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Proposed Rule2021-14728

Rates for Interstate Inmate Calling Services

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Published

July 28, 2021

Issuing agencies

Federal Communications Commission

Abstract

In this Fifth Further Notice of Proposed Rulemaking, the Commission seeks to obtain detailed comment to enable it to make further progress toward ensuring that the rates, charges, and practices for and in connection with interstate and international inmate calling services meet applicable statutory standards. The Commission seeks comment about the provision of functionally equivalent communications services to incarcerated people with hearing and speech disabilities and whether the Commission should expand inmate calling services providers' reporting requirements to include all accessibility-related calls. The Commission also seeks comment on issues regarding the setting permanent interstate and international rate caps for calling services to incarcerated people; potential reforms to the treatment of site commission payments, including whether the Commission should preempt state and local laws imposing legally-mandated site commission payments; on providers' costs to serve different types of facilities; on how it should reform its rules permitting certain types of ancillary service charges in connection with interstate or international calling services and on how it should refine its methodology for setting international rate caps; on whether it should adopt an on-going periodic data collection and, if so, whether it should impose specific recordkeeping on providers; and on the characteristics of the bidding market for inmate calling services contracts and the optimal regulatory regime for inmate calling services in view of those characteristics.

Full Text

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<title>Federal Register, Volume 86 Issue 142 (Wednesday, July 28, 2021)</title>
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[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
[Proposed Rules]
[Pages 40416-40443]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14728]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 12-375, FCC 21-60; FRS 35679]

Rates for Interstate Inmate Calling Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Fifth Further Notice of Proposed Rulemaking, the
Commission seeks to obtain detailed comment to enable it to make
further progress toward ensuring that the rates, charges, and practices
for and in connection with interstate and international inmate calling
services meet applicable statutory standards. The Commission seeks
comment about the provision of functionally equivalent communications
services to incarcerated people with hearing and speech disabilities
and whether the Commission should expand inmate calling services
providers' reporting requirements to include all accessibility-related
calls. The Commission also seeks comment on issues regarding the
setting permanent interstate and international rate caps for calling
services to incarcerated people; potential reforms to the treatment of
site commission payments, including whether the Commission should
preempt state and local laws imposing legally-mandated site commission
payments; on providers' costs to serve different types of facilities;
on how it should reform its rules permitting certain types of ancillary
service charges in connection with interstate or international calling
services and on how it should refine its methodology for setting
international rate caps; on whether it should adopt an on-going
periodic data collection and, if so, whether it should impose specific
recordkeeping on providers; and on the characteristics of the bidding
market for inmate calling services contracts and the optimal regulatory
regime for inmate calling services in view of those characteristics.

DATES: Comments are due August 27, 2021. Reply Comments are due
September 27, 2021.

ADDRESSES: Federal Communications Commission, 45 L Street NE,
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Michael Scott, Disability Rights
Office of the Consumer and Governmental Affairs Bureau, at (202) 418-
1264 or via email at <a href="/cdn-cgi/l/email-protection#e4898d878c858188ca97878b9090a4828787ca838b92">[email&#160;protected]</a> regarding portions of the
Fifth Further Notice of Proposed Rulemaking relating specifically to
the provision of communications services to incarcerated people with
hearing and speech disabilities and Katherine Morehead, Pricing Policy
Division of the Wireline Competition Bureau, at (202) 418-0696 or via
email at <a href="/cdn-cgi/l/email-protection#7d161c0915180f1413185310120f1815181c193d1b1e1e531a120b">[email&#160;protected]</a> regarding other portions of the
Fifth Further Notice of Proposed Rulemaking.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fifth
Further Notice of Proposed Rulemaking, FCC 21-60, released May 24,
2021. This summary is based on the public redacted version of the
document, the full text of which can be obtained from the following
internet address: <a href="https://docs.fcc.gov/public/attachments/FCC-21-60A1.pdf">https://docs.fcc.gov/public/attachments/FCC-21-60A1.pdf</a>.

I. Introduction

1. Unlike virtually everyone else in the United States,
incarcerated people

[[Page 40417]]

have no choice in their telephone service provider. Instead, their only
option typically is to use a service provider chosen by the
correctional facility, and once chosen, that service provider typically
operates on a monopoly basis. Egregiously high rates and charges and
associated unreasonable practices for the most basic and essential
communications capability--telephone service--impedes incarcerated
peoples' ability to stay connected with family and loved ones, clergy,
and counsel, and financially burdens incarcerated people and their
loved ones. Never have such connections been as vital as they are now,
as many correctional facilities have eliminated in-person visitation in
response to the COVID-19 pandemic.
2. The Commission adopts a Fifth Further Notice of Proposed
Rulemaking (FNPRM) to obtain evidence necessary to make further
progress toward accomplishing the critical work that remains. To that
end, this document seeks more detailed comments from stakeholders,
including but not limited to, about the provision of communications
services to incarcerated people with hearing and speech disabilities;
the methodology to be employed in setting permanent interstate and
international rate caps; general reform of the treatment of site
commission payments in connection with interstate and international
calls; the adoption of an on-going periodic cost data collection to
ensure rates are just and reasonable; and additional reforms to its
ancillary service charges rules.
3. The Commission expects today's actions to have immediate
meaningful and positive impacts on the ability of incarcerated people
and their loved ones to satisfy our universal, basic need to
communicate. Although the Commission uses various terminology
throughout this item to refer to the intended beneficiaries of the
actions herein, unless context specifically indicates otherwise, these
beneficiaries are broadly defined as the people placing and receiving
inmate calling services (ICS) calls, whether they are incarcerated
people, members of their family, or other loved ones and friends. The
Commission also may refer to them, generally, as consumers.

II. Background

4. Access to affordable communications services is critical for
everyone in the United States, including incarcerated members of our
society. Studies have long shown that incarcerated people who have
regular contact with family members are more likely to succeed after
release and have lower recidivism rates. Because correctional
facilities generally grant exclusive rights to service providers,
incarcerated people must purchase service from ``locational
monopolies'' and subsequently face rates far higher than those charged
to other Americans.

A. Statutory Background

5. The Communications Act of 1934, as amended (Communications Act
or Act) divides regulatory authority over interstate, intrastate, and
international communications services between the Commission and the
states. Section 2(a) of the Act empowers the Commission to regulate
``interstate and foreign communication by wire or radio.'' This
regulatory authority includes ensuring that ``[a]ll charges, practices,
classifications, and regulations for and in connection with''
interstate or international communications services are ``just and
reasonable'' in accordance with section 201(b) of the Act. Section
201(b) also provides that ``[t]he Commission may prescribe such rules
and regulations as may be necessary in the public interest to carry
out'' these provisions.
6. Section 2(b) of the Act preserves states' jurisdiction over
``charges, classifications, practices, services, facilities, or
regulations for or in connection with intrastate communication
service.'' The Commission is thus ``generally forbidden from entering
the field of intrastate communication service, which remains the
province of the states.'' Stated differently, section 2(b) ``erects a
presumption against the Commission's assertion of regulatory authority
over intrastate communications.''
7. Section 276 of the Act directs the Commission to prescribe
regulations that ensure that payphone service providers, including
inmate calling services providers, ``are fairly compensated for each
and every completed intrastate and interstate call using their
payphone.'' Although the Telecommunications Act of 1996 (1996 Act)
amended the Act and ``chang[ed] the FCC's authority with respect to
some intrastate activities,'' with respect to section 276, the U.S.
Court of Appeals for the District of Columbia Circuit has held that
``the strictures of [section 2(b)] remain in force.'' Accordingly, that
court concluded that section 276 does not authorize the Commission to
determine ``just and reasonable'' rates for intrastate calls, and that
the Commission's authority under that provision to ensure that
providers ``are fairly compensated'' both for intrastate and interstate
calls does not extend to establishing rate caps on intrastate services.

B. History of Commission Proceedings Prior to 2020

8. In 2003, Martha Wright and her fellow petitioners, current and
former incarcerated people and their relatives and legal counsel
(Wright Petitioners), filed a petition seeking a rulemaking to address
``excessive'' inmate calling services rates. The petition sought to
prohibit exclusive inmate calling services contracts and collect-call-
only restrictions in correctional facilities. In 2007, the Wright
Petitioners filed an alternative petition for rulemaking in which they
emphasized the urgency of the need for Commission action due to
``exorbitant'' inmate calling services rates. The Wright Petitioners
proposed benchmark rates for interstate long distance inmate calling
services calls and reiterated their request that providers offer debit
calling as an alternative option to collect calling. The Commission
sought and received comment on both petitions.
9. In 2012, the Commission commenced an inmate calling services
rulemaking proceeding by releasing a document seeking comment on, among
other matters, the proposals in the Wright Petitioners' petitions and
whether to establish rate caps for interstate inmate calling services
calls.
10. In the 2013 ICS Order, in light of record evidence that rates
for calling services used by incarcerated people greatly exceeded the
reasonable costs of providing those services, the Commission adopted
interim interstate rate caps of $0.21 per minute for debit and prepaid
calls and $0.25 per minute for collect calls. These interim interstate
rate caps were first adopted in 2013 and remain in effect as a result
of the vacatur, by the D.C. Circuit, of the permanent rate caps adopted
in the 2015 ICS Order. Under the Commission's rules, ``Debit Calling''
means ``a presubscription or comparable service which allows an Inmate,
or someone acting on an Inmate's behalf, to fund an account set up
[through] a Provider that can be used to pay for Inmate Calling
Services calls originated by the Inmate.'' ``Prepaid Calling'' means
``a presubscription or comparable service in which a Consumer, other
than an Inmate, funds an account set up [through] a Provider of Inmate
Calling Services. Funds from the account can then be used to pay for
Inmate Calling Services, including calls that originate with an
Inmate.'' ``Collect Calling'' means ``an arrangement whereby the called
party takes affirmative action

[[Page 40418]]

clearly indicating that it will pay the charges associated with a call
originating from an Inmate Telephone.'' In the First Mandatory Data
Collection, the Commission required all inmate calling services
providers to submit data on their underlying costs so that the agency
could develop permanent rate caps. In 2014, the Commission sought
comment on reforming charges for services ancillary to the provision of
inmate calling services and on establishing rate caps for both
interstate and intrastate calls. Ancillary service charges are fees
that providers assess on calling services used by incarcerated people
that are not included in the per-minute rates assessed for individual
calls.
11. The Commission adopted a comprehensive framework for interstate
and intrastate inmate calling services in the 2015 ICS Order, including
limits on ancillary service charges and permanent rate caps for
interstate and intrastate inmate calling services calls in light of
``egregiously high'' rates for inmate calling services calls. Because
of continued growth in the number and dollar amount of ancillary
service charges that inflated the effective price paid for inmate
calling services, the Commission limited permissible ancillary service
charges to only five types and capped the charges for each: (1) Fees
for Single-Call and Related Services--billing arrangements whereby an
incarcerated person's collect calls are billed through a third party on
a per-call basis, where the called party does not have an account with
the inmate calling services provider or does not want to establish an
account; (2) Automated Payment Fees--credit card payment, debit card
payment, and bill processing fees, including fees for payments made by
interactive voice response, web, or kiosk; (3) Third-Party Financial
Transaction Fees--the exact fees, with no markup, that providers of
calling services used by incarcerated people are charged by third
parties to transfer money or process financial transactions to
facilitate a consumer's ability to make account payments via a third
party; (4) Live Agent Fees--fees associated with the optional use of a
live operator to complete inmate calling services transactions; and (5)
Paper Bill/Statement Fees--fees associated with providing customers of
inmate calling services an optional paper billing statement. The
Commission relied on sections 201(b) and 276 of the Act to adopt rate
caps for both interstate and intrastate inmate calling services. The
Commission set tiered rate caps of $0.11 per minute for prisons; $0.14
per minute for jails with average daily populations of 1,000 or more;
$0.16 per minute for jails with average daily populations of 350 to
999; and $0.22 per minute for jails having average daily populations of
less than 350. The Commission calculated these rate caps using
industry-wide average costs based on data from the First Mandatory Data
Collection and stated that this approach would allow providers to
``recover average costs at each and every tier.'' The Commission did
not include site commission payments in its permanent rate caps,
finding these payments were not costs reasonably related to the
provision of inmate calling services. The Commission also readopted the
interim interstate rate caps it had adopted in 2013, and extended them
to intrastate calls, pending the effectiveness of the new rate caps,
and sought comment on whether and how to reform rates for international
inmate calling services calls. At the same time, the Commission adopted
a Second Mandatory Data Collection to identify trends in the market and
form the basis for further reform as well as an annual filing
obligation requiring providers to report information on their current
operations, including their interstate, intrastate, and international
rates as well as their ancillary service charges.
12. In the 2016 ICS Reconsideration Order, the Commission
reconsidered its decision to entirely exclude site commission payments
from its 2015 permanent rate caps. The Commission increased those
permanent rate caps to account for claims that certain correctional
facility costs reflected in site commission payments are directly and
reasonably related to the provision of inmate calling services. The
Commission set the revised rate caps at $0.13 per minute for prisons;
$0.19 per minute for jails with average daily populations of 1,000 or
more; $0.21 per minute for jails with average daily populations of 350
to 999; and $0.31 per minute for jails with average daily populations
of less than 350.

C. Judicial Actions

13. In January 2014, in response to providers' petitions for review
of the 2013 ICS Order, the D.C. Circuit stayed the application of
certain portions of the 2013 ICS Order but allowed the Commission's
interim rate caps to remain in effect. Later that year, the court held
the petitions for review in abeyance while the Commission proceeded to
set permanent rates. In March 2016, in response to providers' petitions
for review of the 2015 ICS Order, the D.C. Circuit stayed the
application of the 2015 ICS Order's permanent rate caps and ancillary
service charge caps for Single Call Services while the appeal was
pending. Single-Call Services mean ``billing arrangements whereby an
Inmate's collect calls are billed through a third party on a per-call
basis, where the called party does not have an account with the
Provider of Inmate Calling Services or does not want to establish an
account.'' Later that month, the court stayed the application of the
Commission's interim rate caps to intrastate inmate calling services.
In November 2016, the D.C. Circuit also stayed the 2016 ICS
Reconsideration Order, pending the outcome of the challenge to the 2015
ICS Order.
14. In 2017, in GTL v. FCC, the D.C. Circuit vacated the permanent
rate caps adopted in the 2015 ICS Order. First, the panel majority held
that the Commission lacked the statutory authority to cap intrastate
calling services rates. The court explained that the Commission's
authority over intrastate calls is, except as otherwise provided by
Congress, limited by section 2(b) of the Act and nothing in section 276
of the Act overcomes this limitation. In particular, section 276
``merely directs the Commission to `ensure that all providers [of
calling services to incarcerated people] are fairly compensated' for
their inter- and intrastate calls,'' and it ``is not a `general grant
of jurisdiction' over intrastate ratemaking.'' The court noted that it
``need not decide the precise parameters of the Commission's authority
under Sec. 276.''
15. Second, the D.C. Circuit concluded that the ``Commission's
categorical exclusion of site commissions from the calculus used to set
[inmate calling services] rate caps defie[d] reasoned decision making
because site commissions obviously are costs of doing business incurred
by [inmate calling services] providers.'' The court noted that some
site commissions were ``mandated by state statute,'' while others were
``required by state correctional institutions'' and were thus also a
``condition of doing business.'' The court directed the Commission to
``assess on remand which portions of site commissions might be directly
related to the provision of [inmate calling services] and therefore
legitimate, and which are not.'' The court did not reach the providers'
remaining arguments ``that the exclusion of site commissions denies
[them] fair compensation under [section] 276 and violates the Takings
Clause of the Constitution because it forces providers to provide
services below cost.'' Instead, the court stated

[[Page 40419]]

that the Commission should address these issues on remand when
revisiting the categorical exclusion of site commissions. Judge Pillard
dissented from this view, noting that site commissions are not
legitimate simply because a state demands them.
16. Third, the D.C. Circuit held that the Commission's use of
industry-wide averages in setting rate caps was arbitrary and
capricious because it lacked justification in the record and was not
supported by reasoned decision making. Judge Pillard also dissented on
this point, noting that the Commission has ``wide discretion'' under
section 201 of the Act to decide ``which costs to take into account and
to use industry-wide averages that do not necessarily compensate `each
and every' call.'' More specifically, the court found the Commission's
use of a weighted average per-minute cost to be ``patently
unreasonable'' given that such an approach made calls with above-
average costs unprofitable and thus did ``not fulfill the mandate of
Sec. 276 that `each and every' '' call be fairly compensated.
Additionally, the court found that the 2015 ICS Order ``advance[d] an
efficiency argument--that the larger providers can become profitable
under the rate caps if they operate more efficiently--based on data
from the two smallest firms,'' which ``represent[ed] less than one
percent of the industry,'' and that the Order did not account for
conflicting record data. The court therefore vacated this portion of
the 2015 ICS Order.
17. Finally, the court remanded the ancillary service charge caps.
The D.C. Circuit held that ``the Order's imposition of ancillary fee
caps in connection with interstate calls is justified'' given the
Commission's ``plenary authority to regulate interstate rates under
Sec. 201(b), including `practices . . . for and in connection with'
interstate calls.'' The court held that the Commission ``had no
authority to impose ancillary fee caps with respect to intrastate
calls.'' Because the court could not ``discern from the record whether
ancillary fees can be segregated between interstate and intrastate
calls,'' it remanded the issue so the Commission could determine
whether it could segregate ancillary fee caps on interstate calls
(which are permissible) and on intrastate calls (which are
impermissible). The court also vacated the video visitation annual
reporting requirements adopted in the 2015 ICS Order.
18. In December 2017, after it issued the GTL v. FCC opinion, the
D.C. Circuit in Securus v. FCC ordered the 2016 ICS Reconsideration
Order ``summarily vacated insofar as it purports to set rate caps on
inmate calling service'' because the revised rate caps in that 2016 ICS
Reconsideration Order were ``premised on the same legal framework and
mathematical methodology'' rejected by the court in GTL v. FCC. The
court remanded ``the remaining provisions'' of that Order to the
Commission ``for further consideration . . . in light of the
disposition of this case and other related cases.'' As a result of the
D.C. Circuit's decisions in GTL and Securus, the interim rate caps that
the Commission adopted in 2013 ($0.21 per minute for debit/prepaid
calls and $0.25 per minute for collect calls) remain in effect for
interstate inmate calling services calls.

