Rates for Interstate Inmate Calling Services, NPRM, WC Doc. No. 12-375, FCC 13-113 FRN

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Federal Register / Vol. 78, No. 14 / Tuesday, January 22, 2013 / Proposed Rules
not institute a second comment period.
Any parties interested in commenting
on this action should do so at this time.
DATES: Comments must be received in
writing by February 21, 2013.
ADDRESSES: Submit your comments,
identified by Docket ID Number EPA–
R03–OAR–2012–0784 by one of the
following methods:
A. www.regulations.gov. Follow the
on-line instructions for submitting
comments.
B. Email: [email protected].
C. Mail: EPA–R03–OAR–2012–0784,
Donna Mastro, Acting Associate
Director, Office of Air Program
Planning, Mailcode 3AP30, U.S.
Environmental Protection Agency,
Region III, 1650 Arch Street,
Philadelphia, Pennsylvania 19103.
D. Hand Delivery: At the previouslylisted EPA Region III address. Such
deliveries are only accepted during the
Docket’s normal hours of operation, and
special arrangements should be made
for deliveries of boxed information.
Instructions: Direct your comments to
Docket ID No. EPA–R03–OAR–2012–
0784. EPA’s policy is that all comments
received will be included in the public
docket without change, and may be
made available online at
www.regulations.gov, including any
personal information provided, unless
the comment includes information
claimed to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Do not submit information that you
consider to be CBI or otherwise
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or email. The www.regulations.gov Web
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Electronic files should avoid the use of
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Docket: All documents in the
electronic docket are listed in the

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www.regulations.gov index. Although
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hours at the Air Protection Division,
U.S. Environmental Protection Agency,
Region III, 1650 Arch Street,
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Copies of the State submittal are
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Department of Environmental
Protection, Division of Air Quality, 601
57th Street SE., Charleston, West
Virginia 25304.
FOR FURTHER INFORMATION CONTACT:
Brian Rehn, (215) 814–2176, or by email
at [email protected].
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Please note that if EPA receives
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remainder of the rule, EPA may adopt
as final those provisions of the rule that
are not the subject of an adverse
comment.
Dated: December 26, 2012.
W.C. Early,
Acting Regional Administrator, Region III.
[FR Doc. 2013–00708 Filed 1–18–13; 8:45 am]
BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 64
[WC Docket No. 12–375; FCC 12–167]

Rates for Interstate Inmate Calling
Services
Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:

In this document, the Federal
Communications Commission
(Commission) seeks comment on the
inmate calling services industry and
how to ensure just and reasonable rates
for inmate calling services.

SUMMARY:

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Comments are due on or before
March 25, 2013. Reply comments are
due on or before April 22, 2013.
ADDRESSES: You may submit comments,
identified by WC Docket No. 12–375, by
any of the following methods:
• Federal Communications
Commission’s Web Site: http://
fjallfoss.fcc.gov/ecfs2/. Follow the
instructions for submitting comments.
• People with Disabilities: Contact
the FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: [email protected]
or phone: (202) 418–0530 or TTY: (202)
418–0432.
For detailed instructions for
submitting comments and additional
information on the rulemaking process,
see the SUPPLEMENTARY INFORMATION
section of this document.
FOR FURTHER INFORMATION CONTACT:
Lynne Hewitt Engledow, Wireline
Competition Bureau, Pricing Policy
Division, (202) 418–1520 or (202) 418–
0484 (TTY), or via email at
[email protected].
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Notice of
Proposed Rulemaking in WC Docket No.
12–375, FCC 12–167, adopted on
December 24, 2012, and released on
December 28, 2012. The full text of this
document is available for public
inspection during regular business
hours in the Commission’s Reference
Center, 445 12th Street SW., Room CY–
A257, Washington, DC 20554. The full
text of this document may be
downloaded at the following Internet
address: http://www.fcc.gov/document/
rates-interstate-inmate-calling-services.
The complete text may be purchased
from Best Copy and Printing, Inc., 445
12th Street SW., Room CY–B402,
Washington, DC 20554. To request
alternate formats for persons with
disabilities (e.g. Braille, large print,
electronic files, audio format, etc.) or
reasonable accommodations for filing
comments (e.g. accessible format
documents, sign language interpreters,
CARTS, etc.), send an email to
[email protected] or call the Commission’s
Consumer and Governmental Affairs
Bureau at (202) 418–0530 (voice) or
(202) 418–0432 (TTY).
DATES:

I. Introduction
1. In this item we grant two
longstanding petitions for rulemaking
filed in the docket that seek to ‘‘secure
the ‘just and reasonable’ interstate rates
for prisoners required by Section 201(b)
of the Communications Act’’ by
initiating this Notice of Proposed
Rulemaking (NPRM or Notice) to

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consider changes to our rules governing
rates for interstate interexchange inmate
calling services (ICS). In the first
petition for rulemaking, filed in 2003,
(First Wright Petition), Petitioners
requested that the Commission
‘‘prohibit exclusive inmate calling
service agreements and collect call-only
restrictions at privately-administered
prisons and require such facilities to
permit multiple long distance carriers to
interconnect with prison telephone
systems. * * *’’ In the second petition
for rulemaking, filed in 2007,
(Alternative Wright Petition), Petitioners
proposed that the Commission require
debit calling, prohibit per-call charges
and establish rate caps for all interstate,
interexchange inmate calling services.
The Commission received significant
comment on the two Petitions for
Rulemaking. Recently, there has been
substantial renewed interest and
comment in this docket highlighting
both the wide disparity among interstate
interexchange ICS rate levels and
significant public interest concerns. We
believe it is appropriate to seek
comment to refresh the record and
consider whether changes to our rules
are necessary to ensure just and
reasonable ICS rates for interstate, long
distance calling at publicly- and
privately-administered correctional
facilities.

