Solutions 2020 Call to Action Plan ) ) ) Public
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Before The FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re: ) ) Public Notice #342689 #Solutions 2020 Call to Action Plan ) COMMENTS ON DRAFT #SOLUTIONS2020 ACTION PLAN The Wright Petitioners,1 Prison Policy Initiative, New Jersey Advocates for Immigrant Detainees, and United Church of Christ, OC Inc. (collectively, the "ICS Advocates"), hereby respond to the above-referenced Public Notice and submit these Comments on the Draft #Solutions2020 Action Plan released on December 19, 2016 (the "Action Plan"). While the Public Notice sought comment on a number of issues discussed in the Action Plan, these comments are limited to those raised therein regarding the Comprehensive Reform of Inmate Calling Services ("ICS"). In particular, the ICS Advocates have long-supported the Action Plan's call for the development of "real competition" and "reasonable rates in ICS and video visitation services," as well as the abolishment of "kickbacks to correctional facilities."2 Moreover, the ICS Advocates applaud the Action Plan's recognition that any rule changes adopted with regard to contraband cell phones should be mindful of the imposition of additional costs on inmates and their families. 1 The Wright Petitioners are: Dorothy Wade, Annette Wade, Ethel Peoples, Laurie Nelson, Winston Bliss, Sheila Taylor, Katharine Goray, Ulandis Forte, Charles Wade, Earl Peoples, Darrell Nelson, Melvin Taylor, Jackie Lucas, Peter Bliss, David Hernandez, Lisa Hernandez, Vendella F. Oura, along with The D.C. Prisoners’ Legal Services Project, and Citizens United for Rehabilitation of Errants. Martha Wright, the grandmother of Ulandis Forte, passed away on January 18, 2015. 2 See Action Plan, pg. 2. 1 87383168.1 As set forth below, the ICS Advocates are supplying information regarding the current state of the ICS industry with respect to the rates charged by ICS providers. This information was gathered by undersigned counsel and Prison Policy Initiative staff in late 2016 from publically-available rate information supplied by the ICS providers. The ICS Advocates are also providing additional information regarding efforts to confront the serious issue of contraband cellphones. Specifically, included in these comments are studies discussing the connection between the recent efforts to reduce ICS phone rates and the reduction in confiscations of contraband cellphones, as well as case studies of past implementations of costly Managed Access Systems ("MAS") which raise serious doubts whether the cost of such systems (which is passed on to inmates and their families and/or taxpayers in general) are sufficiently outweighed by the benefits these systems provide. I. BACKGROUND The Wright Petitioners have been actively seeking ICS reform before the Federal Communications Commission since 2002. While their interest originated in a desire to terminate exclusive contracts between private correctional authorities and ICS providers,3 when the Commission expressed its reluctance to intercede, the Wright Petitioners sought comprehensive reform for ICS rates in 2007.4 Since the submission of the Alternative Proposal, the ICS industry has undergone tremendous changes. 3 See Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, Petition of Martha Wright et al. for Rulemaking or, in the Alternative, Petition to Address Referral Issues in Pending Rulemaking, CC Docket No. 96-128 (filed Nov. 3, 2003) ("Wright Petition"). 4 See Implementation of the Pay Telephone Reclassification and Compensation Provisions of the Telecommunications Act of 1996, Petitioners’ Alternative Rulemaking Proposal, CC Docket No. 96- 128 (filed Mar. 1, 2007) ("Alternative Petition"). 2 Gone are the dominant incumbent local exchange carriers. With the exception of CenturyLink, no incumbent LEC provides ICS to the public. Now, the marketplace is dominated by a small number of companies, each vying to becoming a "one-stop shop" for correctional authorities. These companies route all communications (i.e., phone, video, email) to their centralized call centers, whereby the security measures requested by correctional authorities are imposed, and then are passed onto the recipients. As a result, even if a communication is local in nature, the ICS provider routes the communication to its centralized location (in most cases, out of state) before delivering it across the street. As the ICS Advocates conclusively demonstrated in WC Docket 12-375, this consolidation among the ICS providers, along with rapid technological changes, have led to a steep decline in the cost to provide ICS to the public. The Action Plan highlights two issues that have yet to be resolved with finality – establishing reasonable rates