D. 2020 Rates and Charges Reform Efforts

19. In February 2020, the Wireline Competition Bureau (Bureau or
WCB) issued a document seeking to refresh the record on ancillary
service charges in light of the D.C. Circuit's remand in GTL v. FCC.
This document was published in the Federal Register. In the Ancillary
Services Refresh Public Notice, the Bureau sought comment on ``whether
each permitted [inmate calling services] ancillary service charge may
be segregated between interstate and intrastate calls and, if so,
how.'' The Bureau also sought comment on any steps the Commission
should take to ensure, consistent with the D.C. Circuit's opinion, that
providers of interstate inmate calling services do not circumvent or
frustrate the Commission's ancillary service charge rules. The Bureau
also defined jurisdictionally mixed services as `` `[s]ervices that are
capable of communications both between intrastate end points and
between interstate end points' '' and sought comment on, among other
issues, how the Commission should proceed if any permitted ancillary
service is ``jurisdictionally mixed'' and cannot be segregated between
interstate and intrastate calls.
20. In August 2020, the Commission responded to the court's remands
and took action to comprehensively reform inmate calling services rates
and charges. First, the Commission addressed the D.C. Circuit's
directive that the Commission consider whether ancillary service
charges--separate fees that are not included in the per-minute rates
assessed for individual inmate calling services calls--can be
segregated into interstate and intrastate components for the purpose of
excluding the intrastate components from the reach of the Commission's
rules. The Commission found that ancillary service charges generally
are jurisdictionally mixed and cannot be practicably segregated between
the interstate and intrastate jurisdictions except in the limited
number of cases where, at the time a charge is imposed and the consumer
accepts the charge, the call to which the service is ancillary is
clearly an intrastate call. As a result, the Commission concluded that
inmate calling services providers are generally prohibited from
imposing any ancillary service charges other than those permitted by
the Commission's rules, and providers are generally prohibited from
imposing charges in excess of the Commission's applicable ancillary
service fee caps.
21. Second, the Commission proposed rate reform of the inmate
calling services within its jurisdiction. As a result of the D.C.
Circuit's decisions, the interim interstate rate caps of $0.21 per
minute for debit and prepaid calls and $0.25 per minute for collect
calls that the Commission adopted in 2013 remain in effect today.
Commission staff performed extensive analyses of the data it collected
in the Second Mandatory Data Collection as well as the data in the
April 1, 2020, annual reports. In the 2015 ICS Order, the Commission
directed that the Second Mandatory Data Collection be conducted ``two
years from publication of Office of Management and Budget (OMB)
approval of the information collection.'' The Commission received OMB
approval in January 2017, and Federal Register publication occurred on
March 1, 2017. Accordingly, on March 1, 2019, inmate calling services
providers submitted their responses to the Second Mandatory Data
Collection. WCB and the Office of Economics and Analytics (OEA)
undertook a comprehensive analysis of the Second Mandatory Data
Collection responses, and conducted multiple follow-up discussions with
providers to supplement and clarify their responses, in order to
conduct the data analysis upon which the proposals in the August 2020
document are based. Based on that analysis, the Commission proposed to
lower the interstate rate caps to $0.14 per minute for debit, prepaid,
and collect calls from prisons and $0.16 per minute for debit, prepaid,
and collect calls from jails. In so doing, the Commission used a
methodology that addresses the flaws underlying the Commission's 2015
and 2016 rate caps (which used industry-wide averages to set rate caps)
and that is consistent with the mandate in section 276 of the Act that
inmate calling services providers be fairly compensated for each and
every

[[Page 40420]]

completed interstate call. The Commission's methodology included a
proposed 10% reduction in GTL's costs to account, in part, for
seemingly substantially overstated costs. The Commission also proposed
to adopt a waiver process that would permit providers to seek waivers
of the proposed rate caps on a facility-by-facility or contract basis
if the rate caps would prevent a provider from recovering the costs of
providing interstate inmate calling services at a facility or
facilities covered by a contract. The Commission also proposed ``to
adopt a rate cap formula for international inmate calling services
calls that permits a provider to charge a rate up to the sum of the
inmate calling services provider's per-minute interstate rate cap for
that correctional facility plus the amount that the provider must pay
its underlying international service provider for that call on a per-
minute basis (without a markup).'' The Commission explained that this
cap ``would enable inmate calling services providers to account for
widely varying costs,'' be consistent with the ``just and reasonable'
standard in section 201(b) of the Act, and comport with the ``fair
compensation'' provision of section 276 of the Act.
22. In response to the 2020 ICS document, the Commission received
over 90 comments and reply comments and 9 economic studies. Filers
included providers of calling services to incarcerated people, public
interest groups and advocates for the incarcerated, telecommunications
companies, organizations representing individuals who are deaf or hard
of hearing, and providers of telecommunications relay service.
23. Intrastate Rate Reform Efforts. By April 1 of each year, inmate
calling services providers file annual reports with the Commission that
include rates, ancillary service charges, and site commissions. In an
effort to compare interstate inmate calling services rate levels with
intrastate rate levels, Commission staff analyzed the intrastate rate
data submitted as part of the providers' April 1, 2020, annual reports.
Commission staff's review revealed that intrastate rates for debit or
prepaid calls exceed interstate rates in 45 states, with 33 states
allowing rates that are at least double the Commission's interstate cap
and 27 states allowing ``first-minute'' charges that can be more than
25 times that of the first minute of an interstate call. For example,
one provider reported a first-minute intrastate rate of $5.34 and
additional per-minute intrastate rates of $1.39 while reporting the
per-minute interstate rate of $0.21 for the same correctional facility.
Similarly, another provider reported a first-minute intrastate rate of
$6.50 and an additional per-minute intrastate rate of $1.25 while
reporting the per-minute interstate rate of $0.25 for the same
correctional facility. Further, Commission staff identified instances
in which a 15-minute intrastate debit or prepaid call costs as much as
$24.80--almost seven times more than the maximum $3.15 that an
interstate call of the same duration would cost.
24. In light of these data, in September 2020, former Chairman Pai
and Brandon Presley, then president of the National Association of
Regulatory Utility Commissioners (NARUC), jointly sent a letter to the
co-chairs of the National Governors Association urging state
governments to take action to reduce intrastate rates and related fees.
At least one state has enacted a law to reduce intrastate inmate
calling services rates and fees, at least one state commenced a
regulatory proceeding aimed at reducing intrastate inmate calling
services rates and fees, and several states are considering
legislation.

III. Fifth Further Notice of Proposed Rulemaking

25. In this document the Commission seeks further evidence and
comments from stakeholders to consider additional reforms to inmate
calling services rates, services, and practices within its
jurisdiction, including permanent rate caps. To that end, the
Commission seeks comment on the provision of functionally equivalent
communications services to incarcerated people with hearing and speech
disabilities, the methodology for establishing permanent rate caps,
further reforms to the treatment of site commission payments, including
at jails with average daily populations less than 1,000, and revisions
to its ancillary service charge rules, among other matters.

A. Disability Access

26. While there are barriers to telecommunications access for
incarcerated people, the obstacles are much larger for those who are
deaf, hard of hearing, or deafblind, or who have a speech disability.
The Commission refers to this class of people generally as incarcerated
people with communication disabilities. Because functionally equivalent
means of communication with the outside world are often unavailable to
incarcerated people with communication disabilities, they are
effectively trapped in a ``prison within a prison.'' The ability to
make telephone calls is not just important to maintain familial and
intimate relationships necessary for successful rehabilitation, but
also crucial to allow for communication with legal representatives and
medical professionals.
1. Background
27. The Commission first sought comment in 2012 on access to inmate
calling services for incarcerated people with communication
disabilities. In 2015, the Commission affirmed the obligation of inmate
calling services providers, as common carriers, to provide incarcerated
people access to ``mandatory'' forms of TRS--TTY-based TRS and speech-
to-speech relay service (STS). TTY-based TRS allows an individual with
a communication disability to communicate by telephone with another
party, such as a hearing individual, by using a text telephone (TTY)
device to send text to a communications assistant (CA) over a circuit-
switched telephone network. To connect a hearing individual as the
other party to the call, the CA establishes a separate voice service
link with the hearing party and converts the TTY user's text to speech.
The CA listens to the hearing party's voice response and converts that
speech to text for the TTY user. STS ``allows individuals with speech
disabilities to communicate with voice telephone users through the use
of specially trained CAs who understand the speech patterns of persons
with speech disabilities and can repeat the words spoken by that
person.'' The Commission also amended its rules to prohibit inmate
calling services providers from levying or collecting any charge for
TRS calls. For TTY-to-TTY calls, which require substantially longer
time than voice calls, the Commission limited permissible charges to
25% of the applicable per-minute voice rate.
28. The Commission recognized in the 2015 ICS Order that other,
more advanced forms of TRS, many of which use the internet, had been
developed and recognized as eligible for TRS Fund support. For example,
video relay service (VRS) makes use of video communications technology
to allow individuals whose primary language is American Sign Language
(ASL) to communicate in ASL. VRS is a form of TRS that ``allows people
with hearing and speech disabilities who use sign language to
communicate with voice telephone users through video equipment. The
video link allows the [communication assistant] to view and interpret
the party's signed conversation and relay the conversation back and
forth with a voice caller.'' internet

[[Page 40421]]

Protocol Captioned Telephone Service (IP CTS) and its non-internet
counterpart, Captioned Telephone Service (CTS), allow a person who is
hard of hearing to participate in direct voice communications while
receiving captions of the other party's voice--thereby eliminating much
of the delay inherent in more traditional forms of TRS. IP CTS is a
form of TRS ``that permits an individual who can speak but who has
difficulty hearing over the telephone to use a telephone and an
internet Protocol-enabled device via the internet to simultaneously
listen to the other party and read captions of what the other party is
saying.'' And IP Relay enhances traditional text-based relay by making
use of the faster transmission speeds offered by the internet. Today,
among people with communication disabilities, there is far more demand
for these forms of TRS than for TTY-based TRS and STS. In its annual
TRS usage projections for TRS Fund Year 2020-21, the TRS Fund
administrator projected that interstate usage of TTY-based TRS from
July 2020 through April 2021 would total 1,361,038 minutes, and
interstate usage of STS for the same period would be 141,313 minutes.
Taking account of likely intrastate usage, total usage of TTY-based TRS
in this period will not exceed 6 million minutes, and total usage of
STS will not exceed 500,000 minutes. Although these statistics are for
calendar year 2019, an earlier period, TTY-based TRS usage has been
declining over time, and STS usage has not increased significantly in
recent years. Therefore, the corresponding intrastate usage statistics
for TRS Fund Year 2020-21 are likely to be lower (in the case of TTY-
based TRS) or not substantially higher (in the case of STS) than these
totals. By contrast, projected usage of VRS for the same period is
140,575,160 minutes (about 23 times the usage of TTY-based TRS) and
projected usage of IP CTS is 542,340,606 minutes (about 90 times the
usage of TTY-based TRS).
29. The Commission also ``agree[d] with commenters that limiting
all inmates with communication disabilities to one form of TRS,
particularly what many view as an outdated form of TRS that relies on
TTY usage, may result in communication that is not functionally
equivalent to the ability of a hearing individual to communicate by
telephone.'' However, noting that the newer forms of TRS (other than
STS) are not ``mandatory'' for common carriers to provide, the
Commission declined to require calling service providers to make them
available. Instead, it ``strongly encourage[d] correctional facilities
to work with [inmate calling services] providers to offer these other
forms of TRS,'' and to ``comply with obligations that may exist under
other federal laws, including Title II of the ADA, which require the
provision of services to inmates with disabilities that are as
effective as those provided to other inmates.'' The Commission stated
it would ``monitor the implementation and access to TRS in correctional
institutions and may take additional action if inmates with
communications disabilities continue to lack access to functionally
equivalent service.''
30. In 2015, the Commission sought comment on the accessibility
implications of the increasing availability to incarcerated people of
video calling and video visitation services. Recognizing that video
calling could enable incarcerated sign language users to access and use
VRS, as well as communicate directly with other sign language users,
the Commission sought comment on the bandwidths and broadband speeds
currently used for video visitation, the interoperability of video
visitation systems with VRS, the prevalence of VRS access in
correctional institutions, and the steps that should be taken to ensure
that charges for video calling services offered to deaf incarcerated
people are just and reasonable. In 2020, the Commission sought comment
more broadly on the needs of incarcerated people with communication
disabilities, including whether they have adequate access to TRS,
whether additional forms of TRS should be made available by inmate
calling services providers, and what the Commission can do to
facilitate such access. In response to the 2015 and 2020 ICS documents,
the Commission has received information describing the lack of
functionally equivalent access to telecommunications services for
incarcerated people with communication disabilities. The Commission has
also received several individual comments urging it to require more
access to communications in correctional facilities and sharing
personal experiences with disability access to telecommunications in
correctional facilities. As a result of these limitations, the
Accessibility Coalition asserts, many incarcerated people with
communication disabilities have been unable to stay in contact with
their loved ones.

2. Making Modern Forms of TRS Available

31. In light of the comments filed in response to the 2020 ICS
document, as well as other evidence, the Commission proposes to amend
the Commission's rules to require that inmate calling services
providers provide access, wherever feasible, to all forms of TRS that
are eligible for TRS Fund support--including (in addition to TTY-based
TRS and STS) CTS (a non-internet-based telephone captioning service)
and the three forms of internet-based TRS: VRS, IP CTS, and IP Relay.
In proposing that inmate calling services providers offer access to all
forms of TRS, the Commission does not contemplate that providers would
necessarily provide TRS directly. They would only need to ensure that
incarcerated people with hearing and speech disabilities can be
connected to an existing, authorized provider of the appropriate form
of TRS.
32. As the Commission has recognized, ``functional equivalence'' is
an evolving standard for the level of communications access that TRS
must provide. ``Functional equivalence is, by nature, a continuing goal
that requires periodic reassessment. The ever-increasing availability
of new services and the development of new technologies continually
challenge us to determine what specific services and performance
standards are necessary to ensure that TRS is functionally equivalent
to voice telephone service.'' The current record confirms the
Commission's initial assessment in the 2015 ICS Order that TTY-based
TRS and STS may be insufficient by themselves to ensure functionally
equivalent communication for people with communication disabilities. As
explained above, among the general population of people with
communication disabilities, TTY-based TRS and STS are currently the
least frequently used forms of relay service. TTY-based TRS is little
used today because it is based on an obsolete technology, which is very
slow and cumbersome compared with current internet technology. Further,
given the availability of VRS, limiting sign-language users to TTY-
based TRS unnecessarily precludes them from communicating in their
primary language. Similarly, for individuals who are hard of hearing,
captioned telephone services such as CTS and IP CTS frequently provide
far more efficient and effective means of communication than TTY-based
TRS. Further, current transitions to modern IP-based networks have
adversely affected the quality and utility of TTY-based communication.
In the 2016 RTT Order, the Commission recognized the limitations of TTY
technology in an IP environment, and adopted rules to facilitate a
transition from TTY technology to real-time text

[[Page 40422]]

(RTT) as a reliable and interoperable universal text solution over
wireless IP-enabled networks for people who are deaf, hard of hearing,
deafblind, or have a speech disability.
33. Although the Commission has not mandated the provision of the
more advanced forms of TRS by state TRS programs or common carriers,
their ``non-mandatory'' status does not reflect a lower level of need
for these forms of TRS. These forms of TRS are ``non-mandatory'' only
in the limited sense that the Commission does not require that they be
included in the offerings of Commission-certified state TRS programs
(and, in the event that a state does not have a certified TRS program,
does not require common carriers in that state to make their own
arrangements to provide such relay services). Instead, internet-based
TRS are made available by TRS providers operating on a nationwide basis
and certified by the Commission. However, support for all forms of TRS
is mandatory for all carriers and VoIP service providers, which must
support the provision of these services through mandatory contributions
to the TRS Fund. As noted above, among the general population of people
with communication disabilities, there is far more demand for ``non-
mandatory'' than ``mandatory'' relay services. Further, the comments
submitted in response to the 2015 and 2020 ICS documents persuade us
that access to commonly used, widely available relay services such as
VRS and IP CTS is equally or more important for incarcerated people
with communication disabilities than it is for the general population.
Further, incarcerated people--unlike the general population--have no
ability to connect to a suitable form of TRS on their own. Therefore,
to fulfill the statutory TRS mandate with respect to this subset of
people with communication disabilities, it appears to be incumbent on
the Commission to take additional steps in this proceeding to ensure
that they can access those relay services needed for functionally
equivalent communication, regardless of the ``mandatory'' or ``non-
mandatory'' status of such services as provided in other contexts. The
Commission seeks comment on this analysis.
34. Legal Authority. As a threshold matter, the Commission seeks
comment on the extent of its statutory authority to require inmate
calling services providers to provide access to TRS. Section 225 of the
Act directs the Commission to ``ensure that interstate and intrastate
telecommunications relay services are available, to the extent possible
and in the most efficient manner, to [individuals with communications
disabilities] in the United States,'' and incarcerated people are not
excluded from this mandate. To this end, section 225 expressly provides
the Commission with authority over common carriers providing intrastate
as well as interstate communications services, including the authority
to require carriers to provide access to TRS ``to the extent
possible.'' Section 225 also expressly requires common carriers to
``provide in compliance with the regulations prescribed under this
section, throughout the area in which it offers service,
telecommunications relay services, individually, through designees,
through a competitively selected vendor, or in concert with other
carriers.'' Does section 225 authorize the Commission to require that
inmate calling services providers provide access to appropriate forms
of TRS, as well as to regulate the manner in which such access is
provided?
35. As alternative sources of authority, section 255 of the Act
requires providers of telecommunications services to ensure that their
services are ``accessible to and usable by individuals with
disabilities `if readily achievable.''' Similarly, section 716 of the
Act requires providers of advanced communications services (including
VoIP services) to ensure that such services are accessible to and
usable by individuals with disabilities ``unless [these requirements]
are not achievable,'' prohibits such providers from installing
``network features, functions, or capabilities that impede
accessibility or usability,'' and authorizes the Commission to adopt
implementing regulations. The Commission seeks comment on the extent to
which, independently of section 225, these provisions authorize the
Commission to require inmate calling services providers to provide
access to appropriate forms of TRS.
36. As noted earlier in the accompanying Report and Order,
correctional authorities ``exercise near total control over how
incarcerated people are able to communicate with the outside world.''
In general, the Communications Act does not provide us with authority
to regulate the actions of correctional authorities (except to the
extent that they also act as communications service providers or other
entities subject to its authority). As a practical matter, therefore,
its ability to compel an inmate calling services provider to make
additional forms of TRS available in a particular facility may depend,
for example, on whether the correctional institution agrees--or is
required by other applicable law--to make suitable communications
devices and network access available to incarcerated people with
disabilities, or to permit a service provider to do so. The Commission
seeks comment on the extent to which Title II of the ADA or other
federal or state laws require such access. Access to telecommunications
for incarcerated people with disabilities may also involve issues of
constitutional rights. The Commission also stresses that, although the
obligations of inmate calling service providers under any rules the
Commission adopts may be limited to measures that are ``feasible'' in
the circumstances of a particular correctional facility, the Commission
does not propose to preempt other requirements under state or federal
law, whether applicable to service providers or correctional
authorities, which may expand the scope of access to TRS that would
otherwise be deemed ``possible'' under section 225.
37. Benefits and Costs. To supplement the current record, the
Commission seeks further comment on the benefits and costs of requiring
that providers of inmate calling services provide access to all
authorized forms of TRS. First, to establish a baseline, the Commission
seeks additional, specific information on the extent to which VRS, IP
Relay, IP CTS, and CTS are currently being made available in
correctional facilities. According to comments on the 2020 ICS
document, VRS and IP CTS already have been made available in some
correctional facilities. ZP Better Together, LLC, a certified VRS
provider, notes that a number of state facilities that allow video
visitations also have added VRS and point-to-point video communications
for those with accessibility needs. Where available, how are internet-
based relay services and CTS provided? Do correctional facilities make
arrangements directly with TRS Fund-supported TRS providers to provide
these services, or are they accessed through an inmate calling services
provider? What kinds of devices are used to access these forms of TRS,
and how and by which entities are they provided? Similarly, how is
broadband internet access provided to the facility--by arrangement with
an inmate calling services provider or some other entity? Where access
to additional forms of TRS has been made available, what operational or
other challenges were encountered, and how were they addressed?
38. Second, the Commission seeks additional comment on the benefits
of making VRS, IP CTS, IP Relay, and CTS available in correctional
facilities where they are not currently available. As

