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PLN mentioned in article about FCC action on prison phone rates

Wall Street Journal, Nov. 20, 2014.

Nov 20, 2014

FCC Lays Groundwork for More Curbs on Prisoner Call Rates

Regulators are considering banning payments made by telecommunications companies to states for the exclusive rights to provide call services in their prisons and jails, the latest effort by the Federal Communications Commission to rein in rates for inmates’ telephone calls.

So-called site commissions have continued to increase since the FCC imposed rate caps last year on out-of-state calls made by inmates, in the agency’s first major curb on the $1.2 billion industry.

According to a study by Prison Legal News, a prisoner-advocacy group, states receive on average 45% of revenue from prisoners’ calls. Data collected by the FCC from 14 service providers revealed more than $460 million in such payments in 2013.

“The record is clear that site commissions are the primary reason [inmate calling services] rates are unjust and unreasonable,” the FCC said in a proposal slated to be published in Friday’s Federal Register.

In August 2013, the FCC voted 2-1 to cap interstate charges for prepaid calls at 21 cents per minute and collect calls at 25 cents per minute.

The agency said in its latest proposal that it is also weighing rate caps on local calls and eliminating connection fees and other charges, such as those incurred by inmates when they open accounts used to pay for their calls. One interest group has estimated that such fees account for 38% of all payments to the service providers.

Some states, including Missouri, New York and New Mexico have eliminated the commission payments, driving down call rates “significantly,” the FCC said. Other states have recently imposed rate caps of their own, including Alabama, Minnesota and New Jersey.

Three of the largest service providers, Global Tel*Link, Securus Technologies Inc. and Telmate, submitted a proposal in September that supported “reductions in site commission payments,” and the adoption of rate caps of 20 cents per minute for debit and prepaid interstate and intrastate calls, and 24 cents per minute for all interstate and intrastate collect calls.

Prisoners’ advocates have asked the commission to impose a flat all-distance rate of 7 cents per minute.

Last year’s move to impose rate caps has impacted the volume and rates of calls. One provider told the agency that its rates declined 39% after the caps and its call volume increased 20% to 30%. Praeses, another provider, reported that its call volume increased nearly 70%, the FCC said.

The FCC proposal is open for comment for the next 45 days.