[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

[[Page 20820]]

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