Tag Archives: prison calling

FCC Suspends Lower Prison Calling Rates

The FCC issued a surprising ruling that suspended an FCC order from 2024 that requires lower calling rates for telephone and video calls made from jails and prisons. The lower rates were approved by Congress as part of the Martha Wright-Reed Fair and Just Communications Act. That law required lower rates to be effective between January 1 and April 1 of this year for various sizes of facilities. The FCC voted in June to put last year’s order on hold until at least April 1, 2027.

I call this a surprising ruling because the FCC has historically been required to implement laws enacted by Congress. The current FCC presumably doesn’t agree with the 2024 law and subsequent order. In delaying the rules, the FCC cited a negative financial impact on jails and prisons from the new rates. It’s been a common practice for many jails and prisons to charge a “commission” that pay a large share of calling revenues to prisons. For larger jails and prisons, the calling commissions represented a significant revenue source.

Since the FCC was created as an independent agency by Congress, it’s been assumed that the agency is required to implement any laws Congress passes. The only other time I recall the FCC having a major issue with the law was when Chairman Mark Fowler in the 1980s took exception to Congressional rules related to the Fairness Doctrine, although there might have been other instances.

The new rates approved in 2024 range from $0.06 per minute for calls made from prisons to $0.12 per minute for jails with fewer than 99 inmates. These new rates replace older FCC rates that varied between $0.14 per minute for prisons to $0.21 per minute in small jails.

The 2024 order had also set the first cap on the rates for video calls – a technology that is rapidly replacing telephone calls. The new rate caps range from $0.11 per minute in large facilities to $0.25 per minute in the smallest ones. Before the new caps, there were some jails and prisons charging more than $1 per minute for video calling. A lot of prisons and jails also have high ancillary rates for things like a billing fee per call, or families asking for a paper bill. There are still huge fees in place for placing a collect call through an operator.

For those not familiar with prison calling, there are a handful of companies that provide the service in practically every jail and prison in the country. These companies together have what is essentially the last monopoly in the telecom world.

The FCC set the first rate cap on prison calling rates in 2013. Before that, there were rates as high as $2.50 per minute for collect calls. Immediately after that first FCC ruling, a petition was filed at the FCC in 2013 to further reduce rates, and that petition eventually led to the Martha Wright-Reed Act. In full disclosure, I was a technical and cost witness on behalf of inmates in the early FCC cases.

You might wonder how prison callers can justify such high rates when most people now enjoy affordable unlimited long-distance calling. One reason for the high rates is the sizable commissions that go to jails or prisons. Prison calling companies claim they have higher costs since they have to handle penological functions like recording and archiving calls. They also have costs to bill and collect for calling, either from inmate commissary accounts or billed to families. There was a time, a few decades ago, when penological costs justified higher rates, but modern calling technologies have eliminated most of the extra costs.

The FCC order only affects interstate calling rates, and most calls made from jails and prisons stay inside the state. States have a wide variety of rules and rates for in-state calling. When writing this blog, I found a list of in-state rates from a few years ago, and the highest were Minnesota and South Dakota at $0.36 per minute. The lowest in-state rates were New Jersey at $0.06 and California at $0.07 per minute.

Prison calling rates matter because numerous experts say that allowing inmates to stay in contact with their families is one of the best ways to lower recidivism. When I worked on the FCC petitions, I heard numerous stories of prisoners, or their families, who couldn’t afford to make calls.

Is This an Activist FCC?

FCC_New_LogoSince I have been in the industry there have been fourteen different Chairmen at the FCC. And during that time those have been split pretty evenly between democrats and republicans. We had Chairmen who had the reputation of leaning towards the public such as Reed Hundt and those that have favored the large businesses in the industry like Michael Powell. But you can find FCC decisions under each of Chairman that are in favor of the public or in favor of carriers, radio and television stations that the FCC regulates.

When you read the press about the current FCC (the Tom Wheeler FCC) the public impression is that it is pro-competition and pro-public. And there are plenty of rulings that back that up such as:

  • Net neutrality that regulates broadband ISPs and stops them from various practices that would restrict internet choice.
  • The current proposal for privacy rules that would let people restrict how ISPs can use their personal data.
  • Opposed the Comcast / Time Warner merger.
  • Reset the definition of broadband to 25 Mbps down / 3 Mbps up.
  • The decision last year that said that restrictions on municipal broadband were anti-competitive.
  • Opposed the AT&T / T-Mobile merger.
  • Slashed prison calling rates to make it easier for families to stay in contact with those in prison.

Every one of these orders favors the public over the big companies that are regulated by the FCC. And there are other orders beyond this list.  It’s not hard to see why this FCC has built the reputation of being pro-competition and anti-big business. And yet there are some major decisions that have been clearly in favor of the big companies regulated by the FCC.

Probably the biggest of these was the decision to award over $6 billion to the largest telcos to upgrade rural broadband. In establishing the Connect America fund the FCC gave almost all of the money to AT&T, Frontier, and CenturyLink and is only requiring them to upgrade rural broadband over a six year period to speeds of 10 Mbps / 1 Mbps. Those speeds are already becoming obsolete today and are the equivalent of somebody still sitting on a 1 Mbps DSL connection in 2005. Those speeds will provide Internet access, but a household on those speeds can’t do the same things that those of us with faster connections can do. And by the end of the six years these speeds are going to be completely out of date and inadequate.

And just last week this FCC put a rule in its Lifeline order that can be seen as nothing but a giveaway to cellular companies. The FCC is going to allow the $10 per month Lifeline subsidy for low income households to go to a cellular plan operating on the 3G network and with a monthly data cap of only ½ gigabit. The stated purpose of the Lifeline plan is to close the ‘homework gap’ and yet this one provision will probably end up sending a billion dollars a year to the cellular providers to pay for data plans that won’t meet the stated goal of the Lifeline program.

I remember when Chairman Wheeler was announced that industry insiders assumed that he was going to be in favor of the large carriers and cable companies since he had spent his career representing them. But he immediately quieted this criticism by making a number of pro-competitive and anti-carrier rulings.

When I look at the whole record I have a hard time seeing this FCC as activist. They certainly lean towards promoting things that a democratic White House would favor, as you would expect from a democratic FCC Chairman. But at the same time this FCC has handed billions of dollars to big carriers, and in doing so has greatly harmed the public. One can just imagine how far the Connect America Funds could have gone if that money was instead given out over six years as matching funds to build rural fiber systems. That much seed money would have brought a fiber solution to millions rather than stick them with another decade of poor DSL.

But in retrospect, when I look back at all of the various FCC Chairmen I can see that they have presided over decisions on both ends of the spectrum, and that probably comes with the job. The FCC is in charge of regulating very complex industries that change rapidly and which are controlled by large and powerful companies. I’m glad it’s not me sitting in that chair.