[Federal Register Volume 88, Number 67 (Friday, April 7, 2023)]
[Proposed Rules]
[Pages 20804-20822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-07068]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 64
[WC Docket Nos. 12-375, 23-62; FCC 23-19; FR ID 134047]
Incarcerated People's Communication Services; Implementation of
the Martha Wright-Reed Act; Rates for Interstate Inmate Calling
Services
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) seeks comment from the public on the scope and
implementation of the Martha Wright-Reed Just and Reasonable
Communications Act of 2022 (Martha Wright-Reed Act or the Act). Through
the Martha Wright-Reed Act, Congress expanded the Commission's
jurisdiction over incarcerated people's communications services and
expressly directs that the Commission adopt just and reasonable rates
and charges for incarcerated people's audio and video communications
services in correctional institutions. Specifically, the Commission
seeks comment on how to interpret the Act's language to effectively
implement the statute consistent with Congress's intent. The Commission
seeks comment on how Congress's amendments to sections 2(b), 3(1), and
276 of the Communications Act of 1934 (Communications Act) affect the
Commission's regulatory authority over incarcerated people's
communications services and how to draft regulations to implement such
authority. The Commission also seeks comment on how the Martha Wright-
Reed Act affects its ability to ensure that incarcerated people's
communications services and associated equipment are accessible to and
usable by incarcerated people with disabilities.
DATES: Comments are due on or before May 8, 2023; and reply comments
are due on or before June 6, 2023.
ADDRESSES: You may submit comments, identified by WC Docket Nos. 12-375
and 23-62, by either of the following methods:
Electronic Filers: Comments may be filed electronically
using the internet by accessing the Electronic Comment Filing System
(ECFS): https://apps.fcc.gov/ecfs/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
Filings can be sent by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9050 Junction Drive,
Annapolis Junction, MD 20701.
U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 45 L Street NE, Washington, DC 20554.
Effective March 19, 2020, and until further notice, the
Commission no longer accepts any hand or messenger delivered filings.
This is a temporary measure taken to help protect the health and safety
of individuals, and to mitigate the transmission of COVID-19. See FCC
Announces Closure of FCC Headquarters Open Window and Change in Hand-
Delivery Policy, Public Notice, DA 20-304 (March 19, 2020). https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to [email protected], or call the
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice) or
(202) 418-0432 (TTY).
FOR FURTHER INFORMATION CONTACT: Peter Bean, Pricing Policy Division of
the Wireline Competition Bureau, at (202) 418-0786 or via email at
[email protected].
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), in WC Docket Nos. 12-375 and 23-62; FCC
23-19, adopted on March 16, 2023 and released on March 17, 2023. The
full text of this document is available on the following internet
address: https://docs.fcc.gov/public/attachments/FCC-23-19A1.pdf.
Synopsis
1. Nearly twenty years have passed since Martha Wright-Reed and her
fellow petitioners first sought Commission relief from the exorbitant
telephone rates they had to pay to talk to their incarcerated family
members. More than a decade has passed since the Commission began to
respond to those
[[Page 20805]]
petitioners' request and embarked on a process to pursue just and
reasonable rates for telephone calls between incarcerated people and
their loved ones. The Commission's ability to achieve that objective,
however, was limited by statutory provisions, as explained by the
United States Court of Appeals for the District of Columbia Circuit in
Global Tel*Link v. FCC (GTL v. FCC). Recently, Congress, through the
Martha Wright-Reed Act, addressed these limitations and significantly
expanded the Commission's jurisdiction over incarcerated people's
communications services. In response to the D.C. Circuit's decision,
and recognizing the increasing role of advanced communications,
including video, in connecting incarcerated people with their families
and friends, Congress now expressly directs that the Commission
``ensure just and reasonable charges for telephone and advanced
communications services in correctional and detention facilities.''
2. In this item, the Commission builds on its efforts to date,
bolstered by the new tools Congress has bestowed, and begins the
process of implementing the Martha Wright-Reed Act to adopt just and
reasonable rates and charges for incarcerated people's audio and video
communications services. This item continues ongoing efforts to reform
providers' rates, charges, and practices in connection with interstate
and international inmate calling services. At the same time, this item
initiates a new docket, WC Docket No. 23-62, to specifically address
implementation of, and changes required by, the provisions of the
Martha Wright-Reed Act. The Commission seeks comment on how it should
interpret the Act's language to ensure that it implements the statute
in a manner that fulfills Congress's intent. The Commission also seeks
comment on how the Act affects the Commission's ability to ensure that
such services and associated equipment are accessible to and usable by
incarcerated people with disabilities.
Statutory Authority
3. On January 5, 2023, President Biden signed into law the Martha
Wright-Reed Act. Martha Wright-Reed Act, Public Law 117-338, 136 Stat.
6156. The Act was the product of efforts by multiple individuals and
committed stakeholders over a number of years to comprehensively
address the persistent problem of unreasonably high rates and charges
incarcerated people and their families pay for communications services.
At its core, the Act removes the principal statutory limitations that
have prevented the Commission from setting comprehensive and effective
just and reasonable rates for incarcerated people's communications
services.
4. Specifically, the Martha Wright-Reed Act modifies section 276 of
the Communications Act to explicitly enable the Commission to require
that rates for incarcerated people's communications services be just
and reasonable, irrespective of the ``calling device'' used. It also
expands the definition of payphone service in correctional institutions
to encompass all advanced communications services (other than
electronic messaging), including ``any audio or video communications
service used by inmates . . . regardless of technology used.'' In
addition, the new statute amends section 2(b) of the Communications Act
to make clear that the Commission's jurisdiction extends to intrastate
as well as interstate and international communications services used by
incarcerated people. And, in direct response to the GTL v. FCC
decision, the Act expressly allows the Commission to ``use industry-
wide average costs,'' as well as the ``average costs of service of a
communications service provider'' in setting just and reasonable rates.
The Martha Wright-Reed Act also requires that the Commission ``shall
consider,'' as part of its ratemaking, ``costs associated with any
safety and security measures necessary to provide'' telephone service
and advanced communications services. Finally, the statute directs the
Commission to promulgate regulations necessary to implement the
statutory provisions not earlier than 18 months and not later than 24
months after the date of its enactment.
Background
5. In 2003, Martha Wright and her fellow petitioners, then-current
and former incarcerated people and their relatives and legal counsel
(collectively, the Wright Petitioners) filed petitions seeking a
rulemaking to address ``excessive'' rates for incarcerated people's
telephone services. The Wright Petitioners filed an alternative
petition in 2007, in which they emphasized the urgent need for the
Commission to act on ``exorbitant'' rates for calling services for
incarcerated people. In 2012, the Commission commenced a rulemaking
proceeding, releasing the 2012 ICS Notice, 78 FR 4369, January 22,
2013, seeking comment on the Wright Petitioners' petitions and on
establishing rate caps for interstate calling services for incarcerated
people. Unless specifically noted, references herein to ``interstate''
include both interstate and international communications services.
6. In the 2013 ICS Order, 78 FR 67956, November 13, 2013, that
followed, the Commission adopted interim interstate rate caps and
adopted the Commission's first mandatory data collection regarding
inmate calling services (ICS), requiring all providers of those
services to submit data on their underlying costs of service. It also
adopted an annual reporting obligation requiring providers to provide
specific information on their operations, including their rates and
ancillary service charges.
7. In 2015 ICS Order, 80 FR 79135, December 18, 2015, in light of
record evidence of continued ``egregiously high'' rates, the Commission
adopted a comprehensive framework for regulating rates and charges for
both interstate and intrastate calling services for incarcerated
people, re-adopting the interim interstate rate caps, and extending
them to intrastate calls. The Commission used industry-wide average
costs based on data from the First Mandatory Data Collection,
explaining that this approach would allow providers to ``recover
average costs at each and every tier.'' The Commission readopted the
interim interstate rate caps it had adopted in 2013 and extended them
to intrastate calls, pending the effectiveness of the new rate caps.
The Commission also adopted a Second Mandatory Data Collection to
enable it to identify trends in the market and adopt further reforms.
8. As part of that framework, the Commission concluded that site
commissions--payments made by inmate calling providers to correctional
facilities or state authorities--were not costs reasonably related to
the provision of inmate calling services and thus excluded those
payments from the cost data used to set the rate caps. The Commission's
rules define ``Site Commissions'' to mean ``any form of monetary
payment, in-kind payment, gift, exchange of services or goods, fee,
technology allowance, or product that a Provider of Inmate Calling
Services or affiliate of a Provider of Inmate Calling Services may pay,
give, donate, or otherwise provide to an entity that operates a
correctional institution, an entity with which the Provider of Inmate
Calling Services enters into an agreement to provide Inmate Calling
Services, a governmental agency that oversees a correctional facility,
the city, county, or state where a facility is located, or an agent of
any such facility.''
9. In 2016, the Commission continued its reform of the inmate
calling services marketplace by, among other things,
[[Page 20806]]
amending its rate caps to better allow inmate calling service providers
to recover costs incurred as a result of providing such services,
including certain correctional facility costs that the Commission
found, based on the record then before it, were reasonably and directly
related to the provision of inmate calling services.
10. Several parties appealed the Commission's 2015 ICS Order, as
well as a subsequent Commission Order on Reconsideration. The D.C.
Circuit addressed the appeal of the 2015 ICS Order in its 2017 decision
in GTL v. FCC, holding that the Commission lacked statutory authority
to regulate intrastate rates and vacating the intrastate rate caps
adopted in the 2015 ICS Order. The Court also ruled that the
Commission's use of industry-wide average costs to set its interstate
rate caps ``lack[ed] justification in the record and [was] not
supported by reasoned decisionmaking'' in the Order, and it vacated a
reporting requirement related to video visitation services, finding the
requirement was ``too attenuated to the Commission's statutory
authority.''
11. Finally, the Court concluded that the ``Commission's
categorical exclusion of site commissions from the calculus used to set
[inmate calling services] rate caps defie[d] reasoned decision making
because site commissions obviously are costs of doing business incurred
by [inmate calling services] providers.'' The Court directed the
Commission to ``assess on remand which portions of site commissions
might be directly related to the provision of [inmate calling services]
and therefore legitimate, and which are not.''
12. Subsequently, in its 2020 ICS Notice, 85 FR 67480, October 23,
2020, the Commission sought comment on, among other things: (1) its
proposal to lower the interstate rate caps on an interim basis and cap
international rates; (2) the steps necessary to address unreasonable
rates; and (3) the methodology to be employed in setting permanent
interstate and international rate caps. Subsequently, the Commission
released the comprehensive 2021 ICS Order, 86 FR 40340, July 28, 2021,
in which, among other actions, it reformed the treatment of site
commissions, set new interim interstate rate caps for prisons and jails
with average daily populations of 1,000 or more incarcerated people,
and capped international calling rates for the first time.
13. In the 2021 ICS Order, the Commission also sought to improve
the data it collected on calling services for incarcerated people as
part of its efforts to set reasonable permanent rate caps. It delegated
authority to the Wireline Competition Bureau (WCB) and the Office of
Economics and Analytics (OEA) to establish a Third Mandatory Data
Collection to collect uniform cost data to use in setting rate caps
that more closely reflect inmate service providers' costs of providing
service at correctional facilities. After seeking public comment, in
January 2022, WCB and OEA released an Order adopting the data
collection. Parties' responses to the Third Mandatory Data Collection
were due June 30, 2022, and the Commission affirmatively incorporated
those responses into the record in this proceeding.
14. Finally, in September 2022, while analyzing the data from the
Third Mandatory Data Collection, the Commission issued the 2022 ICS
Order, 87 FR 75496, December 9, 2022, which adopted requirements to
improve access to communications services for incarcerated people with
communication disabilities and targeted reforms to lessen the financial
burden on incarcerated people and their loved ones when using calling
services. The Commission also issued the 2022 ICS Notice, 87 FR 68416,
November 15, 2022, seeking additional stakeholder input and evidence
relating to additional reforms concerning incarcerated people with
communication disabilities and providers' rates, charges, and practices
in connection with interstate and international calling services. Among
other things, the 2022 ICS Notice sought comment on how to use inmate
calling services providers' responses to the Mandatory Data Collections
to establish ``reasonable, permanent caps on rates and ancillary
service charges for interstate and international calling services for
incarcerated people.''
