After weeks of hinting at a forthcoming proposal that could upend the ongoing battle to regulate phone and video call costs for incarcerated people and their loved ones, the Federal Communications Commission (FCC) has released that plan to the public. It would effectively gut the historic regulations approved by the agency in 2024.
The FCC published the 88-page Report and Order, Order on Reconsideration and Further Notice of Proposed Rulemaking on October 7, in the hours after the first oral arguments in court over delays to implementation of the 2024 regulations.
Prison and jail phones only facilitate outgoing calls—people in custody can call their families, but not the other way around. In order to dial out, they have to first have money in their phone accounts. The majority of people in jails and prisons either have no access to paying jobs or are paid less than $1 per hour.
The 2024 regulations, authorized by the Martha Wright-Reed Act, represented a landmark decision by the FCC to significantly increase access to incarcerated people’s communication services (IPCS) through new per-minute price caps for phone calls, and the first-ever price caps for video visits.
But in June, following the FCC’s change in leadership and shift to a Republican majority—and overwhelming objection from the IPCS providers whose profits would be regulated—the agency put implementation of the new price caps on hold. Advocates (Public Interest Parties) filed the request for a legal review of the delay. The FCC has been attempting to hold off court proceedings by revealing that it planned to discuss a proposal revising the 2024 IPCS order at an upcoming monthly meeting. Oral arguments did proceed, but the now-public proposal is still slated for an FCC vote at the October 28 meeting. It’s widely understood that it will be approved.
Among sweeping changes that would supersede the 2024 IPCS order, the FCC has proposed a new pricing structure that brings some costs almost back up to what they were originally.
FCC pricing structures in 2024 IPCS order (top) and October 7 proposal (bottom).
More than half United States jails have an average daily population (ADP) of under 100 people, but very few have an ADP under 50. The smaller the facility, the less profitable it is for IPCS providers to bother with, and the crux of the delays in implementing the original price caps is the implied threat that providers would cut services at smaller jails, leaving no authorized form of communication with the outside world.
In recent years, at the encouragement of IPCS providers, some jails have been exploring a shift toward video visits that replace in-person visits entirely. The new rate caps could conceivably leave some people in custody and their families unable to see each other at all, if they can’t pay upwards of $12 for a 30-minute video session.
The high prices and various fees charged by IPCS providers, and profit kickbacks they give to corrections departments, are frequently justified with the argument that they fund necessary security measures. But it’s become standard to explain away pretty much any aspect of institutional operations as a necessary security measure, with little-to-no oversight.
In 2024 the FCC broke security costs into seven categories and determined that only two could be considered “used and useful” in providing IPCS, and could therefore be factored into the price caps. Despite providers and corrections departments’ repeated complaints of “facility costs,” which have now led to a uniform $0.02 additive tacked onto the price caps, there has never been any evidence that these expenses actually exist. The FCC even acknowledges this, and that because providers, corrections departments, law enforcement associations and other interested parties have all comprehensively failed to demonstrate that the expenses exist, the agency was forced to rely on a dubious 2015 survey from the National Sheriff’s Association. That’s where the $0.02 additive came from.
“At present, we find the developed record insufficient to [verify] reported safety and security expenses,” the agency wrote. “Therefore, in the interim and out of an abundance of caution to preserve the general availability of IPCS, we treat all reported safety and security costs as used and useful.”
IPCS providers obviously don’t object to the logic that since the FCC can’t find any evidence such expenses exist, to be on the safe side it’s going to assume that they all exist. All proposed changes are “interim,” while the agency seeks additional comment.
The FCC is asserting that higher price caps are still “just and reasonable”—for providers.
At the center of the new proposal, as in the October 7 court proceedings, is the issue of whether two of the regulations’ statutory mandates are in conflict: “fair compensation” for IPCS providers, and “just and reasonable” costs for incarcerated people and their families. Which they would almost have to be, if “fair compensation” means guaranteed profit for providers no matter what, as they’ve interpreted it so far.
In the wake of the FCC’s 2024 vote approving the original IPCS order, providers launched a barrage of legal filings seeking exemptions, revisions or delays. Among these was a petition for reconsideration by NCIC Inmate Communications, objecting to the FCC calculating provider expenses by using both billed and unbilled minutes.
Initially the FCC had dismissed such efforts. But a year later, the agency has only one remaining commissioner who supported the original regulations in full, and the NCIC Reconsideration Petition is a central component of the new proposal. The FCC is asserting that the Public Interest Parties are wrong in claiming that price caps would be unreasonably high if the agency based its calculations on only billed minutes—because higher price caps would be just and reasonable for providers.
“[Public Interest Parties] fail to acknowledge that basing rates on unbilled minutes will undercompensate providers unless they recover those costs directly from facilities. We therefore are not persuaded that excluding unbilled minutes results in interim rate caps that are not just and reasonable,” the agency wrote. “[C]onsumers are direct beneficiaries of unbilled minutes, an offsetting benefit which must be factored in assessing the reasonableness of industry rate caps overall.”
Due consideration is given to why providers need to make more money, but not to why consumers need to pay less.
The fundamental problem is that the state should not be holding more people in custody than it’s willing or able to provide for. Outsourcing services to for-profit contractors is always going to be at odds with “just and reasonable” costs to families, if such a model relies on those contractors agreeing to not profit quite so much.
The proposal devotes significant space to explaining why higher price caps are necessary for “fair compensation” for providers, and why “the inclusion of [certain] expenses in order to enable service is inherently just and reasonable” if excluding them “would frustrate the industry’s ability to provide the service at all.” The FCC gives due consideration to why providers need to make more money, but none to why consumers need to pay less.
“Just and reasonable” is not argued the same way as “fair compensation.” It’s simply assumed that whatever’s the lowest pricing that providers and their shareholders are happy with, that’s what’s just and reasonable for consumers to pay.
The consumers are low-income families who are chronically cost-burdened by criminal-legal fees, and people in custody whom the state offers a limited number of jobs that pay a few cents an hour. The just and reasonable cost is zero.
Image via Eerie County, New York