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II. Background
A. Description of Inmate Calling
Services
2. Inmate calling services are typically
limited to collect or debit-based calling
from payphones. Collect calls from a
correctional facility usually incur a twopart charge; a per-call set up charge and
a per-minute charge. Debit calling
(charges are deducted from an inmate’s
account), typically incurs a per-minute
charge only. Based on the record, the
per-call charge can vary significantly
from $0.50 to $3.95 and per-minute
charges can vary significantly from
$0.05 to $0.89. Some commenters state
that ICS rates vary based on such factors
as facility size, call volume and the
jurisdiction of the call. Local and
intrastate ICS rates are generally set by
the states. The Commission does not
currently regulate interstate ICS rates.
ICS rates in federal prisons are set by
the Federal Bureau of Prisons.
3. Public Policy Considerations.
Petitioners and some commenters argue
that ICS rate reform is a public policy
imperative because high ICS rates limit
the ability of most inmates to maintain
contact with their families. Commenters
point to studies showing that regular
contact with family reduces inmate

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recidivism. Commenters note that
regular telephone contact with loved
ones also benefits those receiving the
calls, including inmates’ children, as
inmates may be assigned to correctional
facilities far from their homes thus
limiting in-person visits. Commenters
contend that regular telephone contact
between inmates and their loved ones at
high rates places a heavy burden on
inmates’ families because families
typically bear the burden of paying for
the calls. In addition, they assert that
the lack of regular telephone contact
between inmates and their loved ones is
a hardship on families because neither
the inmates nor their families can afford
the high rates.
4. We note that the Government
Accountability Office (GAO) has twice
recognized the conclusions of Federal
Bureau of Prison officials that contact
with family ‘‘aids an inmate’s success
when returning to the community’’ and
thus lowers recidivism. Moreover, the
GAO recently found that ‘‘crowded
visiting rooms make it more difficult for
inmates to visit with their families’’ and
that ‘‘[t]he infrastructure of the facility
may not support the increase in visitors
as a result of the growth in the prison
population.’’ As such, we believe that
regular telephone contact between
inmates and their families is an
important public policy matter, and that
we should consider the impact that
interstate ICS rates have.
5. Unique Characteristics of ICS. The
Commission has recognized that ICS
differs from traditional payphone
services in a number of respects. First,
although barriers to entry are low for
payphone providers in most locations, a
correctional facility typically grants an
exclusive contract to a single ICS
provider for a particular facility,
essentially creating a monopoly at that
facility. As such, competition exists for
ICS contracts but once an ICS provider
wins a contract it becomes the sole ICS
provider in that facility. Unlike nonincarcerated customers who have access
to alternative calling platforms on
public payphones, inmates only have
access to payphones operated by a
single provider for all available services
at that payphone. These contracts
additionally often include a site
commission or location fee paid to the
correctional facility. The Commission
has previously found that ‘‘[t]o have a
realistic chance of winning a contract,
the bidder must include an amount to
cover commissions paid to the inmate
facility.’’ Five years ago Petitioners
estimated that ‘‘commissions add an
average of 43 percent * * * to all other
costs before commissions.’’

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6. Security considerations also
differentiate ICS from public payphone
services. For instance, correctional
facilities typically use an automated
voice-processing system to screen and
process inmate collect calls rather than
a pre-subscribed operator service
provider. ICS providers also employ
blocking mechanisms to prevent
inmates from making direct-dialed (that
is calls made without using the
automated voice-processing system)
calls, access code calls, 800/900 number
calls, or calls to restricted individuals,
such as judges or witnesses.
Correctional facilities also require that
payphones be monitored for frequent
calls to the same number. Moreover,
correctional facilities often require
periodic voice overlays that identify the
call as being placed from a correctional
facility, as well as listening and
recording capabilities for all calls.
Commenters note that the costs of these
security features, hardware and software
costs, and training for staffers make ICS
more costly to provide than public
payphone service.
7. The record to date indicates a wide
disparity in ICS rates between states.
These rates reflect the higher security
and network costs that are inherent in
ICS; the disparity thus may reflect
whether the rates in question include
site commissions. For instance,
correctional facilities located in states
that do not require commissions from
ICS providers often charge lower ICS
rates. For example, New York state
prohibited site commissions in state
prisons and interstate per-minute rates
in such prisons are as low as $0.048. In
contrast, in Colorado, a state that has
site commissions, interstate per-minute
rates can be as high as $0.89. However,
in Montana, another state with site
commissions, the interstate per-minute
rate is $0.12. Such record evidence
raises questions about whether ICS rates
accurately reflect the costs of providing
ICS and whether site commission
payments are a reasonable cost of
providing ICS that therefore should be
recovered in the ICS rates inmates are
charged.
8. We seek comment on the
Commission’s legal authority in Section
III.E below to address the issues raised
by the Petitioners. While we believe that
we have jurisdiction to address
interstate ICS calls we believe those
calls may be a relatively small subset of
all inmate telephone calls. However,
several commenters argue that interstate
calls are often the most expensive and
therefore Commission action, such as
establishing an interstate rate
benchmark, would nevertheless be
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Federal Register / Vol. 78, No. 14 / Tuesday, January 22, 2013 / Proposed Rules
contact between inmates and their
families. In the interest of developing a
complete and current record, this Notice
seeks comment on the reasonableness of
current ICS rates and what steps the
Commission can and should take to
ensure reasonable ICS rates going
forward.
B. Inmate Calling Order on Remand and
NPRM
9. On February 12, 2002, the
Commission adopted an order
addressing whether section 276 of the
Communications Act of 1934, as
amended, (Act) requires the
Commission either to preempt state rate
caps on local collect calls or permits ICS
providers to collect an additional percall surcharge above state rate caps on
local collect calls. In the Inmate Calling
Order on Remand and NPRM, the
Commission concluded that section 276
does not require either preemption or an
additional surcharge and also concluded
that it was unnecessary to impose
nonstructural safeguards on the Bell
Operating Companies’ provision of ICS
services. In making these
determinations, the Commission
recognized the unique nature of ICS,
and concluded that the ‘‘fair
compensation’’ requirement of section
276 did not necessarily mean that
payphones with higher costs should
receive greater compensation than other
payphones.
10. In the NPRM portion of the Inmate
Calling Order on Remand and NPRM,
the Commission asked ‘‘whether the
current regulatory regime applicable to
the provision of inmate calling services
is responsive to the needs of
correctional facilities, ICS providers,
and inmates, and, if not, whether and
how we might address those unmet
needs.’’ Specifically, the Commission
sought detailed comments on ICS rates,
commissions paid to the confinement
facilities, cost and revenue data,
information from states on how they
handle inmate calling, alternatives to
the current system, and information on
call disconnections. The NPRM also
proposed methods to lower ICS rates,
including allowing the use of debit
cards or commissary accounts.
C. Two Petitions for Rulemaking

