[Federal Register Volume 80, Number 243 (Friday, December 18, 2015)]
[Proposed Rules]
[Pages 79020-79027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31253]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[WC Docket No. 12-375; FCC 15-136]
Rates for Interstate Inmate Calling Services
AGENCY: Federal Communications Commission.
ACTION: Proposed rules.
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SUMMARY: In this document, the Commission seeks comment on ways to
promote competition for Inmate Calling Services (ICS), video
visitation, rates for international calls, and considers an array of
solutions to further address areas of concern in the (ICS) industry.
DATES: Comments due January 19, 2016. Reply comments due February 1,
2016.
ADDRESSES: You may submit comments, identified by docket number 12-375
and/or rulemaking number 15-136, by any of the following methods:
[ssquf] Federal Communications Commission's Web site: http://apps.fcc.gov/ecfs/. Follow the instructions for submitting comments.
[ssquf] Mail: Federal Communications Commission, 445 12th Street
SW., Washington, DC 20554.
[ssquf] 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 Engledow, Wireline Competition
Bureau, Pricing Policy Division, (202) 418-1540 or
[email protected]
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third
Further Notice of Proposed Rulemaking, WC Docket: 12-375, released
November 5, 2015. The full text of this document may be downloaded at
the following Internet Address: http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db1105/FCC-15-136A1.pdf.
The complete text may be purchased from Best Copy and Printing,
Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554. To
request alternative formats for persons with disabilities (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 or (202) 418-0432 (TTY).
Pursuant to sections 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 (May 1, 1998).
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/.
[ssquf] 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.
[ssquf] All hand-delivered or messenger-delivered 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.
[ssquf] 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.
[ssquf] 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).
I. Discussion
A. Promoting Competition
1. While we adopted regulations in the November 5, 2015 Report and
Order to correct failures in the ICS market, the Commission generally
prefers to rely on competition over regulation. We seek additional
comment on whether there are ways to promote competition within the ICS
market to enable the Commission to sunset or eliminate our regulations
adopted herein in the future. We also seek comment on the extent to
which the reforms adopted today facilitate a properly functioning
market.
2. In the 2012 NPRM, (78 FR 4369) the Commission noted that the
First Wright Petition asked the Commission to ``mandate the opening of
the ICS market to competition.'' In the First Wright Petition, the
Petitioners further 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 comment on these
proposals but noted that ICS contracts ``are typically exclusive.'' In
the 2013 Order (78 FR 68005), the Commission observed that while it had
previously held that competition existed among ICS providers to provide
service to correctional facilities, facilities opposed the allowance of
multiple providers due to security concerns. The Commission sought
comment on whether security issues were still a legitimate reason for
limiting competition within correctional facilities, and whether any
technological advances had changed the justification for such exclusive
use. The Commission asked similar questions in the Second FNPRM, and
requested comment regarding any costs that may be incurred by the
introduction of multiple providers within a single facility, any
additional barriers to competition within a facility, and how to allow
[[Page 79021]]
greater competition without banning exclusive ICS contracts.
3. In response, commenters raised concern about requiring
facilities to utilize multiple providers at the same location. Many
commenters assert that security could be compromised if more than one
ICS provider operated at a single facility. For instance, GTL notes
that ``investigators would have to conduct duplicative search
procedures'' which could compromise ``law enforcement's ability to
monitor and track inmate calling for victim protection, investigative
resources, and other public safety purposes.'' Securus warns that
officers would need to be trained in every system and that having to
check multiple systems could lead to a delay in officers' ability to
react. Commenters also note potential increased administrative burdens
and complexities for correctional facilities in order to install and
maintain separate telephone systems. Securus asserts such complexities
could include the need to create complex bids to allow for multiple
providers, negotiate and oversee multiple contracts, review and process
vendor payments and address vendor disputes. Commenters assert that
these increased burdens to correctional facilities would likely lead to
higher inmate ICS costs. Some commenters say that requiring multiple
providers per facility could lead small facilities to eliminate ICS
altogether. GTL states that, ``[i]f provision of ICS at facilities with
multiple providers is not financially feasible for each provider, then
facilities will not have multiple providers, regardless of what rules
the Commission promulgates.'' Some commenters suggest that banning
exclusive contracts would lead to lower capital investment resulting in
lower and less predictable call quality. But HRDC suggests that
``[o]nly when consumers are afforded the choice to select
telecommunications providers that offer the best service at the lowest
price will a competitive and free market prevail in the ICS industry.''
