Nearly a decade ago, a debate began in earnest as to whether or not inmate phone providers could be considered public utility companies. This discussion on rate regulation formally began with Illinois congressional representative Bobby L. Rush’s bill, HR 555, The Family Telephone Connection Protection Act of 2007. The bill was never enacted into law, but it brought into consideration the idea of regulating inmate telephone services.

Many people still feel strongly that the inmate phone industry requires more government regulation. A new bill introduced in March would grant the Federal Communications Commission (FCC) regulatory power over interstate inmate calls, and last November, the ACLU published a report concerning this issue. The idea that inmate phone calls have to be expensive is reprehensible to many people and organizations, including our Encartele. We disagree with our competitors about this point, but as industry experts, we are also well-acquainted with the hard costs and labor that go into building and maintaining these communication infrastructures.

There’s a very good reason why inmate phone companies cannot be regulated like public utilities. Simply put, the companies in question do not meet the legal definition of a public utility company. We agree with the ACLU that the inmate phones industry needs better government regulation, but we can’t operate like public utilities.

What is a Public Utility?

It’s an elusive concept, but understanding what a public utility is and is not makes up a crucial part of this discussion. The government’s authority to regulate public utilities has been questioned ever since FDR’s New Deal in the 1930’s, (Historia). Today, the turbulent techno-legal landscape of the U.S. makes this topic even trickier to discuss.

According to the Cornell Law School website (which pulls a definition from Nolo’s Plain English Law Dictionary):

“[A] public utility is any organization which provides services to the general public, although it may be privately owned. Public utilities include electric, gas, telephone, water, and television cable systems, as well as streetcar and bus lines. Public utilities are allowed certain monopoly rights because of the practical need to service entire geographic areas with one system, but they are regulated by state, county, and city public utility commissions under state laws.”

That’s a bit of a mouthful, so let’s break it down:

  1. A public utility provides the general public with a service.
  2. A public utility can be publicly or privately owned.
  3. A public utility requires government regulation, because they are allowed certain monopoly rights to service geographic areas with one system (also known as a natural monopoly).

You may have noticed that telephones were mentioned in that Cornell definition. So that means inmate phones are utilities too then, right? Wrong. There are a whole host of differences between both services. Let’s take a look at a few of them.

Inmate Phones aren’t for the General Public

Every homeowner gets thirsty and needs water pumped into their homes, but not everyone needs to use an inmate phone provider. Some people will go their entire lives without ever receiving an inmate phone call, and that’s just the nature of the business. Inmate phone infrastructure and solutions were never intended for the general public’s use, they were designed by and for the corrections industry.

In addition, both services have very different expressed-use scenarios. Counties often use ITS solutions to facilitate rehabilitation among their detainees, while telephone service for the general public can be used in any number of ways. Public calls can be made at any hour of the day, whereas inmate phone calls are restricted to certain time periods for security reasons. The telephone service provider has no requirement to maintain and store call data for years and years after the call was initiated, for investigative purposes. Nor is the public utility telephone service obligated to cover the entire cost of their infrastructure regardless of whether a monopolistic region will be profitable or not.

Modern inmate telephone systems require a significant number of additional security features that ordinary phone service providers don’t need to develop or maintain. This is part of the reason why inmate phone calls are so much more expensive than regular phone calls.

According to a 2010 report from the Congressional Research Service, the exclusive contractual arrangements negotiated between jails and telephone service providers ensure security and allow them to monitor inmate phone calls. This report also stated that The National Sheriffs Association told Congress in 2009 that changing these arrangements could endanger public safety.

Conclusion

Inmate phone providers by definition are not utilities. We serve highly select populations, and our infrastructure is not accessible for general-purpose use by the public. As we mentioned above, Encartele agrees that inmate phone calls shouldn’t have to be expensive. That’s why we strive to offer affordable rates for all our services, especially CIDNET Mail.

That being said, we also understand that our industry faces some major challenges, mainly in the form of the high cost of commissions levied out in our contracts. If reform-minded organizations wanted to affect meaningful change for friends and family members of inmates, they’d call for something like a nationwide ITS commissions cap rather than utility regulation. Currently, ITS providers don’t compete based on the per-minute cost of the phone calls, they compete based on the commissions they can offer to counties. Capping these commissions would go a long way towards returning a true sense of competition to our industry, and reducing the per-minute cost of the phone call in the process.

Politicians and the ACLU are right about the per-minute costs of inmate calling being too high. Unfortunately, they’re wrong about the best way to lower them.

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