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Inmate Telephone Commission Payments Under the New FCC Regulation

10/13/2016 2:04:37 PM Corrections Related

Phone calls to inmates may be a mainstay for reducing recidivism, but recent changes to FCC regulations have been highly misunderstood. Many administrators have wrongly assumed that commission payments for inmate calling services have been made illegal, but this simply isn't true. Learn what the changes really are and see that inmate telephone service commission payments to correctional facilities are still legal.

A Short History of Inmate Telephone Service

The truth may be that phone calls to loved ones from inside a correctional facility had quickly become costly for the family and friends of inmates in the past. Without an income, inmates have relied on the recipient of the phone call to foot the bill for ongoing communication. Collect phone calls were once the mainstay, and still are in some facilities, but technological advances have created new avenues for payments. Prepaid calling and debit accounts, in addition to traditional collect calls, are now the primary choices for family members, friends and clergy wishing to stay in touch with inmates.

How Commission Payments Came About

As the choices for calling increased so did the ability to take advantage of competing rates. Inmate calling service (ICS) providers, recognized the legitimate security measures and equipment needed for the implementation of their services in each facility. In order to compensate for these costs, ICS providers sought to win over each institution by offering commission payments. These phone commissions generally came in the form of a percentage of the revenues generated from the calling services provided by the ICS providers. Early on in the industry, the percentage based commission payments were a small portion of the revenue generated, but as competition increased, these percentages skyrocketed and acted as a major incentive for facilities to sign or extend contracts with ICS providers.

Why the FCC Stepped In

In an effort to ensure that family members, friends and others providing essential communication, such as attorneys and clergy, are not being penalized for merely communicating with an incarcerated individual through phone calls, the FCC imposed a mandate to regulate inmate phone commissions. While some may see the FCC regulation as a prohibition against inmate phone commissions, the FCC has not forbidden these payments, but rather has placed a cap on the rates that can be charged.

New Regulations Lower Calling Rates but Do Not Make Commission Payments Illegal

The most recent action taken by the FCC on August 4, 2016, did not outlaw commission payments to correctional facilities, but set new rate caps for local and long-distance inmate calling. According to the FCC, these new rate caps will take effect “90 days after publication in the Federal Register for prisons, and six months after publication in the Federal Register for jails.” This means that the new FCC rates will probably take effect during the fourth quarter of 2016 for prisons and during the first quarter of 2017 for jails.

Until then, the FCC’s interim rate cap is in effect at 21 cents per minute for debit and prepaid interstate calls and 25 cents per minute for collect interstate calls. Local or intrastate calls are not currently affected, but will be when the new rates go into effect.

All Correctional Facilities Will Continue to Receive Commission Payments for Inmate Phone Calls

Once the new rate caps take effect, local and long-distance debit and prepaid calls will allow commission payments to correctional facilities using the following rates:

  • State or federal prisons: 13 cents per minute
  • Jails with 1,000 or more inmates: 19 cents per minute
  • Jails with 350-999 inmates: 21 cents per minute
  • Jails of up to 349 inmates: 31 cents per minute

Although this may be a decrease in revenue for some facilities, they will still receive revenue generated by inmate phone calls. Other changes in commissions may be reflected in other services, but these will also still be allowed to be charged by phone companies and may or may not be calculated into commission payments for correctional facilities:

  • Applicable taxes and regulatory fees are to be passed to consumers with no markup.
  • Automated payment fees will be capped at $3.00 per instance.
  • Live agent fees such as payments or account set-ups with the use of a live operator will be capped at $5.95 per instance.
  • Paper bill or statement fees will be capped at $2.00 each, but no fee can be charged for electronic bills or statements.
  • Prepaid account funding minimums will be prohibited and maximums under $50.00 will also be prohibited.
  • Third-party financial transaction fees such as credit card processing fees, MoneyGram or Western Union will be passed directly to users with no markup.

It's clear that correctional facilities will continue to receive commission payments from inmate telephone service providers. The new FCC regulations have merely placed rate caps on the maximums that can be charged for telephone calls, but commission payments remain legal and will continue to be paid to correctional facilities. As long as inmates continue to call home, revenue will continue to be generated and commissions can and will be paid to correctional facilities at all incarceration levels.