4. We seek additional comment on this issue because the record also
indicates there may be multiple providers in some facilities. How
common is this practice? Does it indicate that not all facilities enter
into exclusive ICS contracts? If the Commission finds it necessary to
ban exclusive ICS contracts to encourage greater competition in
providing ICS in correctional institutions, we seek comment on our
legal authority to do so. Would such a ban serve the express purposes
of section 276(b)(1), namely to promote competition and the widespread
deployment of payphone services? How should existing, exclusive ICS
contracts be treated if the Commission decided to ban exclusive
contracts? Should they be abrogated, grandfathered, subject to a
transition period or some other treatment? We seek information on the
extent to which multiple providers currently serve different regions of
the country. Specifically, are there even multiple ICS providers
available to serve each correctional institution? Are there
correctional facilities that can only be served by one ICS provider?
5. Are there ways to mitigate concerns raised in the record that
multiple providers could increase burdens and make it ``more difficult
. . . to maintain security''? How could allowing competition inside
correctional institutions decrease end-user rates? Would facilities, as
suggested in the record, eliminate ICS if the Commission banned
exclusive contracts? If so, would it be necessary for the Commission to
take action to prevent this practice? We seek comment on our legal
authority to do so. Is it feasible for multiple providers to serve the
same facility without having to build out their own separate
infrastructure, for example by offering some form of secure, dial-
around service? If so, could the Commission require ICS providers to
offer such a service? Is it possible for multiple providers to co-exist
at a single facility without compromising important security features
and increasing infrastructure and personnel costs? Would technological
advances address such concerns? Would requiring multiple providers in
institutions, by prohibiting providers from bidding on exclusive
contracts, lead to lower capital investment and ultimately affect call
quality, as suggested by both GTL and Pay Tel? Finally, should the
Commission, as suggested, first adopt rate and ancillary service charge
reform and then determine if additional steps are necessary and perhaps
revisit the idea of intra-facility competition then?
B. Video Calling and Other Advanced Inmate Communications Services
6. Our core goals for inmates and their families, friends, clergy
and lawyers remain the same regardless of the technologies used--
ensuring competition and continued widespread deployment of ICS and the
societal benefits that they bring. Since the Commission adopted the
2013 Order, we have seen an increase in the use of video calling,
including video visitation. Given the lack of competitive pressures and
the market failure the Commission has identified in the ICS market, we
are concerned that rates for video calling and video visitation
services that do not meet the definition of ICS could be used as a way
to allow ICS providers to recover decreased rates as a result of the
reforms adopted herein. We seek further comment on these newer
technologies, to gain a better understanding of their use, the costs to
providers and rates to consumers, and to identify any trend of moving
away from more traditional ICS technologies. We seek comment on whether
the incentives that allowed ICS rates to exceed just, reasonable, and
fair levels might also occur for video calls and the action needed to
address such issues.
7. Background. In the Second FNPRM, the Commission sought comment
on ``the impact of technological advancements on the ICS industry.''
The Commission also invited comment on its legal authority to regulate
the rates for services provided over newer technologies. The Commission
received insight from commenters, but additional information was
necessary to gain a fuller understanding of video visitation and other
advanced services. Accordingly, the Commission asked supplemental
questions about these services in the Second FNPRM. For example, the
Commission specifically sought ``a greater factual understanding of the
availability of these and other services,'' among other issues. The
record received in response to the Second FNPRM provided us with
further detail about the issues surrounding these services, but we
again seek additional information on some questions addressed in both
the FNPRM and Second FNPRM, as well as other areas that we have
determined warrant further consideration. We specifically seek comment
on video calls, including, but not limited to, video visitation, as the
record indicates that such technology is growing in use in correctional
institutions. We also ask questions about other advanced services
described in the record.
8. Discussion. Video calling has become another way for inmates to
make contact with the outside world in addition to in-person visits and
ICS via telephones hanging on the wall. One commenter suggested that
video visitation systems, ``which allow both video and non-video calls
at unregulated rates, email, text messaging, face-to-face visits, mail
and hearing-impaired systems,'' actually compete with ICS providers. We
seek comment on how pervasive video visitation services are in prisons
and jails. How many facilities allow such services? Is there a
difference in availability between prisons and jails? How many
providers offer these services? Are there
[[Page 79022]]
providers of video visitation that are not also providers of
traditional ICS, or do the same companies offer both services? Do
commenters believe certain forms of video visitation are in fact
distinct from ICS? If so, what feature(s) make them distinct? For
instance, might intra-institution video visitation facilities that
require the friend or family member to come to the institution in order
to have a video visit fall inherently outside the definition of ICS as
compared to video visitation between the inmate in the institution and
a friend or family member in a remote location? Do certain forms of
video visitation use devices other than ``inmate telephones'' as the
term is defined in our rules? We also ask commenters to provide data on
the minutes of use for video calls and whether and how these minutes of
use have grown over the last few years. How common are video visitation
only companies, as compared to traditional ICS providers?