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1. First Wright Petition
11. In 2000, current and former
inmates of Corrections Corporation of
America (CCA) confinement facilities,
and the individuals that receive their
telephone calls, filed a class-action
lawsuit against CCA seeking relief from
exclusive dealing arrangements CCA
had with ICS providers. The plaintiffs

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alleged that the exclusive dealing
resulted in restricted telephone service
choices for inmates and caused rates for
those services to substantially increase,
in violation of various constitutional
and statutory provisions, including
section 201(b) of the Act. On August 22,
2001, the United States District Court
for the District of Columbia dismissed
the lawsuit. Pursuant to the doctrine of
primary jurisdiction, the court directed
the parties to file the appropriate
pleadings with the Commission to
resolve the issues the plaintiffs raised.
12. On November 3, 2003, Petitioners
filed the First Wright Petition with the
Commission pursuant to the court’s
directive. Petitioners requested that the
Commission address high ICS rates by
prohibiting exclusive ICS contracts and
collect-call-only restrictions at
privately-administered prisons, and
requiring such facilities to permit
multiple long-distance carriers to
interconnect with prison telephone
systems. The Commission sought and
received comment on the First Wright
Petition.

open a new docket exclusive to ICS
reform in light of the lengthy record, as
well as the fact that the ICS record is
part of the general payphone docket (CC
Docket No. 96–128) which relates to
competition among payphone providers
and the deployment of payphone
services. As such, comments and reply
comments on this Notice must be filed
in WC Docket No. 12–375. We
incorporate comments, reply comments
and ex parte filings from CC Docket No.
96–128 into WC Docket No. 12–375.

2. Alternative Wright Petition
13. On March 1, 2007, Petitioners
filed an alternative rulemaking petition
proposing that the Commission address
high ICS rates by requiring debit calling,
prohibiting per-call charges and
establishing rate caps for all interstate,
interexchange ICS. The Commission
sought and received comment on the
Alternative Wright Petition. On August
15, 2008, a group of ICS providers filed
the Inmate Calling Services Interstate
Call Cost Study (ICS Provider Proposal),
which included cost information to
support their proposed rate
methodology and rate levels for ICS.
14. As described fully below, in this
Notice, we seek updated information on
the ICS market and request answers to
questions raised by the Petitioners. We
specifically request comment from state
departments of corrections and state
officials responsible for prison
telecommunications decision making.
After the ICS Provider Proposal was
filed, a consensus appeared to be
forming about how best to address
inmate calling; we hope to revive those
discussions and consensus building
through our action today.
15. Since the Inmate Calling Order on
Remand and NPRM was released in
2002, the Commission has received
numerous comments regarding ICS
reform. Responses to the NPRM and
subsequent requests for comment on the
First Wright Petition and the Alternative
Wright Petition have provided an
extensive record on ICS reform. We
believe it is appropriate at this time to

A. Rate Caps in the ICS Market

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III. Ensuring ICS Rates Are Just and
Reasonable
16. There are multiple proposals to
address ICS rates in the record. We seek
to balance the goal of ensuring
reasonable ICS rates for end users with
the security concerns and expense
inherent to ICS within the statutory
guidelines of sections 201(b) and 276 of
the Act. Ensuring just and reasonable
ICS rates may be accomplished through
incentives or regulations, or a
combination of both; we seek comment
on these proposals below.
17. In the Alternative Wright Petition,
Petitioners requested that the
Commission set rate caps for interstate
long distance ICS. Specifically,
Petitioners requested that the
Commission ‘‘establish a benchmark
rate for domestic interstate
interexchange inmate debit calling
service of $0.20 per minute and a
benchmark rate for domestic interstate
interexchange inmate collect calling
service of $0.25 per minute, with no setup or other per-call charge.’’ The
Petitioners used 15 and 20 minute call
durations to calculate the rate caps and
based their proposed rate caps on then
current Federal Bureau of Prison and
several individual states’ ICS rates. We
seek comment on the elements of the
rate cap proposal and whether the
criteria used to develop the proposed
caps are appropriate.
18. Per-Call Charge. Each time an
inmate places a payphone call there are
typically two elements that make up its
cost—a per-call set up charge and a perminute charge. We first seek comment
on the per-call charge. Petitioners
propose eliminating the call set up or
per-call charge, which can be as much
as $3.95, and allowing only per-minute
charges. We seek comment on this
proposal. What costs are associated with
the per-call charge? Would the
elimination of the per-call charge help
ensure just and reasonable ICS rates?
Would a prohibition on per-call charges
result in below-cost service?