[[Page 40423]]

noted above, the record to date strongly suggests that TTY-based TRS
and STS, by themselves, are insufficient to ensure that incarcerated
people with communications disabilities have access to functionally
equivalent communications. The Commission seeks additional, specific
information on how and to what extent each of the other TRS-Fund
supported relay services would enhance communications for incarcerated
people with communications disabilities. Where available, what specific
benefits do these services offer that TTY-based TRS and STS cannot?
What communications limitations of TTY-based TRS and STS would be
remedied by providing modern relay services? For example, how would
access to additional forms of TRS improve communications access for
incarcerated people who are deafblind? Should each of these relay
services--VRS, IP CTS, IP Relay, and CTS--be available, or would a
combination of some of them collectively provide adequate access to
telecommunications for incarcerated people with communication
disabilities? Would the provision of modern relay services also benefit
the people that incarcerated people with communication disabilities
want to call?
39. As part of its assessment of the potential benefits of making
other forms of TRS available, the Commission also seeks comment on the
extent to which, as a practical matter, TTY-based TRS is actually
available and usable in correctional facilities. To what extent is
access to TTY-based TRS subject to more restrictions (e.g., physical
access, limited hours, dependence on correctional staff) than telephone
access? For example, to what extent are TTY devices incorporated into
the telephones used by the general incarcerated population, or are TTY
devices available only upon request? The Commission also seeks comment
on the extent to which the TTYs available at correctional facilities
are actually functional and capable of making calls. Are TTYs
adequately maintained? Further, in light of the incompatibilities
between TTYs and IP networks, the Commission seeks comment on the
extent to which correctional facilities have upgraded to IP-enabled
voice service. For those that have upgraded, how do correctional
facilities ensure that incarcerated people with communication
disabilities are able to use TTYs successfully? Do incarcerated people
with disabilities wishing to use TTY-based TRS encounter difficulties
navigating inmate calling services (e.g., accessing the system to
complete steps required to make an outgoing call)? What kinds of
difficulties are encountered by individuals eligible to use STS? To
what extent could such difficulties in using TTY-based TRS and STS be
overcome by providing access to other forms of TRS?
40. Third, what security or other issues do inmate calling services
providers and correctional facilities face that could be affected by
the provision of VRS, IP CTS, IP Relay, and CTS, and how could such
issues be effectively addressed? The Commission has recognized that
security is a significant concern for inmate calling services
generally. However, service providers and correctional facilities have
developed methods for effectively monitoring, recording, and
administering inmate calls, and some commenters have stated that these
solutions are applicable or adaptable to the TRS context. Is there
evidence that security issues are more challenging for TRS than for
inmate calling services in general, and if so, why? What specific
security issues are raised by incarcerated people's access to TRS? Are
there specific concerns with respect to VRS, given its use of video?
How have security concerns been addressed with respect to TTY-based TRS
and STS, and in facilities where VRS is currently available? What
measures are available to address such security concerns with respect
to other forms of TRS?
41. Fourth, what additional costs would be incurred--and by which
entities--in providing access to VRS, IP CTS, IP Relay, and CTS,
respectively, for incarcerated people? For example, would inmate
calling services providers or other entities incur costs associated
with upgrading or modifying existing technology configurations,
operations, or associated network infrastructure? To what extent would
additional broadband services be needed for transmission and completion
of TRS calls, what costs would be involved, and which entity would
incur such costs--the correctional institution or the inmate calling
services provider? To what extent would additional costs be incurred by
TRS providers to provide relay services in correctional facilities?
Would it be necessary to provide training to correctional facilities
personnel regarding modern TRS, and which entity would incur such
costs? To what extent would additional costs be incurred, and by which
entity, in ensuring that the provision of VRS, IP CTS, IP Relay, and
CTS is secure? The Commission seeks detailed estimates of the costs
described above and how they would be incurred--including discussion of
the actual costs incurred in those instances where access to some of
these forms of TRS is already being provided.
42. The Commission also seeks comment on how the various costs
attributable to the provision of TRS access should be recovered. Which,
if any, of the additional costs that may be incurred by TRS providers
should be treated as eligible for TRS Fund support? To the extent that
costs are incurred by inmate calling services providers, to what extent
should they be recoverable in generally applicable inmate calling
services charges that are subject to Commission regulation? As
discussed below, the Communications Act restricts the extent to which
parties to a TRS call may be charged for TRS access.
43. Feasibility, TRS Equipment, and internet Access. As noted
above, its proposed expansion of inmate calling services providers'
obligations to provide access to TRS is necessarily conditional on the
extent to which associated communications capabilities, such as
internet access and suitable user devices, can be made available in a
particular correctional facility. The Commission cannot compel
providers to provide access to all forms of TRS in those facilities
where it is not feasible to do so. The Commission seeks comment on how
to determine feasibility in this context and how potential limitations
on the availability of internet service and user devices could be
addressed and overcome. In order to access relay services, certain
hardware is necessary. The Commission notes that people who are
deafblind may need devices that have refreshable Braille output or text
enlarging capabilities. To access TTY-based relay, a TTY is necessary.
For CTS, a telephone with a display suitable for captioning, and
compatible with the applicable state-program captioning service, is
required. For internet-based forms of TRS, broadband internet access is
required, as well as appropriate devices. Various devices may be used
for IP CTS, such as a caption-displaying telephone compatible with an
IP CTS provider's service, a personal computer, a laptop, a tablet, or
a smartphone. IP Relay, similarly, may be accessed using a personal
computer, a laptop, a tablet, or a smartphone. Finally, VRS requires a
device with a screen and a video camera, such as a standalone
videophone, a personal computer, a laptop, a tablet, or a smartphone.
Internet-based services (IP Relay, IP CTS, and VRS) also require
certain software that is available from TRS providers. With respect to
VRS, the Commission requires that any user

[[Page 40424]]

devices and associated software distributed by a VRS provider must be
interoperable and usable with all VRS providers' services.
44. As a threshold matter, the Commission seeks comment on the
extent to which broadband internet access, as well as the various user
devices described above, are currently made available in correctional
facilities for use by incarcerated people. To what extent are broadband
internet access services currently available for use by incarcerated
people, and could such services be used to support access to internet-
based TRS? For example, the record indicates that remote video
visitation, where available, is often provided by an inmate calling
service provider. Where an inmate calling service provider or
affiliated company is providing video visitation using broadband
internet access, is it feasible for the provider to also use such
broadband service to provide access to VRS or other forms of internet-
based TRS? To what extent are off-the-shelf user devices suitable for
internet access, such as personal computers, laptops, tablets,
smartphones, or specialized videophones, available to incarcerated
people? For VRS, to what extent are video-capable versions of such
devices available? To what extent do correctional facilities place
restrictions on people with disabilities' access to the internet and
internet-capable devices (e.g., physical access, limited hours,
dependence on correctional staff) that are not imposed on the use of
telephones by hearing people? The Commission also seeks comment on any
security issues specific to certain types of equipment that may be used
to access TRS. Are such security issues more easily or effectively
addressed with certain kinds of video-capable user devices than with
others?
45. To what extent is the provision of broadband internet access or
TRS-compatible user devices (other than TTYs) by a correctional
facility required by the ADA or other laws? Federal prisons and other
facilities receiving federal funds are subject to section 504 of the
Rehabilitation Act of 1973 and implementing regulations. State and
local correctional facilities are subject to Title II of the ADA, 42
U.S.C. 12131 et seq., and implementing regulations adopted by the
Department of Justice. For example, public entities must ``furnish
appropriate auxiliary aids and services where necessary to afford
individuals with disabilities, including applicants, participants,
companions, and members of the public, an equal opportunity to
participate in, and enjoy the benefits of, a service, program, or
activity of a public entity.'' Such ``auxiliary aids and services''
include ``qualified interpreters on-site or through video remote
interpreting (VRI) services; . . . real-time computer-aided
transcription services; . . . telephone handset amplifiers; assistive
listening devices; assistive listening systems; telephones compatible
with hearing aids; closed caption decoders; open and closed captioning,
including real-time captioning; voice, text, and video-based
telecommunications products and systems, including text telephones
(TTYs), videophones, and captioned telephones, or equally effective
telecommunications devices; videotext displays; accessible electronic
and information technology; or other effective methods of making
aurally delivered information available to individuals who are deaf or
hard of hearing.'' The Commission invites parties to comment on the
extent to which this or other applicable ADA regulations mandate the
availability to incarcerated people of appropriate equipment for
accessing TRS. To the extent that such access services and devices are
not otherwise available, should the Commission require inmate calling
services providers to provide internet access service or user devices?
The Commission also notes that TRS providers frequently distribute
suitable user devices to TRS users, although its rules do not permit
recovery of device-related costs from the TRS Fund. Should the
Commission make TRS Fund support available for the provision of these
items by a certified TRS provider to an incarcerated person, as an
exception to the cost-recovery prohibition? The Commission seeks
comment on the merits, costs, and benefits of these alternatives, and
whether the Commission has statutory authority to adopt each of them.
46. To what extent do these feasibility issues implicate the
agreements between calling service providers and correctional
facilities, and how should the Commission treat such contractual issues
in defining providers' obligations? For example, an inmate calling
services provider may claim that access to a particular form of TRS is
infeasible at a particular facility because the correctional authority
has withheld permission for incarcerated people to use that form of
TRS--or has withheld permission for the inmate calling services
provider or TRS provider to provide internet access or suitable user
devices. How should the Commission evaluate such possible defenses? For
example, should the Commission require the inmate calling services
provider to provide written evidence that the necessary permissions
were withheld? Should the Commission require providers to make a good
faith effort to secure necessary permissions, and how should a
sufficient effort be defined? Should the Commission require the
provider to show that it assured the correctional authority of its
willingness to abide by reasonable use limitations and security
restrictions? If there is sufficient evidence of infeasibility of
access to some form of TRS due to the policy of the correctional
authority, are there any steps that the Commission could take to
encourage the facility to alter its practice? The Commission invites
commenters to discuss the Commission's legal authority for any measures
advocated in this regard.
3. Application of Existing TRS Rules
47. The Commission seeks comment on whether any modifications of
its existing TRS rules may be appropriate in conjunction with expanded
TRS access for incarcerated people. In general, the rules governing
internet-based forms of TRS are more complex than those applicable to
TTY-based TRS. For example, to prevent waste, fraud, and abuse and
allow the collection of data on TRS usage, its rules require that
people using VRS, IP Relay, or IP CTS be registered with a TRS provider
and that such providers submit information on users registered for VRS
and IP CTS to a central User Registration Database (User Database). The
VRS provider must ``obtain a written certification from the individual
responsible for the videophone, attesting that the individual
understands the functions of the videophone[,] that the cost of VRS
calls made on the videophone is financed by the federally regulated
Interstate TRS Fund,'' and that the institution ``will make reasonable
efforts to ensure that only persons with a hearing or speech disability
are permitted to use the phone for VRS.'' In addition, the VRS provider
must collect and submit to the User Database the following information:
(1) The VRS provider's name; (2) the telephone number assigned to the
videophone; (3) the name and physical address of the institution (and
the Registered Location of the phone, if different from the physical
address); (4) the type of location where the videophone is placed
within the institution; (5) the date of initiation of service to the
videophone; (6) the name of the individual responsible for the
videophone, confirmation that the provider has obtained the
certification described above, and the date the

[[Page 40425]]

certification was obtained; and (7) whether the device is assigned to a
hearing individual who knows sign language. VRS providers, however, may
register videophones maintained by businesses, organizations,
government agencies, or other entities and designated for use in
private or restricted areas as ``enterprise videophones.'' In lieu of
individual registration, should the Commission also permit such
enterprise device registration for equipment used by incarcerated
people to access IP Relay and IP CTS? Should the information and
documents collected by TRS providers for purposes of such enterprise or
individual user registration be the same, or different from, the
information and documents currently required by its rules? Are
additional safeguards necessary for the provision of certain relay
services in the inmate calling services context, to prevent waste,
fraud, and abuse? What steps should be taken to ensure that compliance
with user registration rules or other TRS rules does not create a
significant delay for telecommunication access for incarcerated people
with disabilities?
48. Should incarcerated people be able to select the TRS provider
they wish to use, or should the TRS provider be selected by the inmate
calling services provider serving a facility (or by the facility
itself)? Should a TRS provider be required to identify inmate calling
services calls in their claims for TRS Fund compensation, or to submit
additional or different information to the TRS Fund administrator
regarding TRS calls involving incarcerated people? To assist the
Commission in evaluating the level of service incarcerated people are
receiving, and the effectiveness and efficiency of such service, should
the Commission require TRS providers to report annually on the
provision of TRS to incarcerated people? What kinds of information
should be included in such reports--e.g., identification of the
correctional facilities served, the number and type of devices provided
at each facility, and the number of minutes handled per facility?
49. Are any changes in the Commission's TRS confidentiality rules
necessary to address the security concerns of correctional facilities?
For example, section 64.604(a) states:

Except as authorized by section 705 of the Communications Act,
47 U.S.C. 605, CAs [(communications assistants)] are prohibited from
disclosing the content of any relayed conversation regardless of
content, and with a limited exception for STS CAs, from keeping
records of the content of any conversation beyond the duration of a
call, even if to do so would be inconsistent with state or local
law.