Notice of Proposed Rulemaking
15. The ability to communicate through affordable audio and video
communications is essential to allowing incarcerated people to stay
connected to their family and loved ones, clergy, counsel, and other
critical support systems. Studies consistently show that incarcerated
people who have regular contact with family members are more likely to
succeed after release and have lower recidivism rates. The Commission
interprets the Martha Wright-Reed Act as providing it with the
authority it needs to ensure that the charges associated with
communications services for incarcerated people are just and reasonable
and do not create an unnecessary deterrent to their ability to stay
connected with the world outside their correctional facilities. The
Commission invites comment on this interpretation.
16. Historically, the Commission used the term ``inmate calling
services'' or ``ICS'' when referencing payphone service in the
incarceration context. The Commission will now use the term
``incarcerated people's communications services'' or ``IPCS'' instead
of ``inmate calling services'' or ``ICS'' to refer to the broader range
of communications services subject to the Commission's jurisdiction as
a result of the Act. In connection with this change in terminology, the
Commission is also changing references to ``inmates'' to ``incarcerated
people'' at the request of public interest advocates. The Commission
seeks comment on codifying this updated terminology.
17. As a threshold matter, the Commission interprets the Martha
Wright-Reed Act, taken as a whole, as enhancing and supplementing its
existing jurisdiction, and effectively addressing the constraints
imposed by the D.C. Circuit's interpretation of the Commission's
jurisdiction in GTL v. FCC, and seeks comment on this interpretation.
Specifically, the Commission interprets the statute as expanding its
existing jurisdiction over communications services for incarcerated
people as specified in the technical amendments and implementation
sections of the law. The Martha Wright-Reed Act does not contain
language limiting the Commission's pre-existing authority over
international services. As a result, the Commission's authority over
international services remains intact and will now include all
incarcerated people's international communications services covered by
the statute. In the Commission's view, through this Act, Congress
effectively granted the Commission broad, plenary authority over the
rates and charges for ``any [inmate] audio or video communications
service.'' The Commission proposes to read the Act, in the context of
the GTL decision and its aftermath, as removing any limitations on the
Commission's authority over incarcerated people's audio and video
communications services and empowering the Commission to prohibit
unreasonably high rates and charges for, and in connection with, all
such services, including intrastate services. The Commission seeks
comment on this interpretation. To the extent that parties have a more
limited view of the Commission's authority or suggest that the
Commission must make additional jurisdictional findings, the Commission
asks that the parties describe in detail those limits and additional
findings.
[[Page 20807]]
The Commission further seeks comment on the ultimate goal of Congress
in passing the Martha Wright-Reed Act, described in the legislative
history as legislation that ``will help reduce financial burdens that
prevent [incarcerated] people from being able to communicate with loved
ones and friends.''
18. The Commission encourages all parties to comment on the issues
raised in the NPRM, and specifically invites previous participants in
the proceeding to update their prior submissions to reflect changed
circumstances stemming from the passage of the Martha Wright-Reed Act.
The Commission thus seeks renewed comment on all the issues raised in
its prior Notice of Proposed Rulemakings in light of the statutory
amendments contained in the Martha Wright-Reed Act. The Commission
emphasizes that unresolved issues previously raised in WC Docket No.
12-375 remain pending and are now incorporated in this dual-captioned
proceeding to be addressed in forthcoming Commission orders considering
the record developed in response to the NPRM to the extent applicable.
As part of their responses, parties are welcome to update filings
previously submitted regarding these pending matters in light of the
enactment of the Martha Wright-Reed Act.
19. Purpose and Scope of Martha Wright-Reed Act Amendments. As part
of the commission's effort to fulfill Congress's directives in the
Martha Wright-Reed Act, the Commission seeks comment on the effect of
the amendments Congress made to the authority granted to the Commission
in section 276(b)(1)(A) of the Communications Act. Do commenters agree
that, taken as a whole, these amendments fundamentally expand the scope
of the Commission's authority pursuant to sections 2(b) and 276 and
effectively moot the concerns the D.C. Circuit raised about the
Commission's jurisdiction in GTL v. FCC?
20. Prior to the enactment of the Martha Wright-Reed Act, section
276(b)(1)(A) focused on requiring that service providers be ``fairly
compensated'' for ``each and every'' completed call. Congress has now
eliminated the ``each and every'' call language and added a new
dimension to section 276 of the Communications Act by requiring the
Commission to ``establish a compensation plan to ensure that . . . all
rates and charges'' for incarcerated people's communications services
``are just and reasonable.'' The Commission seeks comment on whether
the amendments to section 276(b)(1)(A) change the central focus of the
section from ensuring that payphone service providers are ``fairly
compensated'' for voice calls with little, if any, ``considerations of
fairness to the consumer,'' to a more balanced approach emphasizing
consumers' (particularly incarcerated people's) and providers' right to
just and reasonable rates and charges for each audio and video
communications service now encompassed within the statutory definition
of ``payphone service.'' How should the Commission balance these
interests going forward? Does the addition of ``just and reasonable''
inform the meaning of ``fair compensation?'' If not, how should the
Commission interpret Congress's apparent emphasis on affordability for
consumers? Conversely, does the requirement that providers be ``fairly
compensated'' for completed calls inform the meaning of ``just and
reasonable?'' In this regard, the Commission seeks comment, generally,
on the relationship between the requirement that providers be ``fairly
compensated'' and the requirement that their rates and charges be
``just and reasonable.''
21. Relatedly, the Commission seeks comment on Congress's intent in
striking the ``per call'' and ``each and every [call]'' language from
section 276(b)(1)(A), particularly the effect of these changes to the
``fairly compensated'' requirement in the context of communications
services for incarcerated people under this new Act. As originally
conceived, the ``fairly compensated'' requirement of section
276(b)(1)(A) was designed to fix the specific problem of uncompensated
payphone calls at that time. But the situation is quite different in
the context of communications services for incarcerated people.
Providers generally receive compensation for the calls they carry
through the per-minute rates charged to consumers of calling services
for incarcerated people. No other entity receives compensation for
calls other than through a contractual arrangement with the provider.
It is therefore difficult to discern what the ``fairly compensated''
requirement adds to the ``just and reasonable'' requirement in the
context of communications services for incarcerated people, especially
given the historical backdrop underlying this provision. Prior to the
enactment of the Martha Wright-Reed Act, the Commission reasoned that
``fair compensation'' in the context of audio calling services for
incarcerated people ``does not mean that each and every completed call
must make the same contribution to a provider's indirect costs. Nor
does it mean a provider is entitled to recover the total `cost' it
claims it incurs in connection with each and every separate inmate
calling services call.'' Instead, the Commission found compensation to
be fair ``if the price for each service or group of services `recovers
at least its incremental costs, and no one service . . . recovers more
than its stand-alone cost.' ''
22. The Commission interprets the elimination of the ``per call''
and ``each and every [call]'' language from section 276 as a signal of
Congress's intent to restrict the application of the ``fairly
compensated'' requirement with respect to communications services for
incarcerated people by no longer requiring the Commission to ensure
that its compensation plan allows for ``fair'' compensation for ``each
and every'' completed call. The Commission seeks comment on this
interpretation. This interpretation appears to be consistent with
Congress's decision to allow the Commission to set rates based on
average costs. Do commenters agree that the Commission is no longer
required to ensure that providers are ``fairly compensated'' for every
call they carry or facilitate? Does elimination of the ``per call''
language give the Commission additional flexibility to consider rates
or rate caps that apply to units others than minutes? What independent
meaning does the ``fairly compensated'' requirement have for
communications services for incarcerated people in light of the other
provisions of the Martha Wright-Reed Act, including the newly-added
requirement to ensure ``just and reasonable'' rates and charges? For
example, does the ``fairly compensated'' requirement circumscribe the
Commission's analysis of ``just and reasonable'' rates? Does it require
the Commission to ensure that providers are able to recover their costs
of providing incarcerated people's communications services, at least on
average, even if not on a per-call basis? Does the fair compensation
requirement affect the Commission's analysis of other issues related to
incarcerated people's communications services, such as the payment of
site commissions or the imposition of ancillary service charges? The
Commission seeks comment on these questions.
23. Other Calling Devices. The Martha Wright-Reed Act extends the
Commission's authority over communications services to include not just
incarcerated people's audio and video communications using traditional
payphones, but also their
[[Page 20808]]
communications using ``other calling device[s].'' Given the absence of
additional qualifying language in the new statute, the Commission
proposes to interpret ``other calling device[s]'' broadly to encompass
all devices that incarcerated people either use presently or may use in
the future to communicate with individuals not confined within the
incarcerated person's correctional institution. Under this proposed
interpretation, ``other calling device[s]'' would encompass all
wireline and wireless phones, computers, tablets, and other
communications equipment capable of sending or receiving the audio or
video communications described in section 276(d), regardless of
transmission format.
24. That interpretation also would encompass all wireline and
wireless equipment, whether audio, video, or both, that incarcerated
people with disabilities presently use to communicate, through any
payphone service, with the non-incarcerated, including but not limited
to videophones, captioned telephones, and peripheral devices for
accessibility, such as braille display readers, screen readers, and
TTYs. Where a person with a disability must use a peripheral device to
access an advanced communications service or device, that service or
device is required to be compatible with such peripheral devices,
unless that is not achievable. The Commission's interpretation would
also encompass other potential devices, not yet in use, to the extent
incarcerated people use them in the future to communicate with people
not confined within the incarcerated person's correctional institution.
The Commission seeks comment on this proposal. Are there any additional
devices that should be included within ``other calling device[s]''?
Conversely, are there any devices that are excluded from the
Commission's jurisdiction? If so, what is the statutory basis for
concluding that Congress intended to exclude audio or video
communications using those devices from the Commission's jurisdiction?
25. Just and Reasonable. The Commission next seeks comment on the
Martha Wright-Reed Act's addition to section 276(b)(1)(A) requiring
that the Commission ``establish a compensation plan to ensure that . .
. all rates and charges'' for incarcerated people's communications
services be ``just and reasonable.'' This language mirrors the ``just
and reasonable'' language in section 201(b) of the Communications Act
and other federal statutes, which has a long interpretive history.
26. The ``traditional regulatory notion of the `just and
reasonable' rate was aimed at navigating the straits between gouging
utility customers and confiscating utility property.'' Setting ``just
and reasonable'' rates therefore ``involves a balancing of the investor
and the consumer interests.'' Given the parallel between the ``just and
reasonable'' language in section 276(b)(1)(A) and the same language in
section 201(b) and other federal statutes, the Commission proposes to
interpret ``just and reasonable'' in section 276(b)(1)(A) to have the
same meaning given to that term in section 201(b) and relevant
precedent interpreting that standard in the ratemaking context. The
Commission seeks comment on this proposal. To the extent commenters
disagree, how should the Commission understand the ``just and
reasonable'' requirement in section 276(b)(1)(A) and how would the
Commission distinguish between the ``just and reasonable'' requirement
in section 276(b)(1)(A) and the ``just and reasonable'' requirement in
section 201(b) if they are not the same?
27. The Commission also seeks comment on how the ``just and
reasonable'' standard in section 276(b)(1)(A) relates to the issue of
site commission payments. How should section 276(b)(1)(A)'s requirement
that rates for communications services for incarcerated people be
``just and reasonable'' affect the Commission's treatment of site
commission payments? In implementing the ``just and reasonable''
requirement in section 201(b), the Commission traditionally relies on
the ``used and useful'' framework to separate costs and expenses that
may be recovered through rates from those that may not.
28. Under the ``used and useful'' framework, the determination of
``just and reasonable'' rates focuses on affording the regulated entity
an opportunity to ``recover[] prudently incurred investments and
expenses that are `used and useful' in the provision of the regulated
service for which rates are being set.'' That framework, which ``is
rooted in American legal theory and particularly in the constitutional
limitations on the taking of private property for public use,''
balances the ``equitable principle that public utilities must be
compensated for the use of their property in providing service to the
public'' with the ``[e]qually central . . . equitable principle that
the ratepayers may not fairly be forced to pay a return except on
investment which can be shown directly to benefit them.'' In applying
these principles, ``the Commission considers whether the investment or
expense `promotes customer benefits, or is primarily for the benefit of
the carrier.' '' Should the Commission apply the ``used and useful''
ratemaking concept as a limiting factor in considering the costs and
expenses allowable in the rates for communications services for
incarcerated people? Why or why not? If not, what principle or
framework should the Commission use in evaluating ``just and
reasonable'' rates and charges under section 276(b)(1)(A) and why would
any such principle or framework be preferable to the well-established
framework the Commission routinely uses when implementing identical
language in section 201(b)?