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19. Petitioners note that inmates often
incur multiple per-call charges when
calls are dropped after a pause in
conversation. We seek data on the
average number of dropped calls that
inmates experience. We request that
commenters suggest ways to prevent
multiple per-call charges for a single
conversation that is disconnected by
security triggers and subsequently
allowed to continue while maintaining
appropriate security measures. For
example, if the per-call charge is
maintained, Petitioners suggest that if a
disconnected call is reinitiated within
two minutes, it should not incur another
per-call charge. Should the Commission
require such a measure? What other
steps could be taken to prevent inmates
from being charged multiple per-call
charges for what amounts to one
conversation? What are the costs
associated with call security and are
they incurred on a fixed or per-call
basis?
20. Per-Minute Rate Caps. Would the
per-minute rate cap approach proposed
by the Petitioners ensure just and
reasonable rates? Are the proposed rate
caps just and reasonable consistent with
sections 201 and 276 of the Act? If not,
would different rate caps be
appropriate? What factors should the
Commission consider in determining an
appropriate per-minute rate cap?
Commenters advocating an alternative
per-minute rate cap should provide
specific, detailed cost information and
other relevant data to support their
proposed per-minute rate caps. Should
the domestic interstate interexchange
ICS per-minute rate cap proposed above
apply to both publicly- and privatelyadministered correctional facilities?
21. Some commenters argue that the
proposed per-minute rate caps are
arbitrary and capricious because they
would preclude providers from
recovering their legitimate costs of
providing service. Others argue that the
Alternative Wright Petition proposal is
confiscatory or may otherwise put ICS
providers out of business. We seek
evidence in support of or disproving
such arguments. Commenters also argue
that the adoption of per-minute rate
caps would chill innovation and
ultimately result in reductions in
service levels because the proposed caps
will not adequately compensate the
providers, thus making ICS a less
attractive service to offer. Others note
that new providers are entering the ICS
market. Commenters supporting such
assertions are asked to provide specific,
detailed information about the ICS
market to support their positions and
describe how market trends influence
ICS rates.

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22. In the Alternative Wright Petition,
Petitioners argue that several benefits
would accrue from setting per-minute
rate caps, such as administrative ease
and the absence of jurisdictional
challenges. We seek comment on this
argument. Can commenters identify any
other benefits to introducing per-minute
rate caps? What are the perceived
problems or challenges associated with
introducing per-minute rate caps? For
example, parties argue that differences
between correctional facilities including
size, location, security levels, facility
age and staffing levels will not allow a
one size fits all solution, such as perminute rate caps. Is this accurate? How
can the Commission establish a solution
that addresses the many variations
among confinement facilities?
23. If the Commission decides to
implement rate caps in the ICS market
how should we? What additional data,
if any, does the Commission require to
set rates? Would a rate cap approach
require the Commission to conduct rate
cases, as some commenters suggest? We
seek comment on the best ways to
determine just and reasonable caps for
ICS rates.
24. Marginal Location Methodology.
In 2008, ICS providers submitted the
ICS Provider Proposal for ICS rates. The
ICS Provider Proposal uses the
‘‘marginal location’’ methodology,
previously adopted by the Commission
to calculate public payphone rates, to
calculate proposed ICS rates. The ICS
providers believe the ‘‘marginal
location’’ methodology provides a
‘‘basis for rates that represent ‘fair
compensation’ as set forth in’’ section
276(b)(1)(A) of the Communications
Act. The ICS Provider Proposal
advocates a two-part rate structure that
includes both a fixed per-call charge
and a per-minute rate, arguing that percall charges must be maintained to
cover such expenses as equipment costs
and monthly line charges. The ICS
providers determined that the
methodology and data yield a requisite
fixed per-call charge of $1.56 with a perminute rate of $0.06 for debit calls, and
a fixed per-call charge of $2.49 with a
per-minute rate of $0.07 for collect calls,
applicable to all ICS providers. In
response, Petitioners point out that the
ICS Provider Proposal ‘‘largely supports
Petitioners’ requested benchmark rates.’’
Petitioners calculate that the ICS
Provider Proposal two-part rate
structure equals rate caps of $0.16 per
minute for a 15-minute debit call and
$0.24 per minute for a 15-minute collect
call.
25. We seek comment on whether the
ICS Provider Proposal methodology
would result in a just and reasonable

