[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
[Proposed Rules]
[Pages 40416-40443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-14728]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 12-375, FCC 21-60; FRS 35679]


Rates for Interstate Inmate Calling Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this Fifth Further Notice of Proposed Rulemaking, the 
Commission seeks to obtain detailed comment to enable it to make 
further progress toward ensuring that the rates, charges, and practices 
for and in connection with interstate and international inmate calling 
services meet applicable statutory standards. The Commission seeks 
comment about the provision of functionally equivalent communications 
services to incarcerated people with hearing and speech disabilities 
and whether the Commission should expand inmate calling services 
providers' reporting requirements to include all accessibility-related 
calls. The Commission also seeks comment on issues regarding the 
setting permanent interstate and international rate caps for calling 
services to incarcerated people; potential reforms to the treatment of 
site commission payments, including whether the Commission should 
preempt state and local laws imposing legally-mandated site commission 
payments; on providers' costs to serve different types of facilities; 
on how it should reform its rules permitting certain types of ancillary 
service charges in connection with interstate or international calling 
services and on how it should refine its methodology for setting 
international rate caps; on whether it should adopt an on-going 
periodic data collection and, if so, whether it should impose specific 
recordkeeping on providers; and on the characteristics of the bidding 
market for inmate calling services contracts and the optimal regulatory 
regime for inmate calling services in view of those characteristics.

DATES: Comments are due August 27, 2021. Reply Comments are due 
September 27, 2021.

ADDRESSES: Federal Communications Commission, 45 L Street NE, 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Michael Scott, Disability Rights 
Office of the Consumer and Governmental Affairs Bureau, at (202) 418-
1264 or via email at <a href="/cdn-cgi/l/email-protection#e4898d878c858188ca97878b9090a4828787ca838b92"><span class="__cf_email__" data-cfemail="1c71757f747d7970326f7f7368685c7a7f7f327b736a">[email protected]</span></a> regarding portions of the 
Fifth Further Notice of Proposed Rulemaking relating specifically to 
the provision of communications services to incarcerated people with 
hearing and speech disabilities and Katherine Morehead, Pricing Policy 
Division of the Wireline Competition Bureau, at (202) 418-0696 or via 
email at <a href="/cdn-cgi/l/email-protection#7d161c0915180f1413185310120f1815181c193d1b1e1e531a120b"><span class="__cf_email__" data-cfemail="86ede7f2eee3f4efe8e3a8ebe9f4e3eee3e7e2c6e0e5e5a8e1e9f0">[email protected]</span></a> regarding other portions of the 
Fifth Further Notice of Proposed Rulemaking.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Fifth 
Further Notice of Proposed Rulemaking, FCC 21-60, released May 24, 
2021. This summary is based on the public redacted version of the 
document, the full text of which can be obtained from the following 
internet address: https://docs.fcc.gov/public/attachments/FCC-21-60A1.pdf.

I. Introduction

    1. Unlike virtually everyone else in the United States, 
incarcerated people

[[Page 40417]]

have no choice in their telephone service provider. Instead, their only 
option typically is to use a service provider chosen by the 
correctional facility, and once chosen, that service provider typically 
operates on a monopoly basis. Egregiously high rates and charges and 
associated unreasonable practices for the most basic and essential 
communications capability--telephone service--impedes incarcerated 
peoples' ability to stay connected with family and loved ones, clergy, 
and counsel, and financially burdens incarcerated people and their 
loved ones. Never have such connections been as vital as they are now, 
as many correctional facilities have eliminated in-person visitation in 
response to the COVID-19 pandemic.
    2. The Commission adopts a Fifth Further Notice of Proposed 
Rulemaking (FNPRM) to obtain evidence necessary to make further 
progress toward accomplishing the critical work that remains. To that 
end, this document seeks more detailed comments from stakeholders, 
including but not limited to, about the provision of communications 
services to incarcerated people with hearing and speech disabilities; 
the methodology to be employed in setting permanent interstate and 
international rate caps; general reform of the treatment of site 
commission payments in connection with interstate and international 
calls; the adoption of an on-going periodic cost data collection to 
ensure rates are just and reasonable; and additional reforms to its 
ancillary service charges rules.
    3. The Commission expects today's actions to have immediate 
meaningful and positive impacts on the ability of incarcerated people 
and their loved ones to satisfy our universal, basic need to 
communicate. Although the Commission uses various terminology 
throughout this item to refer to the intended beneficiaries of the 
actions herein, unless context specifically indicates otherwise, these 
beneficiaries are broadly defined as the people placing and receiving 
inmate calling services (ICS) calls, whether they are incarcerated 
people, members of their family, or other loved ones and friends. The 
Commission also may refer to them, generally, as consumers.

II. Background

    4. Access to affordable communications services is critical for 
everyone in the United States, including incarcerated members of our 
society. Studies have long shown that incarcerated people who have 
regular contact with family members are more likely to succeed after 
release and have lower recidivism rates. Because correctional 
facilities generally grant exclusive rights to service providers, 
incarcerated people must purchase service from ``locational 
monopolies'' and subsequently face rates far higher than those charged 
to other Americans.

A. Statutory Background

    5. The Communications Act of 1934, as amended (Communications Act 
or Act) divides regulatory authority over interstate, intrastate, and 
international communications services between the Commission and the 
states. Section 2(a) of the Act empowers the Commission to regulate 
``interstate and foreign communication by wire or radio.'' This 
regulatory authority includes ensuring that ``[a]ll charges, practices, 
classifications, and regulations for and in connection with'' 
interstate or international communications services are ``just and 
reasonable'' in accordance with section 201(b) of the Act. Section 
201(b) also provides that ``[t]he Commission may prescribe such rules 
and regulations as may be necessary in the public interest to carry 
out'' these provisions.
    6. Section 2(b) of the Act preserves states' jurisdiction over 
``charges, classifications, practices, services, facilities, or 
regulations for or in connection with intrastate communication 
service.'' The Commission is thus ``generally forbidden from entering 
the field of intrastate communication service, which remains the 
province of the states.'' Stated differently, section 2(b) ``erects a 
presumption against the Commission's assertion of regulatory authority 
over intrastate communications.''
    7. Section 276 of the Act directs the Commission to prescribe 
regulations that ensure that payphone service providers, including 
inmate calling services providers, ``are fairly compensated for each 
and every completed intrastate and interstate call using their 
payphone.'' Although the Telecommunications Act of 1996 (1996 Act) 
amended the Act and ``chang[ed] the FCC's authority with respect to 
some intrastate activities,'' with respect to section 276, the U.S. 
Court of Appeals for the District of Columbia Circuit has held that 
``the strictures of [section 2(b)] remain in force.'' Accordingly, that 
court concluded that section 276 does not authorize the Commission to 
determine ``just and reasonable'' rates for intrastate calls, and that 
the Commission's authority under that provision to ensure that 
providers ``are fairly compensated'' both for intrastate and interstate 
calls does not extend to establishing rate caps on intrastate services.

B. History of Commission Proceedings Prior to 2020

    8. In 2003, Martha Wright and her fellow petitioners, current and 
former incarcerated people and their relatives and legal counsel 
(Wright Petitioners), filed a petition seeking a rulemaking to address 
``excessive'' inmate calling services rates. The petition sought to 
prohibit exclusive inmate calling services contracts and collect-call-
only restrictions in correctional facilities. In 2007, the Wright 
Petitioners filed an alternative petition for rulemaking in which they 
emphasized the urgency of the need for Commission action due to 
``exorbitant'' inmate calling services rates. The Wright Petitioners 
proposed benchmark rates for interstate long distance inmate calling 
services calls and reiterated their request that providers offer debit 
calling as an alternative option to collect calling. The Commission 
sought and received comment on both petitions.
    9. In 2012, the Commission commenced an inmate calling services 
rulemaking proceeding by releasing a document seeking comment on, among 
other matters, the proposals in the Wright Petitioners' petitions and 
whether to establish rate caps for interstate inmate calling services 
calls.
    10. In the 2013 ICS Order, in light of record evidence that rates 
for calling services used by incarcerated people greatly exceeded the 
reasonable costs of providing those services, the Commission adopted 
interim interstate rate caps of $0.21 per minute for debit and prepaid 
calls and $0.25 per minute for collect calls. These interim interstate 
rate caps were first adopted in 2013 and remain in effect as a result 
of the vacatur, by the D.C. Circuit, of the permanent rate caps adopted 
in the 2015 ICS Order. Under the Commission's rules, ``Debit Calling'' 
means ``a presubscription or comparable service which allows an Inmate, 
or someone acting on an Inmate's behalf, to fund an account set up 
[through] a Provider that can be used to pay for Inmate Calling 
Services calls originated by the Inmate.'' ``Prepaid Calling'' means 
``a presubscription or comparable service in which a Consumer, other 
than an Inmate, funds an account set up [through] a Provider of Inmate 
Calling Services. Funds from the account can then be used to pay for 
Inmate Calling Services, including calls that originate with an 
Inmate.'' ``Collect Calling'' means ``an arrangement whereby the called 
party takes affirmative action

[[Page 40418]]

clearly indicating that it will pay the charges associated with a call 
originating from an Inmate Telephone.'' In the First Mandatory Data 
Collection, the Commission required all inmate calling services 
providers to submit data on their underlying costs so that the agency 
could develop permanent rate caps. In 2014, the Commission sought 
comment on reforming charges for services ancillary to the provision of 
inmate calling services and on establishing rate caps for both 
interstate and intrastate calls. Ancillary service charges are fees 
that providers assess on calling services used by incarcerated people 
that are not included in the per-minute rates assessed for individual 
calls.
    11. The Commission adopted a comprehensive framework for interstate 
and intrastate inmate calling services in the 2015 ICS Order, including 
limits on ancillary service charges and permanent rate caps for 
interstate and intrastate inmate calling services calls in light of 
``egregiously high'' rates for inmate calling services calls. Because 
of continued growth in the number and dollar amount of ancillary 
service charges that inflated the effective price paid for inmate 
calling services, the Commission limited permissible ancillary service 
charges to only five types and capped the charges for each: (1) Fees 
for Single-Call and Related Services--billing arrangements whereby an 
incarcerated person's collect calls are billed through a third party on 
a per-call basis, where the called party does not have an account with 
the inmate calling services provider or does not want to establish an 
account; (2) Automated Payment Fees--credit card payment, debit card 
payment, and bill processing fees, including fees for payments made by 
interactive voice response, web, or kiosk; (3) Third-Party Financial 
Transaction Fees--the exact fees, with no markup, that providers of 
calling services used by incarcerated people are charged by third 
parties to transfer money or process financial transactions to 
facilitate a consumer's ability to make account payments via a third 
party; (4) Live Agent Fees--fees associated with the optional use of a 
live operator to complete inmate calling services transactions; and (5) 
Paper Bill/Statement Fees--fees associated with providing customers of 
inmate calling services an optional paper billing statement. The 
Commission relied on sections 201(b) and 276 of the Act to adopt rate 
caps for both interstate and intrastate inmate calling services. The 
Commission set tiered rate caps of $0.11 per minute for prisons; $0.14 
per minute for jails with average daily populations of 1,000 or more; 
$0.16 per minute for jails with average daily populations of 350 to 
999; and $0.22 per minute for jails having average daily populations of 
less than 350. The Commission calculated these rate caps using 
industry-wide average costs based on data from the First Mandatory Data 
Collection and stated that this approach would allow providers to 
``recover average costs at each and every tier.'' The Commission did 
not include site commission payments in its permanent rate caps, 
finding these payments were not costs reasonably related to the 
provision of inmate calling services. The Commission also readopted the 
interim interstate rate caps it had adopted in 2013, and extended them 
to intrastate calls, pending the effectiveness of the new rate caps, 
and sought comment on whether and how to reform rates for international 
inmate calling services calls. At the same time, the Commission adopted 
a Second Mandatory Data Collection to identify trends in the market and 
form the basis for further reform as well as an annual filing 
obligation requiring providers to report information on their current 
operations, including their interstate, intrastate, and international 
rates as well as their ancillary service charges.
    12. In the 2016 ICS Reconsideration Order, the Commission 
reconsidered its decision to entirely exclude site commission payments 
from its 2015 permanent rate caps. The Commission increased those 
permanent rate caps to account for claims that certain correctional 
facility costs reflected in site commission payments are directly and 
reasonably related to the provision of inmate calling services. The 
Commission set the revised rate caps at $0.13 per minute for prisons; 
$0.19 per minute for jails with average daily populations of 1,000 or 
more; $0.21 per minute for jails with average daily populations of 350 
to 999; and $0.31 per minute for jails with average daily populations 
of less than 350.

C. Judicial Actions

    13. In January 2014, in response to providers' petitions for review 
of the 2013 ICS Order, the D.C. Circuit stayed the application of 
certain portions of the 2013 ICS Order but allowed the Commission's 
interim rate caps to remain in effect. Later that year, the court held 
the petitions for review in abeyance while the Commission proceeded to 
set permanent rates. In March 2016, in response to providers' petitions 
for review of the 2015 ICS Order, the D.C. Circuit stayed the 
application of the 2015 ICS Order's permanent rate caps and ancillary 
service charge caps for Single Call Services while the appeal was 
pending. Single-Call Services mean ``billing arrangements whereby an 
Inmate's collect calls are billed through a third party on a per-call 
basis, where the called party does not have an account with the 
Provider of Inmate Calling Services or does not want to establish an 
account.'' Later that month, the court stayed the application of the 
Commission's interim rate caps to intrastate inmate calling services. 
In November 2016, the D.C. Circuit also stayed the 2016 ICS 
Reconsideration Order, pending the outcome of the challenge to the 2015 
ICS Order.
    14. In 2017, in GTL v. FCC, the D.C. Circuit vacated the permanent 
rate caps adopted in the 2015 ICS Order. First, the panel majority held 
that the Commission lacked the statutory authority to cap intrastate 
calling services rates. The court explained that the Commission's 
authority over intrastate calls is, except as otherwise provided by 
Congress, limited by section 2(b) of the Act and nothing in section 276 
of the Act overcomes this limitation. In particular, section 276 
``merely directs the Commission to `ensure that all providers [of 
calling services to incarcerated people] are fairly compensated' for 
their inter- and intrastate calls,'' and it ``is not a `general grant 
of jurisdiction' over intrastate ratemaking.'' The court noted that it 
``need not decide the precise parameters of the Commission's authority 
under Sec.  276.''
    15. Second, the D.C. Circuit concluded that the ``Commission's 
categorical exclusion of site commissions from the calculus used to set 
[inmate calling services] rate caps defie[d] reasoned decision making 
because site commissions obviously are costs of doing business incurred 
by [inmate calling services] providers.'' The court noted that some 
site commissions were ``mandated by state statute,'' while others were 
``required by state correctional institutions'' and were thus also a 
``condition of doing business.'' The court directed the Commission to 
``assess on remand which portions of site commissions might be directly 
related to the provision of [inmate calling services] and therefore 
legitimate, and which are not.'' The court did not reach the providers' 
remaining arguments ``that the exclusion of site commissions denies 
[them] fair compensation under [section] 276 and violates the Takings 
Clause of the Constitution because it forces providers to provide 
services below cost.'' Instead, the court stated

[[Page 40419]]

that the Commission should address these issues on remand when 
revisiting the categorical exclusion of site commissions. Judge Pillard 
dissented from this view, noting that site commissions are not 
legitimate simply because a state demands them.
    16. Third, the D.C. Circuit held that the Commission's use of 
industry-wide averages in setting rate caps was arbitrary and 
capricious because it lacked justification in the record and was not 
supported by reasoned decision making. Judge Pillard also dissented on 
this point, noting that the Commission has ``wide discretion'' under 
section 201 of the Act to decide ``which costs to take into account and 
to use industry-wide averages that do not necessarily compensate `each 
and every' call.'' More specifically, the court found the Commission's 
use of a weighted average per-minute cost to be ``patently 
unreasonable'' given that such an approach made calls with above-
average costs unprofitable and thus did ``not fulfill the mandate of 
Sec.  276 that `each and every' '' call be fairly compensated. 
Additionally, the court found that the 2015 ICS Order ``advance[d] an 
efficiency argument--that the larger providers can become profitable 
under the rate caps if they operate more efficiently--based on data 
from the two smallest firms,'' which ``represent[ed] less than one 
percent of the industry,'' and that the Order did not account for 
conflicting record data. The court therefore vacated this portion of 
the 2015 ICS Order.
    17. Finally, the court remanded the ancillary service charge caps. 
The D.C. Circuit held that ``the Order's imposition of ancillary fee 
caps in connection with interstate calls is justified'' given the 
Commission's ``plenary authority to regulate interstate rates under 
Sec.  201(b), including `practices . . . for and in connection with' 
interstate calls.'' The court held that the Commission ``had no 
authority to impose ancillary fee caps with respect to intrastate 
calls.'' Because the court could not ``discern from the record whether 
ancillary fees can be segregated between interstate and intrastate 
calls,'' it remanded the issue so the Commission could determine 
whether it could segregate ancillary fee caps on interstate calls 
(which are permissible) and on intrastate calls (which are 
impermissible). The court also vacated the video visitation annual 
reporting requirements adopted in the 2015 ICS Order.
    18. In December 2017, after it issued the GTL v. FCC opinion, the 
D.C. Circuit in Securus v. FCC ordered the 2016 ICS Reconsideration 
Order ``summarily vacated insofar as it purports to set rate caps on 
inmate calling service'' because the revised rate caps in that 2016 ICS 
Reconsideration Order were ``premised on the same legal framework and 
mathematical methodology'' rejected by the court in GTL v. FCC. The 
court remanded ``the remaining provisions'' of that Order to the 
Commission ``for further consideration . . . in light of the 
disposition of this case and other related cases.'' As a result of the 
D.C. Circuit's decisions in GTL and Securus, the interim rate caps that 
the Commission adopted in 2013 ($0.21 per minute for debit/prepaid 
calls and $0.25 per minute for collect calls) remain in effect for 
interstate inmate calling services calls.