29. The Commission invites comment on how it should apply the
``used and useful'' concept, or any alternative principle or framework
commenters suggest, to providers' site commission payments. The
Commission has previously sought broad comment on the ratemaking
treatment of those payments, including on whether it is appropriate to
permit providers to recover any portion of their site commission
payments from end users through calling services rates and on whether
it ``should preempt state and local laws that impose these payments on
interstate and international'' inmate calling services. The Commission
incorporates its prior questions on site commissions into the NPRM, and
requests that commenters address each of them in relation to each
incarcerated people's communications service now subject to the
Commission's ratemaking authority. Should the Commission's ratemaking
calculations include providers' site commission payments only to the
extent, if any, that they compensate facilities for used and useful
costs that the facilities themselves incur? Why or why not? And if the
Commission takes that approach, how should it determine the facilities'
used and useful costs? Should the Commission make generalized findings
as to what used and useful costs facilities typically incur and allow
each facility to show through the waiver process that its costs exceed
the typical amount? Or should the Commission instead allow those costs
only to the extent an individual facility establishes the extent to
which it incurs used and useful costs?
30. Fairly Compensated. The Commission also invites comment on how
the requirement that providers be ``fairly compensated . . . for
completed intrastate and interstate communications'' should affect the
Commission's ratemaking decisions, including its treatment of site
[[Page 20809]]
commissions. What factors should the Commission consider in determining
whether a provider is fairly compensated for completed communications?
Does the ``fairly compensated'' requirement mean that the Commission
must include all or part of providers' site commission payments in its
ratemaking calculus irrespective of their utility in the completion of
incarcerated people's communications? Why or why not? How should the
answers to these questions affect the Commission's policies regarding
site commissions and, in particular, the Commission's decision on
whether it should preempt state and local laws that impose site
commission payments on incarcerated people's communications services
providers?
31. Rates and Charges. The Commission next seeks comment on what
constitutes the ``rates and charges'' mentioned in the amendments to
section 276(b)(1)(A). The Commission proposes to interpret ``rates'' to
refer to the amounts paid by consumers of incarcerated people's
communications services for calls or other audio or video
communications covered by the statute or the Commission's rules. And
the Commission proposes to interpret ``charges'' to refer to all other
amounts assessed on consumers of incarcerated people's communications
services in connection with those services. These would include
ancillary service charges, authorized fees, mandatory taxes and fees,
and any other charges a provider may seek to impose on consumers of
communications services for incarcerated people. These interpretations
are consistent with the Commission's rules, which currently carve out
ancillary service charges, authorized fees, and mandatory taxes and
fees as separate from rate caps. Do commenters agree with the
Commission's proposed interpretations of these terms? If not, what
alternative interpretations do commenters propose and what is the
justification for these alternative interpretations?
32. Compensation Plan. The Commission also proposes finding that
setting industry-wide rate caps or rate caps applying to groups of
providers, grouped by categories such as facility size or other
characteristics, as opposed to separate rates for individual providers,
would be sufficient to ``establish a compensation plan,'' as required
by the Act. The Commission notes that setting industry-wide rate caps
for incarcerated people's communications services would be consistent
with the Commission's previous rules regulating rates for these
services. Do commenters agree that mandatory rate caps would constitute
a ``compensation plan'' within the meaning of section 276(b)(1)(A)? Are
there other rate regimes that the Commission should consider that are
consistent with--or required by--section 276(b)(1)(A)? If so, what are
they and how do they square with the statutory language and Congress's
intent?
33. The Commission's current rate caps for inmate calling services
limit the amount providers may charge any individual consumer for any
particular call. Other forms of rate cap regulation allow providers to
charge different amounts for particular services as long as the total
charges (weighted by demand) for all services do not exceed an overall
cap, or specify that the providers' total revenues must not exceed a
specified revenue cap. The Commission seeks comment on whether a regime
that constrains rates and ancillary service charges collectively across
all service categories (e.g., audio communications services and video
communications services) and allows providers to set different rates
and charges for the various different services (e.g., lower rates and
charges for audio communications services and higher rates and charges
for video communications services or vice versa) would constitute a
``compensation plan'' sufficient to ensure just and reasonable rates
and that providers are fairly compensated for completed communications,
as required by the Act. Commenters should address how such a regime
would protect individual consumers against unreasonably high rates.
Would sub-caps on rates and charges for different services within each
service category be needed and, if so, how should they be structured?
34. The Commission seeks comment on whether section 276(b)(1)(A)'s
mandate that the Commission ``establish a compensation plan to ensure
that . . . all rates and charges'' for incarcerated people's
communications services be ``just and reasonable'' extends to ensuring
that the providers' practices, classifications, and regulations for or
in connection with those services are just and reasonable.
Specifically, does Congress's reference to a ``compensation plan'' in
section 276(b)(1)(A) allow--or require--that the Commission go beyond
simply ``determining just and reasonable rates,'' as set forth in
section 3(b) of the Martha Wright-Reed Act, and ensure that providers
implement those rates justly and reasonably? The Commission asks for
detailed comment on this area, including on the extent of its section
276(b)(1)(A) authority, if any, to address providers' practices,
classifications, and regulations, as well as any limitations on that
authority. What other authority, if any, does the Commission have to
address the practices, classifications, and regulations for or in
connection incarcerated people's communications services?
35. The Commission also asks how its authority to address unjust
and unreasonable ``practices, classifications, and regulations'' under
section 201(b) of the Communications Act should affect the Commission's
treatment of practices, classifications, and regulations for or in
connection with incarcerated people's communications services. The
Commission has previously recognized that where it ``has jurisdiction
under section 201(b) . . . to regulate rates, charges, and practices of
interstate communications services, the impossibility exception extends
that authority to the intrastate portion of jurisdictionally mixed
services `where it is impossible or impractical to separate the
service's intrastate from interstate components' and state regulation
of the intrastate component would interfere with valid federal rules
applicable to the interstate component.'' Given the provisions of the
Martha Wright-Reed Act granting the Commission authority over
intrastate communications services and advanced communications services
generally in the incarceration context, the Commission asks whether it
may similarly extend its section 201(b) authority to regulate
practices, classifications, and regulations for or in connection with
incarcerated people's intrastate communications services that were
previously subject to state regulation and video services that were
unregulated prior to the enactment of the Act. Can providers
practicably separate incarcerated people's communications services into
interstate and intrastate, or regulated and nonregulated, components?
36. Advanced Communications Services. Prior to the enactment of the
Martha Wright-Reed Act, the Commission's authority under section 276
was limited to ``payphone service,'' a term then defined as ``the
provision of public or semi-public pay telephones, the provision of
inmate telephone service in correctional institutions, and any
ancillary services.'' The new Act expands the Commission's authority
over services in correctional institutions under section 276 to include
``advanced communications services,'' as defined in sections 3(1)(A),
(B), (D), and new (E) of the Communications Act.
37. Those provisions of section 3(1), in turn, define ``advanced
communications services'' as including
[[Page 20810]]
(1) ``interconnected VoIP service,'' (2) ``non-interconnected VoIP
service,'' (3) ``interoperable video conferencing service,'' and (4)
``any audio or video communications service used by inmates for the
purpose of communicating with individuals outside the correctional
institution where the inmate is held, regardless of technology used.''
Apart from the restriction to communications with individuals ``outside
the correctional institution'' in section 3(1)(E), and the exclusion of
``electronic messaging service'' from the revised definition of
``payphone service,'' the language in the new statute appears to confer
on the Commission broad jurisdiction to develop a compensation plan for
the categories of audio and video communications now included in the
definition of ``payphone services'' and includes no other limitation
except for a limitation to communications ``by wire and radio'' arising
from sections 1 and 2(a) of the Communications Act. The Commission
seeks comment on this unequivocal expansion of its statutory authority
under section 276, including how each of the first three types of
``advanced communications services'' provides additional statutory
authority under section 276 beyond what is added by new subsection
3(1)(E) and how each type applies to communications services for
incarcerated people.
38. The Martha Wright-Reed Act extends the Commission's ratemaking
authority to ``interoperable video conferencing service'' by including
sub-paragraph 3(1)(D) of the Communications Act in the definition of
``payphone service'' in section 276(d) of that Act. The Communications
Act defines ``interoperable video conferencing service'' as ``a service
that provides real-time video communications, including audio, to
enable users to share information of the user's choosing.'' The
Commission has a pending proceeding seeking further comment on the
kinds of other services that should be encompassed by the term
``interoperable video conferencing services.'' The Commission seeks
comment on which video services used, or potentially used, by
incarcerated people are included within this definition and whether any
are excluded. Are video visitation services used by incarcerated people
``interoperable video conferencing service[s]'' under this statutory
definition? How should the Commission interpret the phrases ``real-time
video communications'' and ``enable users to share information of the
user's choosing'' in the context of incarcerated people's
communications services? Are there types of video communications
services for incarcerated people that are not real-time? If so, what
are they? Would it include real-time video that is based in
applications or other technologies? Additionally, given the statutory
phrase ``any audio or video communications . . . regardless of
technology used'' in new section 3(1)(E), the Commission seeks comment
on how to address non-traditional audio and video communications
technologies or applications that could effectively enable providers of
communications services to incarcerated people to circumvent the
Commission's rate-making authority. Consistent with Congressional
intent, the Commission will be vigilant in overseeing the provision of
all forms of audio and video communications, and invite comment on the
steps the Commission should take to ensure that its rules adequately
address all forms of audio and video communications subject to its
authority.
39. The Commission seeks comment on the proper scope of the
limiting phrase ``used by inmates for the purpose of communicating with
individuals outside the correctional institution where the inmate is
held'' as used in new section 3(1)(E) of the Communications Act. The
Commission notes that phrase appears only in section 3(1)(E) and there
is no language within section 3(1)(E), or elsewhere in the
Communications Act or the Martha Wright-Reed Act, extending this
limitation to the other categories of advanced communications services
identified in section 2(a)(2) of the Martha Wright-Reed Act. More
specifically, the Commission interprets the use of the limiting phrase
of new subsection 3(1)(E) as not applying to the other subsections of
section 3(1) that are now referenced in section 276(d). In addition,
this limiting phrase has no application to any other aspect of section
(3)(1) outside the context of section 276. The Commission invites
comment on the proper scope of the limitation included in section
3(1)(E).
40. The Commission proposes to interpret the phrase ``any audio or
video communications service'' in subsection 3(1)(E) as encompassing
every method that incarcerated people may presently, or in the future,
use to communicate, by wire or radio, by voice, sign language, or other
audio or visual media. The Commission seeks comment on this proposal.
The Commission also seeks comment on how to interpret the phrase ``used
by inmates for the purpose of communicating with individuals outside
the correctional institution where the inmate is held, regardless of
technology used.'' Does this phrase include all types of audio or video
communications services--regardless of whether the communication is
interstate, intrastate, or international--that an incarcerated person
uses to communicate with a person not confined within the incarcerated
person's correctional institution, regardless of that person's physical
location at the time of the communication? In other words, if a calling
service is typically used for communicating with family, friends, or
loved ones, is that person's physical location at the time of the call
determinative, so that, for example, the Commission's authority over an
incarcerated person's calls to family members' cell phones might cease
when the family members enter the incarcerated person's correctional
institution as opposed to when they are at their homes?
41. The Commission seeks comment on the meaning of the phrase
``outside the correctional institution where the inmate is held'' with
reference to the audio and video communications services covered by
section 2(b)(3) of the Martha Wright-Reed Act. Does it refer to any
physical location not subject to involuntary confinement restrictions?
As discussed in the NPRM, a chief defining characteristic of
correctional institutions is that they are places where people are
involuntarily confined. Could physical locations ``outside'' the
correctional institution include any location not used for confinement
purposes, including rooms designated for communicating with, or
visitation by, persons not subject to confinement, including family,
friends, and members of the general public not subject to confinement?
Similarly, could ``individuals outside the correctional institution''
refer to people who are neither confined in nor employed by the
institution, even if they are temporarily located on the premises of
the institution for purposes of communicating with incarcerated
individuals through some form of audio or video communications service?
The Commission invites comment on these potential interpretations. Are
there additional types of communications encompassed within these
statutory phrases? Conversely, are there other types of communications
that fall outside those phrases? For example, should the Commission
interpret the statutory language as excluding all audio and video
communications between employees of the correctional institution and
incarcerated people from
[[Page 20811]]
the definition of ``payphone service'' as revised by the Act?
