Rule2021-14729
Rates for Interstate Inmate Calling Services
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 28, 2021
Effective
July 28, 2021
Issuing agencies
Federal Communications Commission
Abstract
In this Order on Reconsideration, the Federal Communications Commission (Commission) denies a petition for reconsideration filed by Global Tel*Link Corp. (GTL) seeking reconsideration of the 2020 ICS Order on Remand, released on August 7, 2020. The Commission reiterates that the jurisdictional nature of a telephone call from a prison or jail depends, for purposes of charging consumers, on the physical location of the originating and terminating endpoints of the call. To the extent the endpoints of any particular call from a prison or jail could be either intrastate or interstate and such endpoints are not known or easily knowable, consistent with Commission precedent, rates or charges for such calls may not exceed any applicable federally prescribed rates or charges.
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)]
[Rules and Regulations]
[Pages 40340-40353]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-14729]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[WC Docket No. 12-375, FCC 21-60; FRS 35682]
Rates for Interstate Inmate Calling Services
AGENCY: Federal Communications Commission.
ACTION: Final rule; denial of reconsideration.
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[[Page 40341]]
SUMMARY: In this Order on Reconsideration, the Federal Communications
Commission (Commission) denies a petition for reconsideration filed by
Global Tel*Link Corp. (GTL) seeking reconsideration of the 2020 ICS
Order on Remand, released on August 7, 2020. The Commission reiterates
that the jurisdictional nature of a telephone call from a prison or
jail depends, for purposes of charging consumers, on the physical
location of the originating and terminating endpoints of the call. To
the extent the endpoints of any particular call from a prison or jail
could be either intrastate or interstate and such endpoints are not
known or easily knowable, consistent with Commission precedent, rates
or charges for such calls may not exceed any applicable federally
prescribed rates or charges.
DATES: Effective July 28, 2021.
ADDRESSES: Federal Communications Commission, 45 L Street NE,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Minsoo Kim, Pricing Policy Division of
the Wireline Competition Bureau, at (202) 418-1739 or via email at
<a href="/cdn-cgi/l/email-protection#e9a480879a8686c7a28084a98f8a8ac78e869f"><span class="__cf_email__" data-cfemail="f0bd999e839f9fdebb999db0969393de979f86">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
on Reconsideration, FCC 21-60, released on 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 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 an Order on Reconsideration denying GTL's
petition for reconsideration of the 2020 ICS Order on Remand, published
at 85 FR 67450 (Oct. 23, 2020), and reiterates that the jurisdictional
nature of a telephone call for purposes of charging consumers depends
on the physical location of the originating and terminating endpoints
of the call. To the extent the endpoints of any particular call could
be either intrastate or interstate and such endpoints are not known or
easily knowable, consistent with the Commission's precedent, rates or
charges for such calls may not exceed any applicable federally
prescribed rates or charges.
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 the Commission's universal, basic need
to communicate. Although the Commission uses various terminology
throughout this item to refer to the intended beneficiaries of the
Commission's 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.'' The statute explicitly exempts telecommunications relay
service calls for hearing disabled individuals from the requirement
that providers must be compensated for ``each and every'' completed
call. 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.
Judge Pillard dissented from this view, finding permissible the
Commission's contrary interpretation of the meaning of ``fairly
compensated'' in section 276.
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
[[Page 40342]]
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 the 2012 ICS Notice 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, were readopted in 2015, 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 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 the 2014 ICS Notice, 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 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
[[Page 40343]]
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 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
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. 2020 ICS Order on Remand and Notice. In February 2020, the
Wireline Competition Bureau (Bureau or WCB) issued a public notice
seeking to refresh the record on ancillary service charges in light of
the D.C. Circuit's remand in GTL v. FCC. This Public Notice 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 adopted the 2020 ICS Order on
Remand and 2020 ICS Notice. 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,
[[Page 40344]]
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
ICS Notice 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 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 2020 ICS Notice 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 Notice, 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. Order On Reconsideration
25. The Commission denies the GTL Petition in full on the merits
and, independently, dismisses that petition as procedurally defective,
insofar as it relies on arguments the Commission already considered and
rejected in the underlying order. The Commission considered and
rejected GTL's arguments regarding so-called Commission ``precedent''
purporting to establish a general policy of reliance on NPA-NXX as a
proxy for jurisdiction and whether the Commission's statement required
prior notice and an opportunity to comment. GTL seeks reconsideration
of a single sentence from the 2020 ICS Order on Remand, reiterating
that ``the jurisdictional nature of a call depends on the physical
location of the endpoints of the call and not on whether the area code
or NXX prefix of the telephone number . . . associated with the
account, are associated with a particular state.'' GTL claims that this
sentence (1) ignores telecommunications carriers' historical reliance
on NPA-NXX codes to classify calls as interstate or intrastate; (2)
unfairly singles out providers of calling services for incarcerated
people; (3) presents implementation issues; (4) potentially compromises
state programs funded by assessments on intrastate revenues; and (5)
promulgates a new rule without notice and an opportunity to comment.
The Commission finds each of these claims to be without merit and
affirm the Commission's continued use of the traditional end-to-end
jurisdictional analysis relied upon in the 2020 ICS Order on Remand.
E. Background
26. Last year, the Commission responded to the D.C. Circuit's
directive that it consider whether ancillary
[[Page 40345]]
service charges can be segregated into interstate and intrastate
components to exclude the intrastate components from the reach of the
Commission's rules. The Bureau issued the Ancillary Services Refresh
Public Notice, published at 85 FR 9444 (Feb. 19, 2020), seeking to
refresh the record in light of the D.C. Circuit's remand. Based on the
record developed in response to that public notice, the Commission
found that ``ancillary service charges generally cannot be practically
segregated between the interstate and intrastate jurisdiction 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 a clearly intrastate-only call.'' Thus, the Commission
concluded that providers are generally prohibited from imposing
ancillary service charges, other than those explicitly permitted by the
Commission's rules, and are also generally prohibited from imposing
ancillary service charges in excess of the permitted ancillary service
fee caps in the Commission's rules.
