Rates for Interstate Inmate Calling Services, 68005-68015 [2013-26377]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 78, Number 219 (Wednesday, November 13, 2013)]
[Proposed Rules]
[Pages 68005-68015]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26377]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WC Docket No. 12-375; FCC 13-113]


Rates for Interstate Inmate Calling Services

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks public comment on options to reform the inmate 
calling service (ICS) market. Possible new rules could affect all ICS 
providers, including small entities. In proposing these reforms, the 
Commission seeks comment on various options discussed and additional 
options for reforming the ICS market.

DATES: Comments are due on or before December 13, 2013. Reply comments 
are due on or before December 30, 2013.

ADDRESSES: You may submit comments identified by WC Docket No. 12-375 
by any of the following methods:
    [ssquf] Federal Communications Commission's Web site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
    [ssquf] People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Lynne Engledow, Wireline Competition 
Bureau, Pricing Policy Division, (202) 418-1520 or 
lynne.engledow@fcc.gov.

SUPPLEMENTARY INFORMATION: Pursuant to sections 1.415 and 1.419 of the 
Commission's rules, 47 CFR 1.415, 1.419, interested parties may file 
comments and reply comments on or before the dates indicated on the 
first page of this document. Comments may be filed using the 
Commission's Electronic Comment Filing System (ECFS). See, Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 
1998.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and

[[Page 68006]]

one copy of each filing. If more than one docket or rulemaking number 
appears in the caption of this proceeding, filers must submit two 
additional copies for each additional docket or rulemaking number.
    Filings can be sent by hand or messenger delivery, 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.
    [cir] All hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary must be delivered to FCC Headquarters at 445 
12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
    [cir] Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
    [cir] U.S. Postal Service first-class, Express, and Priority mail 
must be addressed to 445 12th Street SW., Washington, DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to fcc504@fcc.gov or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    This is a summary of the Commission's Report and Order and Further 
Notice of Proposed Rulemaking in WC Docket No. 12-375, FCC 13-113, 
dated on August 9, 2013 and released on September 26, 2013. The full 
text of this document is available for public inspection during regular 
business hours in the Commission's Reference Center, 445 12th Street 
SW., Room CY-A257, Washington, DC 20554. The full text of this document 
may be downloaded at the following Internet address: https://www.fcc.gov/documents/ documents/. The complete text may be purchased from Best 
Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, 
DC 20554. To request alternative formats for persons with disabilities 
(e.g., accessible format documents, sign language, interpreters, CARTS, 
etc.), send an email to fcc504@fcc.gov or call the Commission's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 or (202) 
418-0432 (TTY). This document contains new information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public to comment on the 
information collection requirements contained in this R&O as required 
by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, 
the Commission notes that pursuant to the Small Business Paperwork 
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we 
previously sought specific comment on how the Commission might further 
reduce the information collection burden for small business concerns 
with fewer than 25 employees.
    The proceeding this Further Notice of Proposed Rulemaking (FNPRM) 
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 his or her 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.

I. Further Notice of Proposed Rulemaking

    1. We seek comment on additional measures we could take to ensure 
that interstate and intrastate ICS are provided consistent with the 
statute and public interest, the Commission's authority to implement 
these measures, and the pros and cons of each measure. We believe 
additional action on ICS will help maintain familial contacts stressed 
by confinement and will better serve inmates with special needs while 
still ensuring the critical security needs of correctional facilities 
of various sizes. Specifically, we seek comment on:
     Reforming intrastate ICS rates and practices;
     ICS for the deaf and hard of hearing community;
     Further reforms of interstate and intrastate ICS rates;
     Cost recovery in connection with the provision of ICS;
     Ensuring that charges ancillary to the provision of ICS 
are cost-based;
     ICS call blocking;
     Ways to foster competition to reduce rates within 
correctional facilities; and
     Quality of service for ICS.

A. Reforming Intrastate ICS

    2. In this section, we seek comment on reforming intrastate ICS 
rates and practices to ensure that consumers across the country can 
benefit from a fair, affordable ICS rate framework that encourages 
inmates to stay connected with friends and family. As discussed below, 
we believe that intrastate reform is necessary and that the Commission 
has the authority to reform intrastate ICS rates. We seek comment on 
these issues.
1. Need for Intrastate Rate Reform
    3. We commend states that have undertaken ICS reform. In 
particular, we encourage more states to eliminate site commissions, 
adopt rate caps, disallow or reduce per-call charges, or take other 
steps to reform ICS rates. The reforms adopted in the Order are 
structured in a manner to encourage other states to undertake reform 
and to give states sufficient flexibility to structure reforms in a 
manner that achieves just and reasonable rates. Even so, it is unlikely 
that all 50 states, Washington, DC, and the U.S. territories will all 
engage in ICS reform in the near term. Indeed, several comments 
encourage the Commission to reform intrastate ICS rates as well as 
interstate ICS rates. As a result, if the Commission does not take 
action to

[[Page 68007]]

