In a blow to prisoner advocates, a federal appeals court on Tuesday struck down limits on how much private companies can charge for in-state prisoner phone calls.
The US Court of Appeals for the DC Circuit, in a 2-1 decision, acknowledged that the costs of inmate phone calls were “extraordinarily high” — the opinion cited evidence that a four-minute call could cost as much as $56 — but found that the Federal Communications Commission nevertheless lacked authority to regulate these types of intrastate calls.
Prisoner advocates had argued that the current market failed consumers, and that prisoners and their families were being forced to pay exorbitant costs for phone calls, or had found themselves priced out of communicating entirely. The FCC’s caps on interstate prisoner phone calls — calls that cross state lines — still stand, but Tuesday’s ruling means that companies are free to set rates for intrastate calls, as long as they comply with state regulations.
“We lost badly. This will hurt a lot of family and loved ones, not to mention the prisoners themselves,” Andrew Schwartzman, a lawyer at the Georgetown University Law Center’s Institute for Public Representation, who argued for the prisoner rights groups, told BuzzFeed News in an email.
The FCC stopped defending the intrastate rate caps after President Trump took office, when Ajit Pai, a Republican who opposed the caps, became chairman of the FCC and the commission lost a majority of members who supported them. Prisoner advocacy groups then picked up the defense. The DC Circuit heard arguments in February.
The DC Circuit on Tuesday found that despite the FCC’s decision to abandon arguments in favor of the intrastate caps in court, the case wasn’t moot because the commission hadn’t actually taken any steps to revoke or suspend them.
Pai said in a statement that the DC Circuit agreed with his position that the FCC had exceeded its authority in capping intrastate call rates.
"Looking ahead, I plan to work with my colleagues at the Commission, Congress, and all stakeholders to address the problem of high inmate calling rates in a lawful manner," Pai said.
A representative of the phone services providers did not immediately return a request for comment, nor did FCC Commissioner Mignon Clyburn, the lone remaining member of the commission who supported the rate caps.
DC Circuit Judge Cornelia Pillard dissented from the majority’s decision, writing that the court should have found that federal law gave the FCC authority “not only to raise inadequate rates but also to reduce excessive, monopoly-driven rates.”
“The record shows that these high prices impair the ability of inmates, by definition isolated physically from the outside world, to sustain fragile filaments of connection to families and communities that they might hope to rejoin,” Pillard wrote. “The majority’s decision scuttles a long-term effort to rein in calling costs that are not meaningfully subject to competition and that profit off of inmates’ desperation for connection.”
In 2015, the FCC announced its first ever intrastate rate caps for inmate phone services, ranging from 14 cents to 49 cents per minute, depending on the type of facility. Per the FCC’s order, those rates would drop, to between 11 cents and 22 cents, as of July 2018. (The caps later rose slightly to adjust for additional costs to service providers.) Five companies that provide inmate call services challenged the caps in the DC Circuit.
Federal law divides the authority to regulate telephone communication services between the FCC and the states. The FCC has clear authority over interstate communications. But at issue in this case is the power to regulate intrastate communications, which generally falls to the states.
In 1996, Congress gave the FCC authority to promote competition among payphone service providers, including companies that manage inmate phone services. The law said that the FCC could establish call rates that ensured all payphone providers were “fairly compensated for each and every completed intrastate and interstate call.”
The challengers argued that the authority to make sure providers were “fairly compensated” didn’t override the FCC’s general lack of authority over intrastate communication. The majority of the three-judge DC Circuit panel agreed, and also found that the FCC had wrongly applied its authority to set interstate call rates that are “just and reasonable” to intrastate rates.
The FCC’s order was “legally infirm” because it was based on a “just, reasonable and fair test” that conflated the FCC’s different authorities to regulate interstate versus intrastate communications, and that misinterpreted court precedent and the FCC’s own previous orders, Judge Harry Edwards wrote in the majority opinion.
DC Circuit Judge Laurence Silberman joined Edwards’ opinion. The majority also found that the FCC used flawed methodology in calculating the rate caps, but did uphold the FCC’s caps on other fees for interstate calls.
Updated with comment from FCC Chair Ajit Pai.