42. Under certain of the interpretations suggested above, the
Commission's newly expanded authority under section 276(b)(1)(A) could
extend to onsite video visitation services (i.e., services in which
video communication between persons located within the same building or
site substitute for traditional in-person visitation), either because:
(1) they are interoperable video conferencing services within the
meaning of section 3(1)(D) or because (2) they are video services
within the meaning of section 3(1)(E). In the latter case, incarcerated
people would use onsite video visitation services to communicate with
persons not confined in or employed by a correctional institution--and
with whom the incarcerated person is only allowed to communicate via an
audio or video communications service and only when they are at a
location where the incarcerated person is unable to be. The Commission
seeks comment on whether these interpretations of the Martha Wright-
Reed Act are consistent with the language of the statute and would
further the purposes of the Act. The Commission notes that on-site
video visitation services are typically operated by providers of inmate
calling services as currently defined in the Commission's rules, and
the same services and equipment may be used by an incarcerated person
regardless of whether the ``visitor'' is on-site, at home, or at
another remote location.
43. The Commission also seeks comment on whether the phrase
``regardless of technology used'' in section 3(1)(E) of the
Communications Act encompasses the technology used for video
visitation, now and in the future. The record shows that some
institutions are restricting or prohibiting in-person visits in favor
of video visitation and a visitor may lack sufficient broadband service
or equipment to enable video visitation from their home or elsewhere.
To the extent a service provider charges for video visitation at the
facility, should those charges be subject to the Commission's
ratemaking authority?
44. In light of these concerns, the Commission seeks comment on
interpreting the Act broadly to achieve its stated goal of ensuring
``just and reasonable charges for telephone and advanced communications
services in correctional and detention facilities.'' Further, the
Commission seeks comment on whether a broad interpretation will advance
the goal of section 716 of the Communications Act to ensure that
services and equipment used for advanced communications services are
accessible to and usable by people with disabilities. The Commission
invites comment on whether a broad interpretation would be a correct
reading of section 2(b)(3) of the Martha Wright-Reed Act. Are there
other onsite audio and video services that the Commission should
consider within its authority under this interpretation of the
statutory language? Finally, if the Commission interprets video
communications services as including onsite video visitation, the
Commission seeks comment on how it can ensure that all forms of onsite
video visitation services within the scope of its authority that are
used to communicate with non-incarcerated people are subject to the
rules the Commission adopts to implement the Act. Are there instances
where correctional institutions impose charges on video visitation or
predicate its use on charges for other related or unrelated services?
45. The Commission's Authority Over Intrastate Services. The Martha
Wright-Reed Act amends section 2(b) of the Communications Act, which
generally acts as a limitation on the Commission's jurisdiction over
intrastate communications, as well as a rule for interpreting other
provisions of the Communications Act. Section 2(b) enumerates certain
statutory provisions that are not subject to the generally applicable
limitation on the Commission's jurisdiction. When Congress enacted the
Martha Wright-Reed Act, it added section 276 of the Communications Act
to section 2(b)'s list of exceptions to the general limitation on the
Commission's authority over intrastate communications. This change,
when coupled with the broad language in the amended section 276,
suggests that Congress intended to grant the Commission authority over
all intrastate communications services between incarcerated people and
non-incarcerated people with whom they wish to communicate. Do
commenters agree?
46. The Commission proposes finding that, in combination, the
amendments to section 276 and the addition of section 276 to the
exceptions contained in section 2(b) of the Communications Act grant
the Commission plenary authority over intrastate communications
services provided to incarcerated people. Specifically, the
Commission's authority to adopt rules for intrastate incarcerated
people's communications service is further supported by section
276(b)(1)'s directive that the Commission adopt regulations to
implement, among other things, section 276(b)(1)(A), along with the
broad authority in provisions such as section 201(b) of the
Communications Act, which authorizes the Commission to ``prescribe such
rules and regulations as may be necessary in the public interest to
carry out the provisions of this Act.''
47. In addition, the Commission proposes finding that its expanded
jurisdiction over intrastate communications extends to any
communications service now covered by section 276, including the
``advanced communications services'' added to the definition of
``payphone service.'' The revised definition of advanced communications
services includes ``any audio or video communications service used by
inmates . . . regardless of technology used,'' which was added to the
definition of ``payphone service'' for purposes of section 276 of the
Communications Act. The Commission seeks comment on these proposed
findings and on whether the inclusion of section 276 in the section
2(b) exemption list now provides the Commission with definitive
authority to regulate all audio and video communications services
covered by section 276.
48. The Commission's Approach to Ratemaking. Section 3(a) of the
Martha Wright-Reed Act directs the Commission to ``promulgate any
regulations necessary to implement'' that Act, including its mandate
that ``all rates and charges'' for completed payphone communications be
``just and reasonable.'' Below, the Commission seeks comment on how it
can best discharge this statutory mandate.
49. The Commission's prior efforts to ensure just and reasonable
rates for inmate calling services focused on capping, on an industry-
wide basis, the rates and ancillary services charges providers could
assess for, or in connection with, voice calls, based on providers'
costs. The Commission seeks comment on whether it should follow this
approach with regard to all communications services provided to
incarcerated people. Should the Commission instead set separate caps on
rates and charges for different types of providers or, alternatively,
for each individual provider? The Commission asks that commenters
address the relative benefits and burdens of each approach, including
the potential impact on consumers, providers, and Commission resources.
50. The Commission also seeks comment on whether it should set
separate rate and ancillary services rate caps for audio and video
services. Do the costs of providing audio and video
[[Page 20812]]
services vary significantly? Do the costs of ancillary services depend
on whether these services are ancillary to audio or video services?
Would separate caps for different services benefit incarcerated people
and their families, and other consumers? Would providers incur
additional costs if separate rate caps were implemented, and if so, how
would these costs compare to any benefits consumers might receive from
separate caps? Is there a risk that separate caps for different
services could be exploited in a way that would harm consumers? What
burdens, if any, would separate rates and charges impose on providers?
Would it be difficult for providers to separate their costs in a
meaningful way for different services for purposes of submitting the
data the Commission would need to set separate rate caps? Are there any
voice and video services that are, or could be, combined such that it
would be burdensome to assess separate rates and charges for them? If
so, what are they? Should the Commission allow voice and video services
to be offered as bundles? If so, should the Commission require that all
rates, charges, and terms and conditions of service be included in the
same contract, and the rates and charges for each type of service and
bundle be separately listed so as to be easily identifiable?
51. In the event the Commission decides to set separate caps for
audio and video services, should the Commission subdivide either
category into different types of services for ratemaking purposes? If
so, what should those subcategories be? What types of audio and video
services do providers offer? Do providers offer different audio and
video services as part of a package? Do different types of audio and
video services make different demands on provider resources and, if so,
how should the Commission reflect those differences in its ratemaking?
If the Commission were to set separate caps for different services, how
would the Commission decide what caps to apply to any new covered
services providers may introduce in the future?
52. Assuming that the Martha Wright-Reed Act expands the
Commission's existing jurisdiction over ratemaking to include all
communications services for incarcerated people, including intrastate
services, the Commission must ensure that intrastate rates are also
just and reasonable. In the past, the Commission did not distinguish
between costs for interstate and intrastate voice services in setting
rate caps for interstate inmate calling services. Rather it adopted a
total industry cost approach, explaining that: ``Our calculations use
total industry costs, both interstate and intrastate, because the
available data do not suggest that there are any differences between
the costs of providing interstate and intrastate inmate calling
services. Nor do such data suggest a method for separating reported
costs between the intrastate and interstate jurisdictions that might
capture such differences, if any. Finally, providers do not assert any
such differences.''
53. The Commission followed this total cost approach in the 2021
ICS Order, as detailed in the Appendices to that Order. The Commission
proposes to take a similar approach in implementing the Martha Wright-
Reed Act and to continue to treat costs for interstate voice services
and intrastate voice services as having identical per-unit costs. Do
commenters agree with this approach? If not, they should address in
detail how costs differ between interstate and intrastate voice
services and how to measure these differences. Commenters should also
address whether such differences are substantial enough to warrant
different rate caps based on the jurisdiction of a voice call, taking
into account the burden associated with such a separation. In the time
since the 2020 ICS Notice, have providers developed ways to separate
intrastate voice costs from interstate voice costs? What burdens would
be associated with such a separation process?
54. The Commission also seeks comment on whether it should take a
total cost approach to video services and assume that the average costs
for intrastate video communications services are identical to the
average costs for interstate video communications. If parties disagree
with that assumption, they should explain how costs differ based on the
jurisdictional nature of video communications. Can the jurisdictional
nature of video communications services even be determined or are such
services inherently interstate? Parties should also address whether
such differences are substantial enough to warrant different rate caps
for interstate and intrastate video communications services. Is there a
way for providers to separate the costs associated with interstate
video services in a meaningful way from the costs associated with
intrastate video services? What burdens would be associated with such a
separation?
55. The Commission invites comment on the types of pricing plans it
should allow for the audio and video communications services subject to
its section 276 ratemaking authority. The Commission's rules currently
prohibit providers from charging incarcerated people or their loved
ones for calls on a per-call or per-connection basis and require
providers to price their interstate, international, and
jurisdictionally indeterminate calling services at or below specific
per-minute rate caps. This structure results in incarcerated persons
and their families paying for their interstate and international phone
calls on a per-minute basis. In the 2022 ICS Notice, the Commission
sought comment on whether it should authorize pilot programs under
which providers of incarcerated people's calling services could offer
alternative pricing structures for voice calls, including structures
under which an incarcerated person would receive a specified--or
unlimited--number of monthly minutes of use for a predetermined monthly
charge. Do commenters agree that nothing in the Act precludes the
Commission from adopting alternative pricing structures for audio or
video communications, should the record support this action?
56. The Commission seeks comment on whether it should require a
specific pricing structure for incarcerated people's video
communications services. If so, what should that structure be? Should
the Commission require that providers offer such video communications
services at per-minute rates? If not, what alternative structure do
commenters support, and what would the benefits and burdens be of any
alternative structure? How can the Commission best ensure that the
rates for video communications services are just and reasonable? The
Commission seeks broad comment on the pricing structures under which
providers presently offer video services to incarcerated people and
whether those structures can harm consumers or lead to unreasonably
high rates. What would be the benefits or burdens of allowing providers
to continue to use their current pricing structures for video
communications services, either under pilot programs or on a permanent
basis? Should the Commission allow providers to use these alternative
structures for audio services? If so, what conditions should the
Commission impose on providers to ensure just and reasonable rates for
both incarcerated people's audio and video communications services?
57. The Commission's Use of Data in Ratemaking. Section 3(b)(1) of
the Martha Wright-Reed Act specifies that the Commission ``may use
industry-wide average costs of telephone service and advanced
communications services'' in promulgating implementing
[[Page 20813]]
regulations and determining just and reasonable rates. That section
also specifies that the Commission may use ``the average costs of
service of a communications service provider'' for such purposes. In
the Commission's view, these authorizations, when read in conjunction
with the elimination of the requirement that providers be ``fairly
compensated for each and every'' completed call, respond directly to
the D.C. Circuit's holding that, in the 2015 ICS Order, the Commission
had improperly used industry-wide average costs in setting interstate
rate caps. The Commission invites comment on its view that the language
of the new statutory provisions allows, but does not require, the
Commission to rely on average costs--either on an industry-wide, or
provider-specific basis--to set rate caps for all forms of incarcerated
people's communications services.
58. The Commission also seeks comment on the meaning of ``industry-
wide,'' as used in section 3(b)(1) of the Act. Should the Commission
interpret ``industry-wide'' as referring exclusively to entities that
provide ``any audio or video communications service used by inmates for
the purpose of communicating with individuals outside the correctional
institution where the inmate is held, regardless of technology used''?
Or should the Commission read ``industry-wide'' as referring
collectively to all providers of ``telephone service and advanced
communications services?'' Alternatively, should the Commission
interpret ``industry-wide'' to refer only to some subset of providers
of incarcerated people's communications services? Similarly, does the
phrase ``average costs of service of a communications service
provider'' refer to all communications service providers? Or only to
providers of incarcerated people's communications service or even an
individual provider of communications services for incarcerated people?
The Commission asks that parties explain the basis for their preferred
interpretation of these statutory phrases.
