DC Court Rules FCC Did Not Have Authority to Cap Intrastate Phone Rates

In a disheartening two to one ruling, the DC Circuit Court of Appeals ruled yesterday in the case of Global Tel*Link vs. the FCC, that the FCC did not have the authority to set rates caps for intrastate phone rates in its 2015 Order. As a consequence, Inmate Calling Service (ICS) providers can continue to charge exorbitant rates for families and incarcerated individuals who can least afford it. The earlier FCC interstate rate caps of 21 cents for debit or pre-paid and 25 cents for collect calls remain in effect. Read the full decision here. The New York Times coverage is here.

FCC Commissioner Clyburn said in a statement:

Today’s D.C. Circuit decision is deeply disappointing, not just for me and the many advocates who have fought for more than a decade to bring about much needed reform in the inmate calling services regime … it is a sad day for the more than 2.7 million children in this country with at least one incarcerated parent. But the families who have experienced the pain, anguish and financial burden of trying to communicate with a loved one in jail or prison, are still counting on us, so we will press on.

I remain committed to doing everything I can from working with my colleagues at the Commission, to supporting the efforts of Congress and those in the states to bring relief to millions who continue to suffer from the greatest form of regulatory injustice I have seen in my 18 years as a regulator in the communications space.

Lee Petro, attorney for the Wright Petitioners, who petitioned the FCC nearly two decades ago, said:

Needless to say, we are profoundly disappointed the majority’s reasoning with respect to the FCC’s jurisdiction over intrastate rates. Judge Pillard’s dissent correctly focused on past court decisions [one of which Judge Edwards joined] which acknowledged the FCC’s ‘unambiguous’ authority to regulate intrastate rates. Judge Pillard also correctly focused on the necessity of the FCC to reject efforts by ICS providers to pass through to the families of inmates the significant kickback payments paid to state and local governments. These payments are voluntarily provided so that ICS providers obtain monopoly control of communications services at the correctional facility, and both the providers and correctional authorities have rejected all efforts to introduce competition at the facility-level. In the end, millions of wives, children and grandparents will lose, while privately-owned ICS providers and their correctional authority partners are permitted to continue “earn” unjust, unreasonable and unfair monopoly profits.

We share in their disappointment, but note New Jersey’s ban on commissions, 11 cent rate cap for domestic calls and 25 cent rate cap for international calls remain in place in New Jersey, even as they are challenged in Mercer Superior Court by another provider, Securus Technologies.

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