This rule, which the Commission has recognized as fundamental to
ensuring that TRS is ``functionally equivalent'' to voice
communications and maintaining the trust of TRS users in the TRS
program, applies to TRS providers and their CAs but does not expressly
impose obligations on other parties, such as an inmate calling services
provider that does not employ CAs and is only providing a
communications link to an authorized TRS provider. The Commission
tentatively concludes that the existing rule does not prohibit an
inmate calling services provider or correctional facility from
monitoring the transmissions sent and received between an incarcerated
person and the TRS provider's CA, in the same way as they monitor other
inmate calls, provided that the TRS provider and CA are not directly
facilitating such monitoring. The Commission seeks comment on this
tentative conclusion. The Commission also seeks comment on whether such
monitoring that does not require affirmative steps by the TRS provider
or CA is sufficient to ensure that a facility's security needs are
protected as effectively as for other inmate calls. The Commission
notes that, by monitoring transmissions to and from the incarcerated
user's device, without involving the TRS provider, the inmate calling
services provider or facility would have access to the entire content
of the incarcerated person's conversation with the other party to the
call. That is, the inmate calling services provider or facility could
monitor the incarcerated person's communication directly, and could
monitor the speech of the other party as conveyed in text or ASL video
by the TRS CA. To the extent that monitoring permitted by the current
rule is insufficient to protect institutional security, the Commission
seeks comment on whether there are ways to narrowly address such
security needs in order to avoid eroding the legitimate privacy
interests of TRS users.
50. The Commission seeks comment on whether any other modifications
to its TRS rules are necessary to address the special circumstances
that characterize inmate calling services. For example, what, if any,
changes are needed in the TRS rules governing the types of calls TRS
providers must handle (47 CFR 64.604(a)(3)), the TRS Numbering
Directory (47 CFR 64.613, 64.615(a)(1)-(2)), change of default TRS
provider (47 CFR 64.630-64.636), and TRS customer proprietary network
information (47 CFR 64.5101-64.5111)? In the inmate calling services
context, should any of the rules under part 64, subpart F, that
currently apply to TRS providers be applicable to inmate calling
services providers as well--and if so, which rules?
4. Charges for TRS Calls
51. Prohibition of Provider Charges for TTY-Based TRS Calls. In
2015, the Commission amended its rules to state that ``No [inmate
calling services] Provider shall levy or collect any charge or fee for
TRS-to-voice or voice-to-TTY calls.'' Notwithstanding this rule, some
commenters allege that some calling service providers are imposing fees
on the receiving end of TTY-based TRS calls placed by incarcerated
people. In addition, at least one commenter suggests that incarcerated
people with disabilities may be subject to charges for using or
accessing the TTY or telephone devices needed to make TRS calls. To
prevent circumvention of the rule, advocates and VRS providers have
requested that the Commission clarify that it does not allow either
party to be charged for a TRS call, or for access to equipment when
used to place or receive a TRS call. The Commission seeks additional
comment and information on whether, and to what extent, such practices
have continued after section 64.6040(b) of the rules became effective,
and by which entities--inmate calling services providers or
correctional institutions--such charges are being imposed.
52. The Commission notes that, by its terms, section 64.6040(b)
prohibits any charge for TRS calling, regardless of the person on whom
such a charge might be assessed, or whether such a charge is formally
applied to the service itself or to a device used to access the
service. Prior to the adoption of section 64.6040, other provisions of
the rules might have been read to suggest that inmate calling services
providers were free to charge the called party for TRS calls.
Specifically, in the payphone provisions of the rules, adopted more
than 20 years ago, section 64.1330(b) states that ``[e]ach state must
ensure that access to dialtone, emergency calls, and telecommunications
relay service calls for the hearing disabled is available from all
payphones at no charge to the caller.'' However, the Commission sees no
basis for inferring that the Commission, in adopting section 64.6040,
intended an unstated qualification that similarly limits its
application to the assessment of charges on the initiator of a call. In
any event, the proposed amendment would put to rest any conceivable
doubt that inmate calling services providers are prohibited

[[Page 40426]]

from charging other parties to a TRS call. Nonetheless, to more
effectively deter the charging practices described above, the
Commission proposes to amend the rule to expressly prohibit inmate
calling services providers from levying or collecting any charge on any
party to a TRS call subject to this rule, regardless of whether the
party is the caller or the recipient and whether the party is an
incarcerated person or is communicating with such individual, and
regardless of whether the charge is formally assessed on the service
itself or on the use of a device needed to make the call. The
Commission seeks comment on this proposal, including its costs and
benefits. The Commission also seeks comment on its legal authority in
this regard, including section 225 of the Act, which the Commission
relied upon in the 2013 ICS Order, as well as the interplay with
section 276 of the Act.
53. Provider Charges for Other Forms of TRS. In light of its
proposal above to expand the kinds of relay services that incarcerated
people are able to access, the Commission also proposes to amend
section 64.6040 to prohibit inmate calling service providers from
charging for other forms of TRS to which an inmate calling services
provider provides access. The Commission seeks comment on the costs,
benefits, and statutory authority for this proposal.
54. To the extent that incarcerated people currently have access to
forms of TRS not currently covered by the ban on TRS charges, the
Commission seeks comment on the extent to which callers or called
parties are currently being charged for such TRS calls, and whether
such charges are assessed by the inmate calling services provider, the
correctional facility, the TRS provider, or another entity. Are the
same charges assessed for all types of TRS calls allowed at a given
correctional facility, or only some? If certain charges are only being
assessed for some types of TRS, which types are being assessed? If
charges are imposed on either party for relay calls, what
justification, if any, is proffered for imposing such charges? Are
incarcerated people with communication disabilities being charged to
access equipment needed to make relay calls? If so, how are they being
charged (e.g., per use, or per minute), and how much are they being
charged? Are there any comparable charges for the use of telephones in
correctional facilities? Which entities impose charges for the use of
relay equipment in correctional facilities, and what justification, if
any, is proffered for such charges? Where charges are not imposed for
calls involving such additional forms of TRS, how are costs
attributable to such calls currently being recovered, and how should
they be recovered?
55. To the extent that the Commission has discretion to permit
calling service providers to assess charges for non-TTY TRS, to what
extent should such charges be allowed? Should the Commission allow
charges for some forms of TRS and not others? For example, while VRS
cannot be used for video communication unless the user knows sign
language, CTS and IP CTS have no similar inherent barriers to use--and
consequently are more susceptible to abuse by ineligible users. Could
requiring the free provision of CTS and IP CTS create an undesirable
incentive for ineligible incarcerated people to place calls using such
relay services, simply to avoid the applicable charges for using non-
TRS inmate calling services? Are correctional facilities able to
effectively mitigate such risks? Should any allowed charges be
calibrated, like TTY-to-TTY calls, to take into account that VRS, IP
Relay, IP CTS, or CTS calls, like TTY-to-TTY calls, are of longer
duration than ``functionally equivalent'' calls using ``voice
communications services''? On this point, the Commission invites
commenters to submit evidence regarding the relative duration of
various kinds of TRS calls and voice calls.
56. Correctional Institution Charges. Regarding charges for the use
of relay services (whether TTY-based or modern) or related user devices
or access services that are imposed directly by a correctional
facility, rather than by an inmate calling services provider, the
Commission seeks comment on whether the Commission has authority to
regulate or prohibit such charges, either directly or indirectly, the
source of any such authority, and how any such rules should be
structured. The Commission also seeks comment on the legality of such
charges under other laws, including other titles of the ADA.
5. Direct Video Communication by Incarcerated People With Communication
Disabilities
57. Availability of Direct Communication. Many incarcerated people
with communication disabilities have family and loved ones who also
have communication disabilities. Communication with these people
requires direct communication without TRS. This is a particular concern
for incarcerated persons who are deaf and whose primary language is
ASL. For these individuals, direct communication in their primary
language requires direct video communication. To facilitate direct
communication among ASL users, the Commission has long required VRS
providers to handle point-to-point calls between a registered VRS user
and another ASL user with an assigned VRS telephone number. Further,
the record indicates that the number of correctional facilities that
allow some form of direct video communication by incarcerated people
has grown in recent years.
58. Because of the key role of video communications for ASL users,
because VRS providers are already set up to provide direct video
service in conjunction with VRS, and because the equipment and internet
connection needed for VRS is also sufficient for direct video, the
Commission proposes to require that, wherever inmate calling services
providers provide access to VRS, they also provide access to direct
video service, through a VRS provider or by another effective method.
The Commission seeks comment on this proposal, including its costs and
benefits and relevant sources of statutory authority. The Commission
invites commenters to provide additional information on specific
benefits that direct video communication provides, beyond those offered
by VRS. In terms of benefits, costs, and feasibility, what are the
differences between video visitations, which some facilities currently
allow, and direct video communications using VRS provider networks? Is
one form of direct video communication generally more available than
the other? What are the security concerns, and related costs, with
providing direct video communication in ASL using broadband internet in
correctional facilities? How can such concerns be effectively addressed
to increase the availability of direct video communication to
incarcerated people with disabilities?
59. With respect to direct text-based communication for
incarcerated people with disabilities, the record is insufficient for
us to formulate a proposed rule. What kinds of direct text-based
communication services--such as SMS messaging and real-time text--are
currently available to incarcerated people with disabilities, and to
what extent? Do direct text communications raise security concerns, and
if so, how can they be addressed to enable increased availability of
text communication to incarcerated people with communication
disabilities?
60. Charges for Direct Communication. The Commission's current
rules limit the rates charged by inmate calling services providers for
TTY-to-TTY calls to no more than 25% of the rates they charge for
traditional

[[Page 40427]]

inmate calling services. The Commission invites comment on whether and
how to expand the scope of this rule to include charges for other types
of direct communications.
61. First, the Commission seeks additional information on current
charging practices for other types of direct communications by
incarcerated people with communication disabilities. With respect to
direct video communication that is currently available in correctional
facilities, are incarcerated people being charged for such calls, and
if so, how much? Are different charges currently applied to point-to-
point videophone calls by sign-language-using individuals with
communication disabilities than for video visitation by other
incarcerated people? How do charges for direct video communication and
video visitation compare with charges for voice telephone calls?
Regarding direct text services for incarcerated people with
communication disabilities, are there charges for such services? If so,
what are the rates? Are there differences in how much incarcerated
people with communication disabilities are charged to engage in direct
text communication and how much other incarcerated people are charged
for similar services?
62. The Commission invites comment on whether the Commission should
impose limits on the charges that may be assessed for direct video
communications by ASL users, as well as the costs and benefits and its
statutory authority for regulating such charges. Are such limits
justified by fairness and nondiscrimination considerations, such as
those underlying the TTY-pricing rule? For example, should the
Commission require that an inmate calling services provider's charges
for direct video communication by an incarcerated ASL user should be no
greater than the provider's charges for a voice call of equivalent
duration? Are similar limits needed and appropriate for direct text
communication by people with communication disabilities?
6. Accessibility-Related Reporting
63. As a part of the Commission's Annual Reporting and
Certification Requirement, inmate calling services providers are
required to submit certain information related to accessibility: (1)
``[t]he number of TTY-based Inmate Calling Services calls provided per
facility during the reporting period''; (2) ``[t]he number of dropped
calls the . . . provider experienced with TTY-based calls''; and (3)
``[t]he number of complaints that the . . . provider received related
to[,] e.g., dropped calls, [or] poor call quality[,] and the number of
incidents of each by TTY and TRS users.'' Inmate calling services
providers must submit annual reporting and certifications forms to the
Commission by April 1 of each year. Required information to submit
include international, interstate, and intrastate inmate calling
services rates and ancillary service charges. In the 2015 ICS Order,
the Commission concluded that tracking TTY-based calls would not be
overly burdensome because: (1) TTY-based TRS calls make up only a small
portion of inmate calling services calls; and (2) the need for
specialized equipment or calling a designated TRS number (such as 711),
or both, makes tracking easier. The Commission also found the burdens
of reporting TTY-based calls to be far outweighed by the benefits of
greater transparency and heightened accountability on the part of
inmate calling services providers. In the same order, the Commission
established a safe harbor, allowing inmate calling services providers
to avoid TRS-related reporting obligations if: (1) The provider
operates in a facility that allows additional forms of TRS beyond those
already mandated by the Commission, or (2) the provider has not
received any complaints related to TRS calls. Although the TRS-related
reporting may not be required under this safe harbor, the provider
would need to provide a certification from an officer of the company
stating which prong(s) of the safe harbor the provider has met. This
safe harbor was adopted to help encourage correctional facilities to
adopt more modern forms of TRS. Accessibility Coalition requests that
the Commission expand the reporting requirement to foster
accountability on the part of inmate calling services providers, and to
eliminate the safe harbor. Specifically, they ask to include the
functionality and status of accessible equipment in correctional
facilities in the reporting requirements. At this time, the Commission
does not propose a rule on reporting of accessible equipment by inmate
calling services providers, pending further information and analysis
regarding the current availability of such equipment and the role of
inmate calling services providers in providing such equipment.
Generally, GTL is opposed to additional data collection on the basis it
would create an administrative burden.
64. Given its proposal to expand the types of TRS that inmate
calling services providers are required to provide, the Commission
seeks comment on whether to expand the inmate calling services
providers' reporting requirements to include all other accessibility-
related calls. What are the benefits or burdens, including on small
entities, of imposing these additional requirements? Has its safe
harbor, in fact, driven more correctional facilities to adopt forms of
TRS other than TTY-based TRS and STS? If the reporting requirements are
expanded to include other types of TRS, should the safe harbor be
modified so that inmate calling services providers can avoid TRS-
related reporting obligations only if they have not received complaints
related to TRS calls? Alternatively, should the Commission eliminate
the safe harbor and require all inmate calling services providers to
report the required information?

B. Permanently Capping Provider- and Facility-Related Rate Components

1. Overall Methodology
65. The Commission seeks comment on what methodology the Commission
should use to permanently cap provider-related rate components for
interstate and international inmate calling services. In the Report and
Order the Commission adopts today, the Commission uses data from the
Second Mandatory Data Collection to establish zones of reasonableness
from which the Commission selects separate interim provider-related
rate caps for prisons and larger jails. Although those data are more
than sufficient to support the interim rate caps, the Commission
recognizes that more disaggregated, consistent and uniformly reported
data will be needed for us to set permanent rate caps for interstate
and international inmate calling services that more accurately reflect
the cost of providing inmate calling services, including to jails with
average daily populations less than 1,000. Accordingly, the Commission
establishes another Mandatory Data Collection to enable us to obtain
those data.
66. The Commission seeks comment on how the Commission should use
the data from the Mandatory Data Collection in establishing permanent
provider-related rate caps for interstate and international inmate
calling services. Should the Commission use those data to calculate
industry-wide mean contract costs per paid minute of use, and the
associated standard deviation, in the provision of calling services to
incarcerated persons? Should the Commission, instead, analyze costs at
the facility level, which seems necessary to capture potential
differences in costs associated with smaller facilities? If so, how
would the Commission do that if providers keep

[[Page 40428]]

their costs only on a contract basis? Does that fact suggest that, for
any particular contract, so long as the permanent rate caps enable the
provider to recover the contract costs for interstate and international
services without regard to the different facilities comprising the
contract, the caps would be consistent with the fair compensation
provision of section 276 of the Act? Or should the Commission use an
alternative methodology and, if so, what methodology should the
Commission use?
67. The Commission also seeks comment on whether the Commission
should employ a zone of reasonableness approach in establishing
permanent rate caps. If so, should the Commission establish separate
zones of reasonableness for prisons, larger jails, and jails with
average daily populations less than 1,000? Or should the Commission use
different groupings of facilities? Precisely how should the Commission
establish the upper and lower bounds of the zones of reasonableness for
each group of facilities? Should the Commission follow the approach set
forth in the Appendices to the Report and Order in developing the
database that the Commission use to set any upper and lower bounds? If
not, what alternative approach should the Commission take? What other
steps, if any, should the Commission take to make sure that any upper
and lower bounds reflect the costs of providing interstate and
international inmate calling services? And what criteria should the
Commission use in picking interstate rate caps from within those zones?
How should the Commission determine permanent rate caps if the
Commission does not use a zone of reasonableness approach? Should the
Commission set the caps at its best estimates of industry-wide mean
costs per paid minute of use plus one standard deviation or should the
Commission use another methodology? And, if so, what methodology should
the Commission use?
68. The Commission's rules preclude providers from imposing on
consumers of interstate inmate calling services any charges other than
per-minute usage charges and the permissible ancillary services fees.
The Commission invites comment on whether the Commission should
consider alternative rate structures, such as one under which an
incarcerated person would have a specified--or unlimited--number of
monthly minutes of use for a predetermined monthly charge. Should
providers be permitted to offer different options of rate structures as
long as one of their options would ensure that all consumers of inmate
calling services have the ability to choose a plan subject to the
Commission's prescribed rate caps? Would such an optional rate
structure benefit incarcerated persons and their families? For example,
incarcerated people and their families enjoy free telephone calling in
New York City and San Francisco for calls made from jails. Or would a
different alternative rate structure be preferable? Securus requests
that the Commission adopt a waiver from per minute requirements to
allow ICS providers to establish alternative rate-based pilot programs
to allow families the option of utilizing a flat rate plan. Securus
also requests that the Commission adopt a presumption in favor of
granting such waiver requests upon a showing that the alternative rate
plan would result in a lower effective rate than the interim provider-
related per minute rate caps. The Commission seeks comment on whether
the Commission should adopt such a waiver process, including the
presumption Securus seeks. What incremental costs, if any, would
providers incur to develop an alternative rate structure and implement
it on an ongoing basis? The Commission asks interested parties to
address the relative merits of different rate structures and their
impact on calling services consumers and providers.
2. Provision of Service to Jails With Average Daily Populations Below
1,000
69. In 2020, the Commission sought comment on its proposal to adopt
a single interstate rate cap for prisons and a single interstate rate
cap for jails. The Commission asked, however, whether there are
differences in providers' costs to serve different types of facilities,
and, if so, how it should take those differences into account in
setting interstate rate caps for different types of facilities. The
Commission now seeks to expand the record on these matters.
70. The available data do not make clear how, if at all, jail size
affects the costs providers incur in providing inmate calling services.
Securus asserts that jail size is a ``critical cost factor'' in
providing calling services to incarcerated people, identifying jails
with average daily populations less than 1,000 as being the most costly
to serve. The National Sheriffs' Association, for example, contends
that there are a number of factors that result in jails with fewer
incarcerated people having higher costs per minute, noting that jails
are typically operated by local jurisdictions that are under the
authority of the county government or an elected sheriff, and that
jails lack the economies of scope and scale of federal or state
prisons. The National Sheriffs' Association's 2015 survey shows, in
general, that jails with larger average daily populations have lower
per-minute costs than jails with average daily populations less than
1,000, but even if this is the case, would the fact that the jails
themselves may have higher costs make providers' costs to provide
service at jails with fewer incarcerated people any higher? Pay Tel's
outside consultant argues that ``some locations, particularly small
jails, have characteristics that make them more costly for an [inmate
calling services] provider to serve, and that the higher level of costs
precludes any ability to pay site commissions.'' Is this the case for
other providers as well? High turnover rates may play a role, as Pay
Tel explains, because ``the cost of establishing service or `selling'
to a new customer is greater than the cost of continuing to service or
maintain an existing customer.'' But to the extent providers are able
to recover the cost of account setup and funding through ancillary
service fees, how does setting up new accounts for newly incarcerated
people differ in any material way from funding existing accounts?
71. The Commission seeks comment on the particular factors that
result in higher costs of serving jails having average daily
populations below 1,000 and ask commenters to address how the
Commission should take those factors into account in setting permanent
interstate rate caps using data from the upcoming Mandatory Data
Collection. Are there characteristics that are consistent across all
jails with average daily populations less than 1,000 and that
contribute to making those facilities more costly to serve on a per-
minute basis? What factors affect providers' costs of serving these
jails? Are the characteristics that make it more costly to serve these
jails related to size, geography, state or local law, or other factors?
Does the length of the average incarcerated person's stay influence
providers' costs of serving jails having average daily populations
below 1,000 and, if so, how? What one-time costs, if any, do providers
incur when first offering service to a newly incarcerated person that
differ from the costs of the services permitted under its ancillary
services rules? What is the effect of turnover of incarcerated people
in jails with average daily populations less than 1,000 on a provider's
cost to serve that jail? Finally, are there other cost categories, such
as account setup, customer service, or refund processing, that the
Commission should consider in