D. 2020 Rates and Charges Reform Efforts

    19. In February 2020, the Wireline Competition Bureau (Bureau or 
WCB) issued a document seeking to refresh the record on ancillary 
service charges in light of the D.C. Circuit's remand in GTL v. FCC. 
This document was published in the Federal Register. In the Ancillary 
Services Refresh Public Notice, the Bureau sought comment on ``whether 
each permitted [inmate calling services] ancillary service charge may 
be segregated between interstate and intrastate calls and, if so, 
how.'' The Bureau also sought comment on any steps the Commission 
should take to ensure, consistent with the D.C. Circuit's opinion, that 
providers of interstate inmate calling services do not circumvent or 
frustrate the Commission's ancillary service charge rules. The Bureau 
also defined jurisdictionally mixed services as `` `[s]ervices that are 
capable of communications both between intrastate end points and 
between interstate end points' '' and sought comment on, among other 
issues, how the Commission should proceed if any permitted ancillary 
service is ``jurisdictionally mixed'' and cannot be segregated between 
interstate and intrastate calls.
    20. In August 2020, the Commission responded to the court's remands 
and took action to comprehensively reform inmate calling services rates 
and charges. First, the Commission addressed the D.C. Circuit's 
directive that the Commission consider whether ancillary service 
charges--separate fees that are not included in the per-minute rates 
assessed for individual inmate calling services calls--can be 
segregated into interstate and intrastate components for the purpose of 
excluding the intrastate components from the reach of the Commission's 
rules. The Commission found that ancillary service charges generally 
are jurisdictionally mixed and cannot be practicably segregated between 
the interstate and intrastate jurisdictions except in the limited 
number of cases where, at the time a charge is imposed and the consumer 
accepts the charge, the call to which the service is ancillary is 
clearly an intrastate call. As a result, the Commission concluded that 
inmate calling services providers are generally prohibited from 
imposing any ancillary service charges other than those permitted by 
the Commission's rules, and providers are generally prohibited from 
imposing charges in excess of the Commission's applicable ancillary 
service fee caps.
    21. Second, the Commission proposed rate reform of the inmate 
calling services within its jurisdiction. As a result of the D.C. 
Circuit's decisions, the interim interstate rate caps of $0.21 per 
minute for debit and prepaid calls and $0.25 per minute for collect 
calls that the Commission adopted in 2013 remain in effect today. 
Commission staff performed extensive analyses of the data it collected 
in the Second Mandatory Data Collection as well as the data in the 
April 1, 2020, annual reports. In the 2015 ICS Order, the Commission 
directed that the Second Mandatory Data Collection be conducted ``two 
years from publication of Office of Management and Budget (OMB) 
approval of the information collection.'' The Commission received OMB 
approval in January 2017, and Federal Register publication occurred on 
March 1, 2017. Accordingly, on March 1, 2019, inmate calling services 
providers submitted their responses to the Second Mandatory Data 
Collection. WCB and the Office of Economics and Analytics (OEA) 
undertook a comprehensive analysis of the Second Mandatory Data 
Collection responses, and conducted multiple follow-up discussions with 
providers to supplement and clarify their responses, in order to 
conduct the data analysis upon which the proposals in the August 2020 
document are based. Based on that analysis, the Commission proposed to 
lower the interstate rate caps to $0.14 per minute for debit, prepaid, 
and collect calls from prisons and $0.16 per minute for debit, prepaid, 
and collect calls from jails. In so doing, the Commission used a 
methodology that addresses the flaws underlying the Commission's 2015 
and 2016 rate caps (which used industry-wide averages to set rate caps) 
and that is consistent with the mandate in section 276 of the Act that 
inmate calling services providers be fairly compensated for each and 
every

[[Page 40420]]

completed interstate call. The Commission's methodology included a 
proposed 10% reduction in GTL's costs to account, in part, for 
seemingly substantially overstated costs. The Commission also proposed 
to adopt a waiver process that would permit providers to seek waivers 
of the proposed rate caps on a facility-by-facility or contract basis 
if the rate caps would prevent a provider from recovering the costs of 
providing interstate inmate calling services at a facility or 
facilities covered by a contract. The Commission also proposed ``to 
adopt a rate cap formula for international inmate calling services 
calls that permits a provider to charge a rate up to the sum of the 
inmate calling services provider's per-minute interstate rate cap for 
that correctional facility plus the amount that the provider must pay 
its underlying international service provider for that call on a per-
minute basis (without a markup).'' The Commission explained that this 
cap ``would enable inmate calling services providers to account for 
widely varying costs,'' be consistent with the ``just and reasonable' 
standard in section 201(b) of the Act, and comport with the ``fair 
compensation'' provision of section 276 of the Act.
    22. In response to the 2020 ICS document, the Commission received 
over 90 comments and reply comments and 9 economic studies. Filers 
included providers of calling services to incarcerated people, public 
interest groups and advocates for the incarcerated, telecommunications 
companies, organizations representing individuals who are deaf or hard 
of hearing, and providers of telecommunications relay service.
    23. Intrastate Rate Reform Efforts. By April 1 of each year, inmate 
calling services providers file annual reports with the Commission that 
include rates, ancillary service charges, and site commissions. In an 
effort to compare interstate inmate calling services rate levels with 
intrastate rate levels, Commission staff analyzed the intrastate rate 
data submitted as part of the providers' April 1, 2020, annual reports. 
Commission staff's review revealed that intrastate rates for debit or 
prepaid calls exceed interstate rates in 45 states, with 33 states 
allowing rates that are at least double the Commission's interstate cap 
and 27 states allowing ``first-minute'' charges that can be more than 
25 times that of the first minute of an interstate call. For example, 
one provider reported a first-minute intrastate rate of $5.34 and 
additional per-minute intrastate rates of $1.39 while reporting the 
per-minute interstate rate of $0.21 for the same correctional facility. 
Similarly, another provider reported a first-minute intrastate rate of 
$6.50 and an additional per-minute intrastate rate of $1.25 while 
reporting the per-minute interstate rate of $0.25 for the same 
correctional facility. Further, Commission staff identified instances 
in which a 15-minute intrastate debit or prepaid call costs as much as 
$24.80--almost seven times more than the maximum $3.15 that an 
interstate call of the same duration would cost.
    24. In light of these data, in September 2020, former Chairman Pai 
and Brandon Presley, then president of the National Association of 
Regulatory Utility Commissioners (NARUC), jointly sent a letter to the 
co-chairs of the National Governors Association urging state 
governments to take action to reduce intrastate rates and related fees. 
At least one state has enacted a law to reduce intrastate inmate 
calling services rates and fees, at least one state commenced a 
regulatory proceeding aimed at reducing intrastate inmate calling 
services rates and fees, and several states are considering 
legislation.

III. Fifth Further Notice of Proposed Rulemaking

    25. In this document the Commission seeks further evidence and 
comments from stakeholders to consider additional reforms to inmate 
calling services rates, services, and practices within its 
jurisdiction, including permanent rate caps. To that end, the 
Commission seeks comment on the provision of functionally equivalent 
communications services to incarcerated people with hearing and speech 
disabilities, the methodology for establishing permanent rate caps, 
further reforms to the treatment of site commission payments, including 
at jails with average daily populations less than 1,000, and revisions 
to its ancillary service charge rules, among other matters.

A. Disability Access

    26. While there are barriers to telecommunications access for 
incarcerated people, the obstacles are much larger for those who are 
deaf, hard of hearing, or deafblind, or who have a speech disability. 
The Commission refers to this class of people generally as incarcerated 
people with communication disabilities. Because functionally equivalent 
means of communication with the outside world are often unavailable to 
incarcerated people with communication disabilities, they are 
effectively trapped in a ``prison within a prison.'' The ability to 
make telephone calls is not just important to maintain familial and 
intimate relationships necessary for successful rehabilitation, but 
also crucial to allow for communication with legal representatives and 
medical professionals.
1. Background
    27. The Commission first sought comment in 2012 on access to inmate 
calling services for incarcerated people with communication 
disabilities. In 2015, the Commission affirmed the obligation of inmate 
calling services providers, as common carriers, to provide incarcerated 
people access to ``mandatory'' forms of TRS--TTY-based TRS and speech-
to-speech relay service (STS). TTY-based TRS allows an individual with 
a communication disability to communicate by telephone with another 
party, such as a hearing individual, by using a text telephone (TTY) 
device to send text to a communications assistant (CA) over a circuit-
switched telephone network. To connect a hearing individual as the 
other party to the call, the CA establishes a separate voice service 
link with the hearing party and converts the TTY user's text to speech. 
The CA listens to the hearing party's voice response and converts that 
speech to text for the TTY user. STS ``allows individuals with speech 
disabilities to communicate with voice telephone users through the use 
of specially trained CAs who understand the speech patterns of persons 
with speech disabilities and can repeat the words spoken by that 
person.'' The Commission also amended its rules to prohibit inmate 
calling services providers from levying or collecting any charge for 
TRS calls. For TTY-to-TTY calls, which require substantially longer 
time than voice calls, the Commission limited permissible charges to 
25% of the applicable per-minute voice rate.
    28. The Commission recognized in the 2015 ICS Order that other, 
more advanced forms of TRS, many of which use the internet, had been 
developed and recognized as eligible for TRS Fund support. For example, 
video relay service (VRS) makes use of video communications technology 
to allow individuals whose primary language is American Sign Language 
(ASL) to communicate in ASL. VRS is a form of TRS that ``allows people 
with hearing and speech disabilities who use sign language to 
communicate with voice telephone users through video equipment. The 
video link allows the [communication assistant] to view and interpret 
the party's signed conversation and relay the conversation back and 
forth with a voice caller.'' internet

[[Page 40421]]

Protocol Captioned Telephone Service (IP CTS) and its non-internet 
counterpart, Captioned Telephone Service (CTS), allow a person who is 
hard of hearing to participate in direct voice communications while 
receiving captions of the other party's voice--thereby eliminating much 
of the delay inherent in more traditional forms of TRS. IP CTS is a 
form of TRS ``that permits an individual who can speak but who has 
difficulty hearing over the telephone to use a telephone and an 
internet Protocol-enabled device via the internet to simultaneously 
listen to the other party and read captions of what the other party is 
saying.'' And IP Relay enhances traditional text-based relay by making 
use of the faster transmission speeds offered by the internet. Today, 
among people with communication disabilities, there is far more demand 
for these forms of TRS than for TTY-based TRS and STS. In its annual 
TRS usage projections for TRS Fund Year 2020-21, the TRS Fund 
administrator projected that interstate usage of TTY-based TRS from 
July 2020 through April 2021 would total 1,361,038 minutes, and 
interstate usage of STS for the same period would be 141,313 minutes. 
Taking account of likely intrastate usage, total usage of TTY-based TRS 
in this period will not exceed 6 million minutes, and total usage of 
STS will not exceed 500,000 minutes. Although these statistics are for 
calendar year 2019, an earlier period, TTY-based TRS usage has been 
declining over time, and STS usage has not increased significantly in 
recent years. Therefore, the corresponding intrastate usage statistics 
for TRS Fund Year 2020-21 are likely to be lower (in the case of TTY-
based TRS) or not substantially higher (in the case of STS) than these 
totals. By contrast, projected usage of VRS for the same period is 
140,575,160 minutes (about 23 times the usage of TTY-based TRS) and 
projected usage of IP CTS is 542,340,606 minutes (about 90 times the 
usage of TTY-based TRS).
    29. The Commission also ``agree[d] with commenters that limiting 
all inmates with communication disabilities to one form of TRS, 
particularly what many view as an outdated form of TRS that relies on 
TTY usage, may result in communication that is not functionally 
equivalent to the ability of a hearing individual to communicate by 
telephone.'' However, noting that the newer forms of TRS (other than 
STS) are not ``mandatory'' for common carriers to provide, the 
Commission declined to require calling service providers to make them 
available. Instead, it ``strongly encourage[d] correctional facilities 
to work with [inmate calling services] providers to offer these other 
forms of TRS,'' and to ``comply with obligations that may exist under 
other federal laws, including Title II of the ADA, which require the 
provision of services to inmates with disabilities that are as 
effective as those provided to other inmates.'' The Commission stated 
it would ``monitor the implementation and access to TRS in correctional 
institutions and may take additional action if inmates with 
communications disabilities continue to lack access to functionally 
equivalent service.''
    30. In 2015, the Commission sought comment on the accessibility 
implications of the increasing availability to incarcerated people of 
video calling and video visitation services. Recognizing that video 
calling could enable incarcerated sign language users to access and use 
VRS, as well as communicate directly with other sign language users, 
the Commission sought comment on the bandwidths and broadband speeds 
currently used for video visitation, the interoperability of video 
visitation systems with VRS, the prevalence of VRS access in 
correctional institutions, and the steps that should be taken to ensure 
that charges for video calling services offered to deaf incarcerated 
people are just and reasonable. In 2020, the Commission sought comment 
more broadly on the needs of incarcerated people with communication 
disabilities, including whether they have adequate access to TRS, 
whether additional forms of TRS should be made available by inmate 
calling services providers, and what the Commission can do to 
facilitate such access. In response to the 2015 and 2020 ICS documents, 
the Commission has received information describing the lack of 
functionally equivalent access to telecommunications services for 
incarcerated people with communication disabilities. The Commission has 
also received several individual comments urging it to require more 
access to communications in correctional facilities and sharing 
personal experiences with disability access to telecommunications in 
correctional facilities. As a result of these limitations, the 
Accessibility Coalition asserts, many incarcerated people with 
communication disabilities have been unable to stay in contact with 
their loved ones.

2. Making Modern Forms of TRS Available

    31. In light of the comments filed in response to the 2020 ICS 
document, as well as other evidence, the Commission proposes to amend 
the Commission's rules to require that inmate calling services 
providers provide access, wherever feasible, to all forms of TRS that 
are eligible for TRS Fund support--including (in addition to TTY-based 
TRS and STS) CTS (a non-internet-based telephone captioning service) 
and the three forms of internet-based TRS: VRS, IP CTS, and IP Relay. 
In proposing that inmate calling services providers offer access to all 
forms of TRS, the Commission does not contemplate that providers would 
necessarily provide TRS directly. They would only need to ensure that 
incarcerated people with hearing and speech disabilities can be 
connected to an existing, authorized provider of the appropriate form 
of TRS.
    32. As the Commission has recognized, ``functional equivalence'' is 
an evolving standard for the level of communications access that TRS 
must provide. ``Functional equivalence is, by nature, a continuing goal 
that requires periodic reassessment. The ever-increasing availability 
of new services and the development of new technologies continually 
challenge us to determine what specific services and performance 
standards are necessary to ensure that TRS is functionally equivalent 
to voice telephone service.'' The current record confirms the 
Commission's initial assessment in the 2015 ICS Order that TTY-based 
TRS and STS may be insufficient by themselves to ensure functionally 
equivalent communication for people with communication disabilities. As 
explained above, among the general population of people with 
communication disabilities, TTY-based TRS and STS are currently the 
least frequently used forms of relay service. TTY-based TRS is little 
used today because it is based on an obsolete technology, which is very 
slow and cumbersome compared with current internet technology. Further, 
given the availability of VRS, limiting sign-language users to TTY-
based TRS unnecessarily precludes them from communicating in their 
primary language. Similarly, for individuals who are hard of hearing, 
captioned telephone services such as CTS and IP CTS frequently provide 
far more efficient and effective means of communication than TTY-based 
TRS. Further, current transitions to modern IP-based networks have 
adversely affected the quality and utility of TTY-based communication. 
In the 2016 RTT Order, the Commission recognized the limitations of TTY 
technology in an IP environment, and adopted rules to facilitate a 
transition from TTY technology to real-time text

[[Page 40422]]

(RTT) as a reliable and interoperable universal text solution over 
wireless IP-enabled networks for people who are deaf, hard of hearing, 
deafblind, or have a speech disability.
    33. Although the Commission has not mandated the provision of the 
more advanced forms of TRS by state TRS programs or common carriers, 
their ``non-mandatory'' status does not reflect a lower level of need 
for these forms of TRS. These forms of TRS are ``non-mandatory'' only 
in the limited sense that the Commission does not require that they be 
included in the offerings of Commission-certified state TRS programs 
(and, in the event that a state does not have a certified TRS program, 
does not require common carriers in that state to make their own 
arrangements to provide such relay services). Instead, internet-based 
TRS are made available by TRS providers operating on a nationwide basis 
and certified by the Commission. However, support for all forms of TRS 
is mandatory for all carriers and VoIP service providers, which must 
support the provision of these services through mandatory contributions 
to the TRS Fund. As noted above, among the general population of people 
with communication disabilities, there is far more demand for ``non-
mandatory'' than ``mandatory'' relay services. Further, the comments 
submitted in response to the 2015 and 2020 ICS documents persuade us 
that access to commonly used, widely available relay services such as 
VRS and IP CTS is equally or more important for incarcerated people 
with communication disabilities than it is for the general population. 
Further, incarcerated people--unlike the general population--have no 
ability to connect to a suitable form of TRS on their own. Therefore, 
to fulfill the statutory TRS mandate with respect to this subset of 
people with communication disabilities, it appears to be incumbent on 
the Commission to take additional steps in this proceeding to ensure 
that they can access those relay services needed for functionally 
equivalent communication, regardless of the ``mandatory'' or ``non-
mandatory'' status of such services as provided in other contexts. The 
Commission seeks comment on this analysis.
    34. Legal Authority. As a threshold matter, the Commission seeks 
comment on the extent of its statutory authority to require inmate 
calling services providers to provide access to TRS. Section 225 of the 
Act directs the Commission to ``ensure that interstate and intrastate 
telecommunications relay services are available, to the extent possible 
and in the most efficient manner, to [individuals with communications 
disabilities] in the United States,'' and incarcerated people are not 
excluded from this mandate. To this end, section 225 expressly provides 
the Commission with authority over common carriers providing intrastate 
as well as interstate communications services, including the authority 
to require carriers to provide access to TRS ``to the extent 
possible.'' Section 225 also expressly requires common carriers to 
``provide in compliance with the regulations prescribed under this 
section, throughout the area in which it offers service, 
telecommunications relay services, individually, through designees, 
through a competitively selected vendor, or in concert with other 
carriers.'' Does section 225 authorize the Commission to require that 
inmate calling services providers provide access to appropriate forms 
of TRS, as well as to regulate the manner in which such access is 
provided?
    35. As alternative sources of authority, section 255 of the Act 
requires providers of telecommunications services to ensure that their 
services are ``accessible to and usable by individuals with 
disabilities `if readily achievable.''' Similarly, section 716 of the 
Act requires providers of advanced communications services (including 
VoIP services) to ensure that such services are accessible to and 
usable by individuals with disabilities ``unless [these requirements] 
are not achievable,'' prohibits such providers from installing 
``network features, functions, or capabilities that impede 
accessibility or usability,'' and authorizes the Commission to adopt 
implementing regulations. The Commission seeks comment on the extent to 
which, independently of section 225, these provisions authorize the 
Commission to require inmate calling services providers to provide 
access to appropriate forms of TRS.
    36. As noted earlier in the accompanying Report and Order, 
correctional authorities ``exercise near total control over how 
incarcerated people are able to communicate with the outside world.'' 
In general, the Communications Act does not provide us with authority 
to regulate the actions of correctional authorities (except to the 
extent that they also act as communications service providers or other 
entities subject to its authority). As a practical matter, therefore, 
its ability to compel an inmate calling services provider to make 
additional forms of TRS available in a particular facility may depend, 
for example, on whether the correctional institution agrees--or is 
required by other applicable law--to make suitable communications 
devices and network access available to incarcerated people with 
disabilities, or to permit a service provider to do so. The Commission 
seeks comment on the extent to which Title II of the ADA or other 
federal or state laws require such access. Access to telecommunications 
for incarcerated people with disabilities may also involve issues of 
constitutional rights. The Commission also stresses that, although the 
obligations of inmate calling service providers under any rules the 
Commission adopts may be limited to measures that are ``feasible'' in 
the circumstances of a particular correctional facility, the Commission 
does not propose to preempt other requirements under state or federal 
law, whether applicable to service providers or correctional 
authorities, which may expand the scope of access to TRS that would 
otherwise be deemed ``possible'' under section 225.
    37. Benefits and Costs. To supplement the current record, the 
Commission seeks further comment on the benefits and costs of requiring 
that providers of inmate calling services provide access to all 
authorized forms of TRS. First, to establish a baseline, the Commission 
seeks additional, specific information on the extent to which VRS, IP 
Relay, IP CTS, and CTS are currently being made available in 
correctional facilities. According to comments on the 2020 ICS 
document, VRS and IP CTS already have been made available in some 
correctional facilities. ZP Better Together, LLC, a certified VRS 
provider, notes that a number of state facilities that allow video 
visitations also have added VRS and point-to-point video communications 
for those with accessibility needs. Where available, how are internet-
based relay services and CTS provided? Do correctional facilities make 
arrangements directly with TRS Fund-supported TRS providers to provide 
these services, or are they accessed through an inmate calling services 
provider? What kinds of devices are used to access these forms of TRS, 
and how and by which entities are they provided? Similarly, how is 
broadband internet access provided to the facility--by arrangement with 
an inmate calling services provider or some other entity? Where access 
to additional forms of TRS has been made available, what operational or 
other challenges were encountered, and how were they addressed?
    38. Second, the Commission seeks additional comment on the benefits 
of making VRS, IP CTS, IP Relay, and CTS available in correctional 
facilities where they are not currently available. As

