Federal Communications Commission FCC 13-113
1
DISSENTING STATEMENT OF
COMMISSIONER AJIT PAI
Re: Rates for Interstate Inmate Calling Services, WC Docket No. 12-375.
Not long after I started working at the U.S. Senate Judiciary Committee in 2005, my boss, former 
Senator Sam Brownback, championed the Second Chance Act.
1
  The bill recognized in its findings that 
family support was the most important factor in helping released prisoners reenter society and in reducing 
recidivism.
2
  As the Senator shepherded the bill through the Committee, I got an up-close understanding 
of the social and economic challenges faced by those who are incarcerated and their families.  How 
gratifying it was for so many, then, to see President Bush sign the Second Chance Act just three years 
later.
3
This experience informs my approach to our work on this item.  I believe that the government 
should usually stay its hand in economic matters and allow the price of goods and services to respond to 
consumer choice and competition.  But sometimes the market fails.  And when it does, government 
intervention carefully tailored to address that market failure is appropriate.
The provision of inmate calling services (ICS) is one such market.  Inmates cannot choose their
carrier, and carriers do not compete with each other for an inmate’s calls.  Instead, a prison administrator 
signs an exclusive contract with a single carrier. The decision to enter into such a contract often is driven 
by commissions and in-kind services offered to the prison by a prospective carrier.
4
  As such, the 
incentives of prison administrators and inmates may not align.  This means that we cannot necessarily
count on market competition to keep prices for inmate calling services just and reasonable.
For this reason, I welcomed the opportunity to address the petition filed by Martha Wright almost 
a decade ago, when she came to the FCC seeking redress for the high rates she paid to speak with her 
then-incarcerated grandson.  Having reviewed the record thoroughly, I am convinced that we must take 
action to meet our duties under the law, not to mention our obligations of conscience.  Indeed, the FCC 
should have acted years ago.  I said last December and I say again here:  Ms. Wright expected and 
deserved better.
It is therefore with a heavy heart that I am dissenting from this item.  In an effort to seek common 
ground, I offered a simple proposal to cap interstate rates, with one rate for large jails and a lower rate for 
prisons.  My proposal would have cut interstate rates for prisoners in 36 states (and slashed exorbitant 
rates by more than 50 percent in 26 states) while balancing the need for security.  It would have been easy 
for the FCC to administer and easier for the courts to sustain.  I am disappointed that we were unable to 
achieve consensus and move forward unanimously.
Instead of instituting simple rate caps, as I had proposed, the Order essentially imposes full-scale 
rate-of-return regulation on ICS providers.  I have no doubt that the Order’s approach was crafted with 
the best of intentions.  But I cannot support it.  To put it simply, I do not believe that it is within the 
Commission’s competence to micromanage the prices of inmate calling services.  Nor do we have the 
                                                     
1
Second Chance Act of 2005, S. 1934, 109
th
Cong., 1
st
Sess. (2005), available at http://go.usa.gov/jf4C.
2
Id. § 2(14).
3
Second Chance Act of 2007, Pub. L. No. 110-199, 122 Stat. 657 (2008), available at http://go.usa.gov/jf4R; see 
also “President Bush Signs H.R. 1593, the Second Chance Act of 2007,” available at http://go.usa.gov/jf4W.
4
See, e.g., Implementation of the Pay Telephone Reclassification and Compensation Provisions of the 
Telecommunications Act of 1996, CC Docket No. 96-128, Order on Remand & Notice of Proposed Rulemaking, 17 
FCC Rcd 3248, 3253, para. 12 (2002); Telmate Comments at 6 (“[C]ompetition for these commissions decreases
incentives for cost-reduction and technological innovation.”).
Federal Communications Commission FCC 13-113
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resources to review the effectively-tariffed rates of ICS providers, to sort out legitimate costs from 
illegitimate costs, and to separate intrastate costs from interstate costs, possibly in every one of the 
thousands of correctional institutions in America.  I am not sure how we will handle all of the disputes 
that are likely to arise with the limited and already-hardworking staff we have.
I also believe that the Commission’s decision to impose a one-size-fits-all safe harbor and cap on 
all correctional institutions is a serious mistake.  Based on the record, the rates set forth in the item are 
likely too low for most jails (the majority of jails in our nation hold fewer than 100 inmates), secure 
mental health facilities, and juvenile detention centers.  The end result could be that some facilities 
receive limited phone service or no service at all.  This could disconnect some inmates from their families 
entirely.  For other facilities, the arbitrarily low rate will likely mean fewer security measures.  As the 
National Sheriffs’ Association puts it, this would pose “a substantial security risk to inmates and jail staff 
and to public safety in the community at large.”
5
Had we charted a different course—say, by applying reasonable caps on interstate rates—we 
could have substantially reduced interstate calling rates in a way that would have easily survived judicial 
scrutiny.  As it stands, however, I believe that the Order may not withstand a court challenge.  No party 
could have foreseen the reach of today’s Order when we opened this proceeding last December.  The 
notice of proposed rulemaking teed up a per-minute rate cap and other discrete proposals, but the Order
codifies de facto rate-of-return regulation.  Moreover, the record evidence simply does not support the 
Commission’s approach.  Indeed, the Order recognizes that we do not have the data to establish long-term 
rates and accordingly commences a mandatory data collection—which underscores that the cart is before 
the horse.  All of this portends protracted litigation, which jeopardizes the very benefits this Order is 
supposed to provide to inmates and their families.  As Ms. Wright and the other petitioners know all too 
well, justice delayed is justice denied.
I.
I’ll start with the Order’s legal flaws.  In my view, the Order fails to comply with the 
Administrative Procedure Act (APA) for two principal reasons.  In terms of process, parties were not 
provided with requisite notice of the rules the Commission adopts today.  Additionally, these rules are 
arbitrary and capricious in light of the evidence contained in the record.
A.
On the issue of notice, no party could have foreseen the reach of the Order when we opened this 
proceeding last December.  In our unanimous Notice of Proposed Rulemaking (Inmate Calling NPRM), 
the Commission teed up several discrete proposals to regulate the rates of interstate inmate calls: 
eliminating per-call charges,
6
capping per-minute rates,
7
using a “marginal location methodology” to 
establish just and reasonable caps,
8
using tiered pricing to set differing caps for higher-volume and lower-
volume facilities,
9
establishing different caps for collect calls and debit calls,
10
capping interstate rates at 
                                                     