and charges for ICS communications (phone and video visitation) and introducing competition into the ICS marketplace. Also addressed are the "kickbacks" that ICS providers voluntarily agree to pay to correctional authorities in order to secure monopoly control over all inmate communications at a particular correctional facility, including visitations involving the families of inmates. As discussed below, because certain ICS providers have obtained a court-ordered stay of the rules that would have capped intrastate ICS rates, several ICS providers are charging substantially higher intrastate ICS rates than what they charge for interstate ICS rates.5 These rates were adjusted by ICS providers after the FCC's October 2015 Second Report and Order in WC Docket 12-375 so to ensure that the ICS provider and correctional 5 See Securus Technologies Inc. v. FCC, No. 16-1321 (D.C. Cir. Nov. 2, 2016). 3 facility "remain whole."6 The result is that some ICS providers charge $10 - $15 more to make an ICS call across the street than they charge for a call between Alaska and Florida. Finally, with respect to the serious security issues arising from the use of contraband cell phones in correctional facilities, the Wright Petitioners have previously expressed a concern regarding the possibility that the cost of high-priced surveillance systems may be passed onto inmates and their families through higher ICS rates and fees. The Wright Petitioners have also urged the Commission to adopt policies to protect non- offending inmates and their families from such costs, especially in light of several less- costly options that would reduce the possibility of introducing contraband cell phones into the correctional facilities. II. DISCUSSION A. Ensuring Reasonable Rates and Fees For All ICS Products. Not surprisingly, the ICS Advocates strongly support the Action Plan's goal of encouraging reasonable rates in ICS phone and video visitation services. The Alternative Proposal submitted in 2007 provided extensive evidence that the cost of providing ICS phone service was no more than 15 cents per minute, even for the smallest of facilities. To ensure that ICS providers would receive just and reasonable compensation, the Alternative Proposal urged the Commission to establish benchmark rates at 21 cents for prepaid and debit interstate ICS phone calls, and 25 cents for interstate collect ICS phone calls. The 2008 Wood Study confirmed that determination. 6 See Opposition to GTL’s Petition for Waiver, dated June 17, 2016, at Appendix B, Appendix C. See also Wright Petitioners Ex Parte Presentation, dated July 29, 2016, at Exhibit B. 4 Subsequent evidence, including ICS contracts that promised site commissions above 50% and ICS rates less than 10 cents conclusively demonstrated that the cost of actually providing ICS to consumers was substantially below those set forth in the Alternative Proposal. As such, the Wright Petitioners urged the Commission in 2013 to establish ICS rates at 7 cents per minute, with no ancillary fees. The 2013 Order established safe-harbor and benchmark ICS rates,7 and the 2015 Order eliminated the safe-harbor rate, and established a tiered rate plan depending on the size of the correctional facility.8 Subsequently, the 2016 Order on Reconsideration raised the ICS rate caps adopted in 2015 Order to account for the argument made by ICS providers and correctional authorities that it was more costly to serve smaller correctional facilities.9 Despite the adoption of ICS rate caps that were well above the demonstrated cost of providing ICS service, both the ICS providers and several correctional authorities appealed the 2015 Order and the 2016 Order on Reconsideration, and they remain pending at this time. Moreover, even though the Commission upwardly adjusted the ICS rate caps in the 2016 Order on Reconsideration, the ICS providers and correctional authorities appealed that decision, and obtained a stay. The most obvious result of the pending appeals of the Commission's efforts to implement comprehensive ICS rate cap reform is that there is now a substantial disparity between the rates that ICS providers are charging for intrastate calls as compared to interstate calls. 7 See Rates for Interstate Inmate Calling Services, Report and Order and Further Notice of Proposed Rulemaking, 28 FCC Rcd 14,107 (2013)("2013 ICS Order"). 8 See Rates for Interstate Inmate Calling Services, Second Report and Order and Third Further Notice of Proposed Rulemaking, 30 FCC Rcd 12,763 (2015) ("2015 ICS Order"). 9 See Rates for Interstate Inmate Calling Services, Order on Reconsideration, 31 FCC Rcd 9,300 (2016) ("2016 Order on Reconsideration"). 5 Attached as Exhibit A is a table consisting of intrastate rates that were being charged by the major ICS providers in