59. The Commission seeks comment on the best approach to using
industry-wide average costs to determine just and reasonable rates for
both traditional telephone service and advanced communications services
provided to incarcerated people. Are there any circumstances under
which setting rates based on industry-wide average costs would result
in unreasonably high or unreasonably low rates for any particular group
of providers or consumers? If so, does the statutory language permit
the Commission to divide the relevant industry into groups based on
their average costs per unit of service or specific cost-related
characteristics, such as whether the provider serves facilities
primarily located in rural or urban areas; and, if so, which specific
cost-related characteristics should the Commission consider? If the
Commission takes that step, what additional steps should it take to
discharge its obligation, under section 3(b)(2) of the Martha Wright-
Reed Act, to ``consider . . . differences in the [average costs of
telephone service and advanced communications services] by small,
medium, or large facilities''?
60. The Commission also seeks comment on how it might use ``the
average costs of service of a communications service provider'' to set
just and reasonable rates. Would this statutory language allow the
Commission to use the average costs of an efficient (i.e., least cost)
provider holding quality and provided services constant, or a group of
efficient providers, to set industry-wide rates or to set rates for a
subset of the industry? Does any commenter view the statutory language
as allowing--or even requiring--the Commission to set rates for each
provider based on that provider's average costs of service? Assuming
the Commission has the flexibility to adopt rate caps on an industry-
wide or individual-provider basis, which approach would best allow it
to ensure that rates and charges are just and reasonable? Additionally,
the Commission seeks comment on whether using average costs of service
to set rates for smaller subsets of the industry would raise any
confidentiality concerns and whether those concerns might be outweighed
by the public interest benefits of using average costs.
61. Necessary Safety and Security Costs. The Commission seeks
comment on the directive in section 3(b)(2) of the Martha Wright-Reed
Act that the Commission ``shall consider costs associated with any
safety and security measures necessary to provide'' telephone service
and advanced communications services to incarcerated people. The
Commission seeks comment on what ``shall consider'' means. How much
discretion, if any, does that phrase give the Commission in evaluating
safety and security costs? Is the Commission required to treat all
safety and security costs identified by providers or facilities as
costs recoverable through rates for communications services for
incarcerated people? Could the Commission ``consider'' such costs, but
ultimately decide to exclude all of them from its rate calculations as
unnecessary? Is there a middle ground whereby the Commission could
consider safety and security costs and decide to include some of those
costs, but exclude others, from its rate calculations? To what extent
does the Commission's duty to consider ``costs'' depend on the strength
or credibility of the record documenting such costs?
62. The Commission seeks comment on several aspects of the phrase
``necessary safety and security measures.'' How is the Commission to
understand the word ``necessary'' here? How does a standard of
``necessary'' compare to the ``used and useful'' standard the
Commission traditionally uses in analyzing whether rates are just and
reasonable rates under section 201(b)? The Commission has, in the past,
interpreted ``necessary'' as having essentially the same meaning as
``used and useful.'' But the D.C. Circuit has previously found that
interpretation overly broad, explaining that ``necessary'' ``must be
construed in a fashion that is consistent with the ordinary and fair
meaning of the word, i.e., so as to limit `necessary' to that which is
required to achieve a desired goal.'' The Commission later revised its
interpretation of ``necessary'' in line with a D.C. Circuit opinion.
For example, the Commission concluded that equipment is ``necessary''
for purposes of interconnection or access to unbundled network elements
under section 251(c)(6) if ``an inability to deploy equipment would, as
a practical, economic, or operational matter, preclude the requesting
carrier from obtaining interconnection or access to unbundled network
elements.'' The D.C. Circuit also observed that ``courts have
frequently interpreted the word `necessary' to mean less than
absolutely essential, and have explicitly found that a measure may be
`necessary' even though acceptable alternatives have not been
exhausted.'' How should the Commission implement the D.C. Circuit's
guidance in this context? What is the ``ordinary and fair meaning'' of
the word ``necessary'' as used in section 3(b)(2) of the Martha Wright-
Reed Act?'' Should the Commission interpret ``necessary'' in that
section to mean something less than absolutely essential or
indispensable? Is it something more than ``used and useful''? What
interpretation do commenters suggest, and why?
63. The Commission seeks detailed, specific comment on which safety
and security measures are ``necessary'' to the provision of telephone
and advanced communications services for incarcerated people and why
those
[[Page 20814]]
measures are ``necessary.'' The Commission has previously sought
comment on similar issues regarding telephone service for incarcerated
people. Are any safety and security measures ``necessary'' to the
provision of those services? Or are such measures core features of the
correctional environment, rather than features needed to adapt
communications services to that environment?
64. Some commenters assert that safety and security measures can
cover a wide range of tasks, including, but not limited to, enrolling
incarcerated people into voice biometrics systems, call monitoring,
responding to alerts, blocking and unblocking numbers, and analyzing
call recordings. The Commission seeks comment not only on what
constitute safety and security measures, but also which of those
measures, if any, are ``necessary'' within the meaning of the statutory
language. Commenters should identify and describe any safety and
security measures they consider ``necessary'' to the provision of any
form of communications services for incarcerated people and to explain
in detail why they deem each identified service to be ``necessary.''
Conversely, the Commission invites comment on why specific safety and
security measures, or even broad categories of such measures, are not
``necessary'' to the provision of communications services for
incarcerated people. The Commission also seeks comment on whether the
Commission should interpret the Martha Wright-Reed Act's use of the
term ``safety and security'' as having the same or different meaning as
the term ``security and surveillance'' previously used in this
proceeding.
65. In addition, the Commission invites comment on the extent to
which resources (e.g., labor, tangible and intangible assets, and
materials) of the provider--as opposed to the resources of carceral
facilities or authorities--are used to provide any ``necessary'' safety
and security measures. To the extent more data are required from
providers regarding safety and security measures, WCB and OEA should
seek to obtain those data in the forthcoming supplemental data
collection. The Commission also invites comment on how the Commission
can determine the ``costs associated with'' any necessary safety and
security measures to the extent resources of the facilities are used to
provide these measures. The Commission asks for detailed comment on
what steps, if any, the Commission should take to determine those costs
and on how it should proceed if it is unable to determine those costs.
The Commission also seeks comment on how it should address any
information it has regarding those costs in setting just and reasonable
rates for communications services for incarcerated people. For example,
if the Commission determines that a particular safety or security
measure is necessary to provide a covered service, would it be
appropriate to include the underlying costs in rates and let the
provider and facility determine how to appropriately share those costs?
66. Finally, the Commission invites detailed comment on the
relationship, if any, between safety and security measures and site
commission payments. For example, to what extent do monetary site
commission payments compensate correctional institutions for costs they
bear in connection with ``necessary'' safety and security services they
incur, if any, using their own resources? Do providers offer safety and
security products and services at discounted rates or at no cost to
correctional institutions? If so, what are these products and services?
Do correctional facilities instruct providers to furnish safety and
security products and services on their behalf? If so, what products
and services do correctional facilities typically ask providers to
furnish? Do providers introduce new security and surveillance services
during the contract negotiation process or at some point during the
duration of a contract? If so, why do they do so and what effect do
such services have on end-user rates? To the extent commenters argue
that safety and security measures are embedded in site commission
payments, to what extent, if any, do these payments serve to reimburse
correctional facilities for costs they incur to ensure that the
provision of communications services for incarcerated people does not
pose any associated safety or security risk? If so, what information do
correctional facilities have documenting those costs? Do correctional
facilities ever provide data regarding their safety and security costs
during the contract negotiation process? The Commission invites comment
on these and any other matters that would assist it in understanding
the relationship between safety and security measures and site
commission payments.
67. Size and Type of Correctional Institution. The Martha Wright-
Reed Act directs that the Commission ``shall consider . . . differences
in the [average costs of telephone service and advanced communications
services] by small, medium, or large facilities.'' The Commission seeks
comment on certain questions raised by this language.
68. The Commission first seeks comment on the Martha Wright-Reed
Act's use of differing terms to refer to incarceration facilities,
apparently interchangeably, including ``correctional institutions,''
``correctional facilities,'' ``detention facilities,'' and
``facilities.'' The Commission proposes to interpret each of these
statutory terms as generically and interchangeably referencing places
where people are involuntarily confined. The Commission seeks comment
on this proposal. The Commission also seeks comment on the meaning of
the terms ``detention facility'' and ``detention facilities,'' as used
in the Martha Wright-Reed Act. The statute neither defines these terms
nor provides direction on how the Commission should interpret them.
Neither do the Commission's rules. Should the Commission interpret the
term ``detention facilities'' as having the same meaning as the
Commission's existing definition of ``correctional institution'' or
``correctional facility?'' Does ``detention facility'' have a meaning
different from jails and prisons? Are there compelling reasons to make
any definitional distinctions between correctional institutions and
detention facilities?
69. The Commission also seeks comment on whether the terms
currently defined in its rules--``correctional facility or correctional
institution''--could be used as generic terms to encompass the
different terms used in the Martha Wright-Reed Act. The Commission
proposes to continue to interpret these terms as applying to all
portions of a correctional institution, collectively, to avoid the risk
of any particular institution being divided into multiple entities of
differing sizes in an effort to take advantage of whatever size-based
rate tiers the Commission may adopt as part of its rate structure for
incarcerated people's communications services. The Commission invites
comment on this proposal.
70. The Commission's current rules define ``Correctional Facility
or Correctional Institution'' as ``a jail or a prison'' and then
separately define ``Jail'' and ``Prison.'' The Commission proposes to
continue to interpret the term ``Correctional Institution'' to include
all the facilities encompassed within the current definitions of
``Prison'' and ``Jail.'' The Commission seeks comment on this proposal,
as well as on whether the Commission should expand those definitions to
include other types of facilities. By way of example, the Commission
has previously sought comment on including ``civil commitment
facilities,
[[Page 20815]]
residential facilities, group facilities, and nursing facilities in
which people with disabilities, substance abuse problems, or other
conditions are routinely detained'' as part of the definition of
``Correctional Facility.'' Should the Commission include those, or any
other additional facilities, in its definitions of ``Jail,''
``Prison,'' or ``Correctional Facility''?
71. The Martha Wright-Reed Act states that the Commission ``shall
consider . . . differences in the costs . . . by small, medium or large
facilities or other characteristics,'' as part of its rate-setting
process. The Commission seeks comment on how to interpret ``small,
medium, or large facilities.'' What size categories should the
Commission adopt to implement this language? What size thresholds
should apply to each category? What metrics should the Commission use
to define size categories, and what data should the Commission consider
in setting size thresholds? The Commission also seeks comment on
whether the directive to consider size differences is only relevant if
the Commission uses cost-averaging in setting rates for incarcerated
people's communications services, as addressed in section 3(b)(1) of
the Act. In other words, if the Commission were to base its rates on
something other than industry-wide average costs, would it still be
obligated to consider potential cost differences associated with
serving different-sized facilities?
72. The Commission's current rate structure distinguishes among
different types and sizes of correctional institutions, establishing
separate rate caps for prisons and jails, as well as separate rate
tiers for different-sized jails. This seems consistent with the Martha
Wright-Reed Act's reference to ``small, medium, or large facilities,''
but the Commission seeks comment on whether the Act allows or requires
any change in the Commission's current approach to analyzing providers'
costs based on the type and size of correctional institution being
served. Does the Martha Wright-Reed Act require the Commission to
implement more or fewer rate tiers based on type or size? The
Commission invites parties to provide information in support of any
claims they may make in regard to the differences or similarities in
the costs associated with serving different types or sizes of
facilities. Could the Commission set the same rates for small, medium,
and large facilities after considering cost differences, if any?
73. To the extent the Commission continues to use multiple rate
tiers for different-sized correctional institutions, the Commission
seeks comment on its continued use of average daily population as the
primary metric for measuring the size of correctional institutions. The
Commission incorporates and renews prior calls for comments on how
average daily population should factor into the rate caps, if at all.
Should the Commission adjust the current distinction between jails with
average daily populations below 1,000, and jails with average daily
populations at or above 1,000 based on the Act's use of the terms
``small, medium, or large''? Should the Commission adopt other size
thresholds to account for differing cost characteristics of different-
sized correctional institutions? Are there compelling reasons to adopt
a different metric for determining size other than average daily
population?