9. We are particularly interested in the rates that providers of
video calls charge for this service compared to traditional ICS. How
are these rates established? For example, the Illinois Campaign states
that one provider ``typically charges a dollar a minute for a video
visit.'' PPI suggests that the rate may fluctuate between as low as
$0.33 per minute for certain providers up to $1.50 per minute for
others. We seek detailed information about the rates video visitation
providers charge for these services. What is a typical rate charged for
video visitation? Does the rate differ between prisons and jails? How
much, if at all, do the rates for video visitation fluctuate based on
the type or size of the facility? If there is a difference between
charges for facility type or size, what are the reasons for the
differences? Are the rates for these services different from the rates
for traditional ICS? If so, what is the justification for the
difference? To the extent that video visitation providers are charging
rates that exceed our interim caps, have those providers been able to
explain why their services are not a form of ICS that is not subject to
those caps? If there are strictly video visitation providers who do not
provide other forms of ICS, do their rates differ from those set by
traditional ICS providers? Does the end-user rate fluctuate by call
volume or technology used?
10. What limits or protections would need to be implemented to
provide relief from or prevent excessive rates for video visitation
services, to the extent that they are not already being treated as
forms of ICS? Are the ancillary service charges for video visitation
comparable to those of traditional ICS? PPI explains that certain ICS
providers that also provide video visitation charge different amounts
for credit card transaction fees depending on the technology used by
the inmate. Is this typical for ancillary fees and charges in general?
Do video visitation providers bundle this service with traditional ICS
or other services, and does that affect the rates users pay for video
visitation? Do providers pay site commissions on video calls? If so, we
ask commenters to file information on the magnitude of these payments.
11. News articles and commenters indicate that some ICS providers,
as a condition for offering video calling, have eliminated in-person
visitation entirely. We seek comment on how common conditions, such as
eliminating in-person visits, are to offering video visitation
services. What cost savings do institutions experience, if any, by
moving away from in-person visits? What effects do conditions such as
the elimination of in-person visitation have on inmates and their
decisions to use video visitation or traditional ICS? Are inmates and
their families given a choice? Do they have input into the decision to
eliminate in-person visits? Does the practice of eliminating or
reducing in-person visitation differ between jails and prisons? The
record indicates that some video visitation contracts may also include
a quota system, mandating a minimum number of usages of the technology
per month. What are the consequences if such quotas are not met? How
frequently are such conditions included in video visitation contracts?
Are there other requirements like this that video visitation providers
include in their contracts? One commenter, for example, hypothesized
that ``if commissions on phone services are restricted, providers could
include with the phone services a video visitation system and, as an
incentive to select them, offer to charge for on-site visits while
offering a large commission on the consumer paid visitation services to
compensate for commissions restricted on the inmate phone calling.'' Is
this a practice that occurs, or is likely to occur in some facilities
offering video visitation?
12. We also seek comment on the benefits of video visitation as
compared to traditional ICS. In facilities that offer both video
visitation and traditional ICS, what percentage of inmates and their
families utilize video visitation? For the inmates and families that do
use video visitation, how frequent is their use? What is the
comparative percentage between video visitation usage and traditional
ICS usage? Are inmates and their families more apt to use video
visitation in jails or prisons, or is there no notable difference based
on the type or size of facility? We seek comment on the impact video
calling has on inmate connectivity with friends and family. For
example, is there evidence that video calling has reduced or increased
the frequency of connectivity with friends and family because they may
be charged by the minute, while friends and family do not have to pay
for an in-person visit?
13. We seek general comment on the costs to providers of video
visitation. Are there additional costs to ICS providers in developing,
provisioning, or offering video visitation services? Are there costs to
the correctional facilities for provisioning video visitation services?
Do ancillary service charges and site commissions affect video
visitation rates? If so, how?
14. We have made clear that our authority to regulate ICS is
technology neutral. We also note that certain commenters have
specifically agreed that we have authority to regulate video
visitation. For example, PPI suggests that we should ``regulate the
video visitation industry so that the industry does not shift voice
calls to video visits.'' To the extent that video visitation is not
already a form of ICS that is subject to our ICS rules, is this a
suggestion we should pursue? Are there any barriers to the Commission
specifically regulating video visitation service that do not constitute
inmate telephone service under section 276?
