the amount of minutes and increase their cost recovery. And all of that will be to the benefit of consumers in the form of lower rates."

"There seems to be some uncertainty about the scope of authority to regulate site commissions," emailed Hamden of Chapel Hill, North Carolina. "But the FCC's authority seems clear under the statutes and precedent. After having earlier expressed a firm intention to correct a dysfunctional market which is fundamentally skewed by the practice of paying site commissions, and in light of the failure of a regulatory approach that capped rates without limiting site commissions, I am hopeful that the Commission will address the matter head-on to achieve lasting, comprehensive reform."

One informed person told us it wasn't enough for the FCC to "account" for the ICS costs of correctional facilities. Unless regulators expressly limit site commissions, "they're just going to grow ... like an amoeba," said the person, who didn't expect such regulation. The person suggested ICS providers would seek a stay of the new rate caps if site commissions aren't regulated.

The U.S. Court of Appeals for the D.C. Circuit granted the FCC an extension to Aug. 11 to reply to responses to its motion to hold current litigation in abeyance due to the pending vote.