[[Page 40423]]

noted above, the record to date strongly suggests that TTY-based TRS 
and STS, by themselves, are insufficient to ensure that incarcerated 
people with communications disabilities have access to functionally 
equivalent communications. The Commission seeks additional, specific 
information on how and to what extent each of the other TRS-Fund 
supported relay services would enhance communications for incarcerated 
people with communications disabilities. Where available, what specific 
benefits do these services offer that TTY-based TRS and STS cannot? 
What communications limitations of TTY-based TRS and STS would be 
remedied by providing modern relay services? For example, how would 
access to additional forms of TRS improve communications access for 
incarcerated people who are deafblind? Should each of these relay 
services--VRS, IP CTS, IP Relay, and CTS--be available, or would a 
combination of some of them collectively provide adequate access to 
telecommunications for incarcerated people with communication 
disabilities? Would the provision of modern relay services also benefit 
the people that incarcerated people with communication disabilities 
want to call?
    39. As part of its assessment of the potential benefits of making 
other forms of TRS available, the Commission also seeks comment on the 
extent to which, as a practical matter, TTY-based TRS is actually 
available and usable in correctional facilities. To what extent is 
access to TTY-based TRS subject to more restrictions (e.g., physical 
access, limited hours, dependence on correctional staff) than telephone 
access? For example, to what extent are TTY devices incorporated into 
the telephones used by the general incarcerated population, or are TTY 
devices available only upon request? The Commission also seeks comment 
on the extent to which the TTYs available at correctional facilities 
are actually functional and capable of making calls. Are TTYs 
adequately maintained? Further, in light of the incompatibilities 
between TTYs and IP networks, the Commission seeks comment on the 
extent to which correctional facilities have upgraded to IP-enabled 
voice service. For those that have upgraded, how do correctional 
facilities ensure that incarcerated people with communication 
disabilities are able to use TTYs successfully? Do incarcerated people 
with disabilities wishing to use TTY-based TRS encounter difficulties 
navigating inmate calling services (e.g., accessing the system to 
complete steps required to make an outgoing call)? What kinds of 
difficulties are encountered by individuals eligible to use STS? To 
what extent could such difficulties in using TTY-based TRS and STS be 
overcome by providing access to other forms of TRS?
    40. Third, what security or other issues do inmate calling services 
providers and correctional facilities face that could be affected by 
the provision of VRS, IP CTS, IP Relay, and CTS, and how could such 
issues be effectively addressed? The Commission has recognized that 
security is a significant concern for inmate calling services 
generally. However, service providers and correctional facilities have 
developed methods for effectively monitoring, recording, and 
administering inmate calls, and some commenters have stated that these 
solutions are applicable or adaptable to the TRS context. Is there 
evidence that security issues are more challenging for TRS than for 
inmate calling services in general, and if so, why? What specific 
security issues are raised by incarcerated people's access to TRS? Are 
there specific concerns with respect to VRS, given its use of video? 
How have security concerns been addressed with respect to TTY-based TRS 
and STS, and in facilities where VRS is currently available? What 
measures are available to address such security concerns with respect 
to other forms of TRS?
    41. Fourth, what additional costs would be incurred--and by which 
entities--in providing access to VRS, IP CTS, IP Relay, and CTS, 
respectively, for incarcerated people? For example, would inmate 
calling services providers or other entities incur costs associated 
with upgrading or modifying existing technology configurations, 
operations, or associated network infrastructure? To what extent would 
additional broadband services be needed for transmission and completion 
of TRS calls, what costs would be involved, and which entity would 
incur such costs--the correctional institution or the inmate calling 
services provider? To what extent would additional costs be incurred by 
TRS providers to provide relay services in correctional facilities? 
Would it be necessary to provide training to correctional facilities 
personnel regarding modern TRS, and which entity would incur such 
costs? To what extent would additional costs be incurred, and by which 
entity, in ensuring that the provision of VRS, IP CTS, IP Relay, and 
CTS is secure? The Commission seeks detailed estimates of the costs 
described above and how they would be incurred--including discussion of 
the actual costs incurred in those instances where access to some of 
these forms of TRS is already being provided.
    42. The Commission also seeks comment on how the various costs 
attributable to the provision of TRS access should be recovered. Which, 
if any, of the additional costs that may be incurred by TRS providers 
should be treated as eligible for TRS Fund support? To the extent that 
costs are incurred by inmate calling services providers, to what extent 
should they be recoverable in generally applicable inmate calling 
services charges that are subject to Commission regulation? As 
discussed below, the Communications Act restricts the extent to which 
parties to a TRS call may be charged for TRS access.
    43. Feasibility, TRS Equipment, and internet Access. As noted 
above, its proposed expansion of inmate calling services providers' 
obligations to provide access to TRS is necessarily conditional on the 
extent to which associated communications capabilities, such as 
internet access and suitable user devices, can be made available in a 
particular correctional facility. The Commission cannot compel 
providers to provide access to all forms of TRS in those facilities 
where it is not feasible to do so. The Commission seeks comment on how 
to determine feasibility in this context and how potential limitations 
on the availability of internet service and user devices could be 
addressed and overcome. In order to access relay services, certain 
hardware is necessary. The Commission notes that people who are 
deafblind may need devices that have refreshable Braille output or text 
enlarging capabilities. To access TTY-based relay, a TTY is necessary. 
For CTS, a telephone with a display suitable for captioning, and 
compatible with the applicable state-program captioning service, is 
required. For internet-based forms of TRS, broadband internet access is 
required, as well as appropriate devices. Various devices may be used 
for IP CTS, such as a caption-displaying telephone compatible with an 
IP CTS provider's service, a personal computer, a laptop, a tablet, or 
a smartphone. IP Relay, similarly, may be accessed using a personal 
computer, a laptop, a tablet, or a smartphone. Finally, VRS requires a 
device with a screen and a video camera, such as a standalone 
videophone, a personal computer, a laptop, a tablet, or a smartphone. 
Internet-based services (IP Relay, IP CTS, and VRS) also require 
certain software that is available from TRS providers. With respect to 
VRS, the Commission requires that any user

[[Page 40424]]

devices and associated software distributed by a VRS provider must be 
interoperable and usable with all VRS providers' services.
    44. As a threshold matter, the Commission seeks comment on the 
extent to which broadband internet access, as well as the various user 
devices described above, are currently made available in correctional 
facilities for use by incarcerated people. To what extent are broadband 
internet access services currently available for use by incarcerated 
people, and could such services be used to support access to internet-
based TRS? For example, the record indicates that remote video 
visitation, where available, is often provided by an inmate calling 
service provider. Where an inmate calling service provider or 
affiliated company is providing video visitation using broadband 
internet access, is it feasible for the provider to also use such 
broadband service to provide access to VRS or other forms of internet-
based TRS? To what extent are off-the-shelf user devices suitable for 
internet access, such as personal computers, laptops, tablets, 
smartphones, or specialized videophones, available to incarcerated 
people? For VRS, to what extent are video-capable versions of such 
devices available? To what extent do correctional facilities place 
restrictions on people with disabilities' access to the internet and 
internet-capable devices (e.g., physical access, limited hours, 
dependence on correctional staff) that are not imposed on the use of 
telephones by hearing people? The Commission also seeks comment on any 
security issues specific to certain types of equipment that may be used 
to access TRS. Are such security issues more easily or effectively 
addressed with certain kinds of video-capable user devices than with 
others?
    45. To what extent is the provision of broadband internet access or 
TRS-compatible user devices (other than TTYs) by a correctional 
facility required by the ADA or other laws? Federal prisons and other 
facilities receiving federal funds are subject to section 504 of the 
Rehabilitation Act of 1973 and implementing regulations. State and 
local correctional facilities are subject to Title II of the ADA, 42 
U.S.C. 12131 et seq., and implementing regulations adopted by the 
Department of Justice. For example, public entities must ``furnish 
appropriate auxiliary aids and services where necessary to afford 
individuals with disabilities, including applicants, participants, 
companions, and members of the public, an equal opportunity to 
participate in, and enjoy the benefits of, a service, program, or 
activity of a public entity.'' Such ``auxiliary aids and services'' 
include ``qualified interpreters on-site or through video remote 
interpreting (VRI) services; . . . real-time computer-aided 
transcription services; . . . telephone handset amplifiers; assistive 
listening devices; assistive listening systems; telephones compatible 
with hearing aids; closed caption decoders; open and closed captioning, 
including real-time captioning; voice, text, and video-based 
telecommunications products and systems, including text telephones 
(TTYs), videophones, and captioned telephones, or equally effective 
telecommunications devices; videotext displays; accessible electronic 
and information technology; or other effective methods of making 
aurally delivered information available to individuals who are deaf or 
hard of hearing.'' The Commission invites parties to comment on the 
extent to which this or other applicable ADA regulations mandate the 
availability to incarcerated people of appropriate equipment for 
accessing TRS. To the extent that such access services and devices are 
not otherwise available, should the Commission require inmate calling 
services providers to provide internet access service or user devices? 
The Commission also notes that TRS providers frequently distribute 
suitable user devices to TRS users, although its rules do not permit 
recovery of device-related costs from the TRS Fund. Should the 
Commission make TRS Fund support available for the provision of these 
items by a certified TRS provider to an incarcerated person, as an 
exception to the cost-recovery prohibition? The Commission seeks 
comment on the merits, costs, and benefits of these alternatives, and 
whether the Commission has statutory authority to adopt each of them.
    46. To what extent do these feasibility issues implicate the 
agreements between calling service providers and correctional 
facilities, and how should the Commission treat such contractual issues 
in defining providers' obligations? For example, an inmate calling 
services provider may claim that access to a particular form of TRS is 
infeasible at a particular facility because the correctional authority 
has withheld permission for incarcerated people to use that form of 
TRS--or has withheld permission for the inmate calling services 
provider or TRS provider to provide internet access or suitable user 
devices. How should the Commission evaluate such possible defenses? For 
example, should the Commission require the inmate calling services 
provider to provide written evidence that the necessary permissions 
were withheld? Should the Commission require providers to make a good 
faith effort to secure necessary permissions, and how should a 
sufficient effort be defined? Should the Commission require the 
provider to show that it assured the correctional authority of its 
willingness to abide by reasonable use limitations and security 
restrictions? If there is sufficient evidence of infeasibility of 
access to some form of TRS due to the policy of the correctional 
authority, are there any steps that the Commission could take to 
encourage the facility to alter its practice? The Commission invites 
commenters to discuss the Commission's legal authority for any measures 
advocated in this regard.
3. Application of Existing TRS Rules
    47. The Commission seeks comment on whether any modifications of 
its existing TRS rules may be appropriate in conjunction with expanded 
TRS access for incarcerated people. In general, the rules governing 
internet-based forms of TRS are more complex than those applicable to 
TTY-based TRS. For example, to prevent waste, fraud, and abuse and 
allow the collection of data on TRS usage, its rules require that 
people using VRS, IP Relay, or IP CTS be registered with a TRS provider 
and that such providers submit information on users registered for VRS 
and IP CTS to a central User Registration Database (User Database). The 
VRS provider must ``obtain a written certification from the individual 
responsible for the videophone, attesting that the individual 
understands the functions of the videophone[,] that the cost of VRS 
calls made on the videophone is financed by the federally regulated 
Interstate TRS Fund,'' and that the institution ``will make reasonable 
efforts to ensure that only persons with a hearing or speech disability 
are permitted to use the phone for VRS.'' In addition, the VRS provider 
must collect and submit to the User Database the following information: 
(1) The VRS provider's name; (2) the telephone number assigned to the 
videophone; (3) the name and physical address of the institution (and 
the Registered Location of the phone, if different from the physical 
address); (4) the type of location where the videophone is placed 
within the institution; (5) the date of initiation of service to the 
videophone; (6) the name of the individual responsible for the 
videophone, confirmation that the provider has obtained the 
certification described above, and the date the

[[Page 40425]]

certification was obtained; and (7) whether the device is assigned to a 
hearing individual who knows sign language. VRS providers, however, may 
register videophones maintained by businesses, organizations, 
government agencies, or other entities and designated for use in 
private or restricted areas as ``enterprise videophones.'' In lieu of 
individual registration, should the Commission also permit such 
enterprise device registration for equipment used by incarcerated 
people to access IP Relay and IP CTS? Should the information and 
documents collected by TRS providers for purposes of such enterprise or 
individual user registration be the same, or different from, the 
information and documents currently required by its rules? Are 
additional safeguards necessary for the provision of certain relay 
services in the inmate calling services context, to prevent waste, 
fraud, and abuse? What steps should be taken to ensure that compliance 
with user registration rules or other TRS rules does not create a 
significant delay for telecommunication access for incarcerated people 
with disabilities?
    48. Should incarcerated people be able to select the TRS provider 
they wish to use, or should the TRS provider be selected by the inmate 
calling services provider serving a facility (or by the facility 
itself)? Should a TRS provider be required to identify inmate calling 
services calls in their claims for TRS Fund compensation, or to submit 
additional or different information to the TRS Fund administrator 
regarding TRS calls involving incarcerated people? To assist the 
Commission in evaluating the level of service incarcerated people are 
receiving, and the effectiveness and efficiency of such service, should 
the Commission require TRS providers to report annually on the 
provision of TRS to incarcerated people? What kinds of information 
should be included in such reports--e.g., identification of the 
correctional facilities served, the number and type of devices provided 
at each facility, and the number of minutes handled per facility?
    49. Are any changes in the Commission's TRS confidentiality rules 
necessary to address the security concerns of correctional facilities? 
For example, section 64.604(a) states:

    Except as authorized by section 705 of the Communications Act, 
47 U.S.C. 605, CAs [(communications assistants)] are prohibited from 
disclosing the content of any relayed conversation regardless of 
content, and with a limited exception for STS CAs, from keeping 
records of the content of any conversation beyond the duration of a 
call, even if to do so would be inconsistent with state or local 
law.

    This rule, which the Commission has recognized as fundamental to 
ensuring that TRS is ``functionally equivalent'' to voice 
communications and maintaining the trust of TRS users in the TRS 
program, applies to TRS providers and their CAs but does not expressly 
impose obligations on other parties, such as an inmate calling services 
provider that does not employ CAs and is only providing a 
communications link to an authorized TRS provider. The Commission 
tentatively concludes that the existing rule does not prohibit an 
inmate calling services provider or correctional facility from 
monitoring the transmissions sent and received between an incarcerated 
person and the TRS provider's CA, in the same way as they monitor other 
inmate calls, provided that the TRS provider and CA are not directly 
facilitating such monitoring. The Commission seeks comment on this 
tentative conclusion. The Commission also seeks comment on whether such 
monitoring that does not require affirmative steps by the TRS provider 
or CA is sufficient to ensure that a facility's security needs are 
protected as effectively as for other inmate calls. The Commission 
notes that, by monitoring transmissions to and from the incarcerated 
user's device, without involving the TRS provider, the inmate calling 
services provider or facility would have access to the entire content 
of the incarcerated person's conversation with the other party to the 
call. That is, the inmate calling services provider or facility could 
monitor the incarcerated person's communication directly, and could 
monitor the speech of the other party as conveyed in text or ASL video 
by the TRS CA. To the extent that monitoring permitted by the current 
rule is insufficient to protect institutional security, the Commission 
seeks comment on whether there are ways to narrowly address such 
security needs in order to avoid eroding the legitimate privacy 
interests of TRS users.
    50. The Commission seeks comment on whether any other modifications 
to its TRS rules are necessary to address the special circumstances 
that characterize inmate calling services. For example, what, if any, 
changes are needed in the TRS rules governing the types of calls TRS 
providers must handle (47 CFR 64.604(a)(3)), the TRS Numbering 
Directory (47 CFR 64.613, 64.615(a)(1)-(2)), change of default TRS 
provider (47 CFR 64.630-64.636), and TRS customer proprietary network 
information (47 CFR 64.5101-64.5111)? In the inmate calling services 
context, should any of the rules under part 64, subpart F, that 
currently apply to TRS providers be applicable to inmate calling 
services providers as well--and if so, which rules?
4. Charges for TRS Calls
    51. Prohibition of Provider Charges for TTY-Based TRS Calls. In 
2015, the Commission amended its rules to state that ``No [inmate 
calling services] Provider shall levy or collect any charge or fee for 
TRS-to-voice or voice-to-TTY calls.'' Notwithstanding this rule, some 
commenters allege that some calling service providers are imposing fees 
on the receiving end of TTY-based TRS calls placed by incarcerated 
people. In addition, at least one commenter suggests that incarcerated 
people with disabilities may be subject to charges for using or 
accessing the TTY or telephone devices needed to make TRS calls. To 
prevent circumvention of the rule, advocates and VRS providers have 
requested that the Commission clarify that it does not allow either 
party to be charged for a TRS call, or for access to equipment when 
used to place or receive a TRS call. The Commission seeks additional 
comment and information on whether, and to what extent, such practices 
have continued after section 64.6040(b) of the rules became effective, 
and by which entities--inmate calling services providers or 
correctional institutions--such charges are being imposed.
    52. The Commission notes that, by its terms, section 64.6040(b) 
prohibits any charge for TRS calling, regardless of the person on whom 
such a charge might be assessed, or whether such a charge is formally 
applied to the service itself or to a device used to access the 
service. Prior to the adoption of section 64.6040, other provisions of 
the rules might have been read to suggest that inmate calling services 
providers were free to charge the called party for TRS calls. 
Specifically, in the payphone provisions of the rules, adopted more 
than 20 years ago, section 64.1330(b) states that ``[e]ach state must 
ensure that access to dialtone, emergency calls, and telecommunications 
relay service calls for the hearing disabled is available from all 
payphones at no charge to the caller.'' However, the Commission sees no 
basis for inferring that the Commission, in adopting section 64.6040, 
intended an unstated qualification that similarly limits its 
application to the assessment of charges on the initiator of a call. In 
any event, the proposed amendment would put to rest any conceivable 
doubt that inmate calling services providers are prohibited

