Written By: Curtis A Brown and Allyson Walker

AP Photo/Susan Walsh

Legacy Inmate Communications, a leading provider of inmate communication services to several hundred correctional facilities throughout the United States, has issued its response to last week’s decision by the Federal Communications Commission (FCC) to further limit the cost of phone calls from jails and prisons. The new law will affect all types of inmate calls. 

Legacy Believes there are Serious Legal Questions Regarding the FCC’s Jurisdiction to Regulate In-State Inmate Call Rates 

Legacy’s President and Chief Executive Officer Curtis Brown stated, “Historically, the FCC has not attempted to regulate in-state calling. Last week’s vote marks the first time that the FCC has deemed it under its authority to pass such regulation. Legacy feels that the FCC has clearly overstepped its boundaries and that intrastate calling is not and has never been under the FCC’s jurisdiction.”

Seemingly in concert with Legacy’s opinion, FCC Commissioners Ajit Pai and Michael O'Rielly dissented the ruling, saying they believed the FCC didn't have the authority to take such action.

Mr. Brown explained, “Intrastate calling has historically been regulated by each individual state. By passing intrastate regulation, the FCC has chosen to overrule fifty state-run public service and utility commissions and thousands of city and county governments throughout the nation. The FCC seems to believe that the number of inmates a correctional facility houses directly determines the cost to provide service. That is so fundamentally incorrect that it is hard to believe any real research was done prior to enacting the new law. The bottom line is that three individuals, in a 3-2 vote, decided that they knew better than all of the cities, counties, and state regulatory agencies who have actually been appointed to decide what is fair and reasonable for their in-state inmate calling service. Legacy’s clients are government-run institutions. For these reasons, Legacy is looking at all legal options available to it and its clients to appeal the FCC’s ruling.”

“The FCC is using a ‘for the greater good’ clause to justify their power grab,” continued Mr. Brown. “Ultimately I do not think that argument can survive a legal challenge. The fact that there are several government institutions already in place in each state to ensure fairness in telecommunications practices begs the question of whether the FCC made their decision simply because they have a differing view and wish to take over control. That is not for the greater good of the public; it is for the greater good of the FCC.”

Legacy’s View on the Industry’s Response to the FCC Ruling

James Lowery, Director of Business Development at Legacy, remarked, “There is a reason the FCC has felt the need to step in. We have observed that the industry is largely dominated by just two companies—Global Tel*Link (GTL) and Securus Technologies.

“The record on file with the FCC is replete with information that demonstrates how these two companies have not been good stewards of the industry. Sadly, their strategic attempt to control the market by influencing the Request for Proposals (RFP) process at the city, county, and state levels in an effort to limit competition has seen considerable success.”

Legacy’s CEO Mr. Brown added, “However, the FCC mandating rate caps is not going to fix this monopolistic approach. In fact, it could make matters worse. The proper way for the federal government to address the issue is to help ensure a true and real competitive process at the bidding level. Competition is the market correction needed. This FCC rule could be a knockout blow to small to medium size businesses that have been trying to get footing in a market so dominated by two or three corporations.”

Legacy went on to criticize recent requests from GTL and Securus to add further regulation on the industry while blaming their own customers for their seemingly unfair call pricing. GTL’s CEO Brian Oliver reportedly stated that “local counties, states and sheriffs are ultimately to blame for the high phone rates charged to inmates and family.”

Since the FCC’s ruling, several inmate phone service providers including GTL, Securus, and Telmate have joined together to push for the FCC to regulate even further into the realm of commission payments. Legacy agrees with the FCC’s own assessment is that it lacks the authority to do so.

In direct disagreement with those at the helm of Securus and GTL, Legacy CEO Curtis Brown’s stance is that “the FCC has no authority to regulate what an individual company does with the revenue it achieves, including the choice to share that revenue with its clients at whatever percentage it deems appropriate. If the FCC believes that it has determined a rate cap that is fair and reasonable, it should not matter if a company like Legacy decides to share some of the revenue generated with its correctional facility clients to recoup their costs for providing telephone service to their inmates, as long as the rates being charged comply with the rate cap that was set.

“Our competition’s sole motive in banding together to push for further regulation of commission payments is to maintain its massive control of the market. This will only lead to further industry issues at both the client and corporate level.”

Mr. Brown concluded, “The FCC has decided that they will not only set rate caps for the entire country, but also that the thousands of city, county, and state correctional utilities affected will have just three to six months to reconfigure their budgets to accommodate the new rule. If it weren’t a reality, it would almost be comical.”

“The financial impact of the law is considerable for many city and county governments,” said Mr. Brown. “We would like to take the opportunity now to reassure our current and future clients that we have an action plan in place to ensure uninterrupted service throughout the process. As a true telephone service provider, we are well positioned no matter the outcome of the FCC rule.”