The Federal Communications Commission is about to face another lawsuit, this time over a vote to cap the prices prisoners pay for phone calls.
Yesterday's vote came after complaints that inmate-calling companies are overcharging prisoners, their families, and attorneys. Saying the price of calls sometimes hits $14 per minute, the FCC has now capped rates at 11¢ per minute.
"None of us would consider ever paying $500 a month for a voice-only service where calls are dropped for seemingly no reason, where fees and commissions could be as high at 60 percent per call and, if we are not careful, where a four-minute call could cost us a whopping $54," FCC Commissioner Mignon Clyburn said before yesterday's vote.
Those are the kinds of prices that the two major inmate calling companies, Global Tel*Link (GTL) and Securus Technologies, want to keep charging. Both vowed to take the FCC to court over the decision.
The FCC's decision "create[s] significant financial instability in the industry and will pose a threat to service at many of the nation's smaller jails," GTL said. "Consequently, GTL is left with no choice but to seek judicial review of the FCC's order."
GTL CEO Brian Oliver claimed that the FCC has "hurt inmates and their families—the very people they set out to help. While they might see lower per-minute rates, they could be left with either the lowest quality of phone service or no phone service at all."
Securus said the FCC's decision "will cause smaller and medium-sized prisons and jails to lose the ability for inmates to communicate with friends and family." The company said it will appeal the order and request a stay from the US Court of Appeals in Washington, DC.
"Everybody sues us about everything"
FCC Chairman Tom Wheeler said he isn't surprised that lawsuits are coming. The FCC is already being sued over net neutrality rules, a preemption of state laws that hinder municipal broadband, a crackdown on robocalling, and data privacy protections for poor people who apply for telecom subsidies.
When asked in yesterday's post-vote press conference if he's concerned about defending against an inmate calling lawsuit in addition to the others, Wheeler said, "Oh golly, I think the rule at the FCC is make a decision, go to court. Everybody sues us about everything."
The FCC said its vote yesterday "lower[s] the cap to 11 cents per minute for all local and long distance calls from state and federal prisons, while providing tiered rates for jails to account for the higher costs of serving jails and smaller institutions."
Part of the problem is that jails and prisons have been charging phone companies big commissions in exchange for exclusive contracts. These commission payments are passed on to prisoners.
The FCC did not outlaw commissions but said that it "strongly encourages parties to move away from site commissions and urges states to take action on this issue." Clyburn said that "states must do their part and take a hard look at their site commission practices and how such payments impact prices, service, and the reverberating impact on the community."
Securus and GTL are angry that the FCC excluded the payment of site commissions from its calculation of the new rate caps.
"Commissions are a significant factor in driving rates," Securus said.
Securus CEO Richard Smith said he asked the FCC to allow commissions big enough to "cover [prisons'] costs of providing some telecom related services and continuing inmate related programs."
The FCC's unwillingness to do so "forced us to get the entire Order stayed and overturned by the appeals process," Smith said. "[The FCC] indicated they did not have jurisdiction on dealing with commissions, and adding a per-minute amount as a facility cost recovery mechanism for commissions—but I disagree, they just lacked the courage to do it."
The FCC's failure to limit site commissions while capping the rates phone companies charge will "create significant financial instability in the industry," GTL said.
The FCC's rate cap vote was 3-2, with Republicans Ajit Pai and Michael O'Rielly dissenting.
O'Rielly argued that the FCC does not have authority under the Communications Act to impose the rules. He predicted that the caps "will lead to a worse situation for prisoners and convicts," and that "cost savings from inmate payphone calls will likely be extracted in some other form."
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