[[Page 40426]]

from charging other parties to a TRS call. Nonetheless, to more 
effectively deter the charging practices described above, the 
Commission proposes to amend the rule to expressly prohibit inmate 
calling services providers from levying or collecting any charge on any 
party to a TRS call subject to this rule, regardless of whether the 
party is the caller or the recipient and whether the party is an 
incarcerated person or is communicating with such individual, and 
regardless of whether the charge is formally assessed on the service 
itself or on the use of a device needed to make the call. The 
Commission seeks comment on this proposal, including its costs and 
benefits. The Commission also seeks comment on its legal authority in 
this regard, including section 225 of the Act, which the Commission 
relied upon in the 2013 ICS Order, as well as the interplay with 
section 276 of the Act.
    53. Provider Charges for Other Forms of TRS. In light of its 
proposal above to expand the kinds of relay services that incarcerated 
people are able to access, the Commission also proposes to amend 
section 64.6040 to prohibit inmate calling service providers from 
charging for other forms of TRS to which an inmate calling services 
provider provides access. The Commission seeks comment on the costs, 
benefits, and statutory authority for this proposal.
    54. To the extent that incarcerated people currently have access to 
forms of TRS not currently covered by the ban on TRS charges, the 
Commission seeks comment on the extent to which callers or called 
parties are currently being charged for such TRS calls, and whether 
such charges are assessed by the inmate calling services provider, the 
correctional facility, the TRS provider, or another entity. Are the 
same charges assessed for all types of TRS calls allowed at a given 
correctional facility, or only some? If certain charges are only being 
assessed for some types of TRS, which types are being assessed? If 
charges are imposed on either party for relay calls, what 
justification, if any, is proffered for imposing such charges? Are 
incarcerated people with communication disabilities being charged to 
access equipment needed to make relay calls? If so, how are they being 
charged (e.g., per use, or per minute), and how much are they being 
charged? Are there any comparable charges for the use of telephones in 
correctional facilities? Which entities impose charges for the use of 
relay equipment in correctional facilities, and what justification, if 
any, is proffered for such charges? Where charges are not imposed for 
calls involving such additional forms of TRS, how are costs 
attributable to such calls currently being recovered, and how should 
they be recovered?
    55. To the extent that the Commission has discretion to permit 
calling service providers to assess charges for non-TTY TRS, to what 
extent should such charges be allowed? Should the Commission allow 
charges for some forms of TRS and not others? For example, while VRS 
cannot be used for video communication unless the user knows sign 
language, CTS and IP CTS have no similar inherent barriers to use--and 
consequently are more susceptible to abuse by ineligible users. Could 
requiring the free provision of CTS and IP CTS create an undesirable 
incentive for ineligible incarcerated people to place calls using such 
relay services, simply to avoid the applicable charges for using non-
TRS inmate calling services? Are correctional facilities able to 
effectively mitigate such risks? Should any allowed charges be 
calibrated, like TTY-to-TTY calls, to take into account that VRS, IP 
Relay, IP CTS, or CTS calls, like TTY-to-TTY calls, are of longer 
duration than ``functionally equivalent'' calls using ``voice 
communications services''? On this point, the Commission invites 
commenters to submit evidence regarding the relative duration of 
various kinds of TRS calls and voice calls.
    56. Correctional Institution Charges. Regarding charges for the use 
of relay services (whether TTY-based or modern) or related user devices 
or access services that are imposed directly by a correctional 
facility, rather than by an inmate calling services provider, the 
Commission seeks comment on whether the Commission has authority to 
regulate or prohibit such charges, either directly or indirectly, the 
source of any such authority, and how any such rules should be 
structured. The Commission also seeks comment on the legality of such 
charges under other laws, including other titles of the ADA.
5. Direct Video Communication by Incarcerated People With Communication 
Disabilities
    57. Availability of Direct Communication. Many incarcerated people 
with communication disabilities have family and loved ones who also 
have communication disabilities. Communication with these people 
requires direct communication without TRS. This is a particular concern 
for incarcerated persons who are deaf and whose primary language is 
ASL. For these individuals, direct communication in their primary 
language requires direct video communication. To facilitate direct 
communication among ASL users, the Commission has long required VRS 
providers to handle point-to-point calls between a registered VRS user 
and another ASL user with an assigned VRS telephone number. Further, 
the record indicates that the number of correctional facilities that 
allow some form of direct video communication by incarcerated people 
has grown in recent years.
    58. Because of the key role of video communications for ASL users, 
because VRS providers are already set up to provide direct video 
service in conjunction with VRS, and because the equipment and internet 
connection needed for VRS is also sufficient for direct video, the 
Commission proposes to require that, wherever inmate calling services 
providers provide access to VRS, they also provide access to direct 
video service, through a VRS provider or by another effective method. 
The Commission seeks comment on this proposal, including its costs and 
benefits and relevant sources of statutory authority. The Commission 
invites commenters to provide additional information on specific 
benefits that direct video communication provides, beyond those offered 
by VRS. In terms of benefits, costs, and feasibility, what are the 
differences between video visitations, which some facilities currently 
allow, and direct video communications using VRS provider networks? Is 
one form of direct video communication generally more available than 
the other? What are the security concerns, and related costs, with 
providing direct video communication in ASL using broadband internet in 
correctional facilities? How can such concerns be effectively addressed 
to increase the availability of direct video communication to 
incarcerated people with disabilities?
    59. With respect to direct text-based communication for 
incarcerated people with disabilities, the record is insufficient for 
us to formulate a proposed rule. What kinds of direct text-based 
communication services--such as SMS messaging and real-time text--are 
currently available to incarcerated people with disabilities, and to 
what extent? Do direct text communications raise security concerns, and 
if so, how can they be addressed to enable increased availability of 
text communication to incarcerated people with communication 
disabilities?
    60. Charges for Direct Communication. The Commission's current 
rules limit the rates charged by inmate calling services providers for 
TTY-to-TTY calls to no more than 25% of the rates they charge for 
traditional

[[Page 40427]]

inmate calling services. The Commission invites comment on whether and 
how to expand the scope of this rule to include charges for other types 
of direct communications.
    61. First, the Commission seeks additional information on current 
charging practices for other types of direct communications by 
incarcerated people with communication disabilities. With respect to 
direct video communication that is currently available in correctional 
facilities, are incarcerated people being charged for such calls, and 
if so, how much? Are different charges currently applied to point-to-
point videophone calls by sign-language-using individuals with 
communication disabilities than for video visitation by other 
incarcerated people? How do charges for direct video communication and 
video visitation compare with charges for voice telephone calls? 
Regarding direct text services for incarcerated people with 
communication disabilities, are there charges for such services? If so, 
what are the rates? Are there differences in how much incarcerated 
people with communication disabilities are charged to engage in direct 
text communication and how much other incarcerated people are charged 
for similar services?
    62. The Commission invites comment on whether the Commission should 
impose limits on the charges that may be assessed for direct video 
communications by ASL users, as well as the costs and benefits and its 
statutory authority for regulating such charges. Are such limits 
justified by fairness and nondiscrimination considerations, such as 
those underlying the TTY-pricing rule? For example, should the 
Commission require that an inmate calling services provider's charges 
for direct video communication by an incarcerated ASL user should be no 
greater than the provider's charges for a voice call of equivalent 
duration? Are similar limits needed and appropriate for direct text 
communication by people with communication disabilities?
6. Accessibility-Related Reporting
    63. As a part of the Commission's Annual Reporting and 
Certification Requirement, inmate calling services providers are 
required to submit certain information related to accessibility: (1) 
``[t]he number of TTY-based Inmate Calling Services calls provided per 
facility during the reporting period''; (2) ``[t]he number of dropped 
calls the . . . provider experienced with TTY-based calls''; and (3) 
``[t]he number of complaints that the . . . provider received related 
to[,] e.g., dropped calls, [or] poor call quality[,] and the number of 
incidents of each by TTY and TRS users.'' Inmate calling services 
providers must submit annual reporting and certifications forms to the 
Commission by April 1 of each year. Required information to submit 
include international, interstate, and intrastate inmate calling 
services rates and ancillary service charges. In the 2015 ICS Order, 
the Commission concluded that tracking TTY-based calls would not be 
overly burdensome because: (1) TTY-based TRS calls make up only a small 
portion of inmate calling services calls; and (2) the need for 
specialized equipment or calling a designated TRS number (such as 711), 
or both, makes tracking easier. The Commission also found the burdens 
of reporting TTY-based calls to be far outweighed by the benefits of 
greater transparency and heightened accountability on the part of 
inmate calling services providers. In the same order, the Commission 
established a safe harbor, allowing inmate calling services providers 
to avoid TRS-related reporting obligations if: (1) The provider 
operates in a facility that allows additional forms of TRS beyond those 
already mandated by the Commission, or (2) the provider has not 
received any complaints related to TRS calls. Although the TRS-related 
reporting may not be required under this safe harbor, the provider 
would need to provide a certification from an officer of the company 
stating which prong(s) of the safe harbor the provider has met. This 
safe harbor was adopted to help encourage correctional facilities to 
adopt more modern forms of TRS. Accessibility Coalition requests that 
the Commission expand the reporting requirement to foster 
accountability on the part of inmate calling services providers, and to 
eliminate the safe harbor. Specifically, they ask to include the 
functionality and status of accessible equipment in correctional 
facilities in the reporting requirements. At this time, the Commission 
does not propose a rule on reporting of accessible equipment by inmate 
calling services providers, pending further information and analysis 
regarding the current availability of such equipment and the role of 
inmate calling services providers in providing such equipment. 
Generally, GTL is opposed to additional data collection on the basis it 
would create an administrative burden.
    64. Given its proposal to expand the types of TRS that inmate 
calling services providers are required to provide, the Commission 
seeks comment on whether to expand the inmate calling services 
providers' reporting requirements to include all other accessibility-
related calls. What are the benefits or burdens, including on small 
entities, of imposing these additional requirements? Has its safe 
harbor, in fact, driven more correctional facilities to adopt forms of 
TRS other than TTY-based TRS and STS? If the reporting requirements are 
expanded to include other types of TRS, should the safe harbor be 
modified so that inmate calling services providers can avoid TRS-
related reporting obligations only if they have not received complaints 
related to TRS calls? Alternatively, should the Commission eliminate 
the safe harbor and require all inmate calling services providers to 
report the required information?

B. Permanently Capping Provider- and Facility-Related Rate Components

1. Overall Methodology
    65. The Commission seeks comment on what methodology the Commission 
should use to permanently cap provider-related rate components for 
interstate and international inmate calling services. In the Report and 
Order the Commission adopts today, the Commission uses data from the 
Second Mandatory Data Collection to establish zones of reasonableness 
from which the Commission selects separate interim provider-related 
rate caps for prisons and larger jails. Although those data are more 
than sufficient to support the interim rate caps, the Commission 
recognizes that more disaggregated, consistent and uniformly reported 
data will be needed for us to set permanent rate caps for interstate 
and international inmate calling services that more accurately reflect 
the cost of providing inmate calling services, including to jails with 
average daily populations less than 1,000. Accordingly, the Commission 
establishes another Mandatory Data Collection to enable us to obtain 
those data.
    66. The Commission seeks comment on how the Commission should use 
the data from the Mandatory Data Collection in establishing permanent 
provider-related rate caps for interstate and international inmate 
calling services. Should the Commission use those data to calculate 
industry-wide mean contract costs per paid minute of use, and the 
associated standard deviation, in the provision of calling services to 
incarcerated persons? Should the Commission, instead, analyze costs at 
the facility level, which seems necessary to capture potential 
differences in costs associated with smaller facilities? If so, how 
would the Commission do that if providers keep

[[Page 40428]]

their costs only on a contract basis? Does that fact suggest that, for 
any particular contract, so long as the permanent rate caps enable the 
provider to recover the contract costs for interstate and international 
services without regard to the different facilities comprising the 
contract, the caps would be consistent with the fair compensation 
provision of section 276 of the Act? Or should the Commission use an 
alternative methodology and, if so, what methodology should the 
Commission use?
    67. The Commission also seeks comment on whether the Commission 
should employ a zone of reasonableness approach in establishing 
permanent rate caps. If so, should the Commission establish separate 
zones of reasonableness for prisons, larger jails, and jails with 
average daily populations less than 1,000? Or should the Commission use 
different groupings of facilities? Precisely how should the Commission 
establish the upper and lower bounds of the zones of reasonableness for 
each group of facilities? Should the Commission follow the approach set 
forth in the Appendices to the Report and Order in developing the 
database that the Commission use to set any upper and lower bounds? If 
not, what alternative approach should the Commission take? What other 
steps, if any, should the Commission take to make sure that any upper 
and lower bounds reflect the costs of providing interstate and 
international inmate calling services? And what criteria should the 
Commission use in picking interstate rate caps from within those zones? 
How should the Commission determine permanent rate caps if the 
Commission does not use a zone of reasonableness approach? Should the 
Commission set the caps at its best estimates of industry-wide mean 
costs per paid minute of use plus one standard deviation or should the 
Commission use another methodology? And, if so, what methodology should 
the Commission use?
    68. The Commission's rules preclude providers from imposing on 
consumers of interstate inmate calling services any charges other than 
per-minute usage charges and the permissible ancillary services fees. 
The Commission invites comment on whether the Commission should 
consider alternative rate structures, such as one under which an 
incarcerated person would have a specified--or unlimited--number of 
monthly minutes of use for a predetermined monthly charge. Should 
providers be permitted to offer different options of rate structures as 
long as one of their options would ensure that all consumers of inmate 
calling services have the ability to choose a plan subject to the 
Commission's prescribed rate caps? Would such an optional rate 
structure benefit incarcerated persons and their families? For example, 
incarcerated people and their families enjoy free telephone calling in 
New York City and San Francisco for calls made from jails. Or would a 
different alternative rate structure be preferable? Securus requests 
that the Commission adopt a waiver from per minute requirements to 
allow ICS providers to establish alternative rate-based pilot programs 
to allow families the option of utilizing a flat rate plan. Securus 
also requests that the Commission adopt a presumption in favor of 
granting such waiver requests upon a showing that the alternative rate 
plan would result in a lower effective rate than the interim provider-
related per minute rate caps. The Commission seeks comment on whether 
the Commission should adopt such a waiver process, including the 
presumption Securus seeks. What incremental costs, if any, would 
providers incur to develop an alternative rate structure and implement 
it on an ongoing basis? The Commission asks interested parties to 
address the relative merits of different rate structures and their 
impact on calling services consumers and providers.
2. Provision of Service to Jails With Average Daily Populations Below 
1,000
    69. In 2020, the Commission sought comment on its proposal to adopt 
a single interstate rate cap for prisons and a single interstate rate 
cap for jails. The Commission asked, however, whether there are 
differences in providers' costs to serve different types of facilities, 
and, if so, how it should take those differences into account in 
setting interstate rate caps for different types of facilities. The 
Commission now seeks to expand the record on these matters.
    70. The available data do not make clear how, if at all, jail size 
affects the costs providers incur in providing inmate calling services. 
Securus asserts that jail size is a ``critical cost factor'' in 
providing calling services to incarcerated people, identifying jails 
with average daily populations less than 1,000 as being the most costly 
to serve. The National Sheriffs' Association, for example, contends 
that there are a number of factors that result in jails with fewer 
incarcerated people having higher costs per minute, noting that jails 
are typically operated by local jurisdictions that are under the 
authority of the county government or an elected sheriff, and that 
jails lack the economies of scope and scale of federal or state 
prisons. The National Sheriffs' Association's 2015 survey shows, in 
general, that jails with larger average daily populations have lower 
per-minute costs than jails with average daily populations less than 
1,000, but even if this is the case, would the fact that the jails 
themselves may have higher costs make providers' costs to provide 
service at jails with fewer incarcerated people any higher? Pay Tel's 
outside consultant argues that ``some locations, particularly small 
jails, have characteristics that make them more costly for an [inmate 
calling services] provider to serve, and that the higher level of costs 
precludes any ability to pay site commissions.'' Is this the case for 
other providers as well? High turnover rates may play a role, as Pay 
Tel explains, because ``the cost of establishing service or `selling' 
to a new customer is greater than the cost of continuing to service or 
maintain an existing customer.'' But to the extent providers are able 
to recover the cost of account setup and funding through ancillary 
service fees, how does setting up new accounts for newly incarcerated 
people differ in any material way from funding existing accounts?
    71. The Commission seeks comment on the particular factors that 
result in higher costs of serving jails having average daily 
populations below 1,000 and ask commenters to address how the 
Commission should take those factors into account in setting permanent 
interstate rate caps using data from the upcoming Mandatory Data 
Collection. Are there characteristics that are consistent across all 
jails with average daily populations less than 1,000 and that 
contribute to making those facilities more costly to serve on a per-
minute basis? What factors affect providers' costs of serving these 
jails? Are the characteristics that make it more costly to serve these 
jails related to size, geography, state or local law, or other factors? 
Does the length of the average incarcerated person's stay influence 
providers' costs of serving jails having average daily populations 
below 1,000 and, if so, how? What one-time costs, if any, do providers 
incur when first offering service to a newly incarcerated person that 
differ from the costs of the services permitted under its ancillary 
services rules? What is the effect of turnover of incarcerated people 
in jails with average daily populations less than 1,000 on a provider's 
cost to serve that jail? Finally, are there other cost categories, such 
as account setup, customer service, or refund processing, that the 
Commission should consider in