27. In the 2020 ICS Order on Remand, the Commission addressed
record debate about the jurisdictional classification methodology for
certain inmate calling services calls and the ancillary services
provided in connection with those calls by reminding providers that
``the jurisdictional nature of a call depends on the physical locations
of the endpoints of the call,'' rather than on the area codes or NXX
prefixes of the telephone numbers used to make and receive the call.
GTL and Securus objected to this approach, asserting that relying on a
call's endpoints was inconsistent with prior Commission decisions and
with providers' practice of using NPA-NXX codes as proxies for
jurisdiction. GTL and Securus raised these objections in ex parte
filings during the public circulation period of the 2020 ICS Order on
Remand but before the Commission adopted that Order on August 6, 2020.
GTL and Securus also claimed that the Commission's clarification
regarding how carriers are to determine the jurisdictional nature of a
call required prior notice and an opportunity to comment. In addition,
NCIC questioned ``the FCC's determination that [inmate calling
services] providers will be able to determine the location of the
terminating point of an [inmate calling services] wireless call--and
thus determine whether the call is intrastate or interstate in
nature.''
28. In response to these objections, the Commission explained that
although it has allowed the use of proxies to determine the
jurisdictional nature of certain calls, it has done so only in specific
contexts ``typically related to carrier-to-carrier matters or payment
of fees owed'' and that it ``never adopted a general policy allowing
the broad use of such proxies.'' The Commission distinguished the so-
called ``precedent'' cited by GTL and Securus, explaining that none of
those decisions established actual Commission policy or practice
regarding the use of jurisdictional proxies and that the examples
provided ``relate specifically to carrier-to-carrier arrangements
involving intercarrier compensation or applicable federal fees due
between carriers and the Commission, not to using a proxy for charging
a customer a higher or different rate than it would otherwise be
subject to based on whether the customer's call is interstate or
intrastate.'' The Commission, therefore, rejected GTL's and Securus's
argument that application of the end-to-end analysis required prior
notice and an opportunity to comment, explaining that it was merely
clarifying ``the long-established standard that inmate calling services
providers must apply in classifying calls for purposes of charging
customers the appropriate rates and charges.'' The Commission further
explained that the Bureau's public notice seeking to refresh the record
on ancillary service charges in light of the D.C. Circuit's remand
provided ``notice of, and a full opportunity to comment on, the
jurisdictional status of inmate calling services calls'' because the
public notice sought comment on how to proceed if ancillary services
were ``jurisdictionally mixed'' and defined jurisdictionally mixed
services as those that are ``capable of communications both between
intrastate end points and between interstate end points.''
29. In November 2020, GTL filed a petition seeking reconsideration
of the application of the end-to-end jurisdictional analysis in the
2020 ICS Order on Remand. The Bureau released a Public Notice
announcing the filing of GTL's Petition and establishing deadlines for
oppositions and replies to the Petition. The Bureau received comments
from Pay Tel and replies from NCIC and GTL.
F. Discussion
30. Standard of Review. Any interested party may file a petition
for reconsideration of a final action in a rulemaking proceeding.
Reconsideration ``may be appropriate when the petitioner demonstrates
that the original order contains a material error or omission, or
raises additional facts that were not known or did not exist until
after the petitioner's last opportunity to present such matters.''
Petitions for reconsideration that do not warrant consideration by the
Commission include those that: ``[f]ail to identify any material error,
omission, or reason warranting reconsideration; [r]ely on facts or
arguments which have not been previously presented to the Commission .
. . ; [r]ely on arguments that have been fully considered and rejected
by the Commission within the same proceeding;'' or ``[r]elate to
matters outside the scope of the order for which reconsideration is
sought.'' The Commission may consider facts or arguments not previously
presented if: (1) They ``relate to events which have occurred or
circumstances which have changed since the last opportunity to present
such matters to the Commission;'' (2) they were ``unknown to petitioner
until after [their] last opportunity to present them to the Commission,
and [the petitioner] could not through the exercise of ordinary
diligence have learned of the facts or arguments in question prior to
such opportunity;'' or (3) ``[t]he Commission determines that
consideration of the facts or arguments relied on is required in the
public interest.''
1. GTL's Substantive Arguments Against the End-to-End Analysis Do Not
Warrant Reconsideration
31. GTL's Petition provides no new substantive facts or arguments
that justify reconsideration of the Commission's application of the
end-to-end jurisdictional analysis to calling services for incarcerated
people. Although GTL cites various documents it claims establish a
general Commission policy on the use of jurisdictional proxies for
classifying interstate and intrastate calls, none of the cited
documents establish such a policy, especially in the provision of
inmate calling services. The Commission is also unpersuaded by GTL's
arguments regarding the possible discriminatory treatment of providers
of these calling services, its reliance on third parties to make
jurisdictional determinations, or its unsubstantiated claims about the
effects the Commission's jurisdictional analysis may have on state
programs.
32. GTL first argues that the end-to-end analysis ignores what it
claims is the industry custom and practice of using NPA-NXX codes to
determine whether a call is interstate or intrastate. GTL asserts that
the ``Commission's prior statements have recognized that using NPA-NXX
is an appropriate industry standard for determining whether a call is
interstate or intrastate.'' In this regard, GTL
[[Page 40346]]
emphasizes the 2003 Starpower Damages Order. For its part, NCIC argues
that the Commission's ``precedent'' has been ``correctly cited by
GTL,'' and that the Commission should ``continue to follow that
precedent'' in the context of calling services for incarcerated people.
33. The Commission disagrees. The Commission reaffirms the
Commission's prior conclusion that not one of the decisions cited in
GTL's Petition adopted a general policy allowing broad use of
jurisdictional proxies, such as NPA-NXX codes. Those decisions
primarily concern the use of jurisdictional proxies to determine the
appropriate rating between and among various types of service providers
routing calls originating from one NPA-NXX code to a terminating NPA-
NXX code and vice versa. None of them allow for the use of
jurisdictional proxies in the context of inmate calling services for
which consumers may be charged different rates based on whether a call
is classified as interstate or intrastate. Instead, the decisions GTL
cites merely reflect that the Commission ``has allowed carriers to use
proxies for determining the jurisdictional nature of calls in specific
contexts, typically related to carrier-to-carrier matters or payment of
fees owed.''