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rate. We also encourage commenting
parties that disagree with the ICS
Provider Proposal or proposed
methodology to provide alternative
methodologies supported by
sufficiently-detailed data. We seek
comment on whether the ICS Provider
Proposal has provided sufficient cost,
demand, and revenue detail to allow the
Commission to determine whether the
proposed rates are just and reasonable.
26. We also seek comment on whether
the underlying cost and demand factors
for public payphones and ICS are
similar enough to justify using a cost
methodology designed for public
payphones to set ICS rates. In particular,
we seek comment on the extent to
which ICS rates and call volumes vary
among prisons across the country, and
how the rates and call volumes compare
with the variation that occurs with
public payphones. We seek comment on
whether an additional justification
exists for adopting this cost
methodology.
27. Impact of Rate Reductions on Call
Volumes. We seek comment on whether
call volumes have increased where rates
have been lowered, and the resulting
impact on ICS providers’ revenues. We
note that the 2011 GAO Report found
that only approximately 25 percent of
inmates in the Federal Bureau of Prisons
use their entire monthly allotted
minutes for calls and that if rates were
lowered it would encourage greater
communications with families, which
the Bureau of Prisons ‘‘has stated
facilitates the reintegration of inmates
into society upon release from prison.’’
Do other correctional facilities find that
incarcerated individuals are not using
all their allotted time to make calls?
How much time is allotted, and what is
the percentage of individuals who use
all their time?
28. Tiered Pricing. A recent ex parte
filing by Petitioners attached a
transcript from a New Mexico Public
Service Commission hearing that
described the possible use of a tiered, by
monthly volume of minutes, pricing
structure in the state. Do commenters
believe a per-minute rate set by usage
volume is a viable option? Would tiered
pricing address concerns over a one size
fits all reform approach such as rate
caps? What factors should the
Commission consider in establishing
pricing tiers? What are potential
problems with tiered pricing?
29. Market Forces. Petitioners note
that telecommunications costs in
general, and long distance costs in
particular, are decreasing and therefore,
they believe, ICS rates should follow the
market and decrease as well. Some
participants in this proceeding note that

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Federal Register / Vol. 78, No. 14 / Tuesday, January 22, 2013 / Proposed Rules
‘‘rates in the largest majority of
correctional facilities are moving in a
downward trend.’’ Is this accurate? Can
commenters provide concrete examples
of decreases in ICS rates?
30. Collect Calling v. Debit Calling.
The Alternative Wright Petition suggests
two different rate caps: one for collect
calling and one for debit calling. A
collect call is a call in which the called
person pays for the call and a debit call
deducts the cost of the call from a
prepaid account. Petitioners argue that
collect calling is more expensive
because its costs include billing costs
and uncollectibles, while debit calling is
less expensive because it reduces staff
responsibilities and uncollectibles. Do
commenters agree that there should be
different per-minute rate caps for collect
and debit calling? What are the benefits
of debit calling? For example, do
commenters believe that debit calling
will exert downward pressure on collect
calling rates?
31. Some commenters have expressed
concern about the expense and
difficulty of implementing debit calling.
Specifically, they cite difficulty in
blocking restricted telephone numbers,
the expense of purchasing new
equipment and the challenges of
establishing new processes and
procedures and verifying calling party
identities. Parties have also expressed
safety concerns related to debit calling.
Some prisons already allow for debit
calling. For example, the Federal Bureau
of Prisons allows debit calling in some
of its facilities and the state of Iowa
offers debit calling only. What safety
concerns are raised by debit calling
service, and how have those concerns
been addressed where debit calling
already is permitted? Commenters also
note the increased administrative
workload and cost associated with debit
calling caused by such tasks as issuing
PINs to each inmate in facilities with
high turnover. Have commenters
experienced such challenges, and how
have they been overcome? What are the
other pros or cons of debit calling? We
seek comment on ICS providers’ overall
experiences with offering debit calling.
32. How many correctional facilities
currently offer debit calling? Has debit
calling become more common? What are
the current ratios of debit to collect
calling in correctional facilities? Should
the Commission mandate debit calling
in privately- and publicly-administered
correctional facilities? One commenter
says it offers debit calling to all of the
facilities it serves, but it is not practical
to mandate debit calling because not all
correctional facilities want the service.
What are other challenges to mandating
debit calling?

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33. Prepaid Calling. Commenters
suggest prepaid calling as an alternative
to collect and debit calling. Prepaid
calling allows inmates or their family
members to prepay for minutes, usually
at a discount. This is different from
debit calls, in which money is deducted
from an account, but the minutes are not
purchased in advance. Commenters
argue that the benefits of this approach
may include administrative ease for the
providers, increased safety, controlled
costs for call recipients, and eliminating
the need to block calls because of a call
recipients’ credit standing. However,
Petitioners note that there are
outstanding questions with prepaid
calling such as: how to handle monthly
fees; how to load an inmate’s account;
and minimum required account balance.
If these issues can be sufficiently
addressed, is prepaid calling a viable
ICS option? Do any ICS providers
currently offer prepaid calling? What are
some other concerns or considerations
with prepaid calling?
34. Intrastate-Interstate Parity.
Another alternative would be to adopt
an intrastate-interstate parity principle
that would require that rates for
interstate, long-distance calls not exceed
rates for intrastate, long-distance calls.
Rates for intrastate, long-distance calls
are typically set by state public utility
commissions, and those commissions
may set rates that take into account the
varying cost of providing inmate calling
services within each state given the
security and other features required by
state law. To the extent that interstate
rates for inmate calling services are
significantly higher than intrastate rates,
how would a requirement that ICS
providers set interstate rates at a level
no higher than intrastate, long-distance
rates affect the justness and
reasonableness of those rates? How
many states set rates specifically for
ICS? What is the rate structure for ICS
calls in those states, and what are the
rates for intrastate, long-distance calls?
How do states that set specific ICS rates
ensure that ICS providers are ‘‘fairly
compensated?’’ How do intrastate, longdistance rates differ between states that
establish general rate caps and those
that set specific caps for ICS? If the
Commission adopts a parity principle,
should there be any exceptions to that
principle?
B. Additional Proposals in the Record
35. There are multiple other proposals
in the record that do not directly
address per-call and per-minute ICS
rates. We seek comment on any other
proposals parties contend address the
concerns raised in this proceeding,

