FCC Begins Rulemaking to Develop Just and Reasonable Telecom Rates for Inmates 

By: Andy Regitsky

On January 5, 2023, President Biden signed into law the Martha Wright-Reed Just and Reasonable Communications Act of 2022 (Act), which expands the FCC’s authority over rates charged for telecom services provided to incarcerated people.  The Act is named after a woman (Martha Wright-Reed) who led a group of people seeking Commission action to make it easier to speak to their imprisoned loved ones. 

The Act requires the FCC to adopt just and reasonable rates and charges for the audio and video communications services offered to the incarcerated not earlier than 18 months and not later than 24 months after the date of its enactment.  In response, at its March meeting, the agency initiated a Notice of Proposed Rulemaking and Order (Notice and Order) in Dockets 23-62 and 12-375 which begins the process of implementing the Martha-Wright Reed Act. 

In the Notice of Proposed Rulemaking the FCC seeks industry comments on the following issues: 

The expansion of the Commission’s authority over incarcerated people’s communications services to include advanced communications services (including audio and video services) and intrastate services and to ensure that such incarcerated people do not pay unreasonably high rates and charges for, and in connection with, all such services 

What is fair compensation for providers serving prisons and jails?  While the Act requires that providers receive fair compensation for their telecom services provided, the FCC proposes to eliminate this requirement for every call.  Instead, the Commission proposes fair compensation for telecom providers would be based on the totality of service they provide. 

The meaning of “just and reasonable” in the context of the Act’s other provisions; The agency proposes to use the Telecom Act’s definition of “just and reasonable.”  Thus, section 201(b) requires that “[a]ll charges, practices, classifications, and regulations for and in connection with [interstate or foreign communication by wire or radio] shall be just and reasonable.” 

The appropriate rate-making approach given the Commission’s authority to compute just and reasonable rates; 

The FCC 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 Act or its rules. 

It 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. 

The Commission proposes that telecom providers setting industry-wide rate caps or rate caps applying to groups of providers, as opposed to separate rates for individual providers, would be sufficient to “establish a compensation plan,” as required by the Act. 

It seeks comments on the safety and security costs necessary for telecom providers to provide services to incarcerated people; 

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.  How should the Commission interpret this requirement?  

The Commission’s seeks to ensure that incarcerated people’s communications services are accessible to and usable by people with communication disabilities. 

Finally, in the Order, the Commission reaffirms its prior delegation of data collection authority to the Wireline Competition Bureau and the Office of Economics and Analytics and direct their staffs to initiate a collection of provider data to aid in implementing the Martha Wright-Reed Act.  These bureaus will revise the instructions and reporting template for the Annual Reports that all service providers are required to file each year to include the new data requirements. 

Industry comments on the Notice will be due 30 days after it appears in the Federal Register.