15. HRDC and PPI have suggested that the same perverse incentives
that have harmed the traditional ICS market also harm the video
visitation market. We seek additional comment on whether there is a
similar market failure for video visitation and other advanced services
as the market failure described above for traditional ICS. Keeping in
mind the Commission's stated goals of increased communication at just,
reasonable, and fair rates, what steps can be taken to prevent or
alleviate problems in video visitation that have prompted our action
with regard to traditional ICS? Would adopting rate caps be effective
to ensure just, reasonable, and fair rates for video visitation that
does not meet the definition of ICS? To the extent the record indicates
that a similar failure is occurring in the market for video calling as
we witnessed for traditional ICS, we seek comment on adopting rate caps
and reforms to ancillary service charges to ensure that video calls and
video visitation do not create loopholes that providers may exploit and
undermine the reforms adopted herein.
[[Page 79023]]
16. Some commenters are concerned that bundling regulated and
unregulated products together harms the market for ICS. Would
prohibiting IC providers' bundling of regulated and unregulated
products together in contractual offerings alleviate some of the
problems with current rates charged for advanced services? What other
kinds of advanced services are available to inmates? Are they available
commonly in most facilities, or only in certain ones? What is the
demand for these services and what rates and fees are charged? What
additional functionalities do they offer? Do they provide any greater
benefits to inmates, their families, or others, than traditional
services? What are ICS providers' rates for other services such as
email, voicemail or text messaging? The record indicates that some ICS
providers offer tablet computers and kiosks that allow inmates to
access games, music, educational tools, law library tools and
commissary ordering. What is the compensation mechanism for access to
these offerings? What are ICS providers' rates for such services,
including both service-specific rates and ``all-you-can-eat'' plans?
17. We also seek comment on the implications of offering video
calls, including video visitation, for inmates who are deaf or hard of
hearing. Increased deployment of video call systems has the potential
to provide inmates who are able to communicate using American Sign
Language (ASL) with the ability to access and use VRS, as well as
providing direct communications with other ASL users who have video
communications access. We note, however, that VRS and videophone users
require a smooth, uninterrupted transmission of signal to communicate
effectively in ASL. What range of bandwidths and broadband speeds are
currently provided or planned for video call systems? What bandwidth
and broadband speed are the minimum necessary for effective video
communications between ASL users? In addition, what types of video
technology are currently used in video call systems? To what extent are
video call systems interoperable with the video communications systems
used by VRS providers? Should such interoperability be required? If
video call systems are used to provide accessible video communications
services to deaf inmates, what steps need to be taken to ensure that
any charges for such service are fair, just, and reasonable, given that
for deaf inmates, such services are functionally equivalent to voice
communication? Finally, we seek comment on how prevalent VRS is in
correctional institutions.
C. Recurring Data Collection
18. As discussed above, we adopt a second, one-time Mandatory Data
Collection to occur two years from the effective date of this Order. In
this data collection, we will require all ICS providers to submit ICS
cost, calling, company and contract information as well as facility,
revenue, ancillary fee and advanced service information. We found the
data received in response to the 2013 Mandatory Data Collection to be
beneficial, and anticipate that the forthcoming additional data will
also be helpful to ensure that ICS rates and practices remain just,
reasonable, and fair, in keeping with our statutory mandate.
19. Throughout this proceeding, several commenters suggest that the
Commission impose additional periodic reviews to ``ensure that the
reforms create and maintain the proper incentives to drive ICS rates to
competitive levels.'' We have found in the Order that for the time
being, only a one-time additional collection is warranted. We seek
comment, however, on extending in the future the Mandatory Data
Collection adopted in this Order into a recurring data submission.
Should providers be required to file the cost data described above in
the Mandatory Data Collection annually? Why or why not? Do commenters
agree that an ongoing annual data collection would provide the
Commission with more fulsome data with which to help ``drive end user
rates to competitive levels?'' Since ICS contracts typically run at
least three to five years, with one-year extension options, is there
benefit in collecting more than several years' worth of cost data in
order to obtain a more accurate picture about ICS costs? Some
commenters have asserted that upfront investment costs in certain ICS
facilities are very high. Would collecting ICS cost data over more than
one or two years lead to a more accurate economic picture for such
investments? Would an ongoing ICS cost data collection provide the
Commission a clearer picture of the industry than a one-time data
collection? Would the benefit of such data submissions to the
Commission, and its continued monitoring and regulation of the ICS
industry, outweigh any potential burden on ICS providers?
D. Contract Filing Requirement
20. In the 2013 Order the Commission reminded providers of their
obligations to comply with existing rules, including rules requiring
that ICS providers that are non-dominant interexchange carriers make
their current rates, terms, and conditions available to the public via
their company Web sites. In 2014, the Commission sought comment on
``how to ensure that rates and fees are more transparent to consumers''
and specifically on the requirement that ICS providers notify their
customers regarding the ICS options available to them and the cost of
those options.
