Written by Cyrus Heravi

A recent Federal Communications Commission (FCC) ruling 13-113 places a 21 cent per minute limit on interstate prepaid calls and a 25 cent per minute on interstate collect calls.

FCC Rule 13-113 Background

Like most industries today, the inmate communications industry is experiencing a shift in business as usual. The days of exorbitantly high calling rates and rejected calls to friends and family who cannot afford a simple phone conversation­­— these days are coming to an end. While we at Legacy believe that affordable rates for friends and family is essential to inmate rehabilitation and a healthier community, the new FCC ruling does present new challenges for the corrections industry and the vendors who provide secure communication services.

Effective February of this year, inmates and their friends and family will experience cheaper calling rates when placing interstate calls due to the newly instituted Federal Communications Commission (FCC) ruling that places a per minute rate cap on calls between states. The ruling is aimed at turning the recent tide of dominant inmate communications companies charging high fees to friends and family trying to stay connected. But the new ruling is not without its complexities.

Legacy Communications has offered clients lower calling rates than its competitors since entering into the inmate communications industry over a decade ago. Our company was previously a national payphone provider and long distance carrier, but we transitioned to inmate communications with the belief that our reliable call network and solid infrastructure could provide detention facilities with a great product. We’ve built our company on the idea that lower calling rates translate into a higher volume of phone calls; and more calls means an inmate population that feels connected to people and community. Not all companies currently competing for business in the inmate communications market employ the same approach to lower calling rates, which is the main reason for the FCC’s new action.

The push for lower calling rates has needed over a decade to gain traction. The current FCC ruling has its roots back in 2003 when Ms. Martha Wright, a grandmother from Washington D.C., petitioned the FCC for more affordable long distance rates for inmates placing calls to friends and family. At the time, inmate communications companies such as Securus and GTL were leading the industry with skyrocketing calling rates and fees. When companies like Legacy began competing for customers, we offered lower calling rates and a reliable infrastructure to connect calls. Since then the industry has undergone a gradual self-regulation, trending toward more affordable rates, but nothing as dramatic the decrease that the FCC has now put into effect.

Self-Regulation vs. Government Intervention

The current FCC ruling does put detention facilities, inmate communications providers and even inmates in a difficult position. The expense of providing services differs from facility to facility, and inmate communication providers supply installation, equipment and infrastructure upfront, receiving compensation solely from a small percentage of call revenues. Contracts with facilities usually range between 2-5 years, with detention facilities free to choose another provider at the end of the contract. As unpredictable as this system can potentially be, it is nevertheless effective in generating competition among inmate communication vendors. Because of this competition, inmate vendors were and still are in the process of lowering rates due to normal market forces.

Call storage, voice biometrics, infrastructure security, equipment, staff—the challenges in setting up a telecommunications network for detained individuals at a secure location are not the same as the home phone service you enjoy every day. These things cost considerable amounts of money and time in development. Legacy’s philosophy in regard to rate structures for our customers is based on meeting the needs of all involved—the facility, inmates and friends and family—while having the resources to research and develop new solutions for our clients. We understand the spirit of the new FCC ruling, and we do believe that there are companies in the industry that take advantage of friends and family by charging exorbitantly high rates and fees, but we also believe that the current inmate communications market was and is on its way toward self-regulation.

This said, let’s explore some of the new challenges and potential benefits the ruling presents:

Correction Facility Impact

Jail administrators, already faced with the difficult task of safely housing a growing amount of detainees within a strict budget, will now experience new challenges because of the ruling. Finding a way to fight inmate recidivism while keeping jails efficient and effective is an ongoing task for jail administrators in every state, and with municipalities struggling to find funding, this task will become more complex.

For instance, Inmate Welfare Funds will experience a new difficulty finding the funds for staffing and inmate related services, as these services are largely funded by commissions from inmate phone calls and commissary sales. Inmate Welfare Funds provide for such things as onsite staff, feeding inmates, clothing, rehabilitation programs and operations.

The calling rates that are in effect at each facility are largely determined by county administrators based on proposals from a spectrum of vendors competing for their business. The chosen provider compensates the facility with a decided upon commission percentage of each call placed from the detention facility. With mandated lower call rates and the elimination of commissions on interstate calls there are, in turn, lower commissions. As a result of the recent FCC ruling it is possible that facility staff will be reduced and cuts made to security and inmate programs.

Constituent Impact

Communities might be asked to pick up the tab for cuts made to detention facilities, meaning higher taxes. So that safety and welfare are not compromised, resources for funds will have to be reallocated, and new revenue streams created.

Positives and Negatives

There is no doubt that the new FCC ruling will have many effects. For friends and family of detainees the new ruling means an ease of communication across states, but it could mean compromised onsite infrastructure and higher taxes to pick up the tab. At the facility level, Inmate Welfare Funds will undergo extensive audits to better understand if and how funds can be better allocated.

At the inmate communications provider level, the cost effectiveness of value added services and commission offerings will have to be revised and restructured, with potentially negative consequences. Again, inmate communications companies do not charge facilities for installation, equipment or ongoing services, and receive funding based solely on call revenues. Providing state-of-the-art security services for facilities to monitor inmates and stop crimes becomes more challenging with a substantial decrease in revenue.

Looking Forward

It is important that friends and family of detainees are able to stay connected at affordable prices. We look forward to working with our clients nationwide in meeting these new challenges in ways that better serve the public, all while providing the same reliable service.

What do you think? Do detention facilities have to sacrifice efficiency and effectiveness because of the new FCC ruling, or are there other options?

Let us know your thoughts by leaving a comment below, or dropping us a line on Facebook or Google+.

LINKS:

Here is an article from San Jose Inside that details the new FCC ruling:

San Jose Inside

And here is the official FCC ruling in its entirety:

FCC Ruling