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including any proposals in the record
that are not addressed below.
36. Competition in the ICS Market.
The First Wright Petition requested that
the Commission mandate the opening of
the ICS market to competition and
prohibit collect call only restrictions in
privately-administered correctional
facilities. ICS contracts are typically
exclusive; competition appears to exist
in winning an ICS contract but once an
ICS provider wins a contract it becomes
the sole provider. How do exclusive
contracts influence ICS rates? How
would competitive ICS services be
provided? The First Wright Petition also
argued that the collect calling-only
limitations imposed by many
confinement facilities increase costs to
both ICS providers and inmates that are
not outweighed by corresponding
benefits and that such limitations
should therefore be prohibited. To the
extent ICS is still limited to collect
calling in some correctional facilities,
we seek comment on the rationale
behind this restriction.
37. Site Commissions. ICS contracts
frequently include a site commission or
location rent which is paid to the
facility and in some instances may go to
fund inmate services at the facility.
What types of inmate services or other
services do site commissions fund? How
do site commissions in ICS contracts
vary by facility? Petitioners argue that
ICS rates are inflated to cover
commissions, which can be as much as
65 percent of gross revenues, causing
the rates to be unreasonable in violation
of section 201(b). Is this accurate? We
seek updated data on how much these
site commissions are and how much
they add to per-call costs. The FCC has
previously found that ‘‘under most
contracts, the commission is the single
largest component affecting the rates for
inmate calling service’’ and ‘‘because
the bidder who charges the highest rates
can afford to offer the confinement
facilities the largest location
commissions, the competitive bidding
process may result in higher rates.’’ Do
commenters believe this is still
accurate? The Commission has also
found that ‘‘location rents are not a cost
of payphones, but should be treated as
profit.’’ Do commenters agree with that
conclusion?
38. Some site commissions are
mandated by state statute, while several
states have reduced or eliminated
commissions in ICS contracts. If a state
has reduced or eliminated site
commissions, how has any resulting rate
transition been handled? How has the
lowering or elimination of site
commissions impacted rates? Is this
evidence that site commissions are not

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necessary, or is it evidence that the
market is working and the Commission
need not intervene? Must the
Commission address site commissions
and the effect they have on ICS rates in
order to ensure just and reasonable ICS
rates?
39. Offer No-Cost Calling. In the
Alternative Wright Petition, Petitioners
include a suggestion they contend will
advance the Commission’s universal
service goals and provide all inmates
valuable contact with the outside world.
Specifically, Petitioners suggest that ICS
providers provide a certain amount of
no-cost calling per inmate per month in
each of the facilities they serve in
exchange for the right to charge a higher
per-minute rate. Petitioners suggest
implementing rate caps of $0.22 per
minute for debit calling and $0.275 per
minute for collect calling if ICS
providers offer 20 minutes of free
calling per inmate per month. Can or
should the Commission mandate a
certain amount of free calling per
inmate per month, or should this be
offered at the providers’ discretion?
What legal questions are raised by this
proposal? What other considerations are
raised by this proposal?
40. Billing-Related Call Blocking.
Petitioners also express concern over
billing-related call blocking in
correctional facilities. Specifically,
Petitioners note that ICS providers are
increasingly unable or unwilling to
enter into agreements with LECs to
provide for ICS providers’ billing the
LECs’ customers receiving collect calls
from inmates. As a result, ICS providers
cannot bill for an increasing percentage
of inmate calls and thus ‘‘block inmate
collect calls to numbers served by LECs
with which the service providers have
no billing arrangements.’’ Petitioners
argue that in facilities where collect
calling is the only option, this practice
may ultimately prevent inmates from
being able to make any telephone calls.
Commenters note that many ICS
providers have solutions to ‘‘ensure that
inmates can contact customers served
by these CLECs that refuse to bill for
collect calls.’’ Does this practice
continue? Petitioners argue that debit
calling, which requires pre-payment,
may prevent the need to block calls
when the ICS provider does not have a
billing arrangement with the
terminating LEC. Is this accurate? Do
commenters have experience with
billing-related call blocking? Can
commenters provide data on the average
number of calls that are blocked per
month and the reason for the blocking?
Are there ways, other than mandating
debit calling, to deter or prevent billingrelated call blocking?

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41. Non-Geographic Numbers. ICS
providers have argued that lowering
interstate calling rates may create an
incentive for call recipients to obtain
telephone numbers from other states,
perhaps from wireless or VoIP
providers, to take advantage of the
lowered interstate rates. Petitioners
counter that the opposite is currently
happening; call recipients are obtaining
telephone numbers, from wireless or
VoIP providers, that are local to the
prison to take advantage of lower local
calling rates. Have commenters
experienced either of these practices?
Do these practices raise any security
concerns and if so what are those
concerns?
42. Disabilities Access. There is
evidence in the record to indicate that
inmates with hearing disabilities may
not have access to ICS at reasonable
rates using TTYs. The record suggests
that because the average length of a
telephone conversation using a TTY is
approximately four times longer than a
voice telephone conversation, deaf and
hard of hearing inmates who use TTYs
have to pay more than their hearing
counterparts. The record also suggests
that TTY users have had to pay
additional fees for connecting to a TTY
relay operator. We seek comment on the
types of ICS access that individuals who
are deaf or hard of hearing experience
during their incarceration. Where such
access to ICS is provided, are the rates
the same as those available to those
without a disability? If the rates differ,
what is that difference and what are the
explanations for such difference? We
note that section 276(b)(1)(A)
specifically exempts
‘‘telecommunications relay service calls
for hearing disabled individuals’’ from
the Commission-established ‘‘per call
compensation plan’’ ensuring that ICS
providers are ‘‘fairly compensated.’’
How should the Commission take this
exemption into account in examining
rates?
43. Updated Data. We seek updated
data from all interested parties and the
public, but especially from ICS
providers. Commenters note that the
record regarding nationwide interstate
ICS rates is limited to an ‘‘analysis of
prison phone contracts nationwide’’ that
was conducted by Prison Legal News in
April 2011. As such, we seek comment
on the accuracy and reliability of the
study. In addition, from independent
research we have found more-current
state rates, which continue to
demonstrate a range of prices for ICS
calls among states. For example, for a
15-minute interstate call, we found the
following rates: $6.65 in California;
$2.04 in Montana; $6.45 in Texas; and