74. The Martha Wright-Reed Act also directs the Commission to
consider ``other characteristics'' besides size-based distinctions in
setting rates for incarcerated people's communications services. The
Commission seeks comment on what other characteristics it should
consider in setting rates, including correctional institution type
(whether it is a prison, jail, or other kind of institution),
geographic location (whether it is in an urban, as opposed to a rural,
area), and the technology used (whether it is wireline as opposed to
wireless, internet protocol-based as opposed to circuit-switched, or is
connected to the public switched telephone network (PSTN) as opposed to
transmitted only via the internet). How do these characteristics affect
costs? Should the Commission use ``other characteristics'' in tandem
with the size of a facility when setting new rate caps? If so, how do
these characteristics impact costs? How much weight should be given to
the impact of other characteristics on the underlying costs? Is the
primary driver of costs for some types of calls the number of calls,
minutes, bits, phones, tablets, incarcerated people, network capacity,
some combination of these, or something else? How does this vary with
the nature of the call, for example, whether it is connected to the
PSTN or is an app-to-app call, or whether it is a video or audio call
regardless of the mode of transmission? Can the Commission disregard
the size of the facility if some ``other characteristic'' provides more
compelling cost-related differences?
75. Effect of the Act on Other Laws. Section 4 of the Martha
Wright-Reed Act states that: ``[n]othing in this Act shall be construed
to modify or affect any Federal, State or local law to require
telephone service or advanced communications services at a State or
local prison, jail, or detention facility or prohibit the
implementation of any safety and security measures related to such
services at such facilities.'' The Commission seeks comment on the
meaning and purpose of this provision. As an initial matter, the
Commission proposes finding that the phrase ``this Act,'' as used in
section 4, refers specifically to the Martha Wright-Reed Act, as
opposed to the Communications Act. This seems to be the most logical
reading of that reference, and the Commission seeks comment on this
proposed finding.
76. The Commission next invites comment on the meaning of the
language in the first clause of section 4 of the new Act providing that
``[n]othing in this Act shall be construed to modify or affect any
Federal, State or local law to require telephone service or advanced
communications services at a State or local prison, jail, or detention
facility.'' The Commission seeks comment on how it should interpret
this language as a general matter. Does the language of this clause
simply mean that the Martha Wright-Reed Act does not create any new
obligation for state or local facilities to provide any form of
incarcerated people's calling services? Does the language carry any
different or additional meanings? Should the Commission interpret ``to
require'' in this context as referring to all Federal, State, and local
laws that affirmatively mandate the provision of telephone service or
advanced communications services? Are there other possible meanings of
the phrase in this provision? The Commission observes that the statute
uses the phrase ``to require,'' as opposed to ``to provide,'' or ``to
offer.'' What is the significance of the choice of the word ``require''
in section 4? The Commission invites comment about any of the other
language in this clause and about the interplay between this language
and any of the proposals contained in the NPRM.
77. The Commission also seeks comment on how it should interpret
the second clause of section 4, which specifies that nothing in the Act
shall ``prohibit the implementation of any safety and security measures
related to such services at such facilities.'' Does the language of
this clause simply mean that the just and reasonable ratemaking focus
of the Martha Wright-Reed Act is not intended to interfere with any
correctional official's decision on whether to implement any type of
safety or security measure that the official desires in conjunction
with audio or video communications services? Why or
[[Page 20816]]
why not? How broadly should the Commission interpret the phrase
``safety and security measures'' in this section? Should the Commission
rely on prior definitions of safety and security measures in these
types of facilities? The Commission also seeks comment on how it should
construe the word ``related.'' What does it mean when safety and
security measures are ``related'' to telephone service or advanced
communications services?
78. The Commission notes that the Martha Wright-Reed Act also
references ``safety and security measures'' in section 3(b)(2), which
requires the Commission to consider the costs associated with
``necessary'' safety and security measures in determining just and
reasonable rates. How do commenters propose that the Commission
reconcile the language of this clause with the Commission's duty under
the Act to ensure that rates are ``just and reasonable''? The provision
in section 3(b)(2) requires that the Commission consider certain costs
when determining just and reasonable rates, whereas the reference in
section 4 ensures that correctional officials retain the ability to
implement ``related'' safety and security measures. Thus, under section
4, correctional officials remain free to implement any safety and
security measures related to inmate telephone service or advanced
communications services. The Commission seeks comment on this analysis.
79. Consistent with the above analysis, the Commission seeks
comment on what relationship, if any, section 4 may have with the
Commission's consideration of ``necessary'' safety and security costs
in its ratemaking calculus under section 3. The Commission has
recognized that, in some circumstances, correctional officials may have
used monetary site commission payments to implement safety and security
measures that, for ratemaking purposes, are not necessary for the
provision of incarcerated people's communications services. Contracts
between correctional officials and incarcerated people's communications
services providers also may require, as in-kind site commission
payments, that the providers implement safety and security measures
unrelated to the provision of communications services. Do commenters
agree that the Commission's decision to exclude the costs of such
``unnecessary'' measures from its ratemaking calculus will not
proscribe correctional facilities' prerogatives to implement them as
contemplated by section 4? If not, why not? Are there other
considerations the Commission should take into account with respect to
the ``safety and security measures'' clause in section 4?
80. Finally, the Commission seeks comment on the relationship of
section 4 to section 276(c) of the Communications Act, as amended,
which remains unchanged by the Martha Wright-Reed Act. Section 276(c)
provides that, ``[t]o the extent that any State requirements are
inconsistent with the Commission's regulations, the Commission's
regulations on such matters shall preempt such State requirements.'' In
practice, the Commission has relied on the ``impossibility exception''
to preempt intrastate rates and charges where it is impossible or
impracticable to separate the intrastate components of a service from
interstate components regulated by the Commission's rules. The
impossibility exception applied to such ``jurisdictionally mixed''
rates and charges when the Commission adopted rate caps pursuant to its
authority under section 201(b) of the Act. Since the Commission
proposes to interpret the Martha Wright-Reed Act to provide it clear
authority to establish a compensation plan ensuring ``just and
reasonable'' rates and charges and fair compensation for providers for
both interstate and intrastate services under section 276 of the
Communications Act, the Commission proposes to find that state
regulations that exceed the rates or rate caps the Commission adopt
pursuant to the Martha Wright-Reed Act shall be preempted under section
276(c).
81. The Commission also seeks comment on the proper exercise of its
preemption authority as it relates to state laws that mandate lower
rates and charges for incarcerated people's communications services or
that mandate that such services be offered free to consumers. In light
of the Commission's proposal to find that it has plenary authority over
intrastate communications services provided to incarcerated people, the
Commission invites comment on what steps, if any, the Commission should
consider following a state mandate where a provider is able to claim,
and clearly substantiate its claim, that an unreasonably low rate leads
to unfair compensation to providers. Additionally, to be clear, the
Commission proposes to find that section 4 is no bar to its preemption
authority with respect to establishing the rates and charges for audio
and video communications in correctional facilities and prohibiting
state or local requirements that would require higher rates or charges.
The Commission seeks comment on these proposed findings. Further, the
Commission proposes to find that nothing in section 4 affects its prior
preemption policies under the impossibility exception, and the
Commission seeks comment on this proposed finding. To the extent a
party contends there is such an effect, the Commission asks for
detailed comment on how it should take that effect into account in our
regulation of incarcerated people's communication services. Finally,
the Commission seeks comment broadly on the scope of its preemption
authority in light of the Martha Wright-Reed Act, including in
particular, its authority over site commissions.
82. Necessary Rule Changes. The Martha Wright-Reed Act specifies
that the Commission ``shall promulgate any regulations necessary to
implement this Act and the amendments made by this Act'' not earlier
than 18 months and not later than 24 months after the date of
enactment. As discussed above, the Commission interprets the statutory
amendments to sections 2, 3, and 276 of the Communications Act as
providing the Commission plenary authority over all audio or video
communications services (other than electronic messaging), by wire or
radio, between incarcerated people and individuals not subject to
involuntary confinement. As part of the Act, the Commission must ensure
that all payphone providers are fairly compensated and that all rates
and charges are just and reasonable. In addition, some entities that
are not subject to the Commission's current inmate calling services
rules are now ``payphone service providers'' within the meaning of
section 276(b)(1) of the Communications Act and thus will be subject to
our new rules implementing these statutory mandates. The Commission
seeks comment on what specific rule changes or new rules are necessary
to effectuate the Martha Wright-Reed Act. Any comments proposing new or
amended rules should include, as part of the commenter's submission, a
draft rule or markup of an existing rule to be incorporated into
Subpart FF of Part 64 of the Commission's rules. The Commission notes
that while the Act precludes the Commission's implementing rules from
becoming effective earlier than July 2024, the statutory amendments
became effective upon enactment on January 5, 2023 and are effective
today. Pending the effective date of any new rules the Commission
adopts, any entity that is an inmate calling services provider within
the meaning of the Commission's
[[Page 20817]]
existing rules must comply fully with those rules.
83. The Act allows or requires that the Commission make certain
types of data analyses in promulgating implementing regulations. The
Commission proposes to interpret the Act as allowing it to perform any
and all acts and issue any orders, including orders requiring the
submission of data and other information from audio and video
communications service providers now covered by the Act, conducive to
the discharge of these and its other implementation responsibilities
under the Martha Wright-Reed Act. The Commission invites comment on
this proposal.
84. Accessibility Rule Changes Necessitated by the Expanded
Definition of Advanced Communications Services. The Commission also
seeks comment on the extent to which the Martha Wright-Reed Act expands
its ability to ensure that any audio and video communications services
used by incarcerated people are accessible to and usable by people with
disabilities. With the addition of this new category of services to the
definition of ``advanced communications services,'' some of these
services, as well as some equipment used for such services, regardless
of technology used, may be newly subject to accessibility requirements
under section 716 of the Communications Act. Section 716, added to the
Communications Act by the Twenty-First Century Communications and Video
Accessibility Act of 2010, requires providers of advanced
communications services and manufacturers of equipment used with such
services to ensure that such services and equipment are accessible to
and usable by people with disabilities, unless doing so is not
achievable. If accessibility is not achievable either by building it
into the service or equipment or by using third party accessibility
solutions, then a manufacturer or service provider must ensure that its
equipment or service is compatible with existing peripheral devices or
specialized customer premises equipment, unless not achievable. Each
provider of advanced communications services has a duty not to install
network features, functions, or capabilities that impede accessibility
or usability. In 2011, the Commission adopted Part 14 of its rules,
which implements these statutory provisions, requiring service
providers and equipment manufacturers of all types of advanced
communications services and equipment to meet specific obligations,
performance objectives, recordkeeping, and reporting requirements.
85. The Commission seeks comment generally on what changes to Part
14 of its rules are needed to implement the amended definition of
``advanced communications services.'' The Commission specifically
proposes to amend the Part 14 definition of ``advanced communications
services'' to incorporate the amended statutory definition, and seeks
comment on this proposal. Is there any reason the Commission should not
adopt the statutory definition verbatim? Are there specific terms in
the new category of advanced communications services, apart from those
raised above, that the Commission should separately define in section
14.10 of its rules, and if so, how should they be defined?
86. The Commission also seeks comment on whether any changes are
needed to other provisions of Part 14 to reflect the inclusion of these
services and equipment. For example, are there specific performance
objectives or recordkeeping requirements that should be added or
modified to ensure that providers of covered communications services
and manufacturers of associated equipment used by incarcerated people
are in full compliance with their accessibility obligations?
87. Payphones Other Than in the Incarceration Context. Although the
Martha Wright-Reed Act specifically addresses payphones in the
incarceration context, certain amendments to section 276 of the
Communications Act apply to payphones more generally, including both
those used by incarcerated people and those used by the public, in the
case of more traditional payphones. In 1999, the Commission determined
that traditional (i.e., non-inmate calling services) payphones do not
require pricing regulation because that portion of the payphone market
was sufficiently competitive. In addition, advancements in mobile and
wireless technology have made traditional payphones virtually obsolete.
For payphone service outside of the incarceration context, the
Commission proposes to find that no new regulations are ``necessary''
to implement the Martha Wright-Reed Act and its amendments to the
Communications Act pursuant to section 3(a) of the Act. Accordingly,
the Commission proposes relying on its existing rules governing
traditional payphone service to ensure that all payphone providers
outside of the incarceration context are fairly compensated and that
their rates and charges are just and reasonable, consistent with
section 276(b)(1)(a), as amended. The Commission seeks comment on the
proposal to find new payphone service rules unnecessary and to continue
relying on its existing rules to satisfy any of the new statutory
requirements that apply outside the incarceration context.
88. Effect on Small Entities. The Commission recognizes that its
actions in this proceeding may affect several groups of small entities.