34. At bottom, GTL requests that the Commission engraft into its
inmate calling services rules a jurisdictional proxy--relying on NPA-
NXX codes for all telephone calls from incarcerated people to a called
party regardless of the called parties' service provider of choice--
that the Commission has never suggested might be used in determining
the jurisdictional classification of an inmate calling services call.
The Commission thus is not persuaded that GTL's approach reflects a
reasonable interpretation of the Commission's existing rules.
35. GTL seizes on certain language in the Starpower Damages Order
that, GTL claims, establishes a ``historical'' or ``consistent'' use of
NPA-NXX codes. Contrary to GTL's assertions, however, the Starpower
decision did not announce a general policy permitting the use of
jurisdictional proxies. Rather, Starpower was narrowly concerned with
an intercarrier compensation dispute, the resolution of which hinged on
the treatment of traffic under a Verizon tariff. In the liability phase
of the proceeding, Starpower obtained an order from the Commission
obligating Verizon to pay reciprocal compensation under an
interconnection agreement ``for whatever calls Verizon South bills to
its own customers as local calls under the Tariff, regardless of
whether a call is jurisdictionally interstate.'' In the damages phase,
Verizon argued that, under its tariff definition, the physical location
of the called parties, and not the telephone numbers, determined
whether service was ``local.'' But the Commission concluded that
Verizon rated and billed ISP-bound traffic under its tariff by looking
to the telephone numbers of the parties to a call and not the parties'
physical locations. The Commission held that since Verizon treated ISP-
bound calls as ``local under the Tariff,'' Verizon was obligated to pay
reciprocal compensation under the interconnection agreement. Thus,
although Starpower contains passing references to the use of NPA-NXX to
determine the jurisdictional nature of certain traffic, the decision
ultimately turned on the Commission's interpretation of Verizon's
tariff and Verizon's own practices in applying that tariff.
Accordingly, Starpower does not establish any Commission or industry-
wide policy on the use of jurisdictional proxies. The fact that
Starpower involved internet service provider-bound traffic--i.e.,
traffic to another type of service provider, which at the time was a
separate unsettled jurisdictional issue, rather than an end user
telephone subscriber--alone, makes this case entirely inapposite.
36. In any event, it is simply not reasonable or reliable now, nor
has it been for many years, to assume that a called party is physically
located in the geographic area (rate center) of the switch to which the
party's NPA-NXX code is native. Before Congress adopted the 1996 Act,
when incumbent LECs controlled 99% of the local voice marketplace, one
could reasonably assume that a called party was physically located in
the geographic area associated with a particular NPA-NXX, as NPA-NXX
codes were associated only with a particular incumbent's rate center.
Since that time, however, number porting between and among competing
wireline LECs, wireless carriers, and fixed and nomadic VoIP providers
has rendered NPA-NXX codes an all-too-frequently unreliable means to
determine whether a called party is physically located within a
particular state when it receives and answers a given call.
37. In the 1996 Act, Congress included the requirement that each
LEC ``provide, to the extent technically feasible, number portability
in accordance with requirements prescribed by the Commission.'' This
definition now appears in section 3(37) of the Act. The number
portability rules subsequently adopted by the Commission, as modified
over time, limit number porting between wireline incumbents and
wireline competitors to ports within the same rate center. With respect
to wireline-to-wireless porting, the Commission requires wireline
carriers to port to requesting wireless carriers ``where the requesting
wireless carrier's `coverage area' overlaps the geographic location in
which the customer's wireline number is provisioned, provided that the
porting-in carrier maintains the number's [NPA-NXX] original rate
center designation following the port.'' In other words, when the
wireline number is ported to the wireless carrier's customer, the
original rate center designation is maintained for routing and rating
purposes by other service providers. A wireless carrier may only port a
number to a wireline carrier if the number is associated with the rate
center of the wireline carrier where the customer is located. Nomadic
VoIP ``is usually a VoIP phone installed in a portable computer which
can be taken with the subscriber'' so that ``[c]alls can be made from
anywhere in the world.'' By comparison, fixed VoIP is not movable.
``The [fixed] service is provided by a cable company, for example,
where the telephone does not leave the residence.'' The Commission
began its work implementing the 1996 Act's number portability
requirement with its 1996 First Number Portability Order, in which it
adopted an initial set of rules governing wireline-to-wireline,
wireless-to-wireless, and wireline-to-wireless number portability
obligations. It required that LECs in the 100 largest Metropolitan
Statistical Areas (MSAs) begin implementing a long-term number
portability methodology on a phased deployment schedule, and that CMRS
providers be able to port numbers by the wireline carriers' deadline to
complete number portability implementation and to support network-wide
roaming thereafter. The Commission also established LEC number
portability implementation obligations outside of the 100 largest MSAs.
Subsequently, in 2007, the Commission extended local number portability
obligations to interconnected VoIP providers, both fixed and nomadic.
In 2015, the Commission opened direct access to numbering resources to
interconnected VoIP providers.
38. Today, consumers increasingly rely on nomadic VoIP and mobile
voice services for telephone service. Nomadic interconnected VoIP
services are provided as over-the-top applications and are not
associated with any specific geographic location. ``In this way,
nomadic interconnected VoIP service is
[[Page 40347]]
similar to mobile service, but distinct from fixed telephony service.''
``Over-the-top'' VoIP providers are VoIP providers that are not
facilities-based. The consumer of an over-the-top VoIP service ``uses
an independent data service over a broadband connection.'' The
Commission's December 2019 FCC Form 477 data reflected 12.9 million
over-the-top VoIP subscriptions in the United States at that time.