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$16.55 in Idaho. We encourage
commenters to submit the most up-todate information available regarding
interstate ICS rates to aid us in
developing a clearer understanding of
the ICS market. This includes per-call
and per-minute rates, information on
commissions and what percentage of a
rate they comprise, the number of
disconnected calls, the average length of
calls, and how calls break out by type,
i.e., collect, prepaid and debit.
44. We also seek comment on whether
the Alternative Wright Petition and ICS
Provider Proposal are grounded in
sufficiently-reliable data. For example,
the ICS Provider Proposal contains data
for less than 30 correctional facilities,
none of which impose site commissions.
Is this too small a sample, or a nonrepresentative sample, on which to base
a nationwide solution? ICS providers
argue that in calculating their proposed
rate caps the Petitioners relied on data
from facilities with low cost calling. We
therefore invite parties to comment on
whether the data supporting the First
Wright Petition, the Alternative Wright
Petition and the ICS Provider Proposal
is representative of correctional
facilities across the country.
45. Existing Contracts. Petitioners
suggest that if the Commission
implements a rate cap it should also
mandate a one-year fresh look,
transition period for existing ICS
contracts. Petitioners envision that this
transition period would allow for any
necessary review and termination or
renegotiation of existing ICS contracts in
order to introduce rate caps which
would be effective by the end of the
transition period. Commenters argue
that the Commission cannot insert itself
into the procurement decisions of
correctional agencies, and that any new
ICS-related rules should not be applied
to existing contracts but only to
contracts entered into after the adoption
of new rules.
46. Would it be appropriate to
mandate a fresh look period or should
any new ICS rules apply only to
contracts entered into after the adoption
of new rules? With renegotiated
contracts, how long should the
transition period last? What are typical
ICS contract terms? Do such contracts
usually have change of law provisions
that would be triggered by a
Commission order? How does the length
of existing contracts affect the
implementation of any of the proposals
discussed above? If commenters provide
alternative proposals not discussed
above, they should include information
on how the contractual process will
function with each specific proposal.
After implementing a new ICS regime,

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should the Commission require a
periodic rate review to ensure that the
rates remain just and reasonable?
47. We encourage comment on any
new issues that have arisen in the ICS
market or issues that have not been
addressed above. We request that
commenters provide evidentiary
support for their comments and
suggestions in this proceeding.

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C. Cost/Benefit Analysis of Proposals
48. Acknowledging the potential
difficulty of quantifying costs and
benefits, we seek to determine whether
the proposals above will provide public
benefits that outweigh their costs, and
we seek to maximize the net benefits to
the public from any proposals we adopt.
For example, commenters have argued
that inmate recidivism is decreased with
regular family contact. Accordingly, we
seek specific comment on the costs and
benefits of the proposals above and any
additional proposals received in
response to this Notice. We also seek
any information or analysis that would
help us to quantify these costs or
benefits. Further, we seek comment on
any considerations regarding the
manner in which the proposals could be
implemented that would increase the
number of people who benefit from
them, or otherwise increase their net
public benefit. We request that
interested parties discuss whether, how
and by how much they will be impacted
in terms of costs and benefits of the
proposals included herein. We
recognize that the costs and benefits
may vary based on such things as the
correctional facility served and ICS
provider. We request that parties file
specific analysis and facts to support
any claims of significant costs or
benefits associated with the proposals
herein.
D. Legal Authority
49. We seek comment on the scope of
the Commission’s legal authority to
regulate ICS. Section 276 of the
Communications Act of 1934 (Act)
requires that all payphone providers,
including ICS providers, be ‘‘fairly
compensated.’’ We seek comment on
our authority to address interstate
interexchange ICS rates under section
276(b)(1)(A), which directs the
Commission to ‘‘establish a per call
compensation plan to ensure that all
payphone service providers [(PSPs)] are
fairly compensated for each and every
completed intrastate and interstate
call.’’ We also seek comment on our
authority to address interstate
interexchange ICS rates under section
201(b) of the Act, which requires
common carriers to provide service at