[[Page 40429]]

determining appropriate rate caps for jails having average daily
populations below 1,000? Commenters are asked to share any additional
information that may be relevant for the Commission to consider in
establishing new permanent rate caps for jails with average daily
populations less than 1,000 vis-[agrave]-vis larger jails.
72. The Commission also seeks comment on how its methodology for
setting permanent interstate rate caps can quantify the factors that
make jails with average daily populations less than 1,000 more costly
to serve than prisons and larger jails. What steps should the
Commission take to distinguish the direct costs of serving these jails
from the direct costs of serving prisons and larger jails? How can the
Commission ensure that jails with average daily populations less than
1,000 are allocated an appropriate proportion of providers' common
costs? Should the Commission use a combination of allocation methods to
apportion those costs among facilities and, if so, what allocation
methods should the Commission use?
73. Finally, the Commission seeks comment whether the current
definition of the average daily population sufficiently addresses
fluctuations in jail populations and variations in how correctional
facilities determine average daily populations. Currently, its rules
define the average daily population as ``the sum of all inmates in a
facility for each day of the preceding calendar year, divided by the
number of days in the year.'' However, the record suggests that average
daily populations may fluctuate, and ``[v]arious states and localities
track these numbers differently.'' Should the Commission modify the
definition and if so, how? What other steps, if any, should the
Commission take to ensure that average daily populations are determined
on a consistent basis for all correctional facilities?
3. Correctional Facility Costs
74. In the Report and Order the Commission adopts today, the
Commission reforms, on an interim basis, the current treatment of site
commission payments related to inmate calling services for prisons and
larger jails based on the record before us. The Commission uses the
term ``larger jails'' to refer to facilities with average daily
populations greater than or equal to 1,000. The Commission permits
recovery of payments or portions of site commission payments mandated
by federal, state or local law or regulation (legally mandated) and
those resulting from contractual obligations imposed by correctional
facilities or agencies (contractually prescribed). For legally mandated
site commission payments, the Commission permits providers to pass
through these payments to consumers, without any markup, up to a
maximum total interstate rate of $0.21 per minute. For contractually
prescribed payments, the Commission adopts a new interim rate component
of up to $0.02 per minute for both prisons and larger jails. The
Commission refrains from including jails with average daily populations
less than 1,000 from today's interim rate cap reforms because the
Commission finds the record information insufficient to reasonably
consider such reforms, including for discretionary site commission
payments, at this time. The Commission seeks comment to supplement the
record to account for this fact, specifically with respect to facility
costs reflected in site commission payments. The Commission seeks broad
comment on potential site commission reforms with respect to all
correctional facilities. ICSolutions requests that the Commission
require in-kind site commission payments to be explicitly stated on
consumer bills. The Commission seeks comment on this request. Would
such a requirement be administratively difficult and confusing to
consumers? The Commission also seeks more targeted data and detailed
information that would better enable us to undertake further reforms in
how providers recover site commission payments going forward,
especially for jails with average daily populations less than 1,000, if
permitted at all, that are legitimately related to, and necessary for,
the provision of inmate calling services. Although in some places the
Commission uses the term ``smaller jails'' to refer to facilities with
average daily populations less than 1,000, that usage is not meant to
imply that such jails are small in any absolute sense.
75. In GTL v. FCC, the court left it to the Commission to determine
``which portions of site commissions might be directly related to the
provision of ICS and therefore legitimate, and which are not.'' As the
Commission explained in 2020, site commissions have two components:
Compensating facilities for the costs they incur in providing inmate
calling services and compensating the facilities for the transfer of
market power over inmate calling services from the facilities to the
providers. Prior to the 2016 ICS Reconsideration Order, the Commission
viewed these payments solely as an apportionment of profits between
providers and correctional facility owners even though it recognized
some portion of site commission payments may be attributable to
legitimate facility costs. In the 2016 ICS Reconsideration Order, the
Commission recognized that ``some facilities likely incur costs that
are directly related to the provision of [inmate calling services],''
and determined that ``it is reasonable for those facilities to expect
[inmate calling services] providers to compensate them for those costs
. . . [a]s a legitimate cost of [inmate calling services].'' But, as
the Public Interest Parties' expert explains, it is ``difficult to
disentangle which part of the site commission payment goes towards
reasonable costs and which portion is due to the transfer of market
power.'' Even the National Sheriffs' Association acknowledges that some
portion of site commission payments are ``locational rents,'' while
other parts may be attributable to other factors. How and where should
the Commission draw the line between legitimate and illegitimate
portions of site commissions? The Commission seeks comment on the
specific costs that the Commission should consider to be legitimate for
recovery through site commission allowances as the Commission moves
from the interim steps the Commission takes today to a more permanent
policy. Specifically, what costs are directly related to, and necessary
for, the provision of inmate calling services? What costs are too
attenuated or indirect to be directly related to the provision of
inmate calling services? Commenters should be as specific as possible
in describing specific costs or cost categories. If commenters identify
categories of costs that they believe are directly related to the
provision of inmate calling services, those commenters should identify
with specificity what those costs cover and why they would not be
incurred but for the fact that inmate calling services are provided at
that facility.
76. Methodology to Estimate Costs. The Commission also seeks
comment on other methodologies to estimate correctional facility costs
directly related to the provision of inmate calling services and
whether and how the Commission should consider accounting for
legitimate facility costs related to inmate calling in the future.
Should the Commission continue to permit recovery through an additive
per-minute rate component like the interim $0.02 rate component the
Commission adopts today for larger jails and prisons? Should the
Commission consider some other method of recovery such as a flat fee
per billing period or on a per-call basis? The Commission seeks
comment, generally, on any other

[[Page 40430]]

factors that the Commission should consider in determining legitimate
facility-related costs to enable inmate calling services and whether
those costs are reflected in site commission payments or recovered by
facilities in some other way, and whether it is appropriate to even
permit providers to recover those costs from end users of inmate
calling services. If they are recovered through other means, how best
can the Commission account for that fact so as to ensure there is no
double recovery at the expense of incarcerated people and their
families?
77. Given the difficulties and complexities evidenced in accounting
for and isolating what portion of site commission payments may be
related to legitimate facility costs for enabling inmate calling,
should the Commission simply consider prohibiting providers from
entering into any contract requiring the payment of contractually
prescribed site commissions for interstate and international calling
services? Would such a prohibition be the best way to ensure
incarcerated people and their families do not bear a financial burden
that is unrelated to costs necessary to provide their calling services?
The Commission believes section 201(b) of the Act provides sufficient
authority for us to prohibit such payments. Do commenters agree? What
other legal authority does the Commission have to make this
determination? Would restricting such payments ensure that providers
recover fair compensation pursuant to section 276 of the Act? Would
prohibiting such payments eliminate the incentive for facilities to
select providers that pay the highest site commissions, even if those
providers do not offer the best service or lowest rates? Would
prohibiting such payments encourage facilities to allow multiple
providers of inmate calling services to serve a given facility, instead
of awarding monopoly franchises? Does permitting providers to recover
any portion of site commission payments through interstate and
international rates decrease incentives of providers to negotiate with
facilities to lower or eliminate such payments altogether? The
Commission seeks comment on whether contractually prescribed site
commissions are commonly paid on intrastate calls. If so, will the
ability to charge site commissions on intrastate calls render
ineffective any Commission efforts to encourage correctional facilities
to prioritize the selection of providers with the best service or
lowest rates, rather than those which pay the highest site commission?
78. The Commission seeks comment on legally mandated site
commission payments. As Judge Pillard explained in her dissent in GTL
v. FCC and as the United Church of Christ and Public Knowledge
emphasize, ``the fact that a state may demand them does not make site
commissions a legitimate cost of providing calling services.'' Do
commenters agree? Why or why not? If there is a legal requirement to
pay site commissions in a state, on what basis could the Commission say
that this legal requirement is not recoverable through interstate
inmate calling services rates? Should the Commission preempt state or
local laws that impose these payments on interstate and international
calling services because they interfere with federal policy and its
statutory duty to consumers of inmate calling service that their
interstate rates be just and reasonable? What effect would such a
prohibition have on inmate calling services? How do these various
possible approaches comport with sections 201(b) and 276 of the Act,
and cases interpreting those provisions, including GTL v. FCC? Would
preventing providers from paying site commissions (or certain types of
site commissions) comport with principles of federalism? Should the
Commission consider continuing to allow the payment of site commissions
but prohibit the recovery of any portion of site commissions in
interstate and international rates?
79. Facility Costs for Jails with Average Daily Populations Less
Than 1,000. Several commenters responding to the 2020 ICS document
argue that a $0.02 rate component is inadequate for smaller jails to
recover their costs related to inmate calling services. They point to
the National Sheriffs' Association 2015 cost survey to support the
claim that ``the per minute cost incurred by the vast majority of
Sheriffs and jails for security and administrative duties associated
with [inmate calling services] greatly exceeds $0.02 per minute.'' Pay
Tel contends that a uniform $0.02 allowance for all size facilities is
at odds with the Commission's tiered treatment of site commissions in
the 2016 ICS Reconsideration Order, which adopted higher allowances for
smaller facilities, based on a finding that those facilities incur
higher per-minute costs than larger facilities. Here, commenters
suggest that legitimate facility costs related to inmate calling
services may indeed be higher for smaller facilities. Unfortunately,
they did not provide sufficient evidence to enable us to quantify any
such costs.
80. The Commission seeks that comment now. While the National
Sheriffs' Association points us to its 2015 survey for evidence that
correctional facility costs for smaller facilities are higher, the
survey data for jails with fewer incarcerated people varied far too
widely to comfortably estimate any values that would withstand scrutiny
today. This is particularly the case when even the National Sheriffs'
Association itself explains that ``each individual jail facility has
its own per minute cost because of differences in officer, supervisor
and other employee hours spent on various duties; the compensation
rates for officer, supervisors and other employees; and differences in
minutes of use,'' and states that in some cases, jails with similar
average daily populations have ``significantly different cost per
minute.'' The Commission understands there are many potential variables
that impact facilities' cost of enabling inmate calling services in
addition to size. The Commission seeks detailed comment on those
variables, including jail funding sources that may come from state or
local government budgets to offset these costs.
81. The Commission seeks comment on what costs, if any, jails with
average daily populations less than 1,000 incur related to the
provision of inmate calling services that prisons and larger jails may
not incur. If costs are indeed higher, either in an absolute sense or
on a per-unit basis, at jails with average daily populations less than
1,000, what are the characteristics that make those facilities more
costly to serve? Are these characteristics related to geography, state
or local law, or other factors, and if so, how should the Commission
account for that in its facility-rate component analysis? Are there
particular factors or characteristics that are consistent across all
jails with average daily populations less than 1,000? The Commission
encourages commenters, especially correctional facilities and agencies,
to provide detailed descriptions and analyses of the cost drivers for
jails with average daily populations less than 1,000.
82. The Commission also seeks comment on the effect of turnover of
incarcerated people in jails with average daily populations less than
1,000. The National Sheriffs' Association explains that jails ``contain
people who have been arrested and not convicted and, as a result they
experience a much greater number of admissions and higher turnover.''
Pay Tel's outside consultant points to data previously submitted by Pay
Tel estimating that the average weekly turnover is 62.2% for jails
compared with 1.01% for prisons. According to Pay Tel, this turnover
impacts both provider and facility costs.

[[Page 40431]]

While these turnover costs might lead to increased costs for the
provider due to, for example, larger numbers of account setups and
larger quantities of called numbers to be vetted, do they similarly
increase costs for the facility? If so, how and by how much, and how is
that related specifically to inmate calling services? The National
Sheriffs' Association explains that the relatively shorter stays in
jails with fewer incarcerated people leave correctional facilities with
less time to recover their costs from incarcerated people which, in
turn, leads to higher ``per inmate cost'' in these jails.'' The
Commission seeks detailed comment and analysis on the relationship
between turnover and correctional facilities' costs, but more
specifically, between turnover and inmate calling service costs. For
example, if an intake process requires certain tasks associated with
newly incarcerated people, including explaining the availability of
inmate calling services, the Commission sees no reason why any portion
of the costs of that intake process should be included as a legitimate
facility cost related to inmate calling. This is because intake
procedures are not specific to the provision of inmate calling
services. Facilities incur costs related to these procedures regardless
of whether the correctional facility staff explain the availability of
inmate calling services. The Commission also seeks data regarding
turnover rates and legitimate facility costs unique to jails with
average daily populations less than 1,000, if any. The Commission also
seeks specific information and comment on how the Commission avoids
duplication in cost recovery for inmate calling services-related costs
that both facilities and providers say they incur for the same
functions. Commenters should be specific in identifying cost categories
and providing supporting data for each category.
83. Pay Tel, which ``serves many small facilities,'' indicates that
it has experienced increases in site commissions over the last four
years, but there is no indication that these increases are attributable
to legitimate facility costs related to inmate calling services. What
accounts for these increases and why should incarcerated people and
their families bear the burdens of these costs when other services are
provided to incarcerated people for which they need not pay any fee or
rate? Is there any evidence such increases have any relationship to
inmate calling services at all except that they are being extracted
from an inmate calling services provider? Do these increases reflect
other market dynamics, such as providers offering increasingly larger
site commissions? Have other providers that serve smaller facilities
observed a similar trend? Is this increase attributable to smaller
facilities undertaking a greater share of administrative and security
tasks that calling providers would ordinarily perform for larger
facilities? Are these increases observed at all jails with average
daily populations less than 1,000 or only at the jails with the fewest
people? Conversely, have other providers experienced a decrease in site
commissions at smaller facilities in recent years? If so, what has
caused this decrease? The Commission encourages commenters to submit
current data and detailed analyses of these increases or decreases and
to what they are attributable to enable the Commission to better
understand cost causation at these smaller facilities. The Commission
also seeks comment on whether providers have sought to pay lower site
commissions in connection with inmate calling services and whether such
attempts have been rebuffed or successful.
84. Some commenters advocate for a tiered jail structure based on
average daily population, with the jails with the fewest incarcerated
people receiving the largest per-minute facility-related cost recovery.
The Commission seeks comment on whether the Commission should adopt
separate tiers that distinguish between jails with average daily
populations of less than 350 and somewhat larger jails (e.g., those
with average daily populations of 350 to 999). If so, what tiers should
the Commission adopts? The Commission previously adopted site
commission allowances for tiers that reflected three categories of
incarcerated people (i.e., jails with average daily populations below
350; medium-sized jails with average daily populations of 350 to 999;
and larger jails). Should the Commission adopt these same tiers or
different sizes or number of tiers? If so why? Or would a single tier
covering all jails with average daily populations below 1,000 be more
appropriate? Alternatively, should the Commission conclude, as certain
commenters suggest, that a uniform facility-related allowance is the
most appropriate if any such allowance is permitted? Commenters arguing
that the Commission should adopt different site commission rate
components based on jail size should provide data and supporting
analysis for any proposals submitted. Pay Tel and the National
Sheriffs' Association ask the Commission to consider the data that are
already in the record. But Pay Tel's representation that it has seen
upticks in site commission costs at some of the smaller facilities it
serves suggests that the landscape has changed since those data became
part of the record in this proceeding. The Commission therefore
requests renewed data and analysis regarding reasonable inmate calling
services costs at facilities with average daily populations between 0
and 999.
85. Facility Costs for Prisons and Larger Jails. The Commission
also seeks comment on whether the Commission should further reduce or
eliminate the $0.02 rate component allowance for contractually
prescribed site commissions for prisons, larger jails, or both. The
Commission seeks comment on the same questions the Commission poses for
jails with average daily populations less than 1,000 regarding what
factors impact a facility's legitimate costs to enable inmate calling
services. Should the Commission consider different tier sizes for
larger jails? For example, the National Sheriffs' Association proposes
categorizing the largest jails as those with average daily populations
exceeding 2,500. What would be the basis for different-sized tiers for
prisons and larger jails? Are there material differences in unit costs
that facilities reasonably incur as sizes increase? As explained above
in connection with jails with average daily populations less than
1,000, there is record evidence suggesting that small facilities incur
higher costs due to turnover of the incarcerated population. Are larger
jails and prisons similarly affected by turnover rates? If not, what
effect, if any, does turnover have at larger facilities? As the
Commission does for jails with average daily populations less than
1,000, the Commission asks commenters to provide data on turnover rates
for prisons and larger jails.
86. Security and Surveillance. Several commenters argue that
facilities' security and surveillance costs should not be recovered
through inmate calling services rates as these tasks are ``not related
to the provision of communication service and provide no benefit to
consumers.'' Others argue that these costs should be recovered through
providers' calling rates because correctional facilities incur them to
provide incarcerated people with access to inmate calling services. In
the survey data the National Sheriffs' Association provided, facilities
reported often hundreds of hours a week on security and related
administrative functions associated with inmate calling. How can the
Commission ensure that these functions are not normal security

[[Page 40432]]

functions a facility already incurs? How can the Commission determine
to what extent some of these security-related costs are for services
that should more appropriately be deemed to be general security
services that are added on to inmate calling services but not actually
necessary to the provision of the calling service itself? In other
words, the Commission seeks to determine if inmate calling service
providers are providing two different services to facilities when it
comes to these so-called security and surveillance costs: (1) A
communication service that enables incarcerated people to make
telephone calls; and (2) a separate security service that aids the
facility's general security efforts but would more appropriately be
paid for directly by the facility rather than by the users of the
communications service who receive no benefit from these security
features that are unnecessary to enable them to use the calling
service. The Commission also notes that the functions described by the
National Sheriffs' Association appear to duplicate many of the same
security functions for which providers reported costs. What types of
security and surveillance functions, if any, are appropriately and
directly related to inmate calling? For example, ICSolutions suggests
that a basic phone system requires security related to identifying the
incarcerated individual placing a call, restricting who that individual
can and cannot call, providing the called party with the ability to
accept, reject, or block the caller, and providing the facility with
the ability to monitor and record calls. This is consistent with the
position of Worth Rises, which argues that providers ``have routinely
introduced new security and surveillance services that are not required
by procuring agencies.'' The United Church of Christ, however,
disagrees with ICSolutions's assertions about ``what is considered a
minimum necessary service for the consumer, as opposed to the carceral
facility.'' ICSolutions suggests that anything more than this is not
required for secure calling and that additional products are ``gold-
plated offerings.'' What functions should be disallowed as too
attenuated to claim as legitimate costs? What methodology would permit
the Commission to verify or otherwise isolate telephone calling-related
security and surveillance costs from general security and surveillance
costs in correctional facilities? Worth Rises cautions that isolating
and thus being able to quantify calling-related security and
surveillance costs is an important step in determining how, if at all,
such costs should be recovered through rates. The Commission seeks
comment on how to isolate and quantify these from general security and
surveillance costs.
87. Obtaining Correctional Facility Cost Data. Several commenters
discuss the difficulty in determining facilities' actual costs related
to the provision of inmate calling services from examining providers'
reported costs. For example, GTL asserts that correctional facilities
``are in the best position to provide information regarding their costs
related to [inmate calling services],'' which fall into several generic
categories, namely ``administrative security, monitoring investigative,
maintenance, and staffing.'' The National Sheriffs' Association again
points to its 2015 survey as the most recent data available about
correctional facility costs as reported by correctional officials. Are
the data from the National Sheriffs' Association survey accurate today
regarding the functions and related costs that jails legitimately incur
in connection with inmate calling services? The Commission invites the
National Sheriffs' Association and others to provide updated data and
analysis in this regard. The Commission also seeks comment more broadly
on how the Commission can obtain reliable data on correctional facility
costs. Are there specific questions the Commission could ask of
providers or other stakeholders that would elicit data appropriate to
establish a permanent allowance for recovering legitimate facility-
related costs that are included in site commission payments? Should the
Commission condition any rate element for correctional facility costs
on the provision of reliable correctional facility cost data provided
to us by the facilities themselves? Or should the Commission specify a
default rate cap, similar to the $0.02 per minute that the Commission
adopts on an interim basis in the accompanying Report and Order, and
disallow recovery of any amount above that default rate cap absent the
provision of reliable facility cost data that supports a higher rate
cap?