Subscribers to these services can readily move to other rate centers
throughout the country while retaining their telephone numbers. And
nearly half of all assigned telephone numbers are associated with
wireless phones, which is unsurprising given that the majority of
households in the United States no longer subscribe to a landline
service. The combination of the Commission's number portability orders
and the significant technological changes to the communications
marketplace means that NPA-NXX codes reflected in telephone numbers are
often subject to movement across state lines, on a permanent, nomadic,
or mobile basis, making them unreliable as a geographic indicator of
endpoints for a given call. As the foregoing analysis suggests, only
where the calling party (here, the incarcerated person) and the called
party each have wireline telephone numbers, can an inmate calling
services provider reasonably and reliably determine the jurisdictional
nature of a call between those parties based on the NPA-NXX codes of
the originating and terminating telephone numbers. That is the case
because the Commission's rules require the NPA-NXX of a wireline
telephone subscriber to necessarily physically remain within the
particular rate center from which each wireline telephone number
originated. Unlike for wireless voice service and nomadic VoIP service,
the Commission's number porting rules do not permit telephone numbers
of wireline subscribers to port across rate center boundaries.
39. GTL next complains that the Commission's confirmation of the
end-to-end analysis inappropriately ``singles out [inmate calling
services] providers,'' and that the Commission ``cannot target
particular classes of telecommunications service providers in its
rulemaking when the legal basis for it (and the criticisms that
undergird it) are of universal applicability.'' This complaint is
completely without merit. The Commission has not singled out inmate
calling services providers for disparate treatment. The end-to-end
analysis is, and remains, the generally applicable, default standard
for all telecommunications carriers--not just inmate calling services
providers--for determining the jurisdictional classification of a
telephone call. In addition, inmate calling services providers are
unlike other telecommunications carriers. Calling service providers
have a captive consumer base at each correctional facility they serve
for which they rarely, if ever, offer all-distance calling plans with
uniform rates and charges for intrastate and interstate calls as do
most, if not all, other telecommunications services providers. Indeed,
inmate calling services providers typically have a myriad of different
rates and charges applicable to different jurisdictional call types
(i.e., intraLATA intrastate, interLATA intrastate, intraLATA
interstate, and interLATA interstate). And while providers have not
explained in detail what their resale arrangements with underlying
telecommunications carriers entail, it is the Commission's
understanding that providers typically pay a flat rate for all minutes
of use (except for international calling) regardless of the
jurisdictional nature of the call. Calling service providers continue
to charge incarcerated people (or their families) different rates and
charges purportedly based on differences in costs to serve these
different call types, even though those rates are based on fictional
determinations that have nothing to do with actual geographic
endpoints, except in the case of wireline-to-wireline calls.
40. As explained above, the generally accepted method of
determining the jurisdictional nature of any given call is by an end-
to-end analysis. Thus, contrary to the providers' claims,
jurisdictional proxies are the exception, not the rule. It is only
``[w]here the Commission has found it difficult to apply an end-to-end
approach for jurisdictional purposes, [that] it has proposed or adopted
proxy or allocation mechanisms to approximate the end-to-end result.''
The Commission subsequently adopted permissible proxies for determining
what portion of such jurisdictionally indeterminate VoIP services to
attribute to the interstate jurisdiction for Universal Service Fund
(USF) payment purposes, but such proxies did not pertain to classifying
the underlying calls as either interstate or intrastate for purposes of
billing consumers different rates for telephone calls. In the Vonage
Order, for example, the Commission expressly declined to adopt the use
of proxies for determining whether a call was jurisdictionally
intrastate or interstate or to address the conflict between federal and
state regulatory regimes. Indeed, GTL itself recognized the general
applicability of the end-to-end analysis in its comments on the
Ancillary Services Refresh Public Notice, explaining that ``[t]he
jurisdictional nature of calls themselves is easily classified as
either interstate or intrastate based on the call's points of
origination and termination. This accords with the Commission's
traditional end-to-end analysis for determining jurisdictional
boundaries `beginning with the end point at the inception of a
communication to the end point at its completion.' '' GTL fails to
explain how the application of the Commission's long-established
approach for determining the appropriate jurisdiction of a call
unfairly singles out providers of calling services for incarcerated
people given that, by GTL's own admission, the Commission generally
applies this ``traditional'' analysis to all telecommunications
providers.
41. Because an NPA-NXX code frequently fails to provide any
indication of the actual physical location of a called party (unless it
is known that the called party is a wireline telephone subscriber), it
generally cannot be relied upon to determine the jurisdictional nature
of a call. As the Commission stated in the 2020 ICS Order on Remand, to
do so would undercut interstate callers' federal protection from unjust
and unreasonable interstate charges and practices.
42. GTL also alleges, through reliance on decades-old discussions
of rating based on NPA-NXX and industry guides, that there are
technical barriers that prevent providers of calling services for
incarcerated people from applying the traditional end-to-end analysis.
These allegations arise from the fact that providers rely on third
parties to classify the jurisdiction of calls. As GTL explains it,
calls from correctional facilities, whether to wireline, wireless, or
VoIP numbers, ``are handed off to unaffiliated third-party
telecommunications service providers that route them across the public
switched telephone network to their appropriate termination point,
based on the called number's entry in the Local Exchange Routing
Guide.'' The Local Exchange Routing Guide (LERG) is ``an industry guide
generally used by carriers in their network planning and engineering
and numbering administration. It contains information regarding all
North American central offices and end offices.'' GTL adds that
``[inmate calling services] providers assess charges on
[[Page 40348]]
inmate calls by purchasing access to third-party databases that
classify them as intrastate, interstate, or international'' and that
these databases do not provide the ``actual geographical location
associated with a particular device or service.'' Relatedly, Securus
explains that these third parties use ``telephone numbers or, since the
advent of local number portability, the Local Routing Number . . . as a
proxy for . . . jurisdiction,'' and lack ``the information needed to
apply the end-to-end analysis.'' The Local Routing Number is a
``telephone number assigned in the local number portability database
for the purposes of routing a call to a telephone number that has been
ported. When a call is made to a number that has been ported, the
routing path for the call is established based on the L[ocal] R[outing]
N[umber] rather than on the dialed number.'' GTL concludes that
``[g]iven indicia that classification determinations have, for decades,
been under the control of entities over which many providers exercise
no authority, critical logistical and financial questions present
themselves, such as the costs attendant upon [inmate calling services]
providers should they be required to design, deploy, and implement an
alternative call classification system.''