reform unfair intrastate ICS rates, the unreasonably high rates will 
continue, many families will remain disconnected, and the available 
societal benefits will not be realized.
    4. The Order explains the legal and policy reasons why the 
Commission needed to adopt reforms of interstate ICS rates. We believe 
the same legal and policy concerns identified in the Order apply 
equally with regard to high intrastate rates. For example, lower ICS 
rates result in increased communications between incarcerated parents 
and their children. Additionally, the record indicates that the lack of 
regular contact between incarcerated parents and their children is 
linked to truancy, homelessness, depression, aggression, and poor 
classroom performance. Further, studies have demonstrated that 
increased contact with families during incarceration leads to lower 
rates of recidivism, and associated lower taxpayer costs. Indeed, the 
record indicates that a significant number of ICS calls are intrastate, 
highlighting the need for reform of intrastate rates. We tentatively 
conclude and seek comment on the conclusion that intrastate ICS rate 
reform will yield these and other societal benefits in the same manner 
as interstate ICS rate reform.
    5. As discussed in the Order, the variance in interstate ICS rates 
is significant (from an effective rate of $0.043 per minute in New 
Mexico to $0.89 per minute with a $3.95 call set up charge in Georgia) 
and that such variance is unlikely to be based on the ICS providers' 
costs. In the Order, we conclude that competition and market forces 
have failed to ensure just, reasonable, and fair interstate ICS rates, 
and, for the same reasons, we tentatively conclude that the same 
failure has occurred for intrastate ICS rates as well. We invite 
comment on this analysis. Where states have failed to ensure just, 
reasonable, and fair ICS rates for intrastate services, is the 
Commission compelled to take action to ensure just, reasonable, and 
fair rates under section 276? Should the Commission only take action to 
reform intrastate ICS rates in states that have not reformed rates to 
levels that are at or below our interim safe harbor adopted above? 
Would doing so permit other states to adopt reforms?
    6. For the same reasons we found that site commission payments are 
not part of the cost of providing interstate ICS, we tentatively 
conclude that site commissions should not be recoverable through 
intrastate rates, and seek comment on this tentative conclusion. Where 
states have prohibited site commission payments, we seek comment on 
whether the resulting intrastate ICS rates are just and reasonable and 
whether an average of such rates would provide a reasonable safe harbor 
for fair intrastate ICS rates.
    7. The record also reflects that differing interstate, intrastate 
long distance and local rates have encouraged the use of technology to 
reduce the costs on families. In practice, call recipients obtain 
telephone numbers associated with a geographic area (either local or 
long distance) that corresponds to the lowest ICS rate for a particular 
correctional facility. Will the cost-based rates required by the Order 
create a market-based solution for driving intrastate rates to cost-
based levels absent further regulatory actions? Also, does the 
existence of uniform ICS rates evidence ICS providers' ability to 
provide intrastate and interstate calls at the same rate level, and 
therefore support Commission action to ensure such uniformity among 
interstate and intrastate ICS rates?
2. Legal Authority
    8. Several commenters in this proceeding have argued that the 
Commission has authority to regulate rates for intrastate ICS under 
section 276 of the Act, which directs the Commission to regulate the 
rates for intrastate and interstate payphone services and defines such 
services to include ``the provision of inmate telephone service in 
correctional institutions, and any ancillary services.'' We agree and 
tentatively conclude that section 276 affords the Commission broad 
discretion to regulate intrastate ICS rates and practices that deny 
fair compensation, and to preempt inconsistent state requirements. We 
seek comment on this tentative conclusion and related issues below.
    9. While the Commission has broad jurisdiction over interstate 
telecommunications services, its authority over intrastate 
telecommunications is, except as otherwise provided by Congress, 
generally limited by section 2(b) of the Act, which states that 
``nothing in this Act shall . . . give the Commission jurisdiction with 
respect to . . . intrastate communication service by wire or radio.'' 
As the Supreme Court has held, however, section 2(b) has no effect 
where the Communications Act, by its terms, unambiguously applies to 
intrastate services. That is the case here. Section 276(b)(1) expressly 
authorizes--indeed, instructs--the Commission to regulate intrastate 
payphone services:

    In order to promote competition among payphone service providers 
and promote the widespread deployment of payphone services to the 
benefit of the general public, within 9 months after February 8, 
1996, the Commission shall take all actions necessary (including any 
reconsideration) to prescribe regulations that . . . establish a per 
call compensation plan to ensure that all payphone service providers 
are fairly compensated for each and every completed intrastate and 
interstate call using their payphone, except that emergency calls 
and telecommunications relay service calls for hearing disabled 
individuals shall not be subject to such compensation . . . .

Furthermore, 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.''
    10. We also believe that our authority in this regard finds support 
in judicial precedent. In Illinois Public Telecommunications 
Association v. FCC, the D.C. Circuit upheld against jurisdictional 
challenge the Commission's authority to regulate, and to preempt 
inconsistent state regulation of, the local coin rate for payphones:

    It is undisputed that local coin calls are among the intrastate 
calls for which payphone operators must be ``fairly compensated;'' 
the only question is whether in section 276 the Congress gave the 
Commission the authority to set local coin call rates in order to 
achieve that goal. We conclude that it did.

Thus, we tentatively conclude these statutory provisions and associated 
case law permit the Commission to regulate intrastate ICS provider 
compensation, including end-user rates. We seek comment on this 
conclusion.
    11. We also seek comment on whether and how the Commission's 
potential regulation of intrastate ICS pursuant to section 276 might be 
informed by any relevant provisions within section 276, including, for 
example, (i) the introductory ``purpose'' clause of section 276(b)(1) 
(``In order to promote competition among payphone service providers and 
promote the widespread deployment of payphone services to benefit the 
general public . . . .''); and (ii) section 276(b)(1)(A)'s requirement 
that regulations adopted by the Commission ensure that payphone service 
providers are compensated ``per call'' and for ``each and every 
completed intrastate and interstate call.''
    12. Commenters are asked to identify what, if any, limits apply to 
Commission authority to regulate intrastate ICS rates under section 
276. We note that the Commission's authority to regulate interstate ICS 
rates derives from both sections 276 and 201. We seek comment on 
whether this

[[Page 68008]]

impacts the Commission's authority to regulate intrastate ICS rates. 
For instance, section 201(b) authorizes this Commission to ensure that 
all charges ``for and in connection with'' an interstate common carrier 
communication service are just and reasonable. Does the absence of 
similar language in section 276 constrain our authority to regulate 
intrastate ICS rates in the same manner and to the same extent as 
interstate ICS rates? Alternatively, by broadly defining payphone 
service to also include ``any ancillary services,'' does section 276 
effectively grant the Commission authority over intrastate rates that 
is similar in scope to authority under the ``for and in connection 
with'' provision in section 201(b)?
    13. We seek comment on any sources of authority other than section 
276 that would authorize the Commission to regulate intrastate ICS 
rates paid by end users. Does the provision of ICS--either in its 
current form or as it evolves to include new services and 
technologies--implicate the ``impossibility'' exception to section 2(b) 
of the Act, which allows a Commission regulation to preempt a state 
regulation when it is impossible to separate the interstate and 
intrastate components? Would application of this exception here give 
the Commission any additional authority over intrastate ICS rates 
beyond what is already conferred by the preemption provision in section 
276(c) and the ``each and every intrastate . . . call'' provision in 
section 276(b)(1)(A)?
    14. We also ask whether there are other limits on our authority to 
regulate intrastate ICS rates. For instance, are intrastate ICS rates, 
as some commenters allege, tightly bound up with issues, such as inmate 
discipline and prison security, that are traditionally regulated by 
states, localities, or prison officials and, if so, does that limit the 
Commission's ability to regulate intrastate ICS rates in ways that 
would not be applicable for interstate ICS rates? Would Commission 
regulation of intrastate ICS rates, or any specific elements thereof, 
``present[] unsettled constitutional implications under the 10th and 
11th Amendments,'' as one commenter contends? The record reflects only 
limited analysis in favor of these arguments, and we note that the 
proponents of these arguments have not cited any precedents that would 
preclude the Commission from exercising broad authority over intrastate 
ICS rates under section 276. Commenters should provide a complete 
supporting analysis and justification. We also invite comments on any 
other issues that may be relevant to assessing the scope of the 
Commission's authority to regulate intrastate ICS rates.