C. Revising Ancillary Service Charges Rules

88. The Commission seeks comment on its current rules for permitted
ancillary service charges, and whether the Commission should revisit
the rules and the level of charges. Ancillary service charges are fees
that providers of calling services for incarcerated people assess on
calling services consumers that are not included in the per-minute
rates assessed for individual calls. Currently, the Commission allows
five types of ancillary service charges in connection with interstate
or international inmate calling services:
(1) Fees for Single-Call and Related Services;
(2) Automated Payment Fees;
(3) Third-Party Financial Transaction Fees;
(4) Live Agent Fees; and
(5) Paper Bill/Statement Fees.
89. The Commission has explained that these charges are unchecked
by market forces because incarcerated people and their families must
either incur them when making a call or forego contact with their loved
ones. Ancillary charges have in the past drawn Commission scrutiny and
reform because they were excessive and not cost-justified. The record
reflects concerns that consumers may still be overpaying ancillary
service charges in various ways. The Commission seeks comment on these
concerns. Certain providers argue that the Commission need not consider
making any changes its ancillary service charge cap rules. Do
commenters agree? Why or why not?
90. The record suggests that some providers of inmate calling
services may impose ``duplicate transaction costs'' on the same
payments, such as charging both an automated payment fee and a third-
party financial transaction fee also covering credit/debit card
processing fees, for example, when a consumer makes an automated
payment to fund its account with the services provider. There appears
to be some confusion among industry stakeholders regarding the
relationship between the automated payment fee and third-party
transaction fees as they relate to credit card processing fees. In
connection with automated payment fees, the Commission has suggested
that credit card processing fees that providers incur are already
included in the automated payment fee, which is capped at $3.00. At the
same time, the Commission referred to ``credit card processing fees''
in its discussion of third-party financial transaction fees in the 2015
ICS Order. The Commission seeks comment on whether the credit card
processing fees encompassed in the automated payment fee are the same
credit card processing fees referred to in the third-party financial
transaction fee. If they are the same, then permitting providers to
charge both an automated payment fee and a credit card processing fee
when consumers use a credit or debit card to make an automated payment
would, indeed, seem to allow for double recovery. And if credit or
debit card companies or other third parties are also charging the
consumer a fee for using a credit or debit card to fund their account,
permitting the services

[[Page 40433]]

provider to double recover would mean the consumer might potentially be
paying for the same processing fees three times. Do commenters agree?
Alternatively, is the credit card processing embedded in the automated
payment fee related to providers' costs of allowing credit card and
debit card payments in the facilities they serve separate and apart
from any other fees providers might incur from the third-party
financial institution for enabling such payments when third parties are
involved in the transaction? Are the ``credit card processing fees''
charged by third parties, such as Western Union, Money Gram, or credit
card companies, fees associated solely with transferring cash from a
consumer's credit card to an incarcerated person's calling account? If
so, are those fees passed on to the services provider, or the consumer
requesting the cash transfer, or both? If a third-party transaction fee
can only be passed on by the provider to the consumer when a third
party is directly involved in the transaction with the provider (as
opposed to indirectly when the consumer uses its credit or debit card
to fund an account or pay a bill using an automated method), when would
it be the case that a third-party financial transaction fee is incurred
by the provider that could appropriately be passed on to the consumer?
The Commission seeks comment on how the Commission should amend its
rules to clarify when providers may pass through separate third-party
financial transaction fees and when they may not.
91. Alternatively, the Commission seeks comment on whether its
rules clearly prohibit services providers from charging an automated
payment fee and a third-party financial transaction fee for the same
transaction in spite of some providers' apparent confusion. The Prison
Policy Initiative argues that ``the Commission's record overwhelmingly
indicates that carriers should not be allowed to double-dip by charging
an automated payment fee and passing through third-party fees on the
same transaction.'' Do commenters agree? As discussed above, if the
credit card processing costs associated with the automated payment fee
are different than the credit card processing costs inherent in the fee
associated with the third-party financial transaction fee, how are
providers double-dipping? CPC argues that there is no double-dipping
associated with charging an automated payment fee and a third-party
financial transaction fee for the same transaction. And GTL asserts
that ``[t]he rationale for and purpose of Automated Payment Fees and
Third-Party Financial Transaction Fees are therefore distinct; the
former cannot substitute for or subsume the latter.'' Do commenters
agree with this assertion? Why or why not? Can commenters point us to
specific evidence of other forms of double-dipping in the record? Are
there other costs embedded in the automated payment and third-party
transaction fees that could lead to double recovery? If there is no
overlap between the costs recovered in the automated payment fee and
the third-party financial transaction fee, on what basis would the
Commission say that providers cannot charge both for the same
transaction provided that the charges are at or below the applicable
caps?
92. Similar to its inquiry above, should the Commission
specifically prohibit providers from charging a live agent fee and a
third-party financial transaction fee in the same transaction, if no
third party is directly involved when the consumer provides the agent
with credit or debit card information? The Prison Policy Initiative
alleges that at least one provider may be charging ``an automated-
payment or live-agent fee and passing through its credit- or debit-card
processing costs.'' They point to tariff language that appears to
couple live agent fees with third-party transaction fees. In the 2015
ICS Order, the Commission explained that ``interaction with a live
operator to complete [inmate calling services] transactions may add to
the costs of providing ICS'' recognizing that providers incur costs
associated with use of a live operator. But it is unclear from the
current record whether third-party costs are involved with all or even
some such live agent transactions, or whether such costs are already
included in the live agent fee. For example, if the provider uses its
own live agents, do such agents ever engage in three-way calls with
third parties, such as Western Union or MoneyGram to transfer money to
effectuate the transaction? If so, would it be the provider or the
consumer that would incur the third-party transaction fee imposed by
Western Union or MoneyGram for transferring the money? Even if there
were third parties involved, the Commission has been clear that the fee
for use of a live agent applies ``regardless of the number of tasks
completed in the call.'' Does this suggest that there should be no
other fees passed through to the consumer in connection with the use of
a live operator? Why or why not? ICSolutions characterizes third-party
fees, automated payment fees, and live agent fees as fees related to
funding accounts and suggests that the Commission should amend its
rules to prevent providers from charging more than one of these types
of fees per funding event. Do commenters support this proposal? Why or
why not?
93. Finally, the Commission seeks comment on how the Commission can
ensure that third parties are involved when third-party financial
transaction fees are charged. The Commission has explained that the
third-party financial transaction fees necessarily must involve third
parties. The Prison Policy Initiative suggests that certain fees
characterized as third-party financial transaction fees may not
actually involve third parties. In the case of GTL, for example, the
Prison Policy Initiative explains that ``the customer makes a payment
via GTL's website, thus making only two parties to the transaction.''
The Prison Policy Initiative acknowledges that ``other entities may
participate behind the scenes (such as the customer's card issuer and
GTL's acquiring bank), but these entities are not directly third
parties to the transaction; they are merely agents of the payor and
payee.'' Should the Commission amend its rules to require calling
service providers to specify the third party involved in the
transaction whose fees are being passed through to the consumer? Why or
why not? Should the Commission define a third party in its rules as a
company that is not related to the calling services provider as
ICSolutions suggests? How should the Commission define ``not related''
for purposes of such a rule?
94. The record also reveals that ``15 states now explicitly exclude
any automated payment (or deposit) fees from being charged to end users
because the costs of automated payments are already factored into the
[inmate calling services] provider's direct or indirect costs of
providing service.'' What is the basis for these states' decisions to
exclude these types of fees? Do providers already include these costs
in the cost of providing inmate calling services? To the extent
providers claim that it costs more to serve smaller facilities because
higher turnover rates result in opening proportionately more new
accounts, does this confirm that providers consider the processing of
automated payments (necessary to establish a new account) as a cost
included in their general inmate calling services accounts? The
Commission seeks comment on whether the Commission should similarly
prohibit providers from charging automated payment fees. Should the
Commission instead reduce such fees to account for the third-party
charges embedded in

[[Page 40434]]

those fees? If so, what would be the appropriate cap?
95. In the Report and Order, the Commission adopts an interim cap
of $6.95 for fees related to single-call services and third-party
financial transaction fees based on data provided by the Prison Policy
Initiative and acknowledged by other public interest advocates that
providers were circumventing the ``pass through without markup'' rule
previously in place. NCIC has proposed that the Commission cap the
third-party financial transaction fee associated with single-call
services at the $3.00 cap for automated payment fees or the $5.95 cap
for live agent fees, as applicable. And ICSolutions similarly suggests
that the Commission cap third-party fees at the $5.95 live agent fee
cap or the $3.00 automated fee cap. As the Commission explains in the
Report and Order, however, the record does not contain sufficient
evidence to adopt these proposals at this time. The Commission seeks
comment on these proposals here. Why would it be reasonable to tie fees
for single-call services and/or third-party transaction fees to the
caps for automated payment or live agent fees? What is the relationship
between these fees? Should the Commission consider adopting two
separate caps on third-party financial transaction fees, one for money
transfer companies like Western Union and a separate one for credit
card companies? Given the evidence provided by the Prison Policy
Initiative suggesting that one of the more prevalent money transmitter
services charges more than NCIC's proposed caps, on what basis would
the Commission adopts NCIC's lower caps? In the absence of a revenue-
sharing agreement, do these third parties legitimately charge more than
NCIC's proposed caps, and if so, do providers--due to the volume of
business conducted with these money transfer companies--have an ability
to negotiate lower fees?
96. Relatedly, the Commission remains concerned about the adverse
effect of revenue-sharing arrangements between calling service
providers and third-party financial institutions. In the 2020 ICS Order
on Remand, the Commission cited evidence that inmate calling services
providers have ``entered into revenue-sharing arrangements with third-
party processing companies such as Western Union and MoneyGram where a
third-party processing company shares its revenues generated from
processing transactions for an inmate calling services provider[s]'
customers.'' While the Commission sought additional evidence that
providers were using revenue-sharing or other arrangements to
indirectly mark up ancillary service charge fees, the Commission
received relatively little responsive comment. The Commission therefore
seeks renewed comment on how revenue sharing arrangements work in the
context of ancillary service charges, including concrete evidence of
these arrangements. There is evidence in the record that revenue
sharing can run from the third party to the calling services provider
whereby the third-party provider charges the consumer a fee, which the
third party then shares with the providers. The record also suggests
that providers may charge the incarcerated person inflated fees and
then split the resulting revenue with third parties. Is one scenario
more prevalent than the other? How do commenters suggest that the
Commission detect these types of practices? Will its adoption of a
specific monetary cap--instead of permitting the pass-through of any
third-party financial transaction fee--mitigate this issue, or could it
still occur even under the adopted caps? Should the Commission adopt a
rule disallowing the revenue-sharing arrangements with respect to
interstate or international inmate calls or accounts altogether? If so,
how should the Commission ensure compliance with such a rule?
97. Certain parties point out that the Commission's present
ancillary services charge caps are based on cost data that are over six
years old and assert that all ancillary service charge caps should be
immediately reduced by 10%. These commenters argue that the caps should
also be adjusted in the future based on more current cost data. The
Commission seeks comment on these proposals. The Commission notes that
the Mandatory Data Collection that the Commission authorizes in the
accompanying Report and Order will collect cost data on the permissible
ancillary service charges. Should the Commission adjust the ancillary
service charge caps based on the new data collection the Commission
will receive from the upcoming Mandatory Data Collection? What factors
should the Commission consider in evaluating that cost data for
ancillary service charges in connection with interstate and
international inmate calling services?
98. The Commission asks commenters to address specific factors that
the Commission should consider in evaluating the cost data to ensure
the Commission addresses and accounts for anomalies that may distort
its analysis. The Commission encourages participation, and seek input,
from any state public utility commission or similar state regulatory
agency colleagues having jurisdiction over inmate calling services
based on their expertise setting appropriate ancillary service charge
caps.
99. Should the Commission consider revising the ancillary service
charge caps on a standard periodic basis? If so, how frequently should
the Commission revise those caps and what process should the Commission
follow? Commenters should provide the reasoning and justification for
their responses. For example, how should the Commission balance related
benefits and burdens to all relevant stakeholders and serve the public
interest in determining how frequently to update ancillary service
charge caps to enable the Commission to continually maintain interstate
and international rates and charges that are just and reasonable and
provide fair compensation to providers? How frequently should the
Commission require providers to file updated ancillary charges cost
data to make this possible?
100. The Commission also seeks comment generally on any other
matters related to ancillary services that the Commission should
consider in reforming its ancillary service charges rules. For example,
record evidence suggests that certain providers fail to close accounts
and issue refunds to families of incarcerated people when they are
released. It appears that some state authorities, such as the Alabama
Public Service Commission, have addressed this problem. The Commission
are concerned that any unused funds are not refunded to the account
holder and invite comment on this issue. Should the Commission adopt a
rule requiring automatic refunds after a certain period of inactivity?
If so, what timeframe would be appropriate? Should the timeframe vary
based on the size and type of facility? If the Commission requires
these refunds, how should such refunds be made? Is this issue
sufficiently related to setting up an account and making automatic
payments that the Commission can address it in its existing ancillary
services charges rules, or should the Commission adopt a separate rule
to address this issue? The Commission also seeks comment on whether the
Commission should add a rule relating to account setup fees to prohibit
charging separate fees for establishing an account. Do providers assess
separate fees for account setup? The Commission also seeks comment on
the issue of dropped calls as it relates to ancillary service charges.
Should the Commission amend its rules to prevent providers from
assessing the same ancillary

[[Page 40435]]

service charge in cases where calls are dropped after a call is
successfully connected? For example, should providers be permitted to
charge a fee for single-call services if a consumer makes a call that
is dropped and then must make another call to finish the conversation?
Why or why not? If not, how should the Commission amend its ancillary
service charge rules to prevent this? Are there other issues regarding
dropped calls in the ancillary services context that the Commission
should be aware of? More broadly, are there other practices in which
providers engage that the Commission should also consider addressing in
the context of its ancillary services rules? If so, the Commission asks
commenters to describe such practices in detail and discuss how best
the Commission should address them. Finally, the Commission seeks
comment on whether fees for single-call services are ``already covered
under the other fees applicable to all calls'' as ICSolutions alleges.
Do commenters agree with this assertion? If so, how are these fees
embedded in the other permitted ancillary service charges? Should the
Commission consider eliminating fees for single-call services as a
permissible ancillary service charge? Why or why not and on what basis
would the Commission do so? NCIC and ICSolutions also mistakenly assume
that fees for single-call services are capped at either the $5.95 live
agent fee or the $3.00 automated payment fees, but the Commission's
rules do not establish these caps in connection with fees for single-
call services. Relatedly, should the Commission reduce the cap on fees
for single calls as the Prison Policy Initiative asks? If so, what
would be an appropriate cap?

D. Refining International Rate Methodology To Prevent Double Counting

101. In the Report and Order, the Commission adopts interim rate
caps for international inmate calling services based on a formula that
permits a provider to charge a rate up to the sum of the provider's
per-minute interstate rate cap for a particular correctional facility
plus the amount that the provider must pay its underlying international
service provider for that call on a per-minute basis. The interim rate
caps for international calls will benefit incarcerated people by
lowering the rates for most of their international calls, while
allowing providers to recover their costs for those calls. Nonetheless,
the Commission is concerned that the new interim rate caps for
international calls may be based on an overestimation of the costs
providers actually incur in providing international inmate calling
services.
102. In particular, the Commission is concerned by the Public
Interest Parties' assertion that the interim rate caps for
international calls that the Commission sets today may be double
counting providers' costs for international calls because such costs
are already included in their overall inmate calling services costs
that the Commission uses to set interim interstate rate caps. As the
Public Interest Parties explain, ``some [inmate calling services]
providers reported zero international costs but positive international
minutes and revenues [which] suggests that international costs are
already included in their total costs, and thus accounted for in the
interstate rates.''
103. The Commission seeks comment on this assertion. Do the data
reflect such double counting? Is some degree of double counting a
natural consequence of the way providers reported their costs
associated with international calls as part of their total costs
associated with inmate calling services? Despite Public Interest
Parties' concerns, the record indicates that some providers separately
reported international calling costs in their responses. The Commission
anticipates that in the upcoming Mandatory Data Collection, WCB and OEA
will require calling service providers to report separately the amounts
they pay international service providers for international calls. Will
this eliminate the double counting of international inmate calling
services costs, to the extent it exists? If not, how should the
Commission address this issue if providers do not ordinarily track
international call costs separately? What allocation method should
providers use to reliably separate their international costs from their
interstate costs? The Commission further asks what types of costs
should legitimately be considered as additional costs associated with
international calls. Do those additional costs include only the charges
imposed by international carriers?
104. The Commission also asks commenters to consider other ways in
which the Commission could reform international rates on a permanent
basis to ensure they are just and reasonable. For example, there is
evidence in the record that in addition to varying by country/rate
zone, international rates also vary depending on whether the call
terminates on a mobile or fixed-line network. Should the Commission
address this type of rate variation in setting permanent rate caps for
international calls, and if so, how? Are there other types of
international voice communications that could be provided to
incarcerated people that would result in significantly reduced
financial burdens for international calling to their family and loved
ones abroad? Should the Commission require providers to work with
facilities to enable alternatives to traditional types of voice
communications that would be less expensive? Are there any other issues
the Commission should take into account in setting permanent rate caps
for international inmate calling services?

