
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.”