B. Inmate Calling Services for the Deaf and Hard of Hearing Community

    15. We seek comment on four additional issues raised in our record, 
including: (i) whether and how to discount the per-minute rate for ICS 
calls placed using TTYs, (ii) whether action is required to ensure that 
ICS providers do not deny access to TRS by blocking calls to 711 and/or 
state established TRS access numbers, (iii) the need for ICS providers 
to receive complaints on TRS service and file reports with the 
Commission, and (iv) actions the Commission can take to promote the 
availability and use of VRS and other assistive technologies in 
correctional facilities.
    16. Rates for TTY Calls. The record indicates that despite the fact 
that using TTY equipment is not the preferred form of TRS for many deaf 
and hard of hearing individuals, the equipment is still in widespread 
use in correctional facilities. Consistent with the Commission's 
statement in the 2012 ICS NPRM, commenters assert that TTY-to-voice 
calls take at least three to four times longer than voice-to-voice 
conversations to deliver the same conversational content, not including 
the time it takes to connect to the operator. Given this difference in 
communication speed, commenters argue that TTY users should be charged 
a discounted rate for TTY calls.
    17. We tentatively conclude that inmate calling service per-minute 
rates for TTY calls should be set at 25 percent of the safe harbor rate 
for inmate calls. The 25 percent figure is consistent with record 
evidence regarding the length of a conversational call via TTY as 
compared to regular voice calls. We seek comment on this proposal.
    18. The Commission previously has noted that section 276(b)(1)(A) 
specifically exempts ``telecommunications relay service calls for 
hearing disabled individuals'' from the Commission-established ``per 
call compensation plan'' ensuring that ICS providers are ``fairly 
compensated.'' No party has, to date, responded to the Commission's 
request for comment on how it should take this exemption into account 
in examining rates. We also note that section 225(d)(1) of the Act 
requires the Commission to prescribe regulations that ``require that 
users of telecommunications relay services pay rates no greater than 
the rates paid for functionally equivalent voice communication services 
with respect to such factors as the duration of the call, the time of 
day and the distance from point of origination to point of 
termination.'' We seek comment on whether sections 276 and 225 provide 
sufficient authority for us to adopt a discounted rate for TTY calls.
    19. We also seek comment on how ICS providers should recover the 
costs of providing discounted TTY calls. One proposal would be to 
ensure that the safe harbor per-minute rate levels are set high enough 
to ensure that ICS providers recover the full cost of TTY calls. Given 
the very small number of deaf and hard of hearing inmates relative to 
the overall prison population, are the safe harbor rates adopted in 
today's Order sufficient to allow recovery of the discount? What are 
the total number of TTY minutes of use compared to the total minutes of 
use charged by ICS providers? If the safe harbor rates adopted today 
are not sufficient to recover the cost of a TTY discount, by what 
amount would the rate need to be increased? If the Commission adopts a 
tiered rate structure as discussed below or reduces the safe harbor 
rates adopted in the Order, what effect would this have on the ability 
to recover the discount?
    20. We also seek comment on allowing ICS providers to recover the 
cost of a TTY discount from the Telecommunications Relay Service Fund. 
What steps would the Commission need to take to allow ICS providers to 
obtain certification to request payment from the Fund? What types of 
data would ICS providers need to submit to the Fund administrator when 
seeking compensation? What other steps would the Commission and the 
Fund administrator need to take to ensure that ICS providers are fully 
compensated for discounted TTY calls while protecting the TRS Fund 
against waste, fraud, and abuse?
    21. Access to 711 and State TRS Numbers. We seek comment below on 
ICS call blocking practices generally. We note that commenters allege 
that many ICS providers block calls to toll-free numbers, including 
711, which ``impede[s] deaf inmates' abilities to call a relay service 
provider from a TTY.'' We seek specific comment on the practice of 
blocking calls to 711 and other TRS access numbers. Section 225 of the 
Act states that the Commission ``shall ensure that interstate and 
intrastate telecommunications relay services are available, to the 
extent possible and in the most efficient manner, to hearing-impaired 
and speech-impaired individuals in the United States.'' Does section 
225 of the Act provide to the Commission an independent source of 
authority to

[[Page 68009]]

prevent such blocking? What actions, if any, should the Commission take 
to ensure that deaf and hard of hearing inmates are able to access TRS? 
What methodologies exist to enable deaf inmates to reach relay services 
utilizing 711 and 800 numbers while blocking access to all other 800 
numbers?
    22. TRS Complaints and Reporting. Commenters urge the Commission to 
require ICS providers to collect and report to the Commission: (i) data 
on TRS usage via ICS, and (ii) complaints from individuals that access 
TRS via ICS. We seek comment on these proposals. If the Commission were 
to require ICS providers to submit TRS usage data, what data would be 
appropriate? Would the data that TRS providers submit to the TRS Fund 
Administrator be an appropriate model? Likewise, were the Commission to 
require the collection and reporting of user complaints, would the 
rules applicable to TRS providers serve as an appropriate model? Are 
the Commission's existing consumer complaint procedures sufficient to 
accommodate complaints of this type? We seek comment on the benefits 
and burdens, including on small entities, of imposing these reporting 
requirements.
    23. Availability of Assistive Technologies in Correctional 
Facilities. As discussed above, we decline to mandate the types of TRS 
access technologies correctional facilities must make available to 
inmates. We note, however, that some correctional facilities already 
make VRS or other types of video communication available to inmates, 
and seek comment on how the Commission can facilitate the availability 
of VRS and other forms of assistive technologies in correctional 
facilities. What assistive technologies and devices should ICS 
providers make available? What are the advantages and disadvantages of 
each? Would additional assistive technologies supplant or complement 
TTY technology in the prison context? How can the security concerns of 
correctional facilities be accommodated, especially where 700/800/900 
number calls or IP enabled devices are used?
    24. VRS communications require the interaction of three separate 
yet interlinked components: VRS access technologies, video 
communication service, and relay service provided by ASL-fluent 
communications assistants (CAs). We note that in the recently adopted 
VRS Structural Reform Order, the Commission directed the creation of a 
neutral video communication service provider and a VRS access 
technology reference platform--key elements of VRS service that will be 
operated pursuant to contract with the Commission or the TRS Fund 
Administrator and paid for out of the TRS Fund. We seek comment on 
whether the availability of the neutral video communication service 
provider and the VRS access technology reference platform could 
facilitate the introduction of VRS in correctional facilities. What 
features or requirements, if any, would correctional facilities require 
the neutral video communication service provider and the VRS access 
technology reference platform to offer before allowing their use by 
inmates? Would it be possible for the administrator(s) of the neutral 
video communication service provider and the VRS access technology 
reference platform to implement such requirements or features at a 
reasonable cost to the TRS Fund? What other factors, such as security 
issues unique to correctional facilities, may serve as a barrier to the 
introduction of VRS and other forms of Internet-based TRS in 
correctional facilities?