21. Several commenters have expressed concern over a lack of
transparency regarding ICS rates and fees. HRDC asserts ``almost a
total lack of transparency on the part of both ICS providers and the
government agencies from which they secure their monopoly contracts.''
HRDC further contends that ``state agencies often create obstacles to
inhibit the public records process that require [sic] consumers and
other organizations to unnecessarily expend time and money to obtain
records designated by law to be ``public'' records.'' HRDC suggests
that the Commission require ``all ICS providers to post their contracts
with detention facilities on their Web sites where they are publicly
available.'' Mr. Baker, of the Alabama PSC, asserts that ``lack of
transparency in the ICS industry is problematic'' and recommends
several solutions, including requiring providers to submit to the
Commission and to state commissions ``upon request or routinely if
requested, a copy of the contract from each facility serviced as well
as the provider's response to any facility invitation to bid or request
for proposal.''
22. Securus disagrees with these suggestions and asserts that what
HRDC calls ``public documents often contain information that is
protected from disclosure under the very statutes, like the Freedom of
Information Act, 5 U.S.C. 552, that HRDC invokes'' as a reason for
mandating their disclosure. Securus asserts that such protected
information includes ``non-public financial data, proprietary
information about patented and patentable technology, and the operation
of crucial security features.'' Securus contends that requiring the
production of ICS contracts ``could contravene federal and state
disclosure statutes.'' Securus further asserts that, even if it were
able to enact the ``appropriate, lawful redaction'' needed to protect
sensitive and confidential data, the production of such contracts would
be ``far too broad and too burdensome.'' Finally, Securus asserts that
such contract production will be unnecessary if certain reform
proposals are adopted, such the Joint Provider Proposal provision
requiring all ICS providers to annually certify full
[[Page 79024]]
compliance with all federal and Commission rules and regulations.
23. Section 211 of the Act grants the Commission authority to
require common carriers to ``file with the Commission copies of
contracts and agreements relating to communications traffic.'' Section
43.51 of the Commission's rules specifies that any dominant
communications common carrier ``must file with the Commission, within
thirty (30) days of execution, a copy of each contract, agreement,
concession, license, authorization, operating agreement or other
arrangement to which it is a party and amendments thereto'' that relate
to ``[t]he exchange of services'' and ``matters concerning rates.'' The
Commission has also clarified that ``only non-dominant carriers treated
with forbearance are not required to file contracts,'' whereas non-
dominant carriers who are not treated with forbearance are still
subject to filing requirements because ``material filed by [non-
dominant] carriers subject to streamlined regulations may be useful in
the performance of monitoring.''
24. We share commenters' concern that ICS contracts are not
sufficiently transparent. We also share the concern of commenters who
assert that members of the public must ``unnecessarily expend time and
money to obtain records'' of ICS contracts. We also recognize the
evidence suggesting that the information regarding ICS contracts and
rates that is publically available may not be as reliable as the actual
contract.
25. Should the Commission require ICS providers to file all
contracts, including updates, under its section 211(b) authority? Does
the annual reporting requirement meet this transparency objective? Are
there any reasons such a requirement would not apply to all ICS
providers or result in the filing of all ICS contracts? We seek comment
on the costs and benefits related to contract filing. Would such a
requirement be overly burdensome to ICS providers? Do the benefits
outweigh the costs? Would such requirement conflict with any other
state or federal laws or requirements, such as the Freedom of
Information Act? How should the contracts be filed with the Commission?
To allow greater public accessibility to ICS contracts, we seek comment
on requiring ICS providers to file their contracts with the Commission,
in a newly assigned docket, via the Commission's Electronic Comment
Filing System (ECFS) within 30 days of entering into a new contract.
What would trigger the need to file an updated contract and how quickly
after execution should new or updated contracts be filed? In what
format should contracts be filed? What are the best ways to handle
issues related to confidentiality? Would the Protective Order in effect
in this docket adequately cover any confidentiality issues that might
arise surrounding contracts that might be filed with us? We seek
comment on these and any other potential issues that may arise related
to the potential filing of ICS contracts with the Commission. For
example, should the Commission adopt additional tools to help it
prevent contract-related gaming such as that described above? What do
commenters suggest as additional means to combat such gaming?
E. International Calling Rates
26. In the 2013 FNPRM, the Commission sought comment on the
prevalence of international ICS calling and on the need to reform
international ICS rates. The Commission also sought comment on its
legal authority to regulate international ICS and on what rates should
apply to international ICS, should the Commission assert jurisdiction.