[[Page 40429]]

determining appropriate rate caps for jails having average daily 
populations below 1,000? Commenters are asked to share any additional 
information that may be relevant for the Commission to consider in 
establishing new permanent rate caps for jails with average daily 
populations less than 1,000 vis-[agrave]-vis larger jails.
    72. The Commission also seeks comment on how its methodology for 
setting permanent interstate rate caps can quantify the factors that 
make jails with average daily populations less than 1,000 more costly 
to serve than prisons and larger jails. What steps should the 
Commission take to distinguish the direct costs of serving these jails 
from the direct costs of serving prisons and larger jails? How can the 
Commission ensure that jails with average daily populations less than 
1,000 are allocated an appropriate proportion of providers' common 
costs? Should the Commission use a combination of allocation methods to 
apportion those costs among facilities and, if so, what allocation 
methods should the Commission use?
    73. Finally, the Commission seeks comment whether the current 
definition of the average daily population sufficiently addresses 
fluctuations in jail populations and variations in how correctional 
facilities determine average daily populations. Currently, its rules 
define the average daily population as ``the sum of all inmates in a 
facility for each day of the preceding calendar year, divided by the 
number of days in the year.'' However, the record suggests that average 
daily populations may fluctuate, and ``[v]arious states and localities 
track these numbers differently.'' Should the Commission modify the 
definition and if so, how? What other steps, if any, should the 
Commission take to ensure that average daily populations are determined 
on a consistent basis for all correctional facilities?
3. Correctional Facility Costs
    74. In the Report and Order the Commission adopts today, the 
Commission reforms, on an interim basis, the current treatment of site 
commission payments related to inmate calling services for prisons and 
larger jails based on the record before us. The Commission uses the 
term ``larger jails'' to refer to facilities with average daily 
populations greater than or equal to 1,000. The Commission permits 
recovery of payments or portions of site commission payments mandated 
by federal, state or local law or regulation (legally mandated) and 
those resulting from contractual obligations imposed by correctional 
facilities or agencies (contractually prescribed). For legally mandated 
site commission payments, the Commission permits providers to pass 
through these payments to consumers, without any markup, up to a 
maximum total interstate rate of $0.21 per minute. For contractually 
prescribed payments, the Commission adopts a new interim rate component 
of up to $0.02 per minute for both prisons and larger jails. The 
Commission refrains from including jails with average daily populations 
less than 1,000 from today's interim rate cap reforms because the 
Commission finds the record information insufficient to reasonably 
consider such reforms, including for discretionary site commission 
payments, at this time. The Commission seeks comment to supplement the 
record to account for this fact, specifically with respect to facility 
costs reflected in site commission payments. The Commission seeks broad 
comment on potential site commission reforms with respect to all 
correctional facilities. ICSolutions requests that the Commission 
require in-kind site commission payments to be explicitly stated on 
consumer bills. The Commission seeks comment on this request. Would 
such a requirement be administratively difficult and confusing to 
consumers? The Commission also seeks more targeted data and detailed 
information that would better enable us to undertake further reforms in 
how providers recover site commission payments going forward, 
especially for jails with average daily populations less than 1,000, if 
permitted at all, that are legitimately related to, and necessary for, 
the provision of inmate calling services. Although in some places the 
Commission uses the term ``smaller jails'' to refer to facilities with 
average daily populations less than 1,000, that usage is not meant to 
imply that such jails are small in any absolute sense.
    75. In GTL v. FCC, the court left it to the Commission to determine 
``which portions of site commissions might be directly related to the 
provision of ICS and therefore legitimate, and which are not.'' As the 
Commission explained in 2020, site commissions have two components: 
Compensating facilities for the costs they incur in providing inmate 
calling services and compensating the facilities for the transfer of 
market power over inmate calling services from the facilities to the 
providers. Prior to the 2016 ICS Reconsideration Order, the Commission 
viewed these payments solely as an apportionment of profits between 
providers and correctional facility owners even though it recognized 
some portion of site commission payments may be attributable to 
legitimate facility costs. In the 2016 ICS Reconsideration Order, the 
Commission recognized that ``some facilities likely incur costs that 
are directly related to the provision of [inmate calling services],'' 
and determined that ``it is reasonable for those facilities to expect 
[inmate calling services] providers to compensate them for those costs 
. . . [a]s a legitimate cost of [inmate calling services].'' But, as 
the Public Interest Parties' expert explains, it is ``difficult to 
disentangle which part of the site commission payment goes towards 
reasonable costs and which portion is due to the transfer of market 
power.'' Even the National Sheriffs' Association acknowledges that some 
portion of site commission payments are ``locational rents,'' while 
other parts may be attributable to other factors. How and where should 
the Commission draw the line between legitimate and illegitimate 
portions of site commissions? The Commission seeks comment on the 
specific costs that the Commission should consider to be legitimate for 
recovery through site commission allowances as the Commission moves 
from the interim steps the Commission takes today to a more permanent 
policy. Specifically, what costs are directly related to, and necessary 
for, the provision of inmate calling services? What costs are too 
attenuated or indirect to be directly related to the provision of 
inmate calling services? Commenters should be as specific as possible 
in describing specific costs or cost categories. If commenters identify 
categories of costs that they believe are directly related to the 
provision of inmate calling services, those commenters should identify 
with specificity what those costs cover and why they would not be 
incurred but for the fact that inmate calling services are provided at 
that facility.
    76. Methodology to Estimate Costs. The Commission also seeks 
comment on other methodologies to estimate correctional facility costs 
directly related to the provision of inmate calling services and 
whether and how the Commission should consider accounting for 
legitimate facility costs related to inmate calling in the future. 
Should the Commission continue to permit recovery through an additive 
per-minute rate component like the interim $0.02 rate component the 
Commission adopts today for larger jails and prisons? Should the 
Commission consider some other method of recovery such as a flat fee 
per billing period or on a per-call basis? The Commission seeks 
comment, generally, on any other

[[Page 40430]]

factors that the Commission should consider in determining legitimate 
facility-related costs to enable inmate calling services and whether 
those costs are reflected in site commission payments or recovered by 
facilities in some other way, and whether it is appropriate to even 
permit providers to recover those costs from end users of inmate 
calling services. If they are recovered through other means, how best 
can the Commission account for that fact so as to ensure there is no 
double recovery at the expense of incarcerated people and their 
families?
    77. Given the difficulties and complexities evidenced in accounting 
for and isolating what portion of site commission payments may be 
related to legitimate facility costs for enabling inmate calling, 
should the Commission simply consider prohibiting providers from 
entering into any contract requiring the payment of contractually 
prescribed site commissions for interstate and international calling 
services? Would such a prohibition be the best way to ensure 
incarcerated people and their families do not bear a financial burden 
that is unrelated to costs necessary to provide their calling services? 
The Commission believes section 201(b) of the Act provides sufficient 
authority for us to prohibit such payments. Do commenters agree? What 
other legal authority does the Commission have to make this 
determination? Would restricting such payments ensure that providers 
recover fair compensation pursuant to section 276 of the Act? Would 
prohibiting such payments eliminate the incentive for facilities to 
select providers that pay the highest site commissions, even if those 
providers do not offer the best service or lowest rates? Would 
prohibiting such payments encourage facilities to allow multiple 
providers of inmate calling services to serve a given facility, instead 
of awarding monopoly franchises? Does permitting providers to recover 
any portion of site commission payments through interstate and 
international rates decrease incentives of providers to negotiate with 
facilities to lower or eliminate such payments altogether? The 
Commission seeks comment on whether contractually prescribed site 
commissions are commonly paid on intrastate calls. If so, will the 
ability to charge site commissions on intrastate calls render 
ineffective any Commission efforts to encourage correctional facilities 
to prioritize the selection of providers with the best service or 
lowest rates, rather than those which pay the highest site commission?
    78. The Commission seeks comment on legally mandated site 
commission payments. As Judge Pillard explained in her dissent in GTL 
v. FCC and as the United Church of Christ and Public Knowledge 
emphasize, ``the fact that a state may demand them does not make site 
commissions a legitimate cost of providing calling services.'' Do 
commenters agree? Why or why not? If there is a legal requirement to 
pay site commissions in a state, on what basis could the Commission say 
that this legal requirement is not recoverable through interstate 
inmate calling services rates? Should the Commission preempt state or 
local laws that impose these payments on interstate and international 
calling services because they interfere with federal policy and its 
statutory duty to consumers of inmate calling service that their 
interstate rates be just and reasonable? What effect would such a 
prohibition have on inmate calling services? How do these various 
possible approaches comport with sections 201(b) and 276 of the Act, 
and cases interpreting those provisions, including GTL v. FCC? Would 
preventing providers from paying site commissions (or certain types of 
site commissions) comport with principles of federalism? Should the 
Commission consider continuing to allow the payment of site commissions 
but prohibit the recovery of any portion of site commissions in 
interstate and international rates?
    79. Facility Costs for Jails with Average Daily Populations Less 
Than 1,000. Several commenters responding to the 2020 ICS document 
argue that a $0.02 rate component is inadequate for smaller jails to 
recover their costs related to inmate calling services. They point to 
the National Sheriffs' Association 2015 cost survey to support the 
claim that ``the per minute cost incurred by the vast majority of 
Sheriffs and jails for security and administrative duties associated 
with [inmate calling services] greatly exceeds $0.02 per minute.'' Pay 
Tel contends that a uniform $0.02 allowance for all size facilities is 
at odds with the Commission's tiered treatment of site commissions in 
the 2016 ICS Reconsideration Order, which adopted higher allowances for 
smaller facilities, based on a finding that those facilities incur 
higher per-minute costs than larger facilities. Here, commenters 
suggest that legitimate facility costs related to inmate calling 
services may indeed be higher for smaller facilities. Unfortunately, 
they did not provide sufficient evidence to enable us to quantify any 
such costs.
    80. The Commission seeks that comment now. While the National 
Sheriffs' Association points us to its 2015 survey for evidence that 
correctional facility costs for smaller facilities are higher, the 
survey data for jails with fewer incarcerated people varied far too 
widely to comfortably estimate any values that would withstand scrutiny 
today. This is particularly the case when even the National Sheriffs' 
Association itself explains that ``each individual jail facility has 
its own per minute cost because of differences in officer, supervisor 
and other employee hours spent on various duties; the compensation 
rates for officer, supervisors and other employees; and differences in 
minutes of use,'' and states that in some cases, jails with similar 
average daily populations have ``significantly different cost per 
minute.'' The Commission understands there are many potential variables 
that impact facilities' cost of enabling inmate calling services in 
addition to size. The Commission seeks detailed comment on those 
variables, including jail funding sources that may come from state or 
local government budgets to offset these costs.
    81. The Commission seeks comment on what costs, if any, jails with 
average daily populations less than 1,000 incur related to the 
provision of inmate calling services that prisons and larger jails may 
not incur. If costs are indeed higher, either in an absolute sense or 
on a per-unit basis, at jails with average daily populations less than 
1,000, what are the characteristics that make those facilities more 
costly to serve? Are these characteristics related to geography, state 
or local law, or other factors, and if so, how should the Commission 
account for that in its facility-rate component analysis? Are there 
particular factors or characteristics that are consistent across all 
jails with average daily populations less than 1,000? The Commission 
encourages commenters, especially correctional facilities and agencies, 
to provide detailed descriptions and analyses of the cost drivers for 
jails with average daily populations less than 1,000.
    82. The Commission also seeks comment on the effect of turnover of 
incarcerated people in jails with average daily populations less than 
1,000. The National Sheriffs' Association explains that jails ``contain 
people who have been arrested and not convicted and, as a result they 
experience a much greater number of admissions and higher turnover.'' 
Pay Tel's outside consultant points to data previously submitted by Pay 
Tel estimating that the average weekly turnover is 62.2% for jails 
compared with 1.01% for prisons. According to Pay Tel, this turnover 
impacts both provider and facility costs.

[[Page 40431]]

While these turnover costs might lead to increased costs for the 
provider due to, for example, larger numbers of account setups and 
larger quantities of called numbers to be vetted, do they similarly 
increase costs for the facility? If so, how and by how much, and how is 
that related specifically to inmate calling services? The National 
Sheriffs' Association explains that the relatively shorter stays in 
jails with fewer incarcerated people leave correctional facilities with 
less time to recover their costs from incarcerated people which, in 
turn, leads to higher ``per inmate cost'' in these jails.'' The 
Commission seeks detailed comment and analysis on the relationship 
between turnover and correctional facilities' costs, but more 
specifically, between turnover and inmate calling service costs. For 
example, if an intake process requires certain tasks associated with 
newly incarcerated people, including explaining the availability of 
inmate calling services, the Commission sees no reason why any portion 
of the costs of that intake process should be included as a legitimate 
facility cost related to inmate calling. This is because intake 
procedures are not specific to the provision of inmate calling 
services. Facilities incur costs related to these procedures regardless 
of whether the correctional facility staff explain the availability of 
inmate calling services. The Commission also seeks data regarding 
turnover rates and legitimate facility costs unique to jails with 
average daily populations less than 1,000, if any. The Commission also 
seeks specific information and comment on how the Commission avoids 
duplication in cost recovery for inmate calling services-related costs 
that both facilities and providers say they incur for the same 
functions. Commenters should be specific in identifying cost categories 
and providing supporting data for each category.
    83. Pay Tel, which ``serves many small facilities,'' indicates that 
it has experienced increases in site commissions over the last four 
years, but there is no indication that these increases are attributable 
to legitimate facility costs related to inmate calling services. What 
accounts for these increases and why should incarcerated people and 
their families bear the burdens of these costs when other services are 
provided to incarcerated people for which they need not pay any fee or 
rate? Is there any evidence such increases have any relationship to 
inmate calling services at all except that they are being extracted 
from an inmate calling services provider? Do these increases reflect 
other market dynamics, such as providers offering increasingly larger 
site commissions? Have other providers that serve smaller facilities 
observed a similar trend? Is this increase attributable to smaller 
facilities undertaking a greater share of administrative and security 
tasks that calling providers would ordinarily perform for larger 
facilities? Are these increases observed at all jails with average 
daily populations less than 1,000 or only at the jails with the fewest 
people? Conversely, have other providers experienced a decrease in site 
commissions at smaller facilities in recent years? If so, what has 
caused this decrease? The Commission encourages commenters to submit 
current data and detailed analyses of these increases or decreases and 
to what they are attributable to enable the Commission to better 
understand cost causation at these smaller facilities. The Commission 
also seeks comment on whether providers have sought to pay lower site 
commissions in connection with inmate calling services and whether such 
attempts have been rebuffed or successful.
    84. Some commenters advocate for a tiered jail structure based on 
average daily population, with the jails with the fewest incarcerated 
people receiving the largest per-minute facility-related cost recovery. 
The Commission seeks comment on whether the Commission should adopt 
separate tiers that distinguish between jails with average daily 
populations of less than 350 and somewhat larger jails (e.g., those 
with average daily populations of 350 to 999). If so, what tiers should 
the Commission adopts? The Commission previously adopted site 
commission allowances for tiers that reflected three categories of 
incarcerated people (i.e., jails with average daily populations below 
350; medium-sized jails with average daily populations of 350 to 999; 
and larger jails). Should the Commission adopt these same tiers or 
different sizes or number of tiers? If so why? Or would a single tier 
covering all jails with average daily populations below 1,000 be more 
appropriate? Alternatively, should the Commission conclude, as certain 
commenters suggest, that a uniform facility-related allowance is the 
most appropriate if any such allowance is permitted? Commenters arguing 
that the Commission should adopt different site commission rate 
components based on jail size should provide data and supporting 
analysis for any proposals submitted. Pay Tel and the National 
Sheriffs' Association ask the Commission to consider the data that are 
already in the record. But Pay Tel's representation that it has seen 
upticks in site commission costs at some of the smaller facilities it 
serves suggests that the landscape has changed since those data became 
part of the record in this proceeding. The Commission therefore 
requests renewed data and analysis regarding reasonable inmate calling 
services costs at facilities with average daily populations between 0 
and 999.
    85. Facility Costs for Prisons and Larger Jails. The Commission 
also seeks comment on whether the Commission should further reduce or 
eliminate the $0.02 rate component allowance for contractually 
prescribed site commissions for prisons, larger jails, or both. The 
Commission seeks comment on the same questions the Commission poses for 
jails with average daily populations less than 1,000 regarding what 
factors impact a facility's legitimate costs to enable inmate calling 
services. Should the Commission consider different tier sizes for 
larger jails? For example, the National Sheriffs' Association proposes 
categorizing the largest jails as those with average daily populations 
exceeding 2,500. What would be the basis for different-sized tiers for 
prisons and larger jails? Are there material differences in unit costs 
that facilities reasonably incur as sizes increase? As explained above 
in connection with jails with average daily populations less than 
1,000, there is record evidence suggesting that small facilities incur 
higher costs due to turnover of the incarcerated population. Are larger 
jails and prisons similarly affected by turnover rates? If not, what 
effect, if any, does turnover have at larger facilities? As the 
Commission does for jails with average daily populations less than 
1,000, the Commission asks commenters to provide data on turnover rates 
for prisons and larger jails.
    86. Security and Surveillance. Several commenters argue that 
facilities' security and surveillance costs should not be recovered 
through inmate calling services rates as these tasks are ``not related 
to the provision of communication service and provide no benefit to 
consumers.'' Others argue that these costs should be recovered through 
providers' calling rates because correctional facilities incur them to 
provide incarcerated people with access to inmate calling services. In 
the survey data the National Sheriffs' Association provided, facilities 
reported often hundreds of hours a week on security and related 
administrative functions associated with inmate calling. How can the 
Commission ensure that these functions are not normal security

[[Page 40432]]

functions a facility already incurs? How can the Commission determine 
to what extent some of these security-related costs are for services 
that should more appropriately be deemed to be general security 
services that are added on to inmate calling services but not actually 
necessary to the provision of the calling service itself? In other 
words, the Commission seeks to determine if inmate calling service 
providers are providing two different services to facilities when it 
comes to these so-called security and surveillance costs: (1) A 
communication service that enables incarcerated people to make 
telephone calls; and (2) a separate security service that aids the 
facility's general security efforts but would more appropriately be 
paid for directly by the facility rather than by the users of the 
communications service who receive no benefit from these security 
features that are unnecessary to enable them to use the calling 
service. The Commission also notes that the functions described by the 
National Sheriffs' Association appear to duplicate many of the same 
security functions for which providers reported costs. What types of 
security and surveillance functions, if any, are appropriately and 
directly related to inmate calling? For example, ICSolutions suggests 
that a basic phone system requires security related to identifying the 
incarcerated individual placing a call, restricting who that individual 
can and cannot call, providing the called party with the ability to 
accept, reject, or block the caller, and providing the facility with 
the ability to monitor and record calls. This is consistent with the 
position of Worth Rises, which argues that providers ``have routinely 
introduced new security and surveillance services that are not required 
by procuring agencies.'' The United Church of Christ, however, 
disagrees with ICSolutions's assertions about ``what is considered a 
minimum necessary service for the consumer, as opposed to the carceral 
facility.'' ICSolutions suggests that anything more than this is not 
required for secure calling and that additional products are ``gold-
plated offerings.'' What functions should be disallowed as too 
attenuated to claim as legitimate costs? What methodology would permit 
the Commission to verify or otherwise isolate telephone calling-related 
security and surveillance costs from general security and surveillance 
costs in correctional facilities? Worth Rises cautions that isolating 
and thus being able to quantify calling-related security and 
surveillance costs is an important step in determining how, if at all, 
such costs should be recovered through rates. The Commission seeks 
comment on how to isolate and quantify these from general security and 
surveillance costs.
    87. Obtaining Correctional Facility Cost Data. Several commenters 
discuss the difficulty in determining facilities' actual costs related 
to the provision of inmate calling services from examining providers' 
reported costs. For example, GTL asserts that correctional facilities 
``are in the best position to provide information regarding their costs 
related to [inmate calling services],'' which fall into several generic 
categories, namely ``administrative security, monitoring investigative, 
maintenance, and staffing.'' The National Sheriffs' Association again 
points to its 2015 survey as the most recent data available about 
correctional facility costs as reported by correctional officials. Are 
the data from the National Sheriffs' Association survey accurate today 
regarding the functions and related costs that jails legitimately incur 
in connection with inmate calling services? The Commission invites the 
National Sheriffs' Association and others to provide updated data and 
analysis in this regard. The Commission also seeks comment more broadly 
on how the Commission can obtain reliable data on correctional facility 
costs. Are there specific questions the Commission could ask of 
providers or other stakeholders that would elicit data appropriate to 
establish a permanent allowance for recovering legitimate facility-
related costs that are included in site commission payments? Should the 
Commission condition any rate element for correctional facility costs 
on the provision of reliable correctional facility cost data provided 
to us by the facilities themselves? Or should the Commission specify a 
default rate cap, similar to the $0.02 per minute that the Commission 
adopts on an interim basis in the accompanying Report and Order, and 
disallow recovery of any amount above that default rate cap absent the 
provision of reliable facility cost data that supports a higher rate 
cap?