E. Recurring Mandatory Data Collection

105. The Commission seeks comment on whether the Commission should
conduct cost data collections on a more routine, periodic basis than
the Commission has since the First and Second Mandatory Data
Collections in 2012 and 2019. In 2020, the Commission sought comment on
whether, in the event that it adopted a new data collection, it should
require providers to update their responses to that collection
periodically. The Commission invited comment on the relative benefits
and burdens of a periodic data collection versus another one-time data
collection. The Commission also asked how frequently it should collect
the relevant data, inquiring whether a biennial or triennial collection
covering multiple years would balance the benefits and burdens better
than an annual collection.
106. In the Report and Order, the Commission institutes a Third
Mandatory Data Collection. GTL asserts that data filed in the Annual
Reports are sufficient to evaluate calling service providers' rates,
but the Commission disagrees. Instead, the Commission agrees with the
Public Interest Parties who explain that the Annual Reports only
include information on rates and charges and not the type of cost data
required to establish and ensure continued cost-based rates. The
Commission seeks comment on whether the Third Mandatory Data Collection
should be required to be updated within a specific future timeframe to
enable us to evaluate the reasonableness of providers' interstate and
international rates on a regular basis. The Public Interest Parties
assert that, to further refine rate caps in the future, the Commission
should institute a ``routine, periodic data collection with clear,
structured questions, commit to reviewing that data through scheduled
ratemaking proceedings, and adjust [inmate calling services] rates
accordingly.'' The Public Interest Parties contend that the Commission
should first establish an annual data collection to ensure it has
sufficient and updated

[[Page 40436]]

information to reevaluate rate caps, and then establish a triennial
rate review process to evaluate the prior two years' cost data to
determine whether interstate rates for inmate calling services and
ancillary service charge caps should be lowered. According to the
Public Interest Parties, a three-year review cycle would strike the
appropriate balance between the need for the Commission to fulfill its
statutory mandate and the administrative burdens to providers. Free
Press supports conducting routine future data collections and
implementing a biennial or triennial review process to evaluate rates
based on those data collections. Free Press asserts that a periodic
collection will provide the Commission with the opportunity to conduct
trend analysis on costs, revenues, and prices charged over time, and
that it may give providers an incentive to collect more uniform and
consistent data over time. The Commission seeks comment on these
proposals or alternative proposals that similarly enable us to monitor
costs and revenue for the purpose of continuing to lower the rate caps.
107. The Commission recognizes that the periodic collection and
assessment of cost data could yield valuable information but are
conscious of potential burdens on providers. If the Commission were to
adopt a periodic collection, how could the Commission best structure
the collection in order to maximize its benefits, while at the same
time reducing administrative burdens on providers? Would a triennial
review, as described by the Public Interest Parties, be the ideal
structure? What are the relative benefits and burdens of conducting a
triennial review versus a biennial review, or some other type of
review?
108. The Commission invites comment on how providers should
maintain their records in the event the Commission requires a periodic
collection, such as a triennial review? Should the Commission impose
specific recordkeeping requirements on providers of inmate calling
services? What would be the type of recordkeeping requirements
necessary for a biennial or triennial review, as opposed to a one-time
collection? Is there a relatively small but precisely defined set of
investment and expense accounts that the Commission could establish
relative to providers' inmate calling service assets and labor
activities or categories of assets and labor activities to facilitate
consistent data reporting among all providers? If so, what specific
accounts should be included in the prescribed set of accounts? Securus
considers its cost study ``to be a comprehensive view'' of its cost
structures and encourages ``the Commission to consider similar data
collection from other providers.'' Should the Commission use this cost
study as a model for future mandatory data collections, especially in
regard to the cost categories and methodologies set forth therein? Why
or why not? Should a portion of revenues from ancillary services be
netted out of the inmate calling service costs to the extent that costs
are incurred for assets or labor shared among inmate calling services
and ancillary services if the full amount of these shared costs is
reported as inmate calling service costs? If so, how should it be
calculated? The Commission believes its authority under sections 201
and 220 of the Act permits us to impose certain recordkeeping
obligations on providers for the purpose of ensuring just and
reasonable rates. Do commenters agree? What other authority does the
Commission have to adopt such requirements should they be necessary?
How can the Commission ensure that providers comply with any
recordkeeping requirements? Are there other requirements associated
with a periodic collection, as opposed to a one-time data collection,
that the Commission should consider?
109. Alternatively, should the Commission require providers to
comply with an annual or biennial certification obligation attesting to
the fact that no substantial change in costs has occurred that would
warrant a change in rates? Would such a certification in conjunction
with providers' annual reporting obligation on rates provide us
sufficient basis to avoid periodic data collection on a more routine
basis? The Commission seeks comment on this alternative and any others
that stakeholders may propose.

F. Revisions to the Commission's Definition of ``Jail''

110. The Commission proposes to amend section 64.6000(m) of its
rules to clarify the definition of ``Jail'' in several ways. These
amendments would apply equally to the definition of ``Prison'' because
its rules explain that ``Prisons'' include ``facilities that would
otherwise fall under the definition of a Jail but in which the majority
of inmates are post-conviction or are committed to confinement for
sentences of longer than one year.'' First, the Commission proposes to
modify the definition of ``Jail'' in section 64.6000(m) of its rules to
include facilities operated by the Federal Bureau of Prisons (BOP) and
Immigration and Customs Enforcement (ICE), whether directly or by
contract with third parties. Second, the Commission proposes to add
``juvenile detention facilities'' and ``secure mental health
facilities'' to that definition. The Commission seeks comment on these
proposals, which are consistent with the 2015 ICS Order and are meant
to prevent potential confusion as to the application of its rules.
111. In the 2015 ICS Order, the Commission explained that the rate
caps adopted in that order were meant to apply to ``jails, prisons and
immigration detention facilities, secure mental health facilities and
juvenile detention facilities.'' The Commission further explained that
the general term ``Jail'' was meant to include facilities operated by
local, state, or federal law enforcement agencies and ``city, county or
regional facilities that have contracted with a private company to
manage day-to-day operations; privately-owned and operated facilities
primarily engaged in housing city, county or regional inmates; and
facilities used to detain individuals pursuant to a contract with ICE
and facilities operated by ICE.'' But the codified rule only includes
``facilities used to detain individuals pursuant to a contract'' with
ICE, and does not explicitly include facilities operated directly by
ICE. Similarly, while the BOP is a ``federal law enforcement agency''
such that BOP facilities fall within the purview of its rules, the
codified rule does not explicitly distinguish between facilities
operated by the BOP and those operated under a contract with the BOP.
The Commission therefore proposes to explicitly list ICE and BOP
facilities, whether operated directly by the relevant law enforcement
agency or by contract, in the definition of ``Jail.'' The Commission
finds these proposed changes to 64.6000(m) of its rules to be
clarifying in nature given the Commission's stated intent in 2015 to
include all facilities directly operated by law enforcement agencies
and those operated pursuant to a contract with a third party. The
Commission seeks comment on this analysis. The Commission also seeks
comment on whether there are other types of correctional facilities
that should be explicitly added to its codified definitions of ``Jail''
or ``Prison.''
112. The Commission also proposes to list ``juvenile detention
facilities'' and ``secure mental health facilities'' within the
definition of ``Jail'' in section 64.6000(m). In the 2015 ICS Order,
the Commission concluded that providing inmate calling services in
these facilities was ``more akin to providing service to jail
facilities'' and instructed that ``[t]o the extent that juvenile
detention

[[Page 40437]]

facilities and secure mental health facilities operate outside of jail
or prison institutions'' they would be subject to the rate caps
applicable to jails. However, the codified definition of ``Jail'' does
not include the phrases ``juvenile detention facilities'' or ``secure
mental health facilities.'' As relevant to juvenile facilities, the
National Center for Youth Law explains that it is ``unclear which rate
cap will apply to juvenile facilities, many of which are not described
by the proposed definitions of `jail' or `prison.''' The Commission
therefore proposes to add these terms to the definition of ``Jail'' in
section 64.6000(m) and seek comment on this proposal.

G. Characteristics of the Bidding Market

113. The Commission has already determined that inmate calling
services providers have market power at the facility level once they
win a contract. However, some providers claim that they win contracts
through a competitive bidding process, and thus, that the market or
markets to supply inmate calling services are competitive. To assess
this claim, and its relevance to permanent rate caps, the Commission
seeks comment on the characteristics of the bidding market. The
Commission proposes to define every contract or request for proposal as
a market in which calling service providers participate based on its
understanding that providers generally make contract-by-contract
decisions about whether or not to bid on a particular request for
proposal, and they do not bid on all open requests for proposals. The
Commission seeks comment on these proposed bidding market boundaries or
whether there are other boundaries the Commission should consider.
114. The Commission also seeks comment on the extent of competition
in these bidding markets. What share of providers' contracts are won
through a competitive bidding process? Does this vary across providers?
Does the number of bidders vary from request for proposal to request
for proposal, and if so, what determines bidders' decisions to compete?
Does the number of bidders vary depending on the type and size of
facility? Do large providers have a competitive advantage in bidding
for certain contracts, such as contracts for state prisons, or large or
multiple facility contracts? Are there providers who cannot compete for
such contracts at all? Are some providers unable to bid beyond certain
geographies because of logistical difficulties or difficulties
associated with meeting different governmental requirements? Are some
providers uninterested in certain requests for proposals (e.g., those
for the jails with the fewest people)? What are the implications of
these answers for competition for different requests for proposals?
Should the Commission consider prisons, larger jails, and contracts for
multiple facilities to be in separate market segments? Are there other
potential market segments the Commission should consider? It is common,
in measuring market power in bidding markets, to analyze bids across
many requests for proposals to determine the impact of the number and
identity of bidders on contract prices. In the context of a merger, the
U.S. Department of Justice and Federal Trade Commission recommend
examining ``the frequency or probability with which, prior to the
merger, one of the merging sellers had been the runner-up when the
other won the business.'' Should the Commission collect data to enable
such analysis?
115. The Commission seeks to understand how correctional
authorities select a winning bid. To what extent do correctional
authorities evaluate inmate calling service bids based on costs (both
to incarcerated people and to the facility), quality of service, or
other factors? What is the relevance of site commissions? Do calling
service providers compete on the basis of site commissions? If so, how?
Are providers aware of site commissions offered by other providers in
the bidding process? If not, how do they determine the level of the
site commission to offer to ensure that they remain competitive?
Assuming no site commission is legally mandated, can a provider win a
bid if it offers no site commission to the facility? The Commission has
observed differences in criteria for awarding contracts among various
requests for proposals that the Commission has reviewed. Is this
seeming heterogeneity in the criteria used by authorities when
selecting a winning bid typical? If so, is this heterogeneity more
pronounced in some jurisdictions or jail types than in others?
116. The Commission understands that once a local correctional
authority awards the contract to a particular provider, it is locked
into a multi-year contract, typically with options to renew that avoid
the need for further competitive bidding to serve the facility after
the expiration of the initial term. Is there a typical contract length,
and if so, does this vary across prisons and jails or by contract size?
Are there typical timeframes for options to renew? Does exercising
options to renew lead to contract amendments that also avoid
competitive bidding to effectuate contractual changes? Is contract
length ever a dimension along which provider's bids are compared, in
addition to criteria pre-specified in the request for proposal? Do
correctional authorities give more weight to some criteria than others,
and if so, which ones? How easy or difficult is it to modify the terms
of the contract or terminate it during the contract term if the
correctional authority is dissatisfied with the provider's rates, site
commissions, terms, or quality of service? How common is it for a
contract to be extended by correctional authorities, and does this
occurrence vary as between prisons or jails, or by contract size?
117. The Commission has found that the inmate calling services
industry is highly concentrated, and that GTL possesses the largest
market share, controlling [REDACTED] of the market as measured by paid
minutes. Another provider, Securus, controls [REDACTED] of the market,
which means these two firms collectively control [REDACTED] of the
market. The record also shows high industry concentration as measured
by the Herfindahl-Hirschman Index (HHI). The Commission seeks comment
on these findings. Are these shares still accurate? Does a large
industry share, together with entry barriers and other market
characteristics, give the two largest inmate calling services providers
a degree of market power in bidding for certain or all requests for
proposals?
118. The Commission seeks comment on barriers to entering the
inmate calling services markets, both generally and in terms of bidding
on a particular request for proposal. What impediments do potential
providers face when considering entering the inmate calling services
market? The Commission also seeks comment on actual entry into the
market in the past. How many firms have entered or exited the inmate
calling services market in the past twenty years? What barriers does a
provider face once it enters the market? What services, other than
inmate calling services, must be offered, at a minimum, by a provider
in order to successfully participate in the bidding market given record
evidence of service bundling required by many facilities when issuing
requests for proposals?
119. The Commission also understands that providers frequently
provide multiple nonregulated services at the facilities where they
provide inmate calling services, including commissary services, access
to email and the internet, video services, video visitation and
calling, and access to tablets. Do correctional authorities sometimes
or typically require that the

[[Page 40438]]

same company bundle some or all of these services? If so, are there any
exceptions to this (i.e., do correctional authorities enter into
separate contracts for certain services with different providers), and
how common is this? What other services outside of telephone
communications do providers competitively bid on at the same facility?
Are providers more likely to win bids if they offer other services at
the same facility? Have calling service providers used their market
power, to the extent they have such power, in the communications
services market to affect bidding for other services? The Commission
asks whether the Commission should consider any additional aspects of
the bidding market and invite parties to submit alternative evidence in
the record.
120. If the Commission does find that some providers possess market
power in the bidding market, should the Commission act to make it
easier for small providers to compete? Would doing so better ensure
just and reasonable rates? For example, should the Commission prohibit
dominant providers from including certain terms and conditions in their
contracts with correctional authorities? In many instances, won
contracts are not publicly available. Would requiring the contracts to
be made publicly available make bidding more competitive? The
Commission seeks comment on potential ways to even the playing field
among large and small providers in the bidding market, and on whether
doing so would lower interstate rates paid by incarcerated people and
their families. The Commission also seeks comment on whether such
regulations would result in supporting providers that are currently not
as successful in winning contracts with correctional facilities in
spite of continuing to bid for contracts.
121. The Commission also seeks comment on the optimal regulatory
regime for inmate calling services. If the Commission finds that
certain providers possess market power in the bidding market, should
the Commission classify those providers as dominant carriers? In the
past, the Commission imposed rate-of-return regulation on providers
with market power. Would this type of regulation be appropriate in the
event that market power in the bidding market is found to exist? If
not, what type of regulatory regime would promote regulatory certainty
and permit us to ensure that inmate calling services rates and charges
are just and reasonable? What other type of regulatory framework would
be appropriate to achieve its objectives if the Commission determines
that some or all inmate calling service providers should be considered
dominant carriers? What are the relative costs and benefits of the
alternative approaches? Finally, the Commission welcomes comments by
all stakeholders on appropriate alternative frameworks and ideas that
will promote increased transparency and just and reasonable inmate
calling services rates and charges for incarcerated people.

IV. Procedural Matters

122. Filing of Comments and Replies. Pursuant to sections 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments and reply comments on or before the dates
indicated on the first page of this document. Comments may be filed
using the Commission's Electronic Comment Filing System. See FCC,
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(May 1, 1998). The Protective Order issued in this proceeding permits
parties to designate certain material as confidential. Filings which
contain confidential information should be appropriately redacted, and
filed pursuant to the procedure described therein.
123. Electronic Filers: Comments may be filed electronically using
the internet by accessing the ECFS: <a href="https://www.fcc.gov/ecfs/">https://www.fcc.gov/ecfs/</a>.
124. Paper Filers: Parties who choose to file by paper must file an
original and one copy of each filing. If more than one docket or
rulemaking number appears in the caption of this proceeding, filers
must submit two additional copies for each additional docket or
rulemaking number.
125. Filings can be sent by commercial overnight courier, or by
first-class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
126. Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701. U.S. Postal Service first-class, Express,
and Priority mail must be addressed to 45 L Street NE, Washington, DC
20554.
127. Effective March 19, 2020, and until further notification, the
Commission no longer accepts any hand or messenger delivered filings.
This is a temporary measure taken to help protect the health and safety
of individuals, and to mitigate the transmission of COVID-19.
128. Comments and reply comments must include a short and concise
summary of the substantive arguments raised in the pleading. Comments
and reply comments must also comply with section 1.49 and all other
applicable sections of the Commission's rules. The Commission directs
all interested parties to include the name of the filing party and the
date of the filing on each page of their comments and reply comments.
All parties are encouraged to use a table of contents, regardless of
the length of their submission. The Commission also strongly encourages
parties to track the organization set forth in the Fifth Further Notice
of Proposed Rulemaking in order to facilitate its internal review
process.
129. People with Disabilities. The Commission asks that requests
for accommodations be made as soon as possible in order to allow the
agency to satisfy such requests whenever possible. Send an email to
<a href="/cdn-cgi/l/email-protection#b1d7d2d2848185f1d7d2d29fd6dec7">[email&#160;protected]</a> or call the Consumer and Governmental Affairs Bureau at
(202) 418-0530.
130. Ex Parte Presentations. This proceeding shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies).
131. Persons making oral ex parte presentations are reminded that
memoranda summarizing the presentation must (1) list all persons
attending or otherwise participating in the meeting at which the ex
parte presentation was made and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda, or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in the prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with section 1.1206(b) of the Commission's rules.
Participants in this proceeding should familiarize themselves with the
Commission's ex parte rules.
132. Initial Regulatory Flexibility Act Analysis. As required by
the RFA, the Commission has prepared an Initial

[[Page 40439]]

Regulatory Flexibility Analysis (IRFA) of the possible significant
economic impact on small entities by the policies and rules proposed in
the Fifth Further Notice of Proposed Rulemaking. The Commission
requests written public comments on the IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines
for comments provided in the Fifth Further Notice of Proposed
Rulemaking. The Commission will send a copy of the Fifth Further Notice
of Proposed Rulemaking, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). In addition, the
Fifth Further Notice of Proposed Rulemaking and the IRFA (or summaries
thereof) will be published in the Federal Register.
133. Initial Paperwork Reduction Act Analysis. The Fifth Further
Notice of Proposed Rulemaking contains proposed new information
collection requirements. The Commission, as part of its continuing
effort to reduce paperwork burdens, invites OMB, the general public,
and other Federal agencies to comment on the information collection
requirements contained in this document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4), the Commission seeks specific comment on how the
Commission might further reduce the information collection burden for
small business concerns with fewer than 25 employees.