C. Further ICS Rate Reform

    25. In the Order, we adopted interim safe harbor rate levels and 
interim rate caps based on a conservative analysis of rate and cost 
data in the record. In this section, we seek comment on additional 
reforms including further rate reductions.
1. Rate Structure
    26. We seek comment on additional reforms and alternative ways of 
accomplishing interstate and intrastate rate reforms including the 
establishment of unified interstate and intrastate rates and various 
suggestions for a tiered rate structure. First, we note that in the 
Order we make clear that the rules we adopt apply to inmate telephone 
service provided to the full range of ``correctional institutions,'' 
including institutions such as prisons, jails and immigration detention 
facilities. Beyond the guidance already provided in the order, we seek 
comment on whether the Commission should provide a definition in the 
Commission's rules or to provide a more exhaustive list of the kinds of 
facilities covered. Parties that support the adoption of a definition 
of ``correctional institution'' should suggest proposed rule language 
and the reasons to support the inclusion or exclusion of various 
facilities.
    27. Permanent Safe Harbors and Rate Caps. We seek comment on the 
methodology the Commission should use to establish cost-based permanent 
safe harbors and rate caps to ensure just, reasonable rates and fair 
compensation to providers. We seek comment on maintaining the interim 
rate caps and safe harbor rate levels adopted in the Order and 
expanding that structure to encompass intrastate ICS rates. We note 
that both the safe harbors and rate caps are set at conservative levels 
fully supported by the record but are intended to be interim in nature 
while the Commission further analyzes data received from the mandatory 
data collection adopted in the Order in order to consider whether any 
permanent rates should be further refined. Should we maintain the 
current safe harbors and make them permanent or should they be reduced 
over time given that they were set at conservative levels? Should they 
be applied to intrastate rates? Do commenters propose any specific 
modifications to the interim rate caps and safe harbor rate levels 
adopted above? For example, we seek comment below on various tiered 
approaches. Should any permanent safe harbor or cap be based on a 
tiered approach? Should we adopt a mechanism to adjust any permanent 
safe harbor or rate cap over time to account for changing ICS provider 
costs, inflation, or other factors? We invite commenters to identify 
factors we should consider and to detail the proposed benefits of such 
modifications.
    28. All-Distance Rates. Some providers recommend that the 
Commission adopt a rate structure that charges the same rate regardless 
of the distance or jurisdictional nature of the call. Under such a 
structure, ``all calls are charged at the same per-minute rate 
regardless of distance, call type or jurisdictional classification.'' 
The Commission has, in other contexts, determined that the cost of 
calling today is distance insensitive. We seek comment on parties' 
experience with distance insensitive ICS rates. Do commenters believe 
such a rate structure would be useful in regulating ICS rates going 
forward? Why or why not? We note that some facilities already have such 
rates. Do such rates sufficiently deal with claimed cost differences 
between prisons and jails of varying sizes? Commenters suggest that 
after reducing and standardizing all ICS rates call volumes will 
increase, resulting in increased revenues. Is this suggestion correct? 
Have other commenters experienced such a change? We seek comment on the 
various ICS rate structures suggested in the record. In particular, 
would adoption of the Petitioner's proposed rate of $0.07 per minute 
bring about the benefits of a distance-insensitive rate claimed by 
proponents of such an approach?
    29. Tiered Rate Structure. In the Order we adopted interim safe 
harbor

[[Page 68010]]