43. The Commission finds these arguments unpersuasive. The
Commission's rules specify that providers of inmate calling services
are currently prohibited from charging more than $0.21 per minute for
interstate Debit Calling, Prepaid Calling, or Prepaid Collect Calling
and prior to today's accompanying Report and Order more than $0.25 per
minute for interstate Collect Calling. The current rule language tracks
the language adopted in 2013 but adds the term ``interstate.'' The term
``interstate'' was added to section 64.6030 of the Commission's rules
as a non-substantive change to reflect a D.C. Circuit decision that the
Commission's regulation of inmate calling services rates could extend
no further than the extent of its authority over interstate (and
international) calls. The fact that the addition of ``interstate'' was
a non-substantive change to reflect a court decision limiting the
Commission's inmate calling services rate regulations to the limit of
the Commission's authority further reinforces the reasonableness of
interpreting ``interstate'' consistent with the Commission's historical
jurisdictional approach. The Commission's interpretation of the term
``interstate'' in its rule accords not only with the use of that
terminology in the Communications Act, but also with the Commission's
traditional approach to defining jurisdiction. It is the provider's
responsibility to ``appropriately comply[] with this most basic
regulatory obligation of telecommunications service providers with
respect to their customers--determining the proper jurisdiction of a
call when charging its customers the correct and lawful rates for those
calls using the end-to-end analysis.'' Providers did not express any
concerns about their ability to determine the jurisdiction of any given
call when the Commission's adopted ``interim rate caps . . . for
interstate [inmate calling services]'' in 2013. Nor did they express
such concerns in the following years, as those interim rate caps
continued to apply. Indeed, despite GTL's claims here, it and other
providers use the Commission's historical approach when defining the
terms ``interstate'' and ``intrastate'' in at least some of their
tariffs and price lists. It is unclear why GTL, or any provider, would
base its rates on the geographic locations of the parties to a call if
the service provider could not, in fact, determine where the parties
are located at the time of the call. The record also provides no
indication that the third parties upon which GTL and others claim they
rely for determining the jurisdiction of their calls could not
accurately determine whether a consumer is making calls between NPA-NXX
codes assigned to wireline, wireless, or nomadic VoIP numbers to
determine whether those calls are subject to the Commission's
interstate rate caps without relying on another methodology to
determine the actual endpoints of the call.
44. Further, many of the guides and brochures to which GTL cites in
this regard relate predominantly to call routing rather than rating.
For example, GTL cites to the iconectiv brochure ``Route It Right Every
Time with LERG OnLine.'' That brochure contains precisely two
references to rating, neither of which relate to the billing of end-
user customers. GTL also points to an iconectiv Catalog of Products and
Services, but that document is similarly unhelpful for GTL. Finally,
the iconectiv catalog to which GTL cites notes that the Telecom Routing
Administration's products ``are a mainstay in supporting the various
offerings of service providers . . . and, bottom line, in ensuring
calls placed by their customers and through their network complete
without any problems.'' In other words, the Telecom Routing
Administration provides data that supports the routing of calls.
Nowhere in that catalog does it state that providers should rely solely
on NPA-NXX codes for rating calls to end users. The Commission also
disagrees with GTL's characterization of the Local Exchange Routing
Guide as requiring the use of NPA-NXXs for determining the
jurisdictional nature of a call. Once again, GTL conflates the
relationship of an NPA-NXX code to that code's original rate center
designation, reflected in the Local Exchange Routing Guide for routing
purposes, with using the same rate center information to determine
whether the terminating call to that NPA-NXX code is jurisdictionally
intrastate or interstate. The original rate center designation of an
NPA-NXX number has no bearing on where calls to that number actually
terminate when the called party is a customer of a wireless or nomadic
VoIP provider, at a minimum. But even if it did, that would have no
bearing on inmate calling services providers' obligations to charge
incarcerated people and those whom they call lawful rates.
45. To the extent that the technical issues raised by GTL make it
impracticable or impossible to determine whether a call is interstate
or intrastate based on the geographical endpoints of the call, the
Commission does not require providers of calling services for
incarcerated people to redesign or deploy other call classification
systems. Instead, the Commission reaffirms that providers must charge a
rate at or below the applicable interstate cap for that call. Pay Tel
complains that today's Order ``effectively classif[ies] all [inmate
calling services] calls as jurisdictionally `interstate.''' Pay Tel
asserts that, as a consequence, consumers will face significant rate
increases due to assessment of federal Universal Service Fund charges
on all calls, in addition to a host of other concomitant consequences.
The Commission finds such concerns misplaced. Under the Commission's
end-to-end analysis, charges for a call that is jurisdictionally
indeterminant may not exceed the applicable interim interstate rate
cap, but where a state has a lower rate cap in place for intrastate
calls, charges for a call of indeterminate nature must comply with the
lower state rate cap. The Commission also disagrees that there would
necessarily be a significant impact on Universal Service Fund
assessments as Pay Tel and Securus allege. First, the Commission does
not reclassify any calls as interstate calls; and second providers may
continue to use whatever proxy or good faith
[[Page 40349]]
determination of interstate revenue for purposes of universal service
contributions that they have used in the past for this traffic. The
Commission's actions today go only to the question of the appropriate
jurisdictional treatment for purposes of determining the rates
providers may charge for telephone calls to consumers. The Commission's
actions neither limit the ability of providers to avail themselves of
applicable proxies or safe harbors used for purposes of Universal
Service Fund reporting nor suggest that providers have been incorrectly
complying with the Commission's universal service contribution rules.