V. Initial Regulatory Flexibility Analysis

134. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on small entities by the policies and rules proposed in this Fifth
Further Notice of Proposed Rulemaking (FNPRM). The Commission requests
written public comments on this IRFA. Comments must be identified as
responses to the IRFA and must be filed by the deadlines for comments
provided on the first page of this document. The Commission will send a
copy of the FNPRM, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). In addition, the
FNPRM and the IRFA (or summaries thereof) will be published in the
Federal Register.

1. Need for, and Objectives of, the Proposed Rules

135. In this document, the Commission seeks more detailed evidence
and comments from industry stakeholders to consider further reforms to
inmate calling services rates within its jurisdiction, including
permanent interstate and international rate caps. The Commission seeks
to ensure that functionally equivalent access is provided to people who
are deaf, hard of hearing or deafblind, or have speech disabilities.
The TTY-based telecommunications relay service (TRS) and speech-to-
speech relay service (STS)--the only relay services for which inmate
calling services providers currently are required to provide access
under the Commission's rules--are insufficient to meet the range of
needs of incarcerated people with communication disabilities using
today's networks. The Commission seeks comment on requiring inmate
calling services providers to make available newer forms of TRS, such
as Captioned Telephone Service (CTS) (a non-internet-based telephone
captioning service), and the three forms of internet-based TRS: Video
relay service (VRS), IP Captioned Telephone Service (IP CTS), and IP
Relay (a text-based relay service using IP). The Commission seeks
comment on whether to modify the existing TRS rules for application to
the provision of such services at correctional facilities. The
Commission seeks comment on whether to expand the scope of the rule
prohibiting charges for TRS provided at correctional facilities.
Further, the Commission seeks comment on whether to require inmate
calling services providers to provide access to direct video
communication for incarcerated people with communication disabilities.
Finally, the Commission seeks comment on whether new TRS services
provided to incarcerated people with communication disabilities should
be included in the existing accessibility-related reports.
136. The Commission seeks comment on what methodology it should use
to permanently cap provider-related rate components for interstate and
international inmate calling services. It seeks comment on the
provision of communications services to jails with average daily
populations below 1,000 and on further reforms to the treatment of site
commission payments in connection with interstate and international
inmate calling services, including at jails with average daily
populations below 1,000. Next, the Commission seeks comments on
revisions to its ancillary service charge rules and refining its
international rate methodology to prevent double counting of
international call costs that are already included in the providers'
overall inmate calling services cost. The Commission also seeks comment
on the need to adopt an on-going periodic cost data collection to
ensure interstate and international calling services rates are just and
reasonable and on revisions to the Commission's definition of ``jail''
to clarify the term to include certain types of facilities. Finally,
the Commission seeks comment on the characteristics of the bidding
market in order for the Commission to assess some providers' claims
that they win contracts through a competitive bidding process and thus
the inmate calling services market is competitive.

2. Legal Basis

137. The legal basis for any action that may be taken pursuant to
the FNPRM is contained in sections 1, 2, 4(i)-(j), 201(b), 218, 220,
276, and 403 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 152, 154(i)-(j), 201(b), 218, 220, 276, and 403.

3. Description and Estimate of the Number of Small Entities to Which
the Proposed Rules Will Apply

138. The RFA directs agencies to provide a description of, and
where feasible, an estimate of the number of small entities that may be
affected by the proposed rule revisions, if adopted. The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' In addition, the term ``small business''
has the same meaning as the term ``small-business concern'' under the
Small Business Act. The statutory definition of a small business
applies ``unless an agency, after consultation with the Office of
Advocacy of the Small Business Administration and after opportunity for
public comment, establishes one or more definitions of such term which
are appropriate to the activities of the agency and publishes such
definition(s) in the Federal Register.'' A ``small-business concern''
is one which: (1) Is independently owned and operated; (2) is not
dominant in its field of operation; and (3) satisfies any additional
criteria established by the SBA.
139. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. The Commission's actions, over time, may affect small
entities that are not easily categorized at present. The Commission
therefore describes here, at the outset, three broad groups of

[[Page 40440]]

small entities that could be directly affected herein. First, while
there are industry specific size standards for small businesses that
are used in the regulatory flexibility analysis, according to data from
the SBA's Office of Advocacy, in general a small business is an
independent business having fewer than 500 employees. These types of
small businesses represent 99.9% of all businesses in the United
States, which translates to 30.7 million businesses.
140. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. The IRS benchmark is similar to the
population of less than 50,000 benchmark in 5 U.S.C. 601(5) that is
used to define a small governmental jurisdiction. Therefore, the IRS
benchmark has been used to estimate the number small organizations in
this small entity description. The Commission notes that the IRS data
does not provide information on whether a small exempt organization is
independently owned and operated or dominant in its field. Nationwide,
for tax year 2018, there were approximately 571,709 small exempt
organizations in the U.S. reporting revenues of $50,000 or less
according to the registration and tax data for exempt organizations
available from the IRS.
141. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2017 Census of Governments indicate that there
were 90,075 local governmental jurisdictions consisting of general
purpose governments and special purpose governments in the United
States. Of this number there were 36,931 general purpose governments
(county, municipal and town or township) with populations of less than
50,000 and 12,040 special purpose governments--independent school
districts with enrollment populations of less than 50,000. While the
special purpose governments category also includes local special
district governments, the 2017 Census of Governments data does not
provide data aggregated based on population size for the special
purpose governments category. Therefore, only data from independent
school districts is included in the special purpose governments
category. Accordingly, based on the 2017 U.S. Census of Governments
data, the Commission estimates that at least 48,971 entities fall into
the category of ``small governmental jurisdictions.'' This total is
derived from the sum of the number of general purpose governments
(county, municipal and town or township) with populations of less than
50,000 (36,931) and the number of special purpose governments--
independent school districts with enrollment populations of less than
50,000 (12,040), from the 2017 Census of Governments--Organizations
Tables 5, 6, and 10.
142. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as ``establishments primarily engaged in
operating and/or providing access to transmission facilities and
infrastructure that they own and/or lease for the transmission of
voice, data, text, sound, and video using wired communications
networks. Transmission facilities may be based on a single technology
or a combination of technologies. Establishments in this industry use
the wired telecommunications network facilities that they operate to
provide a variety of services, such as wired telephony services,
including VoIP services, wired (cable) audio and video programming
distribution, and wired broadband internet services. By exception,
establishments providing satellite television distribution services
using facilities and infrastructure that they operate are included in
this industry.'' The SBA has developed a small business size standard
for Wired Telecommunications Carriers, which consists of all such
companies having 1,500 or fewer employees. U.S. Census Bureau data for
2012 show that there were 3,117 firms that operated that year. Of this
total, 3,083 operated with fewer than 1,000 employees. Thus, under this
size standard, the majority of firms in this industry can be considered
small.
143. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. The closest applicable NAICS
Code category is Wired Telecommunications Carriers. Under the
applicable SBA size standard, such a business is small if it has 1,500
or fewer employees. U.S. Census Bureau data for 2012 show that there
were 3,117 firms that operated for the entire year. Of that total,
3,083 operated with fewer than 1,000 employees. Thus under this
category and the associated size standard, the Commission estimates
that the majority of local exchange carriers are small entities.
144. Incumbent Local Exchange Carriers (Incumbent LECs). Neither
the Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The closest
applicable NAICS Code category is Wired Telecommunications Carriers.
Under the applicable SBA size standard, such a business is small if it
has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate
that 3,117 firms operated the entire year. Of this total, 3,083
operated with fewer than 1,000 employees. Consequently, the Commission
estimates that most providers of incumbent local exchange service are
small businesses that may be affected by its actions. According to
Commission data, one thousand three hundred and seven (1,307) Incumbent
Local Exchange Carriers reported that they were incumbent local
exchange service providers. Of this total, an estimated 1,006 have
1,500 or fewer employees. Thus, using the SBA's size standard the
majority of incumbent LECs can be considered small entities.
145. The Commission has included small incumbent LECs in this
present RFA analysis. As noted above, a ``small business'' under the
RFA is one that, inter alia, meets the pertinent small business size
standard (e.g., a telephone communications business having 1,500 or
fewer employees), and ``is not dominant in its field'' of operation.
The SBA's Office of Advocacy contents that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope.
146. Competitive Local Exchange Carriers (Competitive LECs),
Competitive Access Providers (CAPs), Shared-Tenant Service Providers,
and Other Local Service Providers. Neither the Commission nor the SBA
has developed a small business size standard specifically for these
service providers. The appropriate NAICS Code category is Wired
Telecommunications Carriers and under that size standard, such a
business is small if it has 1,500 or fewer employees. U.S. Census
Bureau data for 2012 indicate that 3,117 firms operated during that
year. Of that number, 3,083 operated with fewer than 1,000 employees.
Based on these data, the Commission concludes that the majority of
Competitive LECs, CAPs, Shared-Tenant Service Providers, and Other
Local Service Providers, are small entities. According to Commission
data, 1,442 carriers reported that they were engaged in the provision
of either competitive local exchange services or

[[Page 40441]]

competitive access provider services. Of these 1,442 carriers, an
estimated 1,256 have 1,500 or fewer employees. In addition, 17 carriers
have reported that they are Shared-Tenant Service Providers, and all 17
are estimated to have 1,500 or fewer employees. Also, 72 carriers have
reported that they are Other Local Service Providers. Of this total, 70
have 1,500 or fewer employees. Consequently, based on internally
researched FCC data, the Commission estimates that most providers of
competitive local exchange service, competitive access providers,
Shared-Tenant Service Providers, and Other Local Service Providers are
small entities. The Commission has included small incumbent LECs in
this present RFA analysis. As noted above, a ``small business'' under
the RFA is one that, inter alia, meets the pertinent small business
size standard (e.g., a telephone communications business having 1,500
or fewer employees), and ``is not dominant in its field of operation.''
The SBA's Office of Advocacy contends that, for RFA purposes, small
incumbent LECs are not dominant in their field of operation because any
such dominance is not ``national'' in scope. The Commission has
therefore included small incumbent LECs in this RFA analysis, although
the Commission emphasizes that this RFA action has no effect on
Commission analyses and determinations in other, non-RFA contexts.
147. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA has developed a small business size standard specifically for
Interexchange Carriers. The closest applicable NAICS Code category is
Wired Telecommunications Carriers. The applicable size standard under
SBA rules is that such a business is small if it has 1,500 or fewer
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms
operated for the entire year. Of that number, 3,083 operated with fewer
than 1,000 employees. According to internally developed Commission
data, 359 companies reported that their primary telecommunications
service activity was the provision of interexchange services. Of this
total, an estimated 317 have 1,500 or fewer employees. Consequently,
the Commission estimates that the majority of interexchange service
providers are small entities.
148. Local Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. The
Telecommunications Resellers industry comprises establishments engaged
in purchasing access and network capacity from owners and operators of
telecommunications networks and reselling wired and wireless
telecommunications services (except satellite) to businesses and
households. Establishments in this industry resell telecommunications;
they do not operate transmission facilities and infrastructure. Mobile
virtual network operators (MVNOs) are included in this industry. Under
that size standard, such a business is small if it has 1,500 or fewer
employees. Census data for 2012 show that 1,341 firms provided resale
services during that year. Of that number, all operated with fewer than
1,000 employees. Thus, under this category and the associated small
business size standard, the majority of these resellers can be
considered small entities.
149. Toll Resellers. The SBA has developed a small business size
standard for the category of Telecommunications Resellers. Under that
size standard, such a business is small if it has 1,500 or fewer
employees. According to Commission data, 881 carriers have reported
that they are engaged in the provisions of toll resale services. Of
this total, an estimated 857 have 1,500 or fewer employees and 24 have
more than 1,500 employees. Consequently, the Commission estimates that
the majority of toll resellers are small entities that may be affected
by its action.
150. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to Other Toll Carriers. This category includes toll carriers that do
not fall within the categories of interexchange carriers, operator
service providers, prepaid calling card providers, satellite service
carriers, or toll resellers. The closest applicable NAICS code is for
Wired Telecommunications Carriers. The applicable size standard under
SBA rules is that such a business is small if it has 1,500 or fewer
employees. According to Commission data, 284 companies reported that
their primary telecommunications service activity was the provision of
other toll carriage. Of this total, an estimated 279 have 1,500 or
fewer employees and five have more than 1,500 employees. Consequently,
the Commission estimates that most Other Toll Carriers are small
entities that may be affected by its action.
151. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA has developed a small business size standard specifically for
payphone services providers, a group that includes inmate calling
services providers. The appropriate size standard under SBA rules is
for the category Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 535 carriers have reported that they are
engaged in the provision of payphone services. Of this total, an
estimated 531 have 1,500 or fewer employees and four have more than
1,500 employees. Consequently, the Commission estimates that the
majority of payphone service providers are small entities that may be
affected by its action.
152. TRS Providers. TRS can be included within the broad economic
category of All Other Telecommunications. Ten providers currently
receive compensation from the TRS Fund for providing at least one form
of TRS: ASL Services Holdings, LLC (GlobalVRS); Clarity Products, LLC
(Clarity); ClearCaptions, LLC (ClearCaptions); Convo Communications,
LLC (Convo); Hamilton Relay, Inc. (Hamilton); MachineGenius, Inc.
(MachineGenius); MEZMO Corp. (InnoCaption); Sorenson Communications,
Inc. (Sorenson); Sprint Corporation (Sprint); and ZP Better Together,
LLC (ZP Better Together).
153. All Other Telecommunications. The ``All Other
Telecommunications'' category is comprised of establishments primarily
engaged in providing specialized telecommunications services, such as
satellite tracking, communications telemetry, and radar station
operation. This industry also includes establishments primarily engaged
in providing satellite terminal stations and associated facilities
connected with one or more terrestrial systems and capable of
transmitting telecommunications to, and receiving telecommunications
from, satellite systems. Establishments providing internet services or
voice over internet protocol (VoIP) services via client-supplied
telecommunications connections are also included in this industry. The
SBA has developed a small business size standard for All Other
Telecommunications, which consists of all such firms with annual
receipts of $35 million or less. For this category, U.S. Census Bureau
data for 2012 show that there were 1,442 firms that operated for the
entire year. Of those firms, a total of 1,400 had annual receipts less
than $25 million and 15 firms had annual receipts of $25 million to
$49,999,999. Thus, the Commission estimates that the majority of ``All
Other Telecommunications'' firms potentially affected by its action can
be considered small. TRS can be included within the

[[Page 40442]]

broad economic census category of All Other Telecommunications. Under
this category and the associated small business size standard, a
majority of the ten TRS providers can be considered small.

4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities

154. Compliance with Caps on Permanent Per-Minute Rate, and
Ancillary Service Charges. In the FNPRM, the Commission seeks comments
on further reform of inmate calling services, including permanent rate
caps on interstate and international telephone services and on revising
ancillary service charges rules. To the extent that permanent rate caps
are lower than the interim interstate and international rate caps or
they apply to all types of facilities (including jails with average
daily populations below 1,000), providers (including any smaller
entities) must comply with the new rate caps. Likewise, providers of
all sizes must comply with any new caps or limits on permissible
ancillary service charges.
155. Compliance with Requirements to Provide Access to Additional
Telecommunications Relay Services. In the FNPRM, the Commission seeks
comment on requiring inmate calling services providers to provide
access to several additional TRS and direct video communications
services, and whether such services should be provided at no charge. If
such rules are adopted, they would apply to inmate calling service
providers of all sizes.
156. Recordkeeping, Reporting, and Certification. The FNPRM seeks
comments on adopting an on-going periodic cost data collection to
ensure calling services rates are just and reasonable. It also seeks
comments on revising the Commission's definition of ``jail'' to include
certain types of facilities. To the extent the Commission imposes a new
periodic cost data collection and clarifies the term ``jail'' to
include certain types of facilities, providers of all sizes must
maintain and report their cost data in accordance with the Commission's
rules. Similarly, if the Commission imposes expanded data collection or
other new rules specific to services provided to incarcerated people
with communication disabilities, the data collection and other rules
will be applicable to inmate calling services providers of all sizes.
However, some providers may opt to not make the data filings based on
the ``safe harbor'' applicable to entities, basically, that offer more
than the mandatory TRS services or that have had no complaints,
provided that the safe harbor is expanded and not eliminated entirely.

5. Steps Taken To Minimize the Significant Economic Impact on Small
Entities and Significant Alternatives Considered

157. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and reporting requirements under the rules for such small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
such small entities. The Commission will consider all of these factors
when the Commission receives substantive comment from the public and
potentially affected entities.
158. The Commission seeks comment on differences in costs between
prisons, larger jails, and jails with average daily populations below
1,000 to acco

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