In the Second FNPRM, the Commission sought ``updated comment on
international ICS and the need for Commission reform focused on such
services.''
27. In response, several commenters urge the Commission to regulate
international ICS rates. The record demonstrates that many inmates
either lack access to international ICS or that such services are only
available at very high rates. Numerous international ICS calling rates
far exceed the rates permitted for interstate ICS calls, with some
international rates from county correctional institutions set as high
as $17.85 to $45 for a 15-minute call. Friends and family members who
live outside the United States and who wish to stay in contact with
those who are incarcerated pay the price of such high rates. Commenters
also suggest that immigrant detainees are particularly vulnerable to
high phone rates, due to several factors, including their need to stay
in touch with family abroad and the centrality of phone access to
immigration proceedings. We seek comment on whether and how we should
act to improve inmates' and detainees' access to ICS for international
calls, as well as what rates should apply to such calls. We seek
comment on applying the adopted rate caps to all international calls.
28. Legal Authority to Reform International Rates. Longstanding
precedent establishes the Commission's authority to ensure that
payphone service providers--including providers of ICS--``are fairly
compensated for international as well as interstate and intrastate
calls.'' In addition, section 201 provides the Commission with the
authority to ensure that carriers' rates and practices for interstate
and ``foreign'' communications are just and reasonable, and grants the
Commission authority to ``prescribe such rules and regulations as may
be necessary in the public interest to carry out the provisions of this
chapter.'' Based on these provisions, we tentatively conclude that the
Commission has authority to reform international ICS rates as necessary
to ensure that they are fair, just, and reasonable. We seek comment on
this tentative conclusion.
29. Rates for International Calling. Although several parties note
that rates for international ICS calls are very high in some
facilities, the record contains relatively little information about the
specific costs, if any, ICS providers incur in providing international
calling or what would constitute just, reasonable, and fair
compensation for international ICS calls. The Mandatory Data Collection
required providers to submit their costs related to the provision of
ICS, including the provision of international calling. Responses to the
Mandatory Data Collection, however, did not separate out costs for
international calls from costs for the provision of interstate and
intrastate calls. Thus, we lack information about the costs providers
incur in providing international ICS.
30. We seek comment on extending our rate caps for interstate and
intrastate calls to international calls. Would establishing
international rates at levels consistent with our rate caps ensure that
ICS users do not pay rates that are unfair or that are unjustly or
unreasonably excessive? Would capping rates for international calls at
the same levels as we have established for interstate and intrastate
calls allow providers to receive fair compensation? If not, why not?
Would allowing a higher rate for international calls lead to over-
recovery by providers, as their costs for international calls are
already factored into the rate caps we set to govern interstate and
intrastate ICS rates? Would the benefit of breaking out international
calls be sufficient to justify the added complexity of adding a
separate regime for international calls in addition to the rate caps we
adopt in the accompanying Order? What percentage of ICS providers'
minutes of use do international calling minutes constitute? For
example, would a relatively low volume of international calls weigh
against establishing a separate rate
[[Page 79025]]
regime for such calls, particularly given that the costs of
international calls are already included in the costs we used to set
the rate caps for interstate and intrastate ICS?
31. There is evidence that many of the approximately 400,000
immigrants detained in this country each year are held in local jails
and prisons that have contracted with Immigration Customs and
Enforcement (ICE). ICS rates and policies were discussed at the
Commission's 2014 ICS Workshop. The record indicates that ICE
``detainees are charged . . . a uniform rate of 15 cents per minute for
international calls to landlines and 35 cents per minute for
international calls to mobile phones,'' with ``no additional connection
fees or ancillary charges.'' We seek comment on these rates. Should the
Commission establish separate rate caps for international calls that
terminate to landline devices and for those that terminate to mobile
devices? If so, what rates should apply to each type of call? How
challenging would it be for ICS providers to bill different rates for
different types of international calls? Is it administratively feasible
for ICS providers to distinguish between calls to landline phones
versus calls to mobile devices? Should rates vary depending on which
foreign country the inmate is calling? Should there be a separate rate
cap for international calls made by ICE detainees? Why or why not?
32. The ICE ICS contract provides for free telephone calling
services to select numbers through a ``centralized pro bono platform
which can be accessed at any detention facility.'' According to the
record, since this ICE contract was awarded, ``the number of calls per
detainee and minutes per detainee has increased substantially.'' The
record also indicates that detainees may make calls to 200 different
countries for the same per-minute rates. We seek additional comment on
the rates available under the ICE contract. Are these rates a
reasonable approximation of what the Commission should adopt for
international rate caps? Is ICE able to attain economies of scale that
other facilities are not? Would it be more appropriate for the
Commission to: (1) Adopt the ICE rates for all international calls, (2)
subject international ICS calls to the same rate caps we adopt for
interstate and intrastate calls, or (3) adopt a different rate regime
that is not based on either the ICE rates or the existing rate caps?