Finally, the Commission takes this opportunity to remind providers that
they are permitted but not required to pass through universal service
charges to their end users. As the Commission explained in the 2020 ICS
Order on Remand, ``where the Commission has jurisdiction under section
201(b) of the Act to regulate rates, charges, and practices of
interstate communications services, the impossibility exception extends
that authority to the intrastate portion of jurisdictionally mixed
services `where it is impossible or impractical to separate the
service's intrastate from interstate components' and state regulation
of the intrastate component would interfere with valid federal rules
applicable to the interstate component.'' There is no dispute that the
Commission has jurisdiction over providers' interstate rates, and GTL
does not dispute the Commission's authority to regulate
jurisdictionally indeterminate services. Accordingly, to the extent
that GTL and other providers find it impossible or impracticable to
determine the actual endpoints, hence the actual jurisdictional nature
of a call, they must treat that call as jurisdictionally indeterminate
and must charge a rate at or below the applicable interstate cap.
46. The Commission rejects GTL's argument that the Commission's
application of the end-to-end analysis violates the jurisdictional
limitation in section 221(b) of the Act. That section has been narrowly
interpreted to ``enable state commissions to regulate local exchange
service in metropolitan areas . . . which extend across state
boundaries.'' Section 221(b), which refers to ``telephone exchange
service'' says nothing about payphone service, which is separately
defined in section 276 of the Act. ``Telephone exchange service'' is
broadly defined as ``service within a telephone exchange'' or
``comparable service provided through a system of switches,
transmission equipment, or other facilities (or combination thereof) by
which a subscriber can originate and terminate a telecommunications
service.'' Indeed, the statute recognizes and treats payphone service
separately from exchange service in section 276(a), which prevents Bell
operating company-owned payphones from receiving subsidies ``from . . .
telephone exchange service operations.'' The Commission has previously
recognized this distinction, explaining that although states
traditionally regulated payphones, including by setting local rates,
that role was ``in the context of LECs providing local payphone service
as part of their regulated service.'' By disallowing LEC payphones from
receiving subsidies from their basic exchange service, the Commission
emphasized that section 276 ``greatly changes the way in which states
set local coin rates.'' In sum, the Act treats the exchange service in
section 221(b) separate from payphone service in section 276, and the
courts have narrowly interpreted section 221(b) to apply only to a
state's ability to regulate local exchange service. The Commission is
therefore unpersuaded by GTL's argument that the Commission violated
section 221(b) or acted in a manner precluded by the implementation of
that provision by reiterating that providers of calling services for
incarcerated people must charge their end users for interstate and
intrastate calls based on the physical endpoints of the call.
47. The Commission is also unpersuaded by GTL's claim that the
Commission's jurisdictional analysis might have some ``potential
impact'' on state communications programs that depend on assessments of
intrastate revenues or that the Commission is somehow limiting the
ability of state commissions to use NPA-NXX as a jurisdictional proxy.
GTL provides no evidence that applying an end-to-end analysis for
purposes of complying with the federal interstate rate cap for inmate
calling services charges would either interfere with state authority to
use NPA-NXX as a proxy for determining which calls are within their
jurisdiction or would somehow result in the ``reclassification of all
telecommunications traffic that relies on NPA-NXX . . . as
interstate.'' The Commission does not disturb state and local laws or
regulations that use NPA-NXX or other proxies to determine, for
example, the application of state fees and taxes. The end-to-end
jurisdictional analysis that the Commission reaffirms today only
affects what calling providers may charge incarcerated people and their
loved ones for jurisdictionally indeterminant telephone calls, and as
the Commission has indicated above, continued compliance with
applicable state and local laws that are not in conflict with federal
law remain unaffected.
2. GTL's Procedural Arguments Do Not Warrant Reconsideration
48. The Commission rejects GTL's claim that the Commission needed
to provide additional notice and an additional opportunity for comment
before it clarified in the 2020 ICS Order on Remand that providers must
use the geographical endpoints of a call rather than the area code or
NXX prefix of the call's recipient to determine whether the call is
interstate or intrastate. The Commission rejects this claim on
procedural grounds insofar as the Commission considered and responded
to these arguments in the 2020 ICS Order on Remand, 35 FCC Rcd at 8502-
04, paras. 52-54. The Commission also rejects it on substantive grounds
as discussed herein. GTL mischaracterizes the Commission's
clarification as a ``new and unprecedented [r]ule'' and a ``serious
departure from prior practice.'' On the contrary, after identifying
confusion and debate in the record, the Commission ``remind[ed]'' and
``clarifie[d]'' for providers the end-to-end analysis it ``has
traditionally used to determine whether a call is within its interstate
jurisdiction'' to ensure that providers of calling services for
incarcerated people do not ``circumvent or frustrate [the Commission's]
ancillary service charge rules.'' Providers of calling services for
incarcerated people have been on notice since the Commission adopted
interstate rate caps in 2013 that they could not charge more than the
capped amounts for interstate calls. By interpreting the rate cap rule
as requiring that inmate calling services calls be classified based on
their endpoints, the Commission applied the ordinary meaning of the
term ``interstate'' as that term is defined in the Communications Act.
The Communications Act defines ``interstate communication'' or
``interstate transmission'' as [C]ommunication or transmission (A) from
any State, Territory, or possession of the United States (other than
the Canal Zone), or the District of Columbia, to any other State,
Territory, or possession of the United States (other than the Canal
Zone), or the District of Columbia, (B) from or to the United States to
or from the Canal Zone, insofar as such communication or transmission
takes place within the United States, or (C) between points within the
United States
[[Page 40350]]
but through a foreign country; but shall not, with respect to the
provisions of subchapter II of this chapter (other than second 223 of
this title), include wire or radio communication between points in the
same State, Territory, or possession of the United States, or the
District of Columbia, through any place outside thereof, if such
communication is regulated by a State commission. There has been no new
legislative rule that would have required notice and an opportunity to
comment. The Commission's reminder clearly served the purpose of an
interpretive rule. The Administrative Procedure Act (APA) exempts
interpretive rules from the procedural requirements of notice and
comment rulemaking. An interpretive rule is a clarification or
explanation of existing laws or regulations rather than a substantive
modification in or adoption of new regulations.