For example, payphone service providers that provide only limited
communications services to incarcerated people, or that provide
communications services to incarcerated people via technologies not
previously covered by section 276, will be subject to new regulatory
requirements. In addition, the Commission's implementation of the
Martha Wright-Reed Act may subject entities currently subject to its
inmate calling services rules to new regulatory obligations. The
Commission therefore seeks comment on how it should take into account
the impact on small businesses and, in particular, any disproportionate
impact or unique burdens that small businesses may face, in
effectuating the mandates set forth in the Martha Wright-Reed Act and
the Communications Act. Parties should also address any alternative
proposals that would minimize the burdens on small businesses.
89. Other Reforms Related to Incarcerated People's Communications
Services. In addition to seeking comment on actions the Commission
should take to implement the Martha Wright-Reed Act, the Commission
proposes revisions to its rules to reflect updated language used to
refer to calls made by incarcerated people. The Commission's rules
currently use ``inmate calling services'' or ``ICS'' to refer to ``a
service that allows Inmates to make calls to individuals outside the
Correctional Facility where the Inmate is being held, regardless of the
technology used to deliver the service.'' With the Martha Wright-Reed
Act's expansion of the Commission's authority beyond calling services
to include all audio and video communications services used by
incarcerated people, the Commission uses today and will use going
forward the term ``incarcerated people's communications services'' or
``IPCS'' to refer to these broader service offerings. In connection
with this change in terminology, the Commission has also changed
references to ``inmates'' to ``incarcerated people'' at the request of
public interest advocates. To reflect this evolution in terminology,
the Commission proposes codifying these
[[Page 20818]]
changes in its existing rules and in any new rules the Commission
adopts pursuant to this proceeding. The Commission seeks comment on
this proposal.
90. Finally, the Commission invites parties to comment on any other
matters that may be relevant to its implementation of the Martha
Wright-Reed Act to adopt just and reasonable rates and charges for
incarcerated people's audio and video communications services.
Digital Equity and Inclusion
91. The Commission, as part of its continuing effort to advance
digital equity for all, including people of color, persons with
disabilities, persons who live in rural or Tribal areas, and others who
are or have been historically underserved, marginalized, or adversely
affected by persistent poverty or inequality, invites comment on any
equity-related considerations and benefits (if any) that may be
associated with the proposals and issues discussed herein.
Specifically, the Commission seeks comment on how its proposals may
promote or inhibit advances in diversity, equity, inclusion, and
accessibility, as well the scope of the Commission's relevant legal
authority.
Procedural Matters
92. Ex Parte Rules. The proceeding that the Notice of Proposed
Rulemaking initiates shall be treated as a ``permit-but-disclose''
proceeding in accordance with the Commission's ex parte rules. Persons
making ex parte presentations must file a copy of any written
presentation or a memorandum summarizing any oral presentation within
two business days after the presentation (unless a different deadline
applicable to the Sunshine period applies). Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentation must (1) list all persons attending or otherwise
participating in the meeting at which the ex parte presentation was
made, and (2) summarize all data presented and arguments made during
the presentation. If the presentation consisted in whole or in part of
the presentation of data or arguments already reflected in the
presenter's written comments, memoranda, or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in the prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with Sec. 1.1206(b). In proceedings governed by
Sec. 1.49(f) or for which the Commission has made available a method
of electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants in this proceeding
should familiarize themselves with the Commission's ex parte rules.
93. Regulatory Flexibility Act. The Regulatory Flexibility Act of
1980, as amended (RFA), requires that an agency prepare a regulatory
flexibility analysis for notice and comment rulemakings, unless the
agency certifies that ``the rule will not, if promulgated, have a
significant economic impact on a substantial number of small
entities.'' Accordingly, the Commission has prepared an Initial
Regulatory Flexibility Analysis (IRFA) concerning the possible impact
of the rule and policy changes contained in the Notice of Proposed
Rulemaking.
94. Initial Paperwork Reduction Act of 1995 Analysis. The Notice of
Proposed Rulemaking may contain new or modified information
collection(s) subject to the PRA. If the Commission adopts any new or
modified information collection requirements, they will be submitted to
the OMB for review under section 3507(d) of the PRA. OMB, the general
public, and other federal agencies are invited to comment on the new or
modified information collection requirements contained in these
proceedings. In addition, pursuant to the Small Business Paperwork
Relief Act of 2002, the Commission seeks specific comment on how it
might ``further reduce the information collection burden for small
business concerns with fewer than 25 employees.''
Initial Regulatory Flexibility Analysis
95. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Initial Regulatory
Flexibility Analysis (IRFA) of the possible significant economic impact
on a substantial number of small entities by the policies and rules
proposed in the Notice of Proposed Rulemaking. Written public comments
are requested on this IRFA. Comments must be identified as responses to
the IRFA and must be filed by the deadlines for comments in the Notice
of Proposed Rulemaking. The Commission will send a copy of the Notice
of Proposed Rulemaking, including this IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA). In addition, the
NPRM and IRFA (or summaries thereof) will be published in the Federal
Register.
Need for and Objectives of, the Proposed Rules
96. In the NPRM, the Commission seeks comment on implementing the
Martha Wright-Reed Just and Reasonable Communications Act of 2022
(Martha Wright-Reed Act or Act), enacted by Congress to ensure just and
reasonable rates for telephone and advanced communications services in
correctional and detention facilities. The Act was passed in an effort
to remedy decades of exorbitant rates for telecommunications services
paid by family members, clergy, counsel and other critical support
systems.
97. The Commission seeks comment on the purpose and scope of the
amendments made to its authority and how the Act expands its authority
over incarcerated people's communications services, including over
advanced communications services, intrastate services, and ``any audio
or video communications service used by inmates for the purpose of
communicating with individuals outside the correctional institution
where the inmate is held, regardless of technology used.'' The
Commission also seeks comment on the Act's directions regarding how it
should consider implementing the Act, including when it is to adopt
rules, the use of data to set just and reasonable rates, the costs of
facility safety and security measures, and the size of correctional
facilities. Lastly, the Commission also seeks comment on how the Act
affects its ability to ensure that incarcerated people's communications
services and associated equipment promote digital equity and are
accessible to and usable by incarcerated people with disabilities.
Legal Basis
98. The proposed action is authorized pursuant to sections 1, 2,
4(i)-(j), 5(c), 201(b), 218, 220, 225, 255, 276, 403, and 716 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j),
155(c), 201(b), 218, 220, 225, 255, 276, 403, and 617, and the Martha
Wright-Reed Just and Reasonable Communications Act of 2022, Public Law
117-338, 136 Stat 6156 (2022).
[[Page 20819]]
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
99. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rule revisions, if adopted. The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' In addition, the term ``small business''
has the same meaning as the term ``small-business concern'' under the
Small Business Act. A ``small-business concern'' is one which: (1) is
independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the
SBA.
100. Small Businesses, Small Organizations, Small Governmental
Jurisdictions. The Commission's actions, over time, may affect small
entities that are not easily categorized at present. The Commission
therefore describes here, at the outset, three broad groups of small
entities that could be directly affected herein. First, while there are
industry specific size standards for small businesses that are used in
the regulatory flexibility analysis, according to data from the Small
Business Administration's (SBA) Office of Advocacy, in general a small
business is an independent business having fewer than 500 employees.
These types of small businesses represent 99.9% of all businesses in
the United States, which translates to 32.5 million businesses.
101. Next, the type of small entity described as a ``small
organization'' is generally ``any not-for-profit enterprise which is
independently owned and operated and is not dominant in its field.''
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000
or less to delineate its annual electronic filing requirements for
small exempt organizations. Nationwide, for tax year 2020, there were
approximately 447,689 small exempt organizations in the U.S. reporting
revenues of $50,000 or less according to the registration and tax data
for exempt organizations available from the IRS.
102. Finally, the small entity described as a ``small governmental
jurisdiction'' is defined generally as ``governments of cities,
counties, towns, townships, villages, school districts, or special
districts, with a population of less than fifty thousand.'' U.S. Census
Bureau data from the 2017 Census of Governments indicate that there
were 90,075 local governmental jurisdictions consisting of general
purpose governments and special purpose governments in the United
States. Of this number there were 36,931 general purpose governments
(county or municipal and town or township) with populations of less
than 50,000 and 12,040 special purpose governments--independent school
districts with enrollment populations of less than 50,000. Accordingly,
based on the 2017 U.S. Census of Governments data, we estimate that at
least 48,971 entities fall into the category of ``small governmental
jurisdictions.''
103. Wired Telecommunications Carriers. The U.S. Census Bureau
defines this industry as establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired communications networks. Transmission
facilities may be based on a single technology or a combination of
technologies. Establishments in this industry use the wired
telecommunications network facilities that they operate to provide a
variety of services, such as wired telephony services, including Voice
over internet Protocol (VoIP) services, wired (cable) audio and video
programming distribution, and wired broadband internet services. By
exception, establishments providing satellite television distribution
services using facilities and infrastructure that they operate are
included in this industry. Wired Telecommunications Carriers are also
referred to as wireline carriers or fixed local service providers.
104. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2021 Universal Service
Monitoring Report, as of December 31, 2020, there were 5,183 providers
that reported they were engaged in the provision of fixed local
services. Of these providers, the Commission estimates that 4,737
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
105. Local Exchange Carriers (LECs). Neither the Commission nor the
SBA has developed a size standard for small businesses specifically
applicable to local exchange services. Providers of these services
include both incumbent and competitive local exchange service
providers. Wired Telecommunications Carriers is the closest industry
with a SBA small business size standard. Wired Telecommunications
Carriers are also referred to as wireline carriers or fixed local
service providers. The SBA small business size standard for Wired
Telecommunications Carriers classifies firms having 1,500 or fewer
employees as small. U.S. Census Bureau data for 2017 show that there
were 3,054 firms that operated in this industry for the entire year. Of
this number, 2,964 firms operated with fewer than 250 employees.
Additionally, based on Commission data in the 2021 Universal Service
Monitoring Report, as of December 31, 2020, there were 5,183 providers
that reported they were fixed local exchange service providers. Of
these providers, the Commission estimates that 4,737 providers have
1,500 or fewer employees. Consequently, using the SBA's small business
size standard, most of these providers can be considered small
entities.
106. Competitive Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a size standard for small
businesses specifically applicable to local exchange services.
Providers of these services include several types of competitive local
exchange service providers. Wired Telecommunications Carriers is the
closest industry with a SBA small business size standard. The SBA small
business size standard for Wired Telecommunications Carriers classifies
firms having 1,500 or fewer employees as small. U.S. Census Bureau data
for 2017 show that there were 3,054 firms that operated in this
industry for the entire year. Of this number, 2,964 firms operated with
fewer than 250 employees. Additionally, based on Commission data in the
2021 Universal Service Monitoring Report, as of December 31, 2020,
there were 3,956 providers that reported they were competitive local
exchange service providers. Of these providers, the Commission
estimates that 3,808 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
107. Interexchange Carriers (IXCs). Neither the Commission nor the
SBA have developed a small business size standard specifically for
Interexchange Carriers. Wired Telecommunications Carriers is the
closest industry with a SBA small business size standard. The
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SBA small business size standard for Wired Telecommunications Carriers
classifies firms having 1,500 or fewer employees as small. U.S. Census
Bureau data for 2017 show that there were 3,054 firms that operated in
this industry for the entire year. Of this number, 2,964 firms operated
with fewer than 250 employees. Additionally, based on Commission data
in the 2021 Universal Service Monitoring Report, as of December 31,
2020, there were 151 providers that reported they were engaged in the
provision of interexchange services. Of these providers, the Commission
estimates that 131 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, the
Commission estimates that the majority of providers in this industry
can be considered small entities.
108. Local Resellers. Neither the Commission nor the SBA have
developed a small business size standard specifically for Local
Resellers. Telecommunications Resellers is the closest industry with a
SBA small business size standard. The Telecommunications Resellers
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. Mobile virtual network operators (MVNOs)
are included in this industry. The SBA small business size standard for
Telecommunications Resellers classifies a business as small if it has
1,500 or fewer employees. U.S. Census Bureau data for 2017 show that
1,386 firms in this industry provided resale services for the entire
year. Of that number, 1,375 firms operated with fewer than 250
employees. Additionally, based on Commission data in the 2021 Universal
Service Monitoring Report, as of December 31, 2020, there were 293
providers that reported they were engaged in the provision of local
resale services. Of these providers, the Commission estimates that 289
providers have 1,500 or fewer employees. Consequently, using the SBA's
small business size standard, most of these providers can be considered
small entities.