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‘‘just and reasonable’’ rates and
authorizes the Commission to
‘‘prescribe such rules and regulations as
may be necessary in the public interest
to carry out the provisions of this
chapter.’’ Does the Commission have the
jurisdiction to establish per-minute rate
caps for privately- and publiclyadministered facilities? We encourage
commenters to discuss additional
sources of legal authority for the
Commission to address ICS rates.
50. We note that only a portion of the
telephone calls inmates make from
correctional facilities are interstate,
interexchange ICS. Many calls made
from correctional facilities are intrastate
local or long distance calls, which are
regulated by the states. We therefore
seek comment on how the Commission
can encourage states to reevaluate their
policies regarding intrastate ICS rates.
51. We also seek comment on how
and whether use of VoIP technologies
by ICS providers impacts our analysis
under section 276 of the Act. To what
extent are providers currently utilizing
VoIP technology to provide ICS? Would
the use of VoIP technology affect the
authority of state regulators to address
intrastate ICS rates? What authority
regarding ICS rates would control in
that circumstance?
52. We recognize the important role
that states play in managing correctional
facilities and in contracting with private
correctional management companies.
Some parties believe ICS is exclusively
a state issue because it involves
management of correctional facilities
and therefore its regulation should be
left to state correctional officials. How
would such a conclusion be reconciled
with the Commission’s obligations
under sections 201 and 276 and the fact
that the question of the reasonableness
of ICS rates was referred to the
Commission under the doctrine of
primary jurisdiction? Would the
Commission’s fulfillment of its
obligations under sections 201 and 276
potentially result in preemption of
states’ exercise of regulatory or police
power authority?
53. We also seek comment specific to
the proposals discussed above. Does the
Commission have the authority to
disallow an additional call set up charge
when inmates’ calls are disconnected?
Does the Commission have the legal
authority to mandate that ICS providers
offer debit calling? What legal authority
does the Commission have to address
the site commissions common in ICS
contracts?

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IV. Procedural Matters
A. Filing Instructions
54. Pursuant to §§ 1.415 and 1.419 of
the Commission’s rules, 47 CFR 1.415,
1.419, interested parties may file
comments and reply comments on or
before the dates indicated on the first
page of this document. Comments may
be filed using the Commission’s
Electronic Comment Filing System
(ECFS). See Electronic Filing of
Documents in Rulemaking Proceedings,
63 FR 24121 (1998). Comments and
reply comments on this NPRM must be
filed in WC Docket No. 12–375.
• Electronic Filers: Direct cases and
other pleadings may be filed
electronically using the Internet by
accessing the ECFS: http://
fjallfoss.fcc.gov/ecfs2/.
• Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. If more than one
docket or rulemaking number appears in
the caption of this proceeding, filers
must submit two additional copies for
each additional docket or rulemaking
number.
Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail. All
filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
• All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th St. SW., Room TW–A325,
Washington, DC 20554. The filing hours
are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with
rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights,
MD 20743.
• U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW.,
Washington DC 20554.
People with Disabilities: To request
materials in accessible formats for
people with disabilities (braille, large
print, electronic files, audio format),
send an email to [email protected] or call
the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
B. Ex Parte Requirements
55. The proceeding this Notice
initiates shall be treated as a ‘‘permit-

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but-disclose’’ proceeding in accordance
with the Commission’s ex parte rules.
Persons making ex parte presentations
must file a copy of any written
presentation or a memorandum
summarizing any oral presentation
within two business days after the
presentation (unless a different deadline
applicable to the Sunshine period
applies). Persons making oral ex parte
presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with
§ 1.1206(b). In proceedings governed by
§ 1.49(f) or for which the Commission
has made available a method of
electronic filing, written ex parte
presentations and memoranda
summarizing oral ex parte
presentations, and all attachments

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thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format (e.g., .doc,
.xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex
parte rules.
C. Initial Regulatory Flexibility Analysis
56. As required by the Regulatory
Flexibility Act of 1980 (RFA), the
Commission has prepared an Initial
Regulatory Flexibility Analysis (IRFA)
for this Notice, of the possible
significant economic impact on small
entities of the policies and rules
addressed in this document. Written
public comments are requested on this
IRFA. Comments must be identified as
responses to the IRFA and must be filed
by the deadlines for comments on the
Notice provided on or before the dates
indicated on the first page of this
Notice. The Commission’s Consumer
and Governmental Affairs Bureau,
Reference Information Center, will send
a copy of this Notice of Proposed
Rulemaking, including the IRFA, to the
Chief Counsel for Advocacy of the Small
Business Administration (SBA).
D. Initial Paperwork Reduction Act of
1995 Analysis
57. This document does not contain
proposed information collection
requirements subject to the Paperwork
Reduction Act of 1995, Public Law 104–
13. In addition, therefore, it does not
contain any proposed information
collection burden for small business
concerns with fewer than 25 employees,

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pursuant to the Small Business
Paperwork Relief Act of 2002, Public
Law 107–198, see 44 U.S.C. 3506(c)(4).
V. Ordering Clauses
58. Accordingly, it is ordered that,
pursuant to sections 1, 2, 4(i)–(j), 201(b)
and 276 of the Communications Act of
1934, as amended, 47 USC 151, 152,
154(i)–(j), 201(b) and 276, this Notice of
Proposed Rulemaking is adopted.
59. It is further ordered, that the
Petition of Martha Wright et al. for
Rulemaking or, in the Alternative,
Petition to Address Referral Issues in
Pending Rulemaking is GRANTED IN
PART.
60. It is further ordered, that the
Petitioners’ Alternative Rulemaking
Proposal is granted in part.
61. It is further ordered, that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
the Notice of Proposed Rulemaking,
including the Initial Regulatory
Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small
Business Administration.
62. It is further ordered, that pursuant
to §§ 1.4(b)(1) and 1.103(a) of the
Commission’s rules, 47 CFR 1.4(b)(1)
and 1.103(a), that the Notice of
Proposed Rulemaking shall be effective
on the date of publication of a summary
thereof in the Federal Register.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013–01154 Filed 1–18–13; 8:45 am]
BILLING CODE 6712–01–P

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