Are any of these options supported by cost data or other data in the
record? If not, is such data available? If the Commission adopts rate
caps that are higher than those currently offered by ICE facilities,
should those facilities be allowed to raise their rates? We seek
comment on ICE's decision to apply different rates for international
landline ($0.15/minute) and international mobile ($0.35/minute) calls.
Are these rates a reasonable approximation of providers' costs? Is this
cost differential a similar one to that which other providers have
experienced?
33. We also seek further comment on other issues related to
international calling from correctional facilities. The record
indicates that although it is feasible for inmates to make
international calls, international ICS calling is not always available.
Commenters assert that the lack of availability of international
calling is particularly burdensome to immigrant inmates and their
families. We note that many immigration detainees are housed in county
jails, rather than in ICE detention facilities. In addition, some
inmates in jails and prisons have family and loved ones in countries
outside the United States. Do most facilities allow international
calling? If not, why not? Are any additional restrictions applied to
such calls, such as time-of-day restrictions or prior-permission
requirements? Should the Commission require the availability of
international calls? If so, what legal authority would we rely on to
adopt such a requirement? If we were to adopt such a requirement, what
rates should apply to international calls and how should the Commission
set such rates? Would subjecting international calls to the same rate
caps that apply to interstate and intrastate ICS calls lead to
providers or facilities discontinuing or restricting international ICS
calls?
F. Third-Party Financial Transaction Fees
34. In the Second FNPRM, the Commission sought comment on third-
party financial transactions, and asked how it should ensure that money
transfer service fees paid by ICS consumers are just and reasonable and
fair. In the ICS context, third-party financial transaction fees
consist of two elements: A fee from a third party, such as Western
Union or Money Gram to transfer funds from a consumer to an inmate's
ICS account, and an additional charge by an ICS provider for processing
the funds transferred via the third party for the purpose of paying for
ICS calls. After carefully reviewing the record, we determine, in the
Order above, that the first aspect of third-party financial
transaction, e.g., the money transfer or credit card payment, does not
constitute an ``ancillary service,'' within the meaning of section 276.
However, we assert jurisdiction over any additional fee or markup that
the ICS provider might impose on the end user, and require ICS
providers to pass third-party transaction fees to end users with no
additional markup.
35. Several commenters express concern about an additional issue
related to these transactions: Potential revenue-sharing arrangements
between ICS providers and financial companies. ICSolutions, for
example, states that, despite the Commission's cap on third-party
financial transaction fees, providers and vendors have an incentive to
enter into fee-sharing arrangements with financial services companies,
``thereby complying with the pass-through cost component, but still
unnecessarily increasing consumers' cost.'' ICSolutions urges the
Commission to address this practice by imposing limits on the fees
third-party financial companies can charge end users in an effort to
prevent ``secondary fee-sharing arrangements'' between these companies
and ICS providers that can ``unnecessarily increase the cost of
financial transactions to consumers.'' Similarly, CenturyLink asserts
that ICS providers can ``divert transactions to certain third party
processors, claiming high fees charged by the third party.''
CenturyLink states that, by using a third-party payment processor, an
ICS provider can inflate ancillary fees through a revenue-sharing
agreement that adds a ``direct or indirect markup'' to ancillary
services. CenturyLink argues that providers should be ``permitted to
use such services but not permitted to enter into arrangements that add
a direct markup or indirect markup though a revenue sharing
arrangement.'' Securus, however, defends these calling arrangements as
``innovative, valuable'' additions to ICS that benefit consumer by
giving them more options.
36. We seek additional comment on the revenue-sharing issues
discussed above. First, we seek comment on issues related to our
jurisdiction over these transactions. Does the Commission have
jurisdiction over third-party financial processor vendors, or over
contracts between ICS providers and third-party vendors? Does our
authority over ICS providers allow us to regulate providers' ability to
enter into revenue-sharing arrangements with third-party vendors? Could
these service charges constitute unjust and unreasonable practices, in
violation of section 201(b), or a practice that would lead to unfair
rates in violation of section 276, because, for example, the manner in
which such charges are imposed artificially inflates the amounts that
consumers pay to
[[Page 79026]]
access ICS? How can we ensure that these revenue sharing arrangements
are not used to circumvent our rules prohibiting markups on third-party
fees? How common are the revenue-sharing arrangements described by
CenturyLink and others? Do providers have any control over the fees
established by third parties, such as Western Union or credit card
companies, for payment processing functions? Are these revenue-sharing
arrangements used to add direct or indirect markups to ancillary
services? Should the Commission distinguish between revenue-sharing
arrangements between providers and affiliated companies versus
arrangements between providers and unaffiliated third parties? If so,
what would be the legal basis for such a distinction? Does the
Commission have greater authority over arrangements between ICS
providers and their affiliates than it does over agreements between
providers and unaffiliated entities? Assuming the Commission were to
regulate arrangements between providers and affiliated companies that
offer financial services, how would such regulations work?