C. Revising Ancillary Service Charges Rules

    88. The Commission seeks comment on its current rules for permitted 
ancillary service charges, and whether the Commission should revisit 
the rules and the level of charges. Ancillary service charges are fees 
that providers of calling services for incarcerated people assess on 
calling services consumers that are not included in the per-minute 
rates assessed for individual calls. Currently, the Commission allows 
five types of ancillary service charges in connection with interstate 
or international inmate calling services:
    (1) Fees for Single-Call and Related Services;
    (2) Automated Payment Fees;
    (3) Third-Party Financial Transaction Fees;
    (4) Live Agent Fees; and
    (5) Paper Bill/Statement Fees.
    89. The Commission has explained that these charges are unchecked 
by market forces because incarcerated people and their families must 
either incur them when making a call or forego contact with their loved 
ones. Ancillary charges have in the past drawn Commission scrutiny and 
reform because they were excessive and not cost-justified. The record 
reflects concerns that consumers may still be overpaying ancillary 
service charges in various ways. The Commission seeks comment on these 
concerns. Certain providers argue that the Commission need not consider 
making any changes its ancillary service charge cap rules. Do 
commenters agree? Why or why not?
    90. The record suggests that some providers of inmate calling 
services may impose ``duplicate transaction costs'' on the same 
payments, such as charging both an automated payment fee and a third-
party financial transaction fee also covering credit/debit card 
processing fees, for example, when a consumer makes an automated 
payment to fund its account with the services provider. There appears 
to be some confusion among industry stakeholders regarding the 
relationship between the automated payment fee and third-party 
transaction fees as they relate to credit card processing fees. In 
connection with automated payment fees, the Commission has suggested 
that credit card processing fees that providers incur are already 
included in the automated payment fee, which is capped at $3.00. At the 
same time, the Commission referred to ``credit card processing fees'' 
in its discussion of third-party financial transaction fees in the 2015 
ICS Order. The Commission seeks comment on whether the credit card 
processing fees encompassed in the automated payment fee are the same 
credit card processing fees referred to in the third-party financial 
transaction fee. If they are the same, then permitting providers to 
charge both an automated payment fee and a credit card processing fee 
when consumers use a credit or debit card to make an automated payment 
would, indeed, seem to allow for double recovery. And if credit or 
debit card companies or other third parties are also charging the 
consumer a fee for using a credit or debit card to fund their account, 
permitting the services

[[Page 40433]]

provider to double recover would mean the consumer might potentially be 
paying for the same processing fees three times. Do commenters agree? 
Alternatively, is the credit card processing embedded in the automated 
payment fee related to providers' costs of allowing credit card and 
debit card payments in the facilities they serve separate and apart 
from any other fees providers might incur from the third-party 
financial institution for enabling such payments when third parties are 
involved in the transaction? Are the ``credit card processing fees'' 
charged by third parties, such as Western Union, Money Gram, or credit 
card companies, fees associated solely with transferring cash from a 
consumer's credit card to an incarcerated person's calling account? If 
so, are those fees passed on to the services provider, or the consumer 
requesting the cash transfer, or both? If a third-party transaction fee 
can only be passed on by the provider to the consumer when a third 
party is directly involved in the transaction with the provider (as 
opposed to indirectly when the consumer uses its credit or debit card 
to fund an account or pay a bill using an automated method), when would 
it be the case that a third-party financial transaction fee is incurred 
by the provider that could appropriately be passed on to the consumer? 
The Commission seeks comment on how the Commission should amend its 
rules to clarify when providers may pass through separate third-party 
financial transaction fees and when they may not.
    91. Alternatively, the Commission seeks comment on whether its 
rules clearly prohibit services providers from charging an automated 
payment fee and a third-party financial transaction fee for the same 
transaction in spite of some providers' apparent confusion. The Prison 
Policy Initiative argues that ``the Commission's record overwhelmingly 
indicates that carriers should not be allowed to double-dip by charging 
an automated payment fee and passing through third-party fees on the 
same transaction.'' Do commenters agree? As discussed above, if the 
credit card processing costs associated with the automated payment fee 
are different than the credit card processing costs inherent in the fee 
associated with the third-party financial transaction fee, how are 
providers double-dipping? CPC argues that there is no double-dipping 
associated with charging an automated payment fee and a third-party 
financial transaction fee for the same transaction. And GTL asserts 
that ``[t]he rationale for and purpose of Automated Payment Fees and 
Third-Party Financial Transaction Fees are therefore distinct; the 
former cannot substitute for or subsume the latter.'' Do commenters 
agree with this assertion? Why or why not? Can commenters point us to 
specific evidence of other forms of double-dipping in the record? Are 
there other costs embedded in the automated payment and third-party 
transaction fees that could lead to double recovery? If there is no 
overlap between the costs recovered in the automated payment fee and 
the third-party financial transaction fee, on what basis would the 
Commission say that providers cannot charge both for the same 
transaction provided that the charges are at or below the applicable 
caps?
    92. Similar to its inquiry above, should the Commission 
specifically prohibit providers from charging a live agent fee and a 
third-party financial transaction fee in the same transaction, if no 
third party is directly involved when the consumer provides the agent 
with credit or debit card information? The Prison Policy Initiative 
alleges that at least one provider may be charging ``an automated-
payment or live-agent fee and passing through its credit- or debit-card 
processing costs.'' They point to tariff language that appears to 
couple live agent fees with third-party transaction fees. In the 2015 
ICS Order, the Commission explained that ``interaction with a live 
operator to complete [inmate calling services] transactions may add to 
the costs of providing ICS'' recognizing that providers incur costs 
associated with use of a live operator. But it is unclear from the 
current record whether third-party costs are involved with all or even 
some such live agent transactions, or whether such costs are already 
included in the live agent fee. For example, if the provider uses its 
own live agents, do such agents ever engage in three-way calls with 
third parties, such as Western Union or MoneyGram to transfer money to 
effectuate the transaction? If so, would it be the provider or the 
consumer that would incur the third-party transaction fee imposed by 
Western Union or MoneyGram for transferring the money? Even if there 
were third parties involved, the Commission has been clear that the fee 
for use of a live agent applies ``regardless of the number of tasks 
completed in the call.'' Does this suggest that there should be no 
other fees passed through to the consumer in connection with the use of 
a live operator? Why or why not? ICSolutions characterizes third-party 
fees, automated payment fees, and live agent fees as fees related to 
funding accounts and suggests that the Commission should amend its 
rules to prevent providers from charging more than one of these types 
of fees per funding event. Do commenters support this proposal? Why or 
why not?
    93. Finally, the Commission seeks comment on how the Commission can 
ensure that third parties are involved when third-party financial 
transaction fees are charged. The Commission has explained that the 
third-party financial transaction fees necessarily must involve third 
parties. The Prison Policy Initiative suggests that certain fees 
characterized as third-party financial transaction fees may not 
actually involve third parties. In the case of GTL, for example, the 
Prison Policy Initiative explains that ``the customer makes a payment 
via GTL's website, thus making only two parties to the transaction.'' 
The Prison Policy Initiative acknowledges that ``other entities may 
participate behind the scenes (such as the customer's card issuer and 
GTL's acquiring bank), but these entities are not directly third 
parties to the transaction; they are merely agents of the payor and 
payee.'' Should the Commission amend its rules to require calling 
service providers to specify the third party involved in the 
transaction whose fees are being passed through to the consumer? Why or 
why not? Should the Commission define a third party in its rules as a 
company that is not related to the calling services provider as 
ICSolutions suggests? How should the Commission define ``not related'' 
for purposes of such a rule?
    94. The record also reveals that ``15 states now explicitly exclude 
any automated payment (or deposit) fees from being charged to end users 
because the costs of automated payments are already factored into the 
[inmate calling services] provider's direct or indirect costs of 
providing service.'' What is the basis for these states' decisions to 
exclude these types of fees? Do providers already include these costs 
in the cost of providing inmate calling services? To the extent 
providers claim that it costs more to serve smaller facilities because 
higher turnover rates result in opening proportionately more new 
accounts, does this confirm that providers consider the processing of 
automated payments (necessary to establish a new account) as a cost 
included in their general inmate calling services accounts? The 
Commission seeks comment on whether the Commission should similarly 
prohibit providers from charging automated payment fees. Should the 
Commission instead reduce such fees to account for the third-party 
charges embedded in

[[Page 40434]]

those fees? If so, what would be the appropriate cap?
    95. In the Report and Order, the Commission adopts an interim cap 
of $6.95 for fees related to single-call services and third-party 
financial transaction fees based on data provided by the Prison Policy 
Initiative and acknowledged by other public interest advocates that 
providers were circumventing the ``pass through without markup'' rule 
previously in place. NCIC has proposed that the Commission cap the 
third-party financial transaction fee associated with single-call 
services at the $3.00 cap for automated payment fees or the $5.95 cap 
for live agent fees, as applicable. And ICSolutions similarly suggests 
that the Commission cap third-party fees at the $5.95 live agent fee 
cap or the $3.00 automated fee cap. As the Commission explains in the 
Report and Order, however, the record does not contain sufficient 
evidence to adopt these proposals at this time. The Commission seeks 
comment on these proposals here. Why would it be reasonable to tie fees 
for single-call services and/or third-party transaction fees to the 
caps for automated payment or live agent fees? What is the relationship 
between these fees? Should the Commission consider adopting two 
separate caps on third-party financial transaction fees, one for money 
transfer companies like Western Union and a separate one for credit 
card companies? Given the evidence provided by the Prison Policy 
Initiative suggesting that one of the more prevalent money transmitter 
services charges more than NCIC's proposed caps, on what basis would 
the Commission adopts NCIC's lower caps? In the absence of a revenue-
sharing agreement, do these third parties legitimately charge more than 
NCIC's proposed caps, and if so, do providers--due to the volume of 
business conducted with these money transfer companies--have an ability 
to negotiate lower fees?
    96. Relatedly, the Commission remains concerned about the adverse 
effect of revenue-sharing arrangements between calling service 
providers and third-party financial institutions. In the 2020 ICS Order 
on Remand, the Commission cited evidence that inmate calling services 
providers have ``entered into revenue-sharing arrangements with third-
party processing companies such as Western Union and MoneyGram where a 
third-party processing company shares its revenues generated from 
processing transactions for an inmate calling services provider[s]' 
customers.'' While the Commission sought additional evidence that 
providers were using revenue-sharing or other arrangements to 
indirectly mark up ancillary service charge fees, the Commission 
received relatively little responsive comment. The Commission therefore 
seeks renewed comment on how revenue sharing arrangements work in the 
context of ancillary service charges, including concrete evidence of 
these arrangements. There is evidence in the record that revenue 
sharing can run from the third party to the calling services provider 
whereby the third-party provider charges the consumer a fee, which the 
third party then shares with the providers. The record also suggests 
that providers may charge the incarcerated person inflated fees and 
then split the resulting revenue with third parties. Is one scenario 
more prevalent than the other? How do commenters suggest that the 
Commission detect these types of practices? Will its adoption of a 
specific monetary cap--instead of permitting the pass-through of any 
third-party financial transaction fee--mitigate this issue, or could it 
still occur even under the adopted caps? Should the Commission adopt a 
rule disallowing the revenue-sharing arrangements with respect to 
interstate or international inmate calls or accounts altogether? If so, 
how should the Commission ensure compliance with such a rule?
    97. Certain parties point out that the Commission's present 
ancillary services charge caps are based on cost data that are over six 
years old and assert that all ancillary service charge caps should be 
immediately reduced by 10%. These commenters argue that the caps should 
also be adjusted in the future based on more current cost data. The 
Commission seeks comment on these proposals. The Commission notes that 
the Mandatory Data Collection that the Commission authorizes in the 
accompanying Report and Order will collect cost data on the permissible 
ancillary service charges. Should the Commission adjust the ancillary 
service charge caps based on the new data collection the Commission 
will receive from the upcoming Mandatory Data Collection? What factors 
should the Commission consider in evaluating that cost data for 
ancillary service charges in connection with interstate and 
international inmate calling services?
    98. The Commission asks commenters to address specific factors that 
the Commission should consider in evaluating the cost data to ensure 
the Commission addresses and accounts for anomalies that may distort 
its analysis. The Commission encourages participation, and seek input, 
from any state public utility commission or similar state regulatory 
agency colleagues having jurisdiction over inmate calling services 
based on their expertise setting appropriate ancillary service charge 
caps.
    99. Should the Commission consider revising the ancillary service 
charge caps on a standard periodic basis? If so, how frequently should 
the Commission revise those caps and what process should the Commission 
follow? Commenters should provide the reasoning and justification for 
their responses. For example, how should the Commission balance related 
benefits and burdens to all relevant stakeholders and serve the public 
interest in determining how frequently to update ancillary service 
charge caps to enable the Commission to continually maintain interstate 
and international rates and charges that are just and reasonable and 
provide fair compensation to providers? How frequently should the 
Commission require providers to file updated ancillary charges cost 
data to make this possible?
    100. The Commission also seeks comment generally on any other 
matters related to ancillary services that the Commission should 
consider in reforming its ancillary service charges rules. For example, 
record evidence suggests that certain providers fail to close accounts 
and issue refunds to families of incarcerated people when they are 
released. It appears that some state authorities, such as the Alabama 
Public Service Commission, have addressed this problem. The Commission 
are concerned that any unused funds are not refunded to the account 
holder and invite comment on this issue. Should the Commission adopt a 
rule requiring automatic refunds after a certain period of inactivity? 
If so, what timeframe would be appropriate? Should the timeframe vary 
based on the size and type of facility? If the Commission requires 
these refunds, how should such refunds be made? Is this issue 
sufficiently related to setting up an account and making automatic 
payments that the Commission can address it in its existing ancillary 
services charges rules, or should the Commission adopt a separate rule 
to address this issue? The Commission also seeks comment on whether the 
Commission should add a rule relating to account setup fees to prohibit 
charging separate fees for establishing an account. Do providers assess 
separate fees for account setup? The Commission also seeks comment on 
the issue of dropped calls as it relates to ancillary service charges. 
Should the Commission amend its rules to prevent providers from 
assessing the same ancillary

[[Page 40435]]

service charge in cases where calls are dropped after a call is 
successfully connected? For example, should providers be permitted to 
charge a fee for single-call services if a consumer makes a call that 
is dropped and then must make another call to finish the conversation? 
Why or why not? If not, how should the Commission amend its ancillary 
service charge rules to prevent this? Are there other issues regarding 
dropped calls in the ancillary services context that the Commission 
should be aware of? More broadly, are there other practices in which 
providers engage that the Commission should also consider addressing in 
the context of its ancillary services rules? If so, the Commission asks 
commenters to describe such practices in detail and discuss how best 
the Commission should address them. Finally, the Commission seeks 
comment on whether fees for single-call services are ``already covered 
under the other fees applicable to all calls'' as ICSolutions alleges. 
Do commenters agree with this assertion? If so, how are these fees 
embedded in the other permitted ancillary service charges? Should the 
Commission consider eliminating fees for single-call services as a 
permissible ancillary service charge? Why or why not and on what basis 
would the Commission do so? NCIC and ICSolutions also mistakenly assume 
that fees for single-call services are capped at either the $5.95 live 
agent fee or the $3.00 automated payment fees, but the Commission's 
rules do not establish these caps in connection with fees for single-
call services. Relatedly, should the Commission reduce the cap on fees 
for single calls as the Prison Policy Initiative asks? If so, what 
would be an appropriate cap?

D. Refining International Rate Methodology To Prevent Double Counting

    101. In the Report and Order, the Commission adopts interim rate 
caps for international inmate calling services based on a formula that 
permits a provider to charge a rate up to the sum of the provider's 
per-minute interstate rate cap for a particular correctional facility 
plus the amount that the provider must pay its underlying international 
service provider for that call on a per-minute basis. The interim rate 
caps for international calls will benefit incarcerated people by 
lowering the rates for most of their international calls, while 
allowing providers to recover their costs for those calls. Nonetheless, 
the Commission is concerned that the new interim rate caps for 
international calls may be based on an overestimation of the costs 
providers actually incur in providing international inmate calling 
services.
    102. In particular, the Commission is concerned by the Public 
Interest Parties' assertion that the interim rate caps for 
international calls that the Commission sets today may be double 
counting providers' costs for international calls because such costs 
are already included in their overall inmate calling services costs 
that the Commission uses to set interim interstate rate caps. As the 
Public Interest Parties explain, ``some [inmate calling services] 
providers reported zero international costs but positive international 
minutes and revenues [which] suggests that international costs are 
already included in their total costs, and thus accounted for in the 
interstate rates.''
    103. The Commission seeks comment on this assertion. Do the data 
reflect such double counting? Is some degree of double counting a 
natural consequence of the way providers reported their costs 
associated with international calls as part of their total costs 
associated with inmate calling services? Despite Public Interest 
Parties' concerns, the record indicates that some providers separately 
reported international calling costs in their responses. The Commission 
anticipates that in the upcoming Mandatory Data Collection, WCB and OEA 
will require calling service providers to report separately the amounts 
they pay international service providers for international calls. Will 
this eliminate the double counting of international inmate calling 
services costs, to the extent it exists? If not, how should the 
Commission address this issue if providers do not ordinarily track 
international call costs separately? What allocation method should 
providers use to reliably separate their international costs from their 
interstate costs? The Commission further asks what types of costs 
should legitimately be considered as additional costs associated with 
international calls. Do those additional costs include only the charges 
imposed by international carriers?
    104. The Commission also asks commenters to consider other ways in 
which the Commission could reform international rates on a permanent 
basis to ensure they are just and reasonable. For example, there is 
evidence in the record that in addition to varying by country/rate 
zone, international rates also vary depending on whether the call 
terminates on a mobile or fixed-line network. Should the Commission 
address this type of rate variation in setting permanent rate caps for 
international calls, and if so, how? Are there other types of 
international voice communications that could be provided to 
incarcerated people that would result in significantly reduced 
financial burdens for international calling to their family and loved 
ones abroad? Should the Commission require providers to work with 
facilities to enable alternatives to traditional types of voice 
communications that would be less expensive? Are there any other issues 
the Commission should take into account in setting permanent rate caps 
for international inmate calling services?