rate levels and interim rate caps that are sufficiently conservative to 
enable providers to recover their costs and account for any potential 
differing characteristics associated with providing service to varying 
types and sizes of facilities.
    30. In the 2012 ICS NPRM, the Commission sought comment on the 
usefulness of a tiered rate structure based on volume of ICS minutes at 
the facility. 78 FR 4369, Jan. 23, 2013. In response, commenters 
suggested a tiered rate structure with rate levels that vary according 
to a facilities' monthly volume of minutes. We again seek comment on a 
rate structure tiered by volume of minutes. We seek comment on whether 
a tiered rate structure would enable the Commission to adopt a lower 
rate for larger facilities. Have providers or jurisdictions adopted 
rate structures based on either call volume or inmate capacity? If so, 
what has been their experience? How do the costs of providing service 
differ among facilities for providers serving multiple facilities? 
Specifically, we seek identification of costs incurred individually by 
facility and what proportion of such costs make up the provider's total 
cost of providing service. We note that Securus, in response to the 
2012 ICS NPRM, submitted cost data broken out by four tiers of facility 
size. We seek comment on the call volume based tiers used in Securus' 
filing. Do commenters believe division by such call volume categories 
is a useful way to establish a tiered rate structure? Or is this type 
of division too subjective or too specific to be useful for the 
industry as a whole?
    31. If the Commission were to adopt a tiered ICS rate approach by 
facility size, should the Commission use the breakdown of confinement 
facility sizes from the Bureau of Justice Statistics? Also, commenters 
indicate that centralization in call processing is prevalent in the ICS 
industry, and that this centralization has changed the costs of 
providing ICS. In light of this centralization, we seek comment on 
whether differences in the cost to provide ICS remain between 
differently sized facilities. We also seek comment on whether a tiered 
rate structure would be more applicable to the way ICS is provided in 
practice if the rate tiers varied by ICS provider size rather than by 
facility size.
    32. Tiered Rate Structure between Prisons and Jails. Some parties 
claim that the differences between jails and prisons in terms of such 
factors as size and inhabitants' length of incarceration make the cost 
of service vary. Others disagree. If the Commission were to adopt such 
a proposal, we seek comment on how to define ``jails'' and ``prisons.'' 
Should a jail be defined as a facility where inmates are incarcerated 
for less than one year? If not, what is the appropriate definition of a 
jail? Or should the Commission define prisons and all other facilities 
would be considered jails? We seek comment on whether jails have 
different communications needs and calling practices than inmates in 
longer-term facilities like prisons. Commenters advocating for such a 
difference should explain whether such differences apply uniformly to 
all jails, to smaller jails, or to jails with certain characteristics. 
We note that the record indicates that some jails benefit from 
technological developments that have centralized their ICS operations 
and lowered the costs of providing ICS. Should we adjust our 
regulations and adopt different results for prisons and jails, and if 
so, how? What cost considerations for the provision of ICS affect jails 
that may not affect, or that may be different from, those that affect 
prisons? Instead of treating all jails differently than prisons, should 
we have a tiered structure based on the size of the facility or jail? 
Do commenters suggesting that jails be treated differently believe that 
larger jails have characteristics and call volumes similar to prisons? 
If so, how would the Commission define ``larger'' jails? Should a 
facility be considered a ``larger jail'' if it has more than 100, 200, 
500 or 1000 beds? Would a tiered approach, which would permit higher 
rates for smaller facilities, adequately address any unique needs of 
jails? We also seek comment on the impact of ICS provider call 
processing centralization for prisons and jails. Does this 
centralization diminish or eliminate differences between the cost to 
provide ICS in prisons and jails? Are there other distinctions between 
different types of correctional institutions that the Commission should 
incorporate as it considers additional rate reforms? Commenters 
advocating such distinctions should address the considerations noted 
above with respect to possible distinctions between ``jails'' and 
``prisons,'' including how the different facilities should be defined, 
the basis for drawing the distinctions, and specifically how the 
distinctions should be reflected in our rules.
    33. Per-Call Cap. We seek comment on whether the Commission should 
adopt an overall maximum per-call cap. We note that some states, for 
example, have created flat-rated rate structures (such as those found 
in New Mexico and South Carolina) with only a per-call charge, 
irrespective of the length of the call. Similarly, Washington, DC has 
adopted a $1.75 per-call intrastate cap. Securus suggests that the 
Commission adopt an $8.00 maximum charge for interstate ICS calls ``no 
matter how long the call, no matter the size of the facility, and no 
matter the location of the originating facility.'' We seek comment on 
whether the Commission should adopt an overall rate cap and the caps 
that have been adopted by states and proposed by Securus. How does such 
overall rate cap ensure that rates are just, reasonable, and fair? Is a 
per-minute rate cap also necessary to ensure that shorter calls are 
cost-based and reasonable?
    34. Per-Call Charges. In the Order, we adopted an interim rate 
structure with safe harbor levels and rate caps. While we adopted per-
minute rate levels to effectuate these rate structure elements, we also 
provided some flexibility in implementation. ICS providers electing to 
take advantage of the safe harbor rate levels are permitted to use a 
rate structure that includes per-call charges.
    35. Although we permit the use of per-call charges in the Order, we 
express serious concerns about such charges. With the significant 
automation of a modern ICS network, are there any costs that are 
uniquely incurred during the call initiation phase that would be 
inappropriate, or difficult, to recover through a pure per-minute rate 
structure? Some states and facilities have eliminated per-call charges 
and are presumably able to provide full-cost recovery for ICS 
providers. What are the experiences of parties (facilities, ICS 
providers, and ICS users) where per-call charges have been eliminated? 
What is the experience with such rate structures and do they offer 
benefits that do not exist with per-minute rate structures? What is the 
experience for providers and users with these flat-rated rate 
structures given the identified risks of per-call charges in the ICS 
context? Are providers able to recover the costs of calls with such a 
rate structure? Do the benefits of leaving flexibility to the states, 
facilities, and ICS providers, outweigh the issues associated with per-
call charges?
2. Determining Costs for ICS Rates
    36. In the Order, the Commission adopted interim rate caps and safe 
harbor rate levels for interstate ICS. The Order also required ICS 
providers to file certain ICS-related data to enable the Commission to 
begin the process of establishing permanent rates. As part of this 
process, we seek comment on whether there are additional factors, 
including possibly declining costs related to technological 
innovations,

[[Page 68011]]

that the Commission should consider in order to refine its findings in 
the Order and how the Commission should proceed in establishing ICS 
rates for interstate and intrastate ICS. Additionally, we note that the 
Order adopts a historical cost methodology for the interim rules and we 
seek comment on what measure of cost--e.g., historical, forward 
looking--should be adopted for the permanent rate structure.
    37. Impact of Technology Innovations. The record highlights 
significant changes in the technology and the equipment used to provide 
ICS. In some facilities, Telmate offers video conferencing between 
inmates and their families, email and voice mail services for inmates, 
a secure social media alternative, and a secure photo-sharing service 
for inmates and their families. The Virginia DOC expanded its video 
visitation program in 2010 and offers numerous visitor centers sites at 
which an inmate's friends and family can connect through 
videoconferencing. We seek comment on the impact of technological 
advancements on the ICS industry. Have such advancements reduced the 
cost of providing ICS? We seek comment on specific ways in which 
advanced services help to address security concerns and whether such 
advancements reduce costs. We also invite comment on ways in which 
advanced services could affect access for inmates with disabilities, 
and communications between abled inmates and their friends and family 
with disabilities.
    38. We seek comment on the future of voice-based services in 
correctional settings. In the non-ICS context, voice calling minutes 
have been falling while other forms of communications (e.g., text 
messaging, email, social networks) have been growing in importance. We 
seek comment on the frequency of such alternatives in correctional 
facilities and, where applicable, the impact on ICS calling volumes. 
How have ICS providers introduced such alternatives while still 
providing adequate security capabilities, and why? We seek comment on 
our legal authority to regulate the rates for such alternative 
services.
3. International ICS
    39. We seek comment on the prevalence of international calling and 
whether the Commission should take action to reform ICS rates for 
international calls. The record indicates that although it is feasible 
to make international calls, international ICS calling is not always an 
available option for inmates. Do facilities block international calls 
for security reasons? If so, we seek comment on what specific reasons 
justify blocking international calls. Several commenters assert that 
the lack of availability of international calling is particularly 
burdensome to immigrant inmates and their families. Do most facilities 
allow international calling? If not, why not? How are such calls 
priced? Are any additional restrictions applied to such calls, such as 
time-of-day restrictions or prior-permission requirements? Should the 
Commission require the availability of international calls, and what 
would be the source of legal authority that would authorize the 
Commission adopt such a requirement? If we were to adopt such a 
requirement, what rates should apply to international calls and how 
should the Commission set such rates? We seek comment as to whether 
these rates are appropriate and compensatory.