49. In essence, GTL contends that ``interstate'' as used in the
Commission's inmate calling services rules had a different meaning than
``interstate'' as used in the Communications Act and therefore that it
could classify as intrastate a call that originates in one state and
terminates in another state based solely on NPA-NXX codes. GTL's claim
is unavailing and has no bearing on the question of whether the
Commission was required to provide additional notice and an additional
opportunity to comment prior to clarifying that ``interstate'' as used
in the inmate calling services rules continues to have the same meaning
as ``interstate'' as used in the Communications Act and historical
Commission usage of the term.
50. In any event, the Ancillary Services Refresh Public Notice
fully apprised all interested parties that the Commission would be
considering how it should proceed in the event an ancillary service
could not ``be segregated between interstate and intrastate calls.''
That public notice also invited comment on what additional steps the
Commission should take to ensure that providers of interstate inmate
calling services do not circumvent or frustrate the Commission's
ancillary service charge rules. GTL claims that the Ancillary Services
Refresh Public Notice was insufficient to inform stakeholders that the
Commission might reexamine ``the methodology used to determine whether
a call or charge is interstate or intrastate.'' But the Public Notice
made clear that the Commission would be considering when an ancillary
service is interstate, which necessarily involves a determination
whether the calls in connection with that service are interstate. For
this reason, the Commission also rejects Pay Tel's assertion that the
Ancillary Services Refresh Public Notice did not contemplate an
evaluation of the jurisdictional classification of inmate calling
services calls. And, when the record revealed that certain providers
were using NPA-NXX codes, rather than endpoints, to classify calls as
interstate or intrastate, the Commission properly clarified, consistent
with the text of the Act and long-standing precedent, that using the
geographic endpoints was the proper method to determine call
jurisdiction. Thus, the Commission's clarification that providers must
use an end-to-end analysis in classifying calls as interstate or
intrastate was, at the very least, a logical outgrowth of the Ancillary
Services Refresh Public Notice. Indeed, absent such clarification, the
Commission could not have responded fully to the D.C. Circuit's
directive to ascertain on remand whether ancillary service charges
could be segregated between interstate and intrastate components.
51. For the reasons stated herein, the Commission denies GTL's
petition on the merits and dismiss it as procedurally defective.
IV. Severability
52. All of the rules and policies that are adopted in the
Commission's Third Report and Order and this Order on Reconsideration
are designed to ensure that rates for inmate calling services are just
and reasonable while also fulfilling the Commission's obligations under
sections 201(b) and 276 of the Act. Each of the separate reforms the
Commission undertakes here serves a particular function toward these
goals. Therefore, it is the Commission's intent that each of the rules
and policies adopted herein shall be severable. If any of the rules or
policies is declared invalid or unenforceable for any reason, the
remaining rules shall remain in full force and effect.
V. Procedural Matters
53. 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#52343131676266123431317c353d24"><span class="__cf_email__" data-cfemail="086e6b6b3d383c486e6b6b266f677e">[email protected]</span></a> or call the Consumer and Governmental Affairs Bureau at
(202) 418-0530.
54. Congressional Review Act. The Commission will not send a copy
of this Order on Reconsideration to Congress and the Government
Accountability Office pursuant to the Congressional Review Act (CRA),
see 5 U.S.C. 801(a)(1)(A), because it does not adopt any rule as
defined in the CRA, 5 U.S.C. 804(3).
55. Supplemental Final Regulatory Flexibility Act Analysis. As
required by the Regulatory Flexibility Act of 1980, as amended (RFA),
the Commission has prepared a Supplemental Final Regulatory Flexibility
Analysis (FRFA) relating to the Order on Reconsideration. The FRFA is
set forth below.
56. Final Paperwork Reduction Act Analysis. The Order on
Reconsideration does not contain new or modified information collection
requirements subject to the Paperwork Reduction Act of 1995, Public Law
104-13. Therefore, it does not contain any new or modified information
collection burdens for small business concerns with fewer than 25
employees, pursuant to the Small Business Paperwork Relief Act of 2002,
Public Law 107-198, see 44 U.S.C. 3506(c)(4).
VI. Supplemental Final Regulatory Flexibility Analysis
A. Need for, and Objectives of, the Order on Reconsideration
57. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the Second Further Notice of Proposed Rulemaking in the
Commission's Inmate Calling Services proceeding. The Commission sought
written public comment on the proposals in that Notice, including
comment on the IRFA. The Commission did not receive comments directed
toward the IRFA. Thereafter, the Commission issued a Final Regulatory
Flexibility Analysis (FRFA) conforming to the RFA. This Supplemental
FRFA supplements that FRFA to reflect the actions taken in the Order on
Reconsideration and conforms to the RFA.
58. The Order on Reconsideration denies a Petition for
Reconsideration of the 2020 ICS Order on Remand and reiterates that the
jurisdictional nature of an inmate calling services telephone call
depends on the physical location of the originating and terminating
endpoints of the call.
B. Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
59. The Commission did not receive comments specifically addressing
the rules and policies proposed in the IRFA.
[[Page 40351]]
C. Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
60. The Chief Counsel did not file any comments in response to the
proposed rules in this proceeding.
D. Description and Estimate of the Number of Small Entities to Which
Rules Will Apply
61. 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 rules adopted herein. 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. Pursuant to 5 U.S.C. 601(3), 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 Small Business Administration
(SBA).
62. Small Businesses. Nationwide, there are a total of
approximately 27.9 million small businesses, according to the SBA.
63. 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. The available
U.S. Census Bureau data does not provide a more precise estimate of the
number of firms that meet the SBA size standard. Thus, under this size
standard, the majority of firms in this industry can be considered
small.
64. 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.
65. 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. The available U.S. Census
Bureau data does not provide a more precise estimate of the number of
firms that meet the SBA size standard. 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.