E. Recurring Mandatory Data Collection

    105. The Commission seeks comment on whether the Commission should 
conduct cost data collections on a more routine, periodic basis than 
the Commission has since the First and Second Mandatory Data 
Collections in 2012 and 2019. In 2020, the Commission sought comment on 
whether, in the event that it adopted a new data collection, it should 
require providers to update their responses to that collection 
periodically. The Commission invited comment on the relative benefits 
and burdens of a periodic data collection versus another one-time data 
collection. The Commission also asked how frequently it should collect 
the relevant data, inquiring whether a biennial or triennial collection 
covering multiple years would balance the benefits and burdens better 
than an annual collection.
    106. In the Report and Order, the Commission institutes a Third 
Mandatory Data Collection. GTL asserts that data filed in the Annual 
Reports are sufficient to evaluate calling service providers' rates, 
but the Commission disagrees. Instead, the Commission agrees with the 
Public Interest Parties who explain that the Annual Reports only 
include information on rates and charges and not the type of cost data 
required to establish and ensure continued cost-based rates. The 
Commission seeks comment on whether the Third Mandatory Data Collection 
should be required to be updated within a specific future timeframe to 
enable us to evaluate the reasonableness of providers' interstate and 
international rates on a regular basis. The Public Interest Parties 
assert that, to further refine rate caps in the future, the Commission 
should institute a ``routine, periodic data collection with clear, 
structured questions, commit to reviewing that data through scheduled 
ratemaking proceedings, and adjust [inmate calling services] rates 
accordingly.'' The Public Interest Parties contend that the Commission 
should first establish an annual data collection to ensure it has 
sufficient and updated

[[Page 40436]]

information to reevaluate rate caps, and then establish a triennial 
rate review process to evaluate the prior two years' cost data to 
determine whether interstate rates for inmate calling services and 
ancillary service charge caps should be lowered. According to the 
Public Interest Parties, a three-year review cycle would strike the 
appropriate balance between the need for the Commission to fulfill its 
statutory mandate and the administrative burdens to providers. Free 
Press supports conducting routine future data collections and 
implementing a biennial or triennial review process to evaluate rates 
based on those data collections. Free Press asserts that a periodic 
collection will provide the Commission with the opportunity to conduct 
trend analysis on costs, revenues, and prices charged over time, and 
that it may give providers an incentive to collect more uniform and 
consistent data over time. The Commission seeks comment on these 
proposals or alternative proposals that similarly enable us to monitor 
costs and revenue for the purpose of continuing to lower the rate caps.
    107. The Commission recognizes that the periodic collection and 
assessment of cost data could yield valuable information but are 
conscious of potential burdens on providers. If the Commission were to 
adopt a periodic collection, how could the Commission best structure 
the collection in order to maximize its benefits, while at the same 
time reducing administrative burdens on providers? Would a triennial 
review, as described by the Public Interest Parties, be the ideal 
structure? What are the relative benefits and burdens of conducting a 
triennial review versus a biennial review, or some other type of 
review?
    108. The Commission invites comment on how providers should 
maintain their records in the event the Commission requires a periodic 
collection, such as a triennial review? Should the Commission impose 
specific recordkeeping requirements on providers of inmate calling 
services? What would be the type of recordkeeping requirements 
necessary for a biennial or triennial review, as opposed to a one-time 
collection? Is there a relatively small but precisely defined set of 
investment and expense accounts that the Commission could establish 
relative to providers' inmate calling service assets and labor 
activities or categories of assets and labor activities to facilitate 
consistent data reporting among all providers? If so, what specific 
accounts should be included in the prescribed set of accounts? Securus 
considers its cost study ``to be a comprehensive view'' of its cost 
structures and encourages ``the Commission to consider similar data 
collection from other providers.'' Should the Commission use this cost 
study as a model for future mandatory data collections, especially in 
regard to the cost categories and methodologies set forth therein? Why 
or why not? Should a portion of revenues from ancillary services be 
netted out of the inmate calling service costs to the extent that costs 
are incurred for assets or labor shared among inmate calling services 
and ancillary services if the full amount of these shared costs is 
reported as inmate calling service costs? If so, how should it be 
calculated? The Commission believes its authority under sections 201 
and 220 of the Act permits us to impose certain recordkeeping 
obligations on providers for the purpose of ensuring just and 
reasonable rates. Do commenters agree? What other authority does the 
Commission have to adopt such requirements should they be necessary? 
How can the Commission ensure that providers comply with any 
recordkeeping requirements? Are there other requirements associated 
with a periodic collection, as opposed to a one-time data collection, 
that the Commission should consider?
    109. Alternatively, should the Commission require providers to 
comply with an annual or biennial certification obligation attesting to 
the fact that no substantial change in costs has occurred that would 
warrant a change in rates? Would such a certification in conjunction 
with providers' annual reporting obligation on rates provide us 
sufficient basis to avoid periodic data collection on a more routine 
basis? The Commission seeks comment on this alternative and any others 
that stakeholders may propose.

F. Revisions to the Commission's Definition of ``Jail''

    110. The Commission proposes to amend section 64.6000(m) of its 
rules to clarify the definition of ``Jail'' in several ways. These 
amendments would apply equally to the definition of ``Prison'' because 
its rules explain that ``Prisons'' include ``facilities that would 
otherwise fall under the definition of a Jail but in which the majority 
of inmates are post-conviction or are committed to confinement for 
sentences of longer than one year.'' First, the Commission proposes to 
modify the definition of ``Jail'' in section 64.6000(m) of its rules to 
include facilities operated by the Federal Bureau of Prisons (BOP) and 
Immigration and Customs Enforcement (ICE), whether directly or by 
contract with third parties. Second, the Commission proposes to add 
``juvenile detention facilities'' and ``secure mental health 
facilities'' to that definition. The Commission seeks comment on these 
proposals, which are consistent with the 2015 ICS Order and are meant 
to prevent potential confusion as to the application of its rules.
    111. In the 2015 ICS Order, the Commission explained that the rate 
caps adopted in that order were meant to apply to ``jails, prisons and 
immigration detention facilities, secure mental health facilities and 
juvenile detention facilities.'' The Commission further explained that 
the general term ``Jail'' was meant to include facilities operated by 
local, state, or federal law enforcement agencies and ``city, county or 
regional facilities that have contracted with a private company to 
manage day-to-day operations; privately-owned and operated facilities 
primarily engaged in housing city, county or regional inmates; and 
facilities used to detain individuals pursuant to a contract with ICE 
and facilities operated by ICE.'' But the codified rule only includes 
``facilities used to detain individuals pursuant to a contract'' with 
ICE, and does not explicitly include facilities operated directly by 
ICE. Similarly, while the BOP is a ``federal law enforcement agency'' 
such that BOP facilities fall within the purview of its rules, the 
codified rule does not explicitly distinguish between facilities 
operated by the BOP and those operated under a contract with the BOP. 
The Commission therefore proposes to explicitly list ICE and BOP 
facilities, whether operated directly by the relevant law enforcement 
agency or by contract, in the definition of ``Jail.'' The Commission 
finds these proposed changes to 64.6000(m) of its rules to be 
clarifying in nature given the Commission's stated intent in 2015 to 
include all facilities directly operated by law enforcement agencies 
and those operated pursuant to a contract with a third party. The 
Commission seeks comment on this analysis. The Commission also seeks 
comment on whether there are other types of correctional facilities 
that should be explicitly added to its codified definitions of ``Jail'' 
or ``Prison.''
    112. The Commission also proposes to list ``juvenile detention 
facilities'' and ``secure mental health facilities'' within the 
definition of ``Jail'' in section 64.6000(m). In the 2015 ICS Order, 
the Commission concluded that providing inmate calling services in 
these facilities was ``more akin to providing service to jail 
facilities'' and instructed that ``[t]o the extent that juvenile 
detention

[[Page 40437]]

facilities and secure mental health facilities operate outside of jail 
or prison institutions'' they would be subject to the rate caps 
applicable to jails. However, the codified definition of ``Jail'' does 
not include the phrases ``juvenile detention facilities'' or ``secure 
mental health facilities.'' As relevant to juvenile facilities, the 
National Center for Youth Law explains that it is ``unclear which rate 
cap will apply to juvenile facilities, many of which are not described 
by the proposed definitions of `jail' or `prison.''' The Commission 
therefore proposes to add these terms to the definition of ``Jail'' in 
section 64.6000(m) and seek comment on this proposal.

G. Characteristics of the Bidding Market

    113. The Commission has already determined that inmate calling 
services providers have market power at the facility level once they 
win a contract. However, some providers claim that they win contracts 
through a competitive bidding process, and thus, that the market or 
markets to supply inmate calling services are competitive. To assess 
this claim, and its relevance to permanent rate caps, the Commission 
seeks comment on the characteristics of the bidding market. The 
Commission proposes to define every contract or request for proposal as 
a market in which calling service providers participate based on its 
understanding that providers generally make contract-by-contract 
decisions about whether or not to bid on a particular request for 
proposal, and they do not bid on all open requests for proposals. The 
Commission seeks comment on these proposed bidding market boundaries or 
whether there are other boundaries the Commission should consider.
    114. The Commission also seeks comment on the extent of competition 
in these bidding markets. What share of providers' contracts are won 
through a competitive bidding process? Does this vary across providers? 
Does the number of bidders vary from request for proposal to request 
for proposal, and if so, what determines bidders' decisions to compete? 
Does the number of bidders vary depending on the type and size of 
facility? Do large providers have a competitive advantage in bidding 
for certain contracts, such as contracts for state prisons, or large or 
multiple facility contracts? Are there providers who cannot compete for 
such contracts at all? Are some providers unable to bid beyond certain 
geographies because of logistical difficulties or difficulties 
associated with meeting different governmental requirements? Are some 
providers uninterested in certain requests for proposals (e.g., those 
for the jails with the fewest people)? What are the implications of 
these answers for competition for different requests for proposals? 
Should the Commission consider prisons, larger jails, and contracts for 
multiple facilities to be in separate market segments? Are there other 
potential market segments the Commission should consider? It is common, 
in measuring market power in bidding markets, to analyze bids across 
many requests for proposals to determine the impact of the number and 
identity of bidders on contract prices. In the context of a merger, the 
U.S. Department of Justice and Federal Trade Commission recommend 
examining ``the frequency or probability with which, prior to the 
merger, one of the merging sellers had been the runner-up when the 
other won the business.'' Should the Commission collect data to enable 
such analysis?
    115. The Commission seeks to understand how correctional 
authorities select a winning bid. To what extent do correctional 
authorities evaluate inmate calling service bids based on costs (both 
to incarcerated people and to the facility), quality of service, or 
other factors? What is the relevance of site commissions? Do calling 
service providers compete on the basis of site commissions? If so, how? 
Are providers aware of site commissions offered by other providers in 
the bidding process? If not, how do they determine the level of the 
site commission to offer to ensure that they remain competitive? 
Assuming no site commission is legally mandated, can a provider win a 
bid if it offers no site commission to the facility? The Commission has 
observed differences in criteria for awarding contracts among various 
requests for proposals that the Commission has reviewed. Is this 
seeming heterogeneity in the criteria used by authorities when 
selecting a winning bid typical? If so, is this heterogeneity more 
pronounced in some jurisdictions or jail types than in others?
    116. The Commission understands that once a local correctional 
authority awards the contract to a particular provider, it is locked 
into a multi-year contract, typically with options to renew that avoid 
the need for further competitive bidding to serve the facility after 
the expiration of the initial term. Is there a typical contract length, 
and if so, does this vary across prisons and jails or by contract size? 
Are there typical timeframes for options to renew? Does exercising 
options to renew lead to contract amendments that also avoid 
competitive bidding to effectuate contractual changes? Is contract 
length ever a dimension along which provider's bids are compared, in 
addition to criteria pre-specified in the request for proposal? Do 
correctional authorities give more weight to some criteria than others, 
and if so, which ones? How easy or difficult is it to modify the terms 
of the contract or terminate it during the contract term if the 
correctional authority is dissatisfied with the provider's rates, site 
commissions, terms, or quality of service? How common is it for a 
contract to be extended by correctional authorities, and does this 
occurrence vary as between prisons or jails, or by contract size?
    117. The Commission has found that the inmate calling services 
industry is highly concentrated, and that GTL possesses the largest 
market share, controlling [REDACTED] of the market as measured by paid 
minutes. Another provider, Securus, controls [REDACTED] of the market, 
which means these two firms collectively control [REDACTED] of the 
market. The record also shows high industry concentration as measured 
by the Herfindahl-Hirschman Index (HHI). The Commission seeks comment 
on these findings. Are these shares still accurate? Does a large 
industry share, together with entry barriers and other market 
characteristics, give the two largest inmate calling services providers 
a degree of market power in bidding for certain or all requests for 
proposals?
    118. The Commission seeks comment on barriers to entering the 
inmate calling services markets, both generally and in terms of bidding 
on a particular request for proposal. What impediments do potential 
providers face when considering entering the inmate calling services 
market? The Commission also seeks comment on actual entry into the 
market in the past. How many firms have entered or exited the inmate 
calling services market in the past twenty years? What barriers does a 
provider face once it enters the market? What services, other than 
inmate calling services, must be offered, at a minimum, by a provider 
in order to successfully participate in the bidding market given record 
evidence of service bundling required by many facilities when issuing 
requests for proposals?
    119. The Commission also understands that providers frequently 
provide multiple nonregulated services at the facilities where they 
provide inmate calling services, including commissary services, access 
to email and the internet, video services, video visitation and 
calling, and access to tablets. Do correctional authorities sometimes 
or typically require that the

[[Page 40438]]

same company bundle some or all of these services? If so, are there any 
exceptions to this (i.e., do correctional authorities enter into 
separate contracts for certain services with different providers), and 
how common is this? What other services outside of telephone 
communications do providers competitively bid on at the same facility? 
Are providers more likely to win bids if they offer other services at 
the same facility? Have calling service providers used their market 
power, to the extent they have such power, in the communications 
services market to affect bidding for other services? The Commission 
asks whether the Commission should consider any additional aspects of 
the bidding market and invite parties to submit alternative evidence in 
the record.
    120. If the Commission does find that some providers possess market 
power in the bidding market, should the Commission act to make it 
easier for small providers to compete? Would doing so better ensure 
just and reasonable rates? For example, should the Commission prohibit 
dominant providers from including certain terms and conditions in their 
contracts with correctional authorities? In many instances, won 
contracts are not publicly available. Would requiring the contracts to 
be made publicly available make bidding more competitive? The 
Commission seeks comment on potential ways to even the playing field 
among large and small providers in the bidding market, and on whether 
doing so would lower interstate rates paid by incarcerated people and 
their families. The Commission also seeks comment on whether such 
regulations would result in supporting providers that are currently not 
as successful in winning contracts with correctional facilities in 
spite of continuing to bid for contracts.
    121. The Commission also seeks comment on the optimal regulatory 
regime for inmate calling services. If the Commission finds that 
certain providers possess market power in the bidding market, should 
the Commission classify those providers as dominant carriers? In the 
past, the Commission imposed rate-of-return regulation on providers 
with market power. Would this type of regulation be appropriate in the 
event that market power in the bidding market is found to exist? If 
not, what type of regulatory regime would promote regulatory certainty 
and permit us to ensure that inmate calling services rates and charges 
are just and reasonable? What other type of regulatory framework would 
be appropriate to achieve its objectives if the Commission determines 
that some or all inmate calling service providers should be considered 
dominant carriers? What are the relative costs and benefits of the 
alternative approaches? Finally, the Commission welcomes comments by 
all stakeholders on appropriate alternative frameworks and ideas that 
will promote increased transparency and just and reasonable inmate 
calling services rates and charges for incarcerated people.

IV. Procedural Matters

    122. Filing of Comments and Replies. 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. See FCC, 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(May 1, 1998). The Protective Order issued in this proceeding permits 
parties to designate certain material as confidential. Filings which 
contain confidential information should be appropriately redacted, and 
filed pursuant to the procedure described therein.
    123. Electronic Filers: Comments may be filed electronically using 
the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    124. 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.
    125. Filings can be sent 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.
    126. Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701. U.S. Postal Service first-class, Express, 
and Priority mail must be addressed to 45 L Street NE, Washington, DC 
20554.
    127. Effective March 19, 2020, and until further notification, the 
Commission no longer accepts any hand or messenger delivered filings. 
This is a temporary measure taken to help protect the health and safety 
of individuals, and to mitigate the transmission of COVID-19.
    128. Comments and reply comments must include a short and concise 
summary of the substantive arguments raised in the pleading. Comments 
and reply comments must also comply with section 1.49 and all other 
applicable sections of the Commission's rules. The Commission directs 
all interested parties to include the name of the filing party and the 
date of the filing on each page of their comments and reply comments. 
All parties are encouraged to use a table of contents, regardless of 
the length of their submission. The Commission also strongly encourages 
parties to track the organization set forth in the Fifth Further Notice 
of Proposed Rulemaking in order to facilitate its internal review 
process.
    129. People with Disabilities. The Commission asks that requests 
for accommodations be made as soon as possible in order to allow the 
agency to satisfy such requests whenever possible. Send an email to 
<a href="/cdn-cgi/l/email-protection#b1d7d2d2848185f1d7d2d29fd6dec7"><span class="__cf_email__" data-cfemail="bfd9dcdc8a8f8bffd9dcdc91d8d0c9">[email protected]</span></a> or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530.
    130. Ex Parte Presentations. 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).
    131. 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 the 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 section 1.1206(b) of the Commission's rules. 
Participants in this proceeding should familiarize themselves with the 
Commission's ex parte rules.
    132. Initial Regulatory Flexibility Act Analysis. As required by 
the RFA, the Commission has prepared an Initial

[[Page 40439]]

Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on small entities by the policies and rules proposed in 
the Fifth Further Notice of Proposed Rulemaking. The Commission 
requests written public comments on the IRFA. Comments must be 
identified as responses to the IRFA and must be filed by the deadlines 
for comments provided in the Fifth Further Notice of Proposed 
Rulemaking. The Commission will send a copy of the Fifth Further Notice 
of Proposed Rulemaking, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA). In addition, the 
Fifth Further Notice of Proposed Rulemaking and the IRFA (or summaries 
thereof) will be published in the Federal Register.
    133. Initial Paperwork Reduction Act Analysis. The Fifth Further 
Notice of Proposed Rulemaking contains proposed new information 
collection requirements. The Commission, as part of its continuing 
effort to reduce paperwork burdens, invites OMB, the general public, 
and other Federal agencies to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the 
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), the Commission seeks specific comment on how the 
Commission might further reduce the information collection burden for 
small business concerns with fewer than 25 employees.

V. Initial Regulatory Flexibility Analysis

    134. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (IRFA) of the possible significant economic impact 
on small entities by the policies and rules proposed in this Fifth 
Further Notice of Proposed Rulemaking (FNPRM). The Commission requests 
written public comments on this IRFA. Comments must be identified as 
responses to the IRFA and must be filed by the deadlines for comments 
provided on the first page of this document. The Commission will send a 
copy of the FNPRM, including this IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA). In addition, the 
FNPRM and the IRFA (or summaries thereof) will be published in the 
Federal Register.

1. Need for, and Objectives of, the Proposed Rules

    135. In this document, the Commission seeks more detailed evidence 
and comments from industry stakeholders to consider further reforms to 
inmate calling services rates within its jurisdiction, including 
permanent interstate and international rate caps. The Commission seeks 
to ensure that functionally equivalent access is provided to people who 
are deaf, hard of hearing or deafblind, or have speech disabilities. 
The TTY-based telecommunications relay service (TRS) and speech-to-
speech relay service (STS)--the only relay services for which inmate 
calling services providers currently are required to provide access 
under the Commission's rules--are insufficient to meet the range of 
needs of incarcerated people with communication disabilities using 
today's networks. The Commission seeks comment on requiring inmate 
calling services providers to make available newer forms of TRS, such 
as Captioned Telephone Service (CTS) (a non-internet-based telephone 
captioning service), and the three forms of internet-based TRS: Video 
relay service (VRS), IP Captioned Telephone Service (IP CTS), and IP 
Relay (a text-based relay service using IP). The Commission seeks 
comment on whether to modify the existing TRS rules for application to 
the provision of such services at correctional facilities. The 
Commission seeks comment on whether to expand the scope of the rule 
prohibiting charges for TRS provided at correctional facilities. 
Further, the Commission seeks comment on whether to require inmate 
calling services providers to provide access to direct video 
communication for incarcerated people with communication disabilities. 
Finally, the Commission seeks comment on whether new TRS services 
provided to incarcerated people with communication disabilities should 
be included in the existing accessibility-related reports.
    136. The Commission seeks comment on what methodology it should use 
to permanently cap provider-related rate components for interstate and 
international inmate calling services. It seeks comment on the 
provision of communications services to jails with average daily 
populations below 1,000 and on further reforms to the treatment of site 
commission payments in connection with interstate and international 
inmate calling services, including at jails with average daily 
populations below 1,000. Next, the Commission seeks comments on 
revisions to its ancillary service charge rules and refining its 
international rate methodology to prevent double counting of 
international call costs that are already included in the providers' 
overall inmate calling services cost. The Commission also seeks comment 
on the need to adopt an on-going periodic cost data collection to 
ensure interstate and international calling services rates are just and 
reasonable and on revisions to the Commission's definition of ``jail'' 
to clarify the term to include certain types of facilities. Finally, 
the Commission seeks comment on the characteristics of the bidding 
market in order for the Commission to assess some providers' claims 
that they win contracts through a competitive bidding process and thus 
the inmate calling services market is competitive.