D. Ancillary Charges

1. Background
    40. In response to inquiries in the 2012 ICS NPRM, the record 
indicates that ICS providers impose charges on inmates and ICS call 
recipients that do not recover the costs of providing phone service but 
rather recover costs associated with functions ancillary to 
provisioning ICS such as initiating, maintaining and closing debit or 
prepaid ICS accounts, sending a paper bill or sending calls to a 
wireless number. The Order adopted requirements that such ancillary 
service charges related to ICS be cost-based and provides enforcement 
mechanisms applicable to any challenges. The Bureau released a Public 
Notice on June 26, 2013 seeking additional comment on these charges 
including: ``the level of each fee, the total amount of revenue 
received from each fee, and the cost of providing the service for which 
the fee recovers.'' 78 FR 42034, July 15, 2013. The record received 
indicates that providers are charging a variety of fees at fee levels 
ranging from no fee for account replenishment when a paper check is 
sent in the mail, to a $7.95 processing fee for payment by credit or 
debit card, and $11.95 processing fee for payment through Western 
Union, among others.
2. Discussion
    41. In the Order, we require charges for any services that are 
ancillary to the costs of providing ICS to be cost-based, and require 
ICS providers to submit cost data for these ancillary service charges 
as part of the mandatory data request. Here we seek comment on how the 
Commission can ensure, going forward, that ancillary charges are just, 
reasonable, and cost-based. For example, the record reflects that ICS 
providers typically use third parties to process debit and prepaid 
transactions, and there are concerns that the charges passed on to 
inmates or their called parties are not entirely cost-based. Is this 
accurate? If so, what are the actual costs charged to the ICS providers 
by such third parties? We seek comment on whether the Commission should 
identify certain ancillary charges that are unreasonable practices and 
therefore prohibited under the Act?
    42. The record indicates that some ICS providers offer ``no fee'' 
options for replenishing debit or prepaid accounts. What are 
commenters' experiences with such options? We request that commenters 
describe any other no- or low-fee options offered by ICS providers. 
Should the Commission mandate that ICS providers offer such no or low 
fee options? We seek comment on this approach, including our legal 
authority to mandate a no or low fee option.
    43. Likewise, we seek comment on the cost drivers underlying ICS 
providers' ancillary service charges. Are charges for these services 
currently cost-based? Will our complaint process ensure that charges 
for services that are ancillary to the telecommunications costs of 
providing ICS are cost-based on an ongoing basis? Do commenters believe 
that the costs underlying ancillary service charges should be treated 
as compensable though ICS rates? Can we set a safe harbor rate that 
will ensure that charges for such ancillary services are cost-based? 
How would such a safe harbor work? If we set such a safe harbor, what 
kind of process should be available to ICS providers that believe they 
cannot recover their costs for such ancillary services? What 
information should we require the ICS providers to submit to support 
such requests?
    44. Finally, we seek comment on whether some ancillary services 
charges constitute unjust and unreasonable practices, in violation of 
section 201(b), or a practice that would lead to unfair rates in 
violation of section 276, regardless of the level of the charge, 
because how such charges are imposed make ICS too expensive and thus 
unavailable to some consumers. The Commission has consistently held 
that practices may be unjust and unreasonable without regard to the 
charges related to those practices. Examples of practices that we 
believe may be unjust and unreasonable to the extent they impose de 
minimis costs to the ICS provider include imposing inactivity charges 
on a customer's

[[Page 68012]]

prepaid account, and charging a customer to close an account and refund 
their money to them. We seek comment on whether we should consider 
these charges, or any other ancillary service charges, to be unjust and 
unreasonable.

E. Prohibiting Call Blocking

1. Background
    45. The Commission has a long-standing policy that largely 
prohibits call blocking. Specifically, the Commission has determined 
that the refusal to deliver voice telephone calls ``risks degradation 
of the country's telecommunications network'' and poses a serious 
threat to the ``ubiquity and seamlessness'' of the network. The issue 
of call blocking has arisen in multiple contexts in the ICS industry. 
Throughout this proceeding ICS providers have offered various 
justifications for their call blocking practices. Here we seek 
additional comment on these practices which break down into two 
fundamental types. We invite commenters to address any other types of 
blocking and we seek comment on whether we need to address blocking 
beyond the two specific types described below.
2. Billing-Related Call Blocking
    46. The Commission sought information in the 2012 ICS NPRM on 
billing-related call blocking. 78 FR 4369, Jan. 23, 2013. In the Order 
above we conclude that billing-related call blocking of interstate ICS 
calls is only permissible if the ICS provider offers a ``prepaid 
collect'' option, as described above. We seek comment on whether our 
conclusion resolves the issues surrounding billing-related blocking of 
interstate ICS calls. Additionally, we seek comment on whether we 
should extend our prohibition on blocking to intrastate ICS calls. In 
particular, we invite comment on whether it is possible to block only 
interstate calls while not blocking intrastate calls, or whether such a 
separation is impracticable. In light of our mandate above for 
``prepaid collect,'' do the problems Petitioners describe remain? Or is 
it correct, as commenters have said, that such ``products help to 
ensure that inmates reach their intended parties regardless of their 
billing status''? Does our mandate regarding ``prepaid collect'' 
options address ICS providers' problems of uncollectibles? What other 
options are there to prevent call blocking due to a lack of a billing 
relationship between the ICS provider and the called parties' provider, 
whether ILEC, CLEC, wireless provider or VoIP provider? Should we 
prohibit ICS providers from entering into a new contract or contract 
extension for ICS that include collect calling-only requirements unless 
they offer an alternative prepaid collect calling option? What would be 
our authority for doing so? We also seek comment on whether our mandate 
should apply only to interstate collect-only calling, or whether it 
should also apply to intrastate collect-only calling. Can the two be 
separated? Under what authority could we mandate a prepaid collect 
calling option for intrastate ICS?
    47. Finally, one ICS provider suggests that the best way to deal 
with billing-related call blocking is to encourage the use of prepaid 
or debit ICS accounts. We seek comment on the usefulness and ubiquity 
of debit and prepaid calling in correctional facilities and whether we 
should mandate that ICS providers offer such services. Under what 
authority can we mandate provision of such services?
3. Non-Geographically Based Telephone Number Call Blocking
    48. Consumers today can and do obtain telephone numbers that do not 
reflect their geographic location. In the ICS context, doing so may 
enable consumers to be charged a lower rate depending on the 
differences among local, intrastate long distance, and interstate long 
distance rates. The Commission sought comment on this practice in the 
2012 ICS NPRM. Given the Commission precedent largely prohibiting call 
blocking, with limited exceptions, we seek comment on whether any types 
of ICS call blocking may be necessary or appropriate, particularly in 
relation to non-geographically based telephone numbers. If such 
blocking is necessary, how can this need be reconciled with Commission 
precedent? To the extent that commenters assert that blocking occurs to 
address security concerns, we seek comment on the reason and frequency 
of such blocking. We seek comment on whether there are any additional 
concerns that could justify blocking outgoing ICS calls to non-
geographically based telephone numbers. Given the Commission's policy 
against unreasonable call blocking, we are skeptical of the need for 
call blocking and seek alternatives to blocking that maintain the 
ubiquity of the national telecommunications network while balancing 
security needs.