Specifically, how could the Commission prevent an affiliate from
sharing revenues (or profits) with an ICS provider? Are there other
factual or legal considerations the Commission should consider in
determining whether and how to address arrangements between ICS
providers and financial services companies?
G. Cost/Benefit Analysis of Proposals
37. Acknowledging the potential difficulty of quantifying costs and
benefits, we seek to determine whether each of the proposals above will
provide public benefits that outweigh their costs. We also seek to
maximize the net benefits to the public from any proposals we adopt.
For example, commenters have argued that inmate recidivism decreases
with regular family contact. This not only benefits the public broadly
by reducing crimes, lessening the need for additional correctional
facilities and cutting overall costs to society, but also likely has a
positive effect on the welfare of inmates' children. We seek specific
comment on the costs and benefits of the proposals above and any
additional proposals received in response to this Third Further Notice.
We also seek any information or analysis that would help us to quantify
these costs or benefits. We request that interested parties discuss
whether, how, and by how much they would be impacted in terms of costs
and benefits of the proposals included herein. Additionally, we ask
that parties consider whether the above proposals have multiplier
effects beyond their immediate impact that could affect their interest
or, more broadly, the public interest. 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 recognize that
the costs and benefits may vary based on such factors as the
correctional facility served and ICS provider. We have received minimal
cost benefit analysis in this proceeding. Therefore, we request again
that parties file specific analyses and facts to support any claims of
significant costs or benefits associated with the proposals herein.
II. Procedural Matters
A. Filing Instructions
38. Pursuant to sections 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 Third FNPRM must be filed in WC Docket No. 12-375.
Electronic Filers: Comments 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.
[ssquf] All hand-delivered or messenger-delivered 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.
[ssquf] 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.
[ssquf] 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
39. This proceeding shall be treated as a ``permit-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. Memoranda must contain a summary of the substance of
the ex parte presentation ad not merely a list of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. If the oral 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 rule 1.1206(b). In proceedings governed
by rule 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 thereto,
must be filed through the
[[Page 79027]]
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. Paperwork Reduction Act Analysis
40. This Further Notice contains proposed information collection
requirements. The Commission, as part of its continuing effort to
reduce paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collection
requirements contained in this document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Comments should address: (a)
whether the proposed collection of information is necessary for the
proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy
of the Commission's burden estimates; (c) ways to enhance the quality,
utility, and clarity of the information collected; (d) ways to minimize
the burden of the collection of information on the respondents,
including the use of automated collection techniques or other forms of
information technology; and (e) way to further reduce the information
collection burden on small business concerns with fewer than 25
employees. In addition, pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek
specific comment on how we might further reduce the information
collection burden for small business concerns with fewer than 25
employees.
D. Initial Regulatory Flexibility Analysis
41. As required by the Regulatory Flexibility Act of 1980 (RFA),
the Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) for this document, of the possible significant economic impact
on small entities of the policies and rules addressed in this document.
The IRFA is available in Appendix F of the full-text copy of the
Commission's Second Report and Order and Third Further Notice of
Proposed Rulemaking, released November 5, 2015. 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
document. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, will send a copy of this Further Notice
of Proposed Rulemaking, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA).
III. Ordering Clauses
42. Accordingly, it is ordered that, pursuant to sections 1, 2,
4(i)-(j), 201(b), 215, 218, 220, 276, 303(r), and 403 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j),
201(b), 215, 218, 220, 276, 303(r), and 403 Third Further Notice of
Proposed Rulemaking is adopted.
43. It is further ordered, that pursuant to sections 1.4(b)(1) and
1.103(a) of the Commission's rules, 47 CFR 1.4(b)(1) and 1.103(a), that
this Third Further Notice of Proposed Rulemaking shall be effective 30
days after publication of a summary thereof in the Federal Register
except as noted otherwise above.
Federal Communications Commission.
Gloria J. Miles,
Federal Register Liaison Officer, Office of the Secretary.
[FR Doc. 2015-31253 Filed 12-17-15; 8:45 am]
BILLING CODE 6712-01-P