2. Legal Basis

    137. The legal basis for any action that may be taken pursuant to 
the FNPRM is contained in sections 1, 2, 4(i)-(j), 201(b), 218, 220, 
276, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 152, 154(i)-(j), 201(b), 218, 220, 276, and 403.

3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    138. The RFA directs agencies to provide a description of, and 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rule revisions, if adopted. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small-business concern'' under the 
Small Business Act. The statutory definition of a small business 
applies ``unless an agency, after consultation with the Office of 
Advocacy of the Small Business Administration and after opportunity for 
public comment, establishes one or more definitions of such term which 
are appropriate to the activities of the agency and publishes such 
definition(s) in the Federal Register.'' A ``small-business concern'' 
is one which: (1) Is independently owned and operated; (2) is not 
dominant in its field of operation; and (3) satisfies any additional 
criteria established by the SBA.
    139. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes here, at the outset, three broad groups of

[[Page 40440]]

small entities that could be directly affected herein. First, while 
there are industry specific size standards for small businesses that 
are used in the regulatory flexibility analysis, according to data from 
the SBA's Office of Advocacy, in general a small business is an 
independent business having fewer than 500 employees. These types of 
small businesses represent 99.9% of all businesses in the United 
States, which translates to 30.7 million businesses.
    140. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. The IRS benchmark is similar to the 
population of less than 50,000 benchmark in 5 U.S.C. 601(5) that is 
used to define a small governmental jurisdiction. Therefore, the IRS 
benchmark has been used to estimate the number small organizations in 
this small entity description. The Commission notes that the IRS data 
does not provide information on whether a small exempt organization is 
independently owned and operated or dominant in its field. Nationwide, 
for tax year 2018, there were approximately 571,709 small exempt 
organizations in the U.S. reporting revenues of $50,000 or less 
according to the registration and tax data for exempt organizations 
available from the IRS.
    141. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 36,931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments--independent school 
districts with enrollment populations of less than 50,000. While the 
special purpose governments category also includes local special 
district governments, the 2017 Census of Governments data does not 
provide data aggregated based on population size for the special 
purpose governments category. Therefore, only data from independent 
school districts is included in the special purpose governments 
category. Accordingly, based on the 2017 U.S. Census of Governments 
data, the Commission estimates that at least 48,971 entities fall into 
the category of ``small governmental jurisdictions.'' This total is 
derived from the sum of the number of general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 (36,931) and the number of special purpose governments--
independent school districts with enrollment populations of less than 
50,000 (12,040), from the 2017 Census of Governments--Organizations 
Tables 5, 6, and 10.
    142. Wired Telecommunications Carriers. The U.S. Census Bureau 
defines this industry as ``establishments primarily engaged in 
operating and/or providing access to transmission facilities and 
infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired communications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies. Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. U.S. Census Bureau data for 
2012 show that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small.
    143. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable NAICS 
Code category is Wired Telecommunications Carriers. Under the 
applicable SBA size standard, such a business is small if it has 1,500 
or fewer employees. U.S. Census Bureau data for 2012 show that there 
were 3,117 firms that operated for the entire year. Of that total, 
3,083 operated with fewer than 1,000 employees. Thus under this 
category and the associated size standard, the Commission estimates 
that the majority of local exchange carriers are small entities.
    144. Incumbent Local Exchange Carriers (Incumbent LECs). Neither 
the Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The closest 
applicable NAICS Code category is Wired Telecommunications Carriers. 
Under the applicable SBA size standard, such a business is small if it 
has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate 
that 3,117 firms operated the entire year. Of this total, 3,083 
operated with fewer than 1,000 employees. Consequently, the Commission 
estimates that most providers of incumbent local exchange service are 
small businesses that may be affected by its actions. According to 
Commission data, one thousand three hundred and seven (1,307) Incumbent 
Local Exchange Carriers reported that they were incumbent local 
exchange service providers. Of this total, an estimated 1,006 have 
1,500 or fewer employees. Thus, using the SBA's size standard the 
majority of incumbent LECs can be considered small entities.
    145. The Commission has included small incumbent LECs in this 
present RFA analysis. As noted above, a ``small business'' under the 
RFA is one that, inter alia, meets the pertinent small business size 
standard (e.g., a telephone communications business having 1,500 or 
fewer employees), and ``is not dominant in its field'' of operation. 
The SBA's Office of Advocacy contents that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope.
    146. Competitive Local Exchange Carriers (Competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate NAICS Code category is Wired 
Telecommunications Carriers and under that size standard, such a 
business is small if it has 1,500 or fewer employees. U.S. Census 
Bureau data for 2012 indicate that 3,117 firms operated during that 
year. Of that number, 3,083 operated with fewer than 1,000 employees. 
Based on these data, the Commission concludes that the majority of 
Competitive LECs, CAPs, Shared-Tenant Service Providers, and Other 
Local Service Providers, are small entities. According to Commission 
data, 1,442 carriers reported that they were engaged in the provision 
of either competitive local exchange services or

[[Page 40441]]

competitive access provider services. Of these 1,442 carriers, an 
estimated 1,256 have 1,500 or fewer employees. In addition, 17 carriers 
have reported that they are Shared-Tenant Service Providers, and all 17 
are estimated to have 1,500 or fewer employees. Also, 72 carriers have 
reported that they are Other Local Service Providers. Of this total, 70 
have 1,500 or fewer employees. Consequently, based on internally 
researched FCC data, the Commission estimates that most providers of 
competitive local exchange service, competitive access providers, 
Shared-Tenant Service Providers, and Other Local Service Providers are 
small entities. The Commission has included small incumbent LECs in 
this present RFA analysis. As noted above, a ``small business'' under 
the RFA is one that, inter alia, meets the pertinent small business 
size standard (e.g., a telephone communications business having 1,500 
or fewer employees), and ``is not dominant in its field of operation.'' 
The SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. The Commission has 
therefore included small incumbent LECs in this RFA analysis, although 
the Commission emphasizes that this RFA action has no effect on 
Commission analyses and determinations in other, non-RFA contexts.
    147. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
Interexchange Carriers. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers. The applicable size standard under 
SBA rules is that such a business is small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms 
operated for the entire year. Of that number, 3,083 operated with fewer 
than 1,000 employees. According to internally developed Commission 
data, 359 companies reported that their primary telecommunications 
service activity was the provision of interexchange services. Of this 
total, an estimated 317 have 1,500 or fewer employees. Consequently, 
the Commission estimates that the majority of interexchange service 
providers are small entities.
    148. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. The 
Telecommunications Resellers industry comprises establishments engaged 
in purchasing access and network capacity from owners and operators of 
telecommunications networks and reselling wired and wireless 
telecommunications services (except satellite) to businesses and 
households. Establishments in this industry resell telecommunications; 
they do not operate transmission facilities and infrastructure. Mobile 
virtual network operators (MVNOs) are included in this industry. Under 
that size standard, such a business is small if it has 1,500 or fewer 
employees. Census data for 2012 show that 1,341 firms provided resale 
services during that year. Of that number, all operated with fewer than 
1,000 employees. Thus, under this category and the associated small 
business size standard, the majority of these resellers can be 
considered small entities.
    149. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 881 carriers have reported 
that they are engaged in the provisions of toll resale services. Of 
this total, an estimated 857 have 1,500 or fewer employees and 24 have 
more than 1,500 employees. Consequently, the Commission estimates that 
the majority of toll resellers are small entities that may be affected 
by its action.
    150. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard for small businesses specifically applicable 
to Other Toll Carriers. This category includes toll carriers that do 
not fall within the categories of interexchange carriers, operator 
service providers, prepaid calling card providers, satellite service 
carriers, or toll resellers. The closest applicable NAICS code is for 
Wired Telecommunications Carriers. The applicable size standard under 
SBA rules is that such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 284 companies reported that 
their primary telecommunications service activity was the provision of 
other toll carriage. Of this total, an estimated 279 have 1,500 or 
fewer employees and five have more than 1,500 employees. Consequently, 
the Commission estimates that most Other Toll Carriers are small 
entities that may be affected by its action.
    151. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services providers, a group that includes inmate calling 
services providers. The appropriate size standard under SBA rules is 
for the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 535 carriers have reported that they are 
engaged in the provision of payphone services. Of this total, an 
estimated 531 have 1,500 or fewer employees and four have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of payphone service providers are small entities that may be 
affected by its action.
    152. TRS Providers. TRS can be included within the broad economic 
category of All Other Telecommunications. Ten providers currently 
receive compensation from the TRS Fund for providing at least one form 
of TRS: ASL Services Holdings, LLC (GlobalVRS); Clarity Products, LLC 
(Clarity); ClearCaptions, LLC (ClearCaptions); Convo Communications, 
LLC (Convo); Hamilton Relay, Inc. (Hamilton); MachineGenius, Inc. 
(MachineGenius); MEZMO Corp. (InnoCaption); Sorenson Communications, 
Inc. (Sorenson); Sprint Corporation (Sprint); and ZP Better Together, 
LLC (ZP Better Together).
    153. All Other Telecommunications. The ``All Other 
Telecommunications'' category is comprised of establishments primarily 
engaged in providing specialized telecommunications services, such as 
satellite tracking, communications telemetry, and radar station 
operation. This industry also includes establishments primarily engaged 
in providing satellite terminal stations and associated facilities 
connected with one or more terrestrial systems and capable of 
transmitting telecommunications to, and receiving telecommunications 
from, satellite systems. Establishments providing internet services or 
voice over internet protocol (VoIP) services via client-supplied 
telecommunications connections are also included in this industry. The 
SBA has developed a small business size standard for All Other 
Telecommunications, which consists of all such firms with annual 
receipts of $35 million or less. For this category, U.S. Census Bureau 
data for 2012 show that there were 1,442 firms that operated for the 
entire year. Of those firms, a total of 1,400 had annual receipts less 
than $25 million and 15 firms had annual receipts of $25 million to 
$49,999,999. Thus, the Commission estimates that the majority of ``All 
Other Telecommunications'' firms potentially affected by its action can 
be considered small. TRS can be included within the

[[Page 40442]]

broad economic census category of All Other Telecommunications. Under 
this category and the associated small business size standard, a 
majority of the ten TRS providers can be considered small.

4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities

    154. Compliance with Caps on Permanent Per-Minute Rate, and 
Ancillary Service Charges. In the FNPRM, the Commission seeks comments 
on further reform of inmate calling services, including permanent rate 
caps on interstate and international telephone services and on revising 
ancillary service charges rules. To the extent that permanent rate caps 
are lower than the interim interstate and international rate caps or 
they apply to all types of facilities (including jails with average 
daily populations below 1,000), providers (including any smaller 
entities) must comply with the new rate caps. Likewise, providers of 
all sizes must comply with any new caps or limits on permissible 
ancillary service charges.
    155. Compliance with Requirements to Provide Access to Additional 
Telecommunications Relay Services. In the FNPRM, the Commission seeks 
comment on requiring inmate calling services providers to provide 
access to several additional TRS and direct video communications 
services, and whether such services should be provided at no charge. If 
such rules are adopted, they would apply to inmate calling service 
providers of all sizes.
    156. Recordkeeping, Reporting, and Certification. The FNPRM seeks 
comments on adopting an on-going periodic cost data collection to 
ensure calling services rates are just and reasonable. It also seeks 
comments on revising the Commission's definition of ``jail'' to include 
certain types of facilities. To the extent the Commission imposes a new 
periodic cost data collection and clarifies the term ``jail'' to 
include certain types of facilities, providers of all sizes must 
maintain and report their cost data in accordance with the Commission's 
rules. Similarly, if the Commission imposes expanded data collection or 
other new rules specific to services provided to incarcerated people 
with communication disabilities, the data collection and other rules 
will be applicable to inmate calling services providers of all sizes. 
However, some providers may opt to not make the data filings based on 
the ``safe harbor'' applicable to entities, basically, that offer more 
than the mandatory TRS services or that have had no complaints, 
provided that the safe harbor is expanded and not eliminated entirely.

5. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities and Significant Alternatives Considered

    157. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rules for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities. The Commission will consider all of these factors 
when the Commission receives substantive comment from the public and 
potentially affected entities.
    158. The Commission seeks comment on differences in costs between 
prisons, larger jails, and jails with average daily populations below 
1,000 to account for differences in costs incurred by providers 
servicing these different facility types and sizes. To that end, the 
Commission seeks comment on provisioning of inmate calling services to 
small jails and different correctional facility costs involving 
different facility sizes. The Commission also seeks comment on 
employing separate zones of reasonableness in establishing permanent 
rate caps for prisons, larger jails, and jails with average daily 
populations below 1,000 to ensure that even small providers serving 
jails, which may be smaller, higher-cost facilities, and larger 
prisons, which often benefit from economies of scale, can recover their 
legitimate inmate calling services-related costs.
    159. The Commission also seeks comment on whether it should revise 
its ancillary service charge caps on a standard periodic basis and if 
so, how frequently the Commission should do so while balancing related 
benefits and burdens to all relevant stakeholders and serve the public 
interest and ensuring that the interstate and international rates are 
just and reasonable and provide fair compensation to providers.
    160. The Commission asks whether its proposed periodic data 
collection would impose unreasonable burdens and costs. The Commission 
also seeks comment on how to structure the data collection in order to 
maximize its benefits, while at the same time reducing the 
administrative burdens on providers by asking, for example, how 
frequently the Commission should require the cost data collection to 
occur and whether the Commission should allow a certification of no 
substantial change in lieu of a full data collection to alleviate 
burdens on providers.
    161. Given the Commission's long-standing finding that every 
provider has a monopoly in the facilities it serves, the Commission 
seeks comment on whether calling services providers have market power 
in bidding for calling services contracts. The Commission also asks for 
comment on what kind of regulation would be appropriate in the event 
that market power in the bidding market is found to exist.
    162. Regarding the provision of functionally equivalent access to 
people who are deaf, hard of hearing or deafblind, or have speech 
disabilities, the Commission does not expect that the implementation of 
new forms of TRS or direct video communication would have much impact 
on small providers of inmate calling services. The TRS itself is 
provided by other entities. Small inmate calling services providers 
would need to provide access to that TRS, which may require special 
equipment (such as videophones) and appropriate billing and security 
features. The data obtained from providing these additional services 
may be additional data that would be required for annual accessibility-
related reports. The Commission seeks comment on the impact of expanded 
reporting requirements on small entities, including the modification or 
elimination of the safe harbor for entities that have had no TRS-
related complaints.
    163. The Commission will consider the economic impact on small 
entities, as identified in comments filed in response to the FNPRM and 
this IRFA, in reaching its final conclusions and promulgating rules in 
this proceeding.

6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    164. None.

VI. Ordering Clauses

    165. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 2, 4(i)-(j), 201(b), 218, 220, 276, and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-
(j), 201(b), 218, 220, 276, 403, and 617, this Fifth Further Notice of 
Proposed Rulemaking is adopted.
    166. It is further ordered that, pursuant to applicable procedures 
set forth in sections 1.415 and 1.419 of the

[[Page 40443]]

Commission's Rules, 47 CFR 1.415, 1.419, interested parties may file 
comments on this Fifth Further Notice of Proposed Rulemaking on or 
before 30 days after publication of a summary of this Fifth Further 
Notice of Proposed Rulemaking in the Federal Register and reply 
comments on or before 60 days after publication of a summary of this 
Fifth Further Notice of Proposed Rulemaking in the Federal Register.
    167. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Fifth Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis and the Supplemental Final 
Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Communications common carriers, Individuals with disabilities, 
Prisons, Reporting and recordkeeping requirements, Telecommunications, 
Telephone, Waivers.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

    For the reasons set forth above, the Federal Communications 
Commission proposes to amend Part 64, subpart FF of Title 47 of the 
Code of Federal Regulations as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 is revised to read as follows:

    Authority:  47 U.S.C. 151, 152, 154, 201, 202, 217, 218, 220, 
222, 225, 226, 227, 227b, 228, 251(a), 251(e), 254(k), 255, 262, 
276, 403(b)(2)(B), (c), 616, 620, 716, 1401-1473, unless otherwise 
noted; Pub. L. 115-141, Div. P, sec. 503, 132 Stat. 348, 1091.

0
2. Amend Sec.  64.6000 by revising paragraph (m)(3) and adding new 
paragraphs (y) through (aa) to read as follows:


Sec.  64.6000  Definitions.

* * * * *
    (m) * * *
    (3) Post-conviction and awaiting transfer to another facility. The 
term also includes city, county, or regional facilities that have 
contracted with a private company to manage day-to-day operations; 
privately-owned and operated facilities primarily engaged in housing 
city, county or regional Inmates; facilities used to detain individuals 
operated directly by the Federal Bureau of Prisons or U.S. Immigration 
and Customs Enforcement, or pursuant to a contract with those agencies; 
juvenile detention centers; and secure mental health facilities;
* * * * *
    (y) Incarcerated person with a communication disability means an 
incarcerated individual who is deaf, hard of hearing, or deafblind, or 
has a speech disability.
    (z) Telecommunications relay services (TRS) and other TRS-related 
terms used in this subpart are defined in 47 CFR 64.601.
    (aa) TRS Fund means the Telecommunications Relay Services Fund 
described in 47 CFR 64.604(c)(5)(iii).
0
3. Amend Sec.  64.6040 by revising the section heading and paragraph 
(b) and adding paragraphs (c) through (d) to read as follows:


Sec.  64.6040  Communications Access for Incarcerated People with 
Communication Disabilities.

* * * * *
    (b) No Provider shall levy or collect any charge or fee on or from 
any party to a TRS call to or from an incarcerated person, including 
any charge for the use of a device or transmission service when used to 
access TRS from a correctional facility.
    (c) A Provider shall provide access for incarcerated people with 
communication disabilities to any form of TRS that is eligible for TRS 
Fund support.
    (d) A Provider shall provide access to direct video service for 
incarcerated people eligible to access video relay service (VRS).
0
4. Amend Sec.  64.6060 by revising paragraphs (a)(5) and (6) to read as 
follows:


Sec.  64.6060  Annual reporting and certification requirement.

    (a) * * *
    (5) The number of calls provided per facility, and the number of 
dropped calls per facility, during the reporting period in each of the 
following categories:
    (i) TTY-to-TTY Inmate Calling Services calls;
    (ii) Direct video calls placed or received by ASL users;
    (iii) TRS calls, broken down by each form of TRS that can be 
accessed from the facility; and
    (6) The number of complaints that the reporting Provider received 
related to dropped calls and poor call quality, respectively, in each 
of the categories set forth in paragraph (a)(5) of this section.
* * * * *

[FR Doc. 2021-14728 Filed 7-27-21; 8:45 am]
BILLING CODE 6712-01-P


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