F. Exclusive ICS Contracts

    49. We conclude in the Order that competition does not effectively 
constrain rates for interstate ICS to ensure that such rates are just, 
reasonable, and fair. While the Commission found that there is 
competition among ICS providers to provide service to correctional 
facilities, it concluded that there is not sufficient competition 
within facilities to ensure that rates are just and reasonable to end 
users because of exclusive contract arrangements. We seek comment in 
this section on whether we should encourage competition within 
correctional facilities to reduce rates.
    50. We generally seek comment on whether there are ways to foster 
competition to constrain rates to just, reasonable, and fair levels 
within correctional facilities. When the Commission previously sought 
comment on allowing multiple providers to serve correctional 
facilities, correctional facilities and ICS providers generally opposed 
the allowance of multiple providers because of security concerns. What 
has changed, if anything, in the last decade that may allow for 
competition among ICS providers within a single facility? If commenters 
believe that security concerns still provide a reason for not allowing 
multiple ICS providers within a facility, we seek comment on what the 
specific concerns are. For example, could a facility have uniform 
security requirements that would apply to any provider offering service 
in the facility? What are the advantages and disadvantages of such an 
approach? In its comments, Verizon states that allowing multiple ICS 
providers to serve inmates at a correctional facility could promote 
competition among ICS providers. Verizon also raises the question of 
whether the security concerns justifying exclusive contracts have been 
superseded by any technological advances. Do technological advances 
change the equation? If so, could we expect in the future to rely on 
competition to ensure just, reasonable, and fair ICS rates for inmates 
and ICS providers? Are there rules or requirements the Commission could 
adopt to facilitate such a transition? We seek comment on these issues 
and the Commission's authority to adopt rules and requirements to 
facilitate such a transition.

G. Quality of Service

    51. In the Order, we observe that, given our conservative safe 
harbor and rate cap scheme, quality of service should not be negatively 
impacted by the ICS rates we adopt, and we further encourage continued 
innovation and efficiencies to improve quality of service. Here, we 
seek comment on whether it is necessary for the Commission to develop 
minimum federal quality of service standards that would apply to all 
facilities. For

[[Page 68013]]

example, ICE set forth national detention standards, which established 
requirements for effective communication, sufficient access, and daily 
maintenance. Under these standards, facilities must maintain at least a 
25 to 1 ratio of detainees to operable telephones. Do prison and jail 
facilities currently have similar rules or regulations in place to 
secure the quality of inmate calling services? Have states adopted any 
regulations of this sort? We seek comment on whether national standards 
are necessary. Should we establish rules regarding the quality of 
inmate phone calls, the number of phones in a facility, or the 
maintenance of telephones? If adoption of such national standards would 
be beneficial, under what authority could the Commission adopt such 
rules? We also seek comment on whether we should require ICS providers 
to include the ratio of telephones to inmates per facility in their 
annual certification filings. Commenters advocating for such an 
approach should specify the Commission's legal authority to adopt their 
proposals.

H. Cost/Benefit Analysis of Proposals

    52. Acknowledging the potential difficulty of quantifying costs and 
benefits, we seek to determine whether each of the proposals above will 
provide public benefits that outweigh their costs, and we seek to 
maximize the net benefits to the public from any proposals we adopt. 
For example, commenters have argued that inmate recidivism is decreased 
with regular family contact. Accordingly, we seek specific comment on 
the costs and benefits of the proposals above and any additional 
proposals received in response to this FNPRM. We also seek any 
information or analysis that would help us to quantify these costs or 
benefits. Further, we seek comment on any considerations regarding the 
manner in which the proposals could be implemented that would increase 
the number of people who benefit from them, or otherwise increase their 
net public benefit. We request that interested parties discuss whether, 
how and by how much they will be impacted in terms of costs and 
benefits of the proposals included herein. We recognize that the costs 
and benefits may vary based on such factors as the correctional 
facility served and ICS provider. We request that parties file specific 
analyses and facts to support any claims of significant costs or 
benefits associated with the proposals herein.

II. Procedural Matters

A. Filing Instructions

    53. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 
47 CFR 1.415, 1.419, interested parties may file comments and reply 
comments on or before the dates indicated on the first page of this 
document. Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS). See Electronic Filing of Documents in 
Rulemaking Proceedings, 63 FR 24121 (1998). Comments and reply comments 
on this FNPRM must be filed in WC Docket No. 12-375.
     Electronic Filers: Direct cases and other pleadings may be 
filed electronically using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, 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.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours 
are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes and boxes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street SW., Washington DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an email to fcc504@fcc.gov or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).

B. Ex Parte Requirements

    54. The proceeding this FNPRM 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 his or her 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.

C. Paperwork Reduction Act Analysis

    55. This FNPRM does not contain proposed information collection(s) 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. In addition, therefore, it does not contain any new or modified 
information collection burden for small business concerns with fewer 
than 25 employees, pursuant to the Small Business Paperwork Relief Act 
of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

D. Congressional Review Act

    56. The Commission will send a copy of this Report and Order and 
Further Notice of Proposed Rulemaking in a report to be sent to 
Congress and the

[[Page 68014]]

Government Accountability Office pursuant to the Congressional Review 
Act (CRA). See 5 U.S.C. 801(a)(1)(A).