109. Toll Resellers. Neither the Commission nor the SBA have
developed a small business size standard specifically for Toll
Resellers. Telecommunications Resellers is the closest industry with a
SBA small business size standard. The Telecommunications Resellers
industry comprises establishments engaged in purchasing access and
network capacity from owners and operators of telecommunications
networks and reselling wired and wireless telecommunications services
(except satellite) to businesses and households. Establishments in this
industry resell telecommunications; they do not operate transmission
facilities and infrastructure. MVNOs are included in this industry. The
SBA small business size standard for Telecommunications Resellers
classifies a business as small if it has 1,500 or fewer employees. U.S.
Census Bureau data for 2017 show that 1,386 firms in this industry
provided resale services for the entire year. Of that number, 1,375
firms operated with fewer than 250 employees. Additionally, based on
Commission data in the 2021 Universal Service Monitoring Report, as of
December 31, 2020, there were 518 providers that reported they were
engaged in the provision of toll services. Of these providers, the
Commission estimates that 495 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
110. Other Toll Carriers. Neither the Commission nor the SBA has
developed a definition for small businesses specifically applicable to
Other Toll Carriers. This category includes toll carriers that do not
fall within the categories of interexchange carriers, operator service
providers, prepaid calling card providers, satellite service carriers,
or toll resellers. Wired Telecommunications Carriers is the closest
industry with a SBA small business size standard. The SBA small
business size standard for Wired Telecommunications Carriers classifies
firms having 1,500 or fewer employees as small. U.S. Census Bureau data
for 2017 show that there were 3,054 firms in this industry that
operated for the entire year. Of this number, 2,964 firms operated with
fewer than 250 employees. Additionally, based on Commission data in the
2021 Universal Service Monitoring Report, as of December 31, 2020,
there were 115 providers that reported they were engaged in the
provision of other toll services. Of these providers, the Commission
estimates that 113 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
111. Payphone Service Providers (PSPs). Neither the Commission nor
the SBA have developed a small business size standard specifically for
payphone service providers, a group that includes incarcerated people's
communications services providers. Telecommunications Resellers is the
closest industry with a SBA small business size standard. The
Telecommunications Resellers industry comprises establishments engaged
in purchasing access and network capacity from owners and operators of
telecommunications networks and reselling wired and wireless
telecommunications services (except satellite) to businesses and
households. Establishments in this industry resell telecommunications;
they do not operate transmission facilities and infrastructure. Mobile
virtual network operators (MVNOs) are included in this industry. The
SBA small business size standard for Telecommunications Resellers
classifies a business as small if it has 1,500 or fewer employees. U.S.
Census Bureau data for 2017 show that 1,386 firms in this industry
provided resale services for the entire year. Of that number, 1,375
firms operated with fewer than 250 employees. Additionally, based on
Commission data in the 2021 Universal Service Monitoring Report, as of
December 31, 2020, there were 58 providers that reported they were
engaged in the provision of payphone services. Of these providers, the
Commission estimates that 57 providers have 1,500 or fewer employees.
Consequently, using the SBA's small business size standard, most of
these providers can be considered small entities.
112. Telecommunications Relay Service (TRS) Providers.
Telecommunications relay services enable individuals who are deaf, hard
of hearing, deaf-blind, or who have a speech disability to communicate
by telephone in a manner that is functionally equivalent to using voice
communication services. Internet-based TRS (iTRS) connects an
individual with a hearing or a speech disability to a TRS
communications assistant using an internet Protocol-enabled device via
the internet, rather than the public switched telephone network. Video
Relay Service (VRS) one form of iTRS, enables people with hearing or
speech disabilities who use sign language to communicate with voice
telephone users over a broadband connection using a video communication
device. Internet Protocol Captioned Telephone Service (IP CTS) another
form of iTRS, permits a person with hearing loss to have a telephone
conversation while reading
[[Page 20821]]
captions of what the other party is saying on an internet-connected
device. Providers must be certified by the Commission to provide VRS
and IP CTS and to receive compensation from the TRS Fund for TRS
provided in accordance with applicable rules.
113. Neither the Commission nor the SBA have developed a small
business size standard specifically for TRS Providers. All Other
Telecommunications is the closest industry with a SBA small business
size standard. Internet Service Providers (ISPs) and Voice over
internet Protocol (VoIP) services, via client-supplied
telecommunications connections are included in this industry. The SBA
small business size standard for this industry classifies firms with
annual receipts of $35 million or less as small. U.S. Census Bureau
data for 2017 show that there were 1,079 firms in this industry that
operated for the entire year. Of those firms, 1,039 had revenue of less
than $25 million. Based on Commission data there are ten certified iTRS
providers. The Commission however does not compile financial
information for these providers. Nevertheless, based on available
information, the Commission estimates that most providers in this
industry are small entities.
114. All Other Telecommunications. This industry is comprised of
establishments primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems. Providers of
internet services (e.g., dial-up ISPs) or VoIP services, via client-
supplied telecommunications connections are also included in this
industry. The SBA small business size standard for this industry
classifies firms with annual receipts of $35 million or less as small.
U.S. Census Bureau data for 2017 show that there were 1,079 firms in
this industry that operated for the entire year. Of those firms, 1,039
had revenue of less than $25 million. Based on this data, the
Commission estimates that the majority of ``All Other
Telecommunications'' firms can be considered small.
115. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements for Small Entities. In the NPRM, the Commission
seeks comment on further reforms to the regulations governing
incarcerated people's communications services, which could potentially
affect potential reporting and compliance requirements for small
entities and for providers of incarcerated people's communications
services of all sizes. For example, the NPRM seeks comment on whether
to continue using a ``total industry cost'' approach in setting rate
caps, which would result in the same per-unit rate caps for interstate
and intrastate voice services. Were the Commission to follow this
approach in implementing the Act's ``just and reasonable rates''
requirement--resulting in a unitary rate cap for any providers of
incarcerated people's interstate and intrastate communications
services--it would potentially reduce the compliance burden on smaller
providers.
116. The Commission's implementation of the Martha Wright-Reed Act
may require entities, including small entities and incarcerated
people's communications services providers of all sizes, currently
subject to the Commission's inmate calling services rules to be subject
to modified or new reporting or other compliance obligations. This may
also be the case for providers newly subject to the Commission's
expanded regulatory authority, such as providers offering only
intrastate or certain advanced communications. In addition, the
Commission recognizes that its actions in this proceeding may affect
the reporting, recordkeeping, and other compliance requirements for
several groups of small entities. In assessing the cost of compliance
for small entities and for providers of incarcerated people's
communications services of all sizes, at this time, the Commission is
not in a position to determine whether the proposed rules in the NPRM
will impose any significant costs for compliance in general, or whether
they will require small entities to hire attorneys, engineers,
consultants, or other professionals to comply. It is also undetermined
at this time if any new software, or modifications to existing
software, will be necessary for small entities and for providers of
incarcerated people's communications services of all sizes to
effectively comply with the proposed rules.
117. Within 18-24 months following enactment, the Commission is
required by the Martha Wright-Reed Act to adopt rules to ensure that
the rates and fees for incarcerated people's communications services
are just and reasonable. This may include new ratemaking methodologies,
such as the use of industry-wide average costs of telephonic service
and advanced communications data; new services, such as any audio or
video communications service used to communicate with persons outside
of the facility, regardless of technology used; and new entities, such
as providers that are newly subject to our authority. In the NPRM, the
Commission seeks comment on the collection and use of existing and
additional data in determining just and reasonable rates and charges
for incarcerated people's communications services, as well as on the
implementation of its newly expanded jurisdictional authority. If rules
are adopted pursuant to these proposals, they would apply to
incarcerated people's communications services providers of all sizes,
including small providers.
118. The Commission seeks comment on updating and restructuring its
current (third) mandatory data collection. First, to the extent that
the Commission updates and restructures its most recent data
collection, providers of incarcerated people's communications services
of all sizes, including small providers, would need to maintain and
report their cost data in accordance with the Commission's rules.
Similarly, if the Commission imposes data collection requirements, or
other new rules specific to implementation of the Martha Wright-Reed
Act, the data collection requirements and other rules will be
applicable to incarcerated people's communications services providers
of all sizes. The Commission also seeks comment on how it should
proceed if a particular provider or providers do not provide reliable
and accurate information in response to the updated data collection.
Any procedures it may adopt would impact reporting requirements for all
relevant entities, including small entities. Additionally, the
Commission seeks comment how to proceed if information submitted by
providers does not allow it to determine with precision the costs
attributable to any particular service or function, or groups of
services or functions. Any steps the Commission would take to ensure
the accuracy or precision of providers' data submissions could also
potentially affect reporting requirements for all relevant entities,
including small entities and providers of incarcerated people's
communications services of all sizes.
[[Page 20822]]
Steps Taken To Minimize the Significant Economic Impact on Small
Entities and Significant Alternatives Considered
119. The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): (1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rules for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.
120. In the NPRM, the Commission seeks to fulfill Congress's intent
via the implementation of the Martha Wright-Reed Act, including its
directive that the Commission ensure just and reasonable rates and
charges for incarcerated people's audio and video communications
services. While doing so, the Commission is mindful of the potential
impact on small businesses and, in particular, any disproportionate
impact or unique burdens that small businesses may face in complying
with any rules the Commission may adopt. Below the Commission discusses
several steps it has taken that could reduce the economic impact for
small entities.
121. Allowing additional time for small and medium-sized businesses
to comply with the proposed rules, including the timeframe for
compliance, could reduce the economic impact for small entities. The
Commission considered and seeks comment on whether such an approach
would serve the public interest. In doing so, the Commission has
provided small entities the opportunity to offer alternatives not
already considered, giving small entities ample time to minimize
whatever potential burdens they may face.
122. The Commission also seeks comment on the Martha Wright-Reed
Act's directive to consider the size of incarceration facilities in
setting just and reasonable rates and charges for services. The
Commission seeks comment on whether the ``industry-wide'' average cost
language in the Martha Wright-Reed Act refers only to some subset of
providers of incarcerated people's communications services or all such
providers. In doing so, the Commission seeks information that will help
to determine the appropriate approach to ensuring just and reasonable
rates as required by the Act. The Commission would also benefit by
using the information obtained from comments to inform its evaluation
of its regulatory options, including those that may potentially be less
burdensome for smaller providers.
123. The Martha Wright-Reed Act states that the Commission ``shall
consider . . . differences in the costs . . . by small, medium or large
facilities or other characteristics,'' as part of its rate-setting
process. The Commission seeks comment on how to interpret ``small,
medium, or large facilities.'' The Commission considered and seeks
comment on whether it is obligated to consider potential cost
differences associated with serving different-sized facilities if it
sets rates based on something other than industry-wide average costs.
This information will assist the Commission in considering alternatives
such as whether it should implement more or fewer rate tiers based on
the type or size of facility, and whether the Commission should set the
same rates for small, medium, and large facilities after considering
cost differences, if any.
124. Considering the economic impact on small entities through
comments filed in response to the NPRM and this IRFA, as part of its
efforts to implement the Martha Wright-Reed Act and promulgate rules in
these proceedings, could allow the Commission to potentially obtain
cost-benefit analyses and other input that would enable it to identify
reasonable alternatives that may not be readily apparent, and offer
alternatives not already considered that could minimize the economic
impact on small entities.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rules
125. None.
Ordering Clauses
126. It is ordered, pursuant to sections 1, 2, 4(i)-(j), 5(c),
201(b), 218, 220, 225, 255, 276, 403, and 716 of the Communications Act
of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j), 155(c), 201(b),
218, 220, 225, 255, 276, 403, and 617, and the Martha Wright-Reed Just
and Reasonable Communications Act of 2022, Public Law 117-338, 136 Stat
6156 (2022), the Notice of Proposed Rulemaking is hereby adopted.
127. It is further ordered, pursuant to applicable procedures set
forth in Sec. Sec. 1.415 and 1.419 of the Commission's rules, 47 CFR
1.415, 1.419, interested parties may file comments on the Notice of
Proposed Rulemaking on or before 30 days after publication of a summary
of the Notice of Proposed Rulemaking in the Federal Register and reply
comments on or before 60 days after publication of a summary of the
Notice of Proposed Rulemaking in the Federal Register.
Federal Communications Commission.
Marlene Dortch,
Secretary.
[FR Doc. 2023-07068 Filed 4-6-23; 8:45 am]
BILLING CODE 6712-01-P