66. 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 Small Business Act
contains a definition of ``small business concern,'' which the RFA
incorporates into its own definition of ``small business.'' See 15
U.S.C. 632(a); see also 5 U.S.C. 601(2). SBA regulations interpret
``small business concern'' to include the concept of dominance on a
national basis. See 13 CFR 121.102(b). The Commission has therefore
included small incumbent LECs in this RFA analysis, although it
emphasizes that this RFA action has no effect on Commission analyses
and determinations in other, non-RFA contexts.
67. 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.
The available U.S. Census Bureau data does not provide a more precise
estimate of the number of firms that meet the SBA size standard. 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 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,
[[Page 40352]]
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 it emphasizes that this
RFA action has no effect on Commission analyses and determinations in
other, non-RFA contexts.
68. 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. The available U.S. Census Bureau data does not
provide a more precise estimate of the number of firms that meet the
SBA size standard. 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.
69. Local 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, 213 carriers have reported
that they are engaged in the provision of local resale services. Of
these, an estimated 211 have 1,500 or fewer employees and two have more
than 1,500 employees. Consequently, the Commission estimates that the
majority of local resellers are small entities that may be affected by
the Commission's action.
70. 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 provision of toll resale services. Of
these, 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
the Commission's action.
71. 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 size standard under
SBA rules is for Wired Telecommunications Carriers. Under that size
standard, 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 these, 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 the Commission's action.
72. 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 these, an estimated
531 have 1,500 or fewer employees and four have more than 1,5000
employees. Consequently, the Commission estimates that the majority of
payphone service providers are small entities that may be affected by
the Commission's action.
73. 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).
74. 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. Under this category and the associated small
business size standard, a majority of the ten TRS providers can be
considered small.
E. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities
75. The Order on Reconsideration confirms that providers must
properly identify the physical location of the originating and
terminating endpoints of the call in order to determine the
jurisdictional nature of the call. To the extent those services are
interstate, international, or jurisdictionally mixed, the provider must
comply with interim interstate and international inmate calling
services caps or limits adopted by the Commission.
[[Page 40353]]
F. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
76. The RFA requires an agency to describe any significant,
specifically small business, 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.''
77. The Commission's rate caps differentiate between prisons,
larger jails, and jails with average daily populations below 1,000 to
account for differences in costs incurred by providers servicing these
different facility types. The Commission adopts new interim interstate
provider-related rate caps for prisons and larger jails and for collect
calls from jails with average daily populations below 1,000. The
Commission believes these actions properly recognize that, in
comparison to prisons and larger jails, jails with average daily
populations below 1,000 may be relatively high-cost facilities for
providers to serve. The Commission also adopts rate caps for
international calls originating from facilities of any size.
78. The Commission adopts new interim interstate facility-related
rate components for prisons and larger jails to allow providers to
recover portions of site commission payments estimated to be directly
related to the provision of inmate calling services and to separately
list these charges on consumers' bills. Providers must determine
whether a site commission payment is either (1) mandated pursuant to
state statute, or law or regulation and adopted pursuant to state
administrative procedure statutes where there is notice and an
opportunity for public comment that operates independently of the
contracting process between correctional institutions and providers
(Legally Mandated facility rate component), or (2) results from
contractual obligations reflecting negotiations between providers and
correctional facilities arising from the bidding and subsequent
contracting process (the Contractually Prescribed facility rate
component). For Legally Mandated site commission payments, providers
may pass these payments through to consumers without any markup, as an
additional component of the new interim interstate per-minute rate cap.
For Contractually Prescribed site commission payments, providers may
recover an amount up to $0.02 per minute to account for these costs. To
promote increased transparency, the Third Report and Order requires
providers to clearly label a Legally Mandated or Contractually
Prescribed facility rate component, as applicable, in the rates and
charges portion of a consumer's bill, including disclosing the source
of such provider's obligation to pay that facility-related rate
component.
79. The Commission recognizes that it cannot foreclose the
possibility that in certain limited instances, the interim rate caps
may not be sufficient for certain providers to recover their costs of
providing interstate and international inmate calling services. To
minimize the burden on providers, the Commission adopts a waiver
process that allows providers to seek relief from its rules at the
facility or contract level if they can demonstrate that they are unable
to recover their legitimate inmate calling services-related costs at
that facility or for that contract. The Commission will review
submitted waivers and potentially raise each applicable rate cap to a
level that enables the provider to recover the costs of providing
inmate calling services at that facility. This waiver opportunity
should benefit any inmate calling services providers that may be small
businesses and that are unable to recover their interstate and
international costs under the new interim rate caps.
G. Report to Congress
80. The Commission will send a copy of the Third Report and Order
and Order on Reconsideration, including this Supplemental FRFA, in a
report to be sent to Congress pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996. In addition, the Commission will send
a copy of the Order on Reconsideration, including this Supplemental
FRFA, to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the Order on Reconsideration, and
Supplemental FRFA (or summaries thereof) will also be published in the
Federal Register.
VII. Ordering Clauses
81. Accordingly, it is ordered that, pursuant to the authority
contained in sections 1, 2, 4(i)-(j), 201(b), 218, 220, 225, 255, 276,
403, and 716 of the Communications Act of 1934, as amended, 47 U.S.C.
151, 152, 154(i)-(j), 201(b), 218, 220, 225, 255, 276, 403, and 617,
this Order on Reconsideration is adopted.
82. It is further ordered that, pursuant to the authority contained
in sections 1, 2, 4(i)-(j), 201(b), 218, 220, 225, 255, 276, 403, and
716 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152,
154(i)-(j), 201(b), 218, 220, 225, 255, 276, 403, and 617, the Petition
for Reconsideration, filed November 23, 2020, by Global Tel*Link Corp.
is denied in full and dismissed in part as described herein.
83. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Order on Reconsideration, including the Supplemental Final
Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of
the Small Business Administration.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2021-14729 Filed 7-27-21; 8:45 am]
BILLING CODE 6712-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.