E. Initial Regulatory Flexibility Analysis

    57. As required by the Regulatory Flexibility Act of 1980 (RFA), 
the Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) for this FNPRM, of the possible significant economic impact on 
small entities of the policies and rules addressed in this document. 
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 on the FNPRM provided on or before the dates indicated on 
the first page of this FNPRM. The Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, will send a 
copy of this Notice of Proposed Rulemaking, including the IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration (SBA).
1. Need for, and Objectives of, the Notice
    58. In today's Order, the Commission adopted rules to ensure that 
rates for interstate calling at correctional institutions are just and 
reasonable, and to that end, established calling rates for interstate 
inmate calling services (ICS). This FNPRM seeks comment on additional 
measures the Commission could take to ensure that interstate and 
intrastate ICS are provided consistent with the statute and public 
interest, the Commission's authority to implement these measures, and 
the pros and cons of each measure. The Commission believes that 
additional action on ICS will help maintain familial contacts stressed 
by confinement and will better serve inmates with special needs while 
still ensuring the critical security needs of correctional facilities 
of various sizes. Specifically, the FNPRM seeks comment on:
     Reforming intrastate ICS rates and practices;
     ICS for the deaf and hard of hearing community;
     Further reforms of interstate and intrastate ICS rates;
     Cost recovery in connection with the provision of ICS;
     Ensuring that charges ancillary to the provision of ICS 
are cost-based;
     ICS call blocking;
     Ways to foster competition to reduce rates within 
correctional facilities; and
     Quality of service for ICS.
2. Legal Basis
    59. The legal basis for any action that may be taken pursuant to 
the FNPRM is contained in sections 1, 2, 4(i)-(j), 201(b) and 276 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-
(j), 201(b) and 276.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    60. 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 rules, 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.
    61. Small Businesses. Nationwide, there are a total of 
approximately 27.9 million small businesses, according to the SBA.
    62. Wired Telecommunications Carriers. The SBA has developed a 
small business size standard for Wired Telecommunications Carriers, 
which consists of all such companies having 1,500 or fewer employees. 
According to Census Bureau data for 2007, there were 3,188 firms in 
this category, total, that operated for the entire year. Of this total, 
3,144 firms had employment of 999 or fewer employees, and 44 firms had 
employment of 1,000 employees or more. Thus, under this size standard, 
the majority of firms can be considered small.
    63. Local Exchange Carriers (LECs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to local exchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 1,307 carriers reported 
that they were incumbent local exchange service providers. Of these 
1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 
301 have more than 1,500 employees. Consequently, the Commission 
estimates that most providers of local exchange service are small 
entities that may be affected by our action.
    64. Incumbent Local Exchange Carriers (incumbent LECs). Neither the 
Commission nor the SBA has developed a size standard for small 
businesses specifically applicable to incumbent local exchange 
services. The closest applicable size standard under SBA rules is for 
Wired Telecommunications Carriers. Under that size standard, such a 
business is small if it has 1,500 or fewer employees. According to 
Commission data, 1,307 carriers reported that they were incumbent local 
exchange service providers. Of these 1,307 carriers, an estimated 1,006 
have 1,500 or fewer employees and 301 have more than 1,500 employees. 
Consequently, the Commission estimates that most providers of incumbent 
local exchange service are small businesses that may be affected by our 
action.
    65. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' The 
SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on Commission analyses and determinations 
in other, non-RFA contexts.
    66. Competitive Local Exchange Carriers (competitive LECs), 
Competitive Access Providers (CAPs), Shared-Tenant Service Providers, 
and Other Local Service Providers. Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate size standard under SBA rules is for 
the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 1,442 carriers reported that they were 
engaged in the provision of either competitive local exchange services 
or competitive access provider services. Of these 1,442 carriers, an 
estimated 1,256 have 1,500 or fewer employees and 186 have more than 
1,500 employees. In addition, 17 carriers have reported that they are 
Shared-Tenant Service Providers, and all 17 are estimated to have 1,500 
or fewer employees. In addition, 72 carriers have reported that they 
are Other Local Service Providers. Of the

[[Page 68015]]

72, 70 have 1,500 or fewer employees and two have more than 1,500 
employees. Consequently, the Commission estimates that most providers 
of competitive local exchange service, competitive access providers, 
Shared-Tenant Service Providers, and Other Local Service Providers are 
small entities that may be affected by our action.
    67. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a size standard for small businesses specifically 
applicable to interexchange services. The closest applicable size 
standard under SBA rules is for Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 359 companies reported 
that their primary telecommunications service activity was the 
provision of interexchange services. Of these 359 companies, an 
estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 
employees. Consequently, the Commission estimates that the majority of 
interexchange service providers are small entities that may be affected 
by our action.
    68. Local Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 213 carriers have reported 
that they are engaged in the provision of local resale services. Of 
these, an estimated 211 have 1,500 or fewer employees and two have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of local resellers are small entities that may be affected by 
our action.
    69. Toll Resellers. The SBA has developed a small business size 
standard for the category of Telecommunications Resellers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 881 carriers have reported 
that they are engaged in the provision of toll resale services. Of 
these, an estimated 857 have 1,500 or fewer employees and 24 have more 
than 1,500 employees. Consequently, the Commission estimates that the 
majority of toll resellers are small entities that may be affected by 
our action.
    70. Other Toll Carriers. Neither the Commission nor the SBA has 
developed a size standard 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. The closest applicable size standard under 
SBA rules is for Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 284 companies reported that their primary 
telecommunications service activity was the provision of other toll 
carriage. Of these, an estimated 279 have 1,500 or fewer employees and 
five have more than 1,500 employees. Consequently, the Commission 
estimates that most Other Toll Carriers are small entities that may be 
affected by our action.
    71. Payphone Service Providers (PSPs). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
payphone services providers. The appropriate size standard under SBA 
rules is for the category Wired Telecommunications Carriers. Under that 
size standard, such a business is small if it has 1,500 or fewer 
employees. According to Commission data, 535 carriers have reported 
that they are engaged in the provision of payphone services. Of these, 
an estimated 531 have 1,500 or fewer employees and four have more than 
1,500 employees. Consequently, the Commission estimates that the 
majority of payphone service providers are small entities that may be 
affected by our action.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities
    72. In this FNPRM, the Commission seeks public comment on options 
to reform the inmate calling service market. Possible new rules could 
affect all ICS providers, including small entities. In proposing these 
reforms, the Commission seeks comment on various options discussed and 
additional options for reforming the ICS market.
5. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    73. 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.''
    74. The FNPRM seeks comment from all interested parties. The 
Commission is aware that some of the proposals under consideration may 
impact small entities. Small entities are encouraged to bring to the 
Commission's attention any specific concerns they may have with the 
proposals outlined in the FNPRM. In addition, the Commission seeks 
updated data, as described in the FNPRM, from small entities that may 
be impacted by Commission action on ICS.
    75. The Commission expects to consider the economic impact on small 
entities, as identified in comments filed in response to the FNPRM, in 
reaching its final conclusions and taking action in this proceeding. 
Specifically, the Commission will conduct a cost/benefit analysis as 
part of this FNPRM and consider the public benefits of any such 
requirements it might adopt, to ensure that they outweigh their impacts 
on small businesses.
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    76. None.

III. Ordering Clauses

    77. Accordingly, it is ordered that pursuant to sections 1, 4(i), 
4(j), 201, 225, 276, and 303(r) of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 154(i)-(j), 201, 225, 276, 303(r), the Report 
and Order and Further Notice of Proposed Rulemaking in WC Docket No. 
12-375 are adopted.
    78. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Order and Further Notice of Proposed Rulemaking, including 
the Final Regulatory Flexibility Analysis and Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2013-26377 Filed 11-12-13; 8:45 am]
BILLING CODE 6712-01-P