5
Letter from Sheriff (ret.) Aaron D. Kennard, Executive Director, National Sheriffs’ Association, to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 12-375, at 2 (July 31, 2013).
6
Rates for Interstate Inmate Calling Services, WC Docket No. 12-375, Notice of Proposed Rulemaking, 27 FCC 
Rcd 16629, 16637, paras. 18–19 (2012).
7
Id. at 16637–38, paras. 20–23.
8
Id. at 16638–39, paras. 24–26.
9
Id. at 16639–40, para. 28.
10
Id. at 16640–41, paras. 30–32.
Federal Communications Commission FCC 13-113
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intrastate long-distance rates,
11
requiring ICS providers to offer debit or prepaid calling options,
12
and 
mandating a certain amount of free calling for each inmate per month.
13
Notably, de facto rate-of-return regulation was not on the table.
14
  Instead, that option was 
proposed by the National Association of State Utility Consumer Advocates (NASUCA) in its comments, 
three full months after we adopted the Inmate Calling NPRM.
15
  Although the Commission can address 
comments in the record (and indeed must respond to significant ones), the APA does not allow for such 
informal methods to propose rules.  Rather, an agency “must itself provide notice of a regulatory 
proposal. Having failed to do so, it cannot bootstrap notice from a comment.”
16
The Order attempts to establish notice partly by pointing to language in the Inmate Calling
NPRM seeking “comment on any other proposals parties contend address the concerns raised in this 
proceeding.”
17
  But a jejune request for comment on “any other proposals” did not apprise stakeholders 
that rate-of-return regulation was under consideration.
18
  This omission matters.  The D.C. Circuit has 
instructed that “[a]gency notice must describe the range of alternatives being considered with reasonable 
specificity. Otherwise, interested parties will not know what to comment on, and notice will not lead to 
better-informed agency decision-making.”
19
  And the Second Circuit just recently chided the Commission 
for “solicitations . . . too general to provide adequate notice that a [particular] rule was under 
consideration.”
20
Unfortunately, that is exactly what happened here.  Had the Commission sought comment on 
imposing rate-of-return regulation upon ICS providers, the record almost surely would look quite 
different than it does today.
21
  But instead, after parties provided extensive commentary on the specific 
ideas set forth in the Inmate Calling NPRM, the Commission adopted far more onerous rate-of-return 
regulation—a scheme that was nowhere mentioned in the Inmate Calling NPRM.  It is therefore
unsurprising that no party other than NASUCA, to my knowledge, discussed it as an option for regulating 
                                                     
11
Id. at 16641, para. 34.
12
Id. at 16641–42, paras. 33, 36.
13
Id. at 16643, para. 39.
14
The Order implicitly acknowledges as much when it describes the Inmate Calling NPRM as proposing “possible 
rate caps for interstate ICS; the ICS Provider Data Submission; collect, debit, and prepaid ICS calling options; site 
commissions; issues regarding disabilities access; and the Commission’s statutory authority to regulate ICS” but not 
the cost-based, rate-of-return methodology the Order in fact adopts.  See Order at para. 10.
15
NASUCA Comments at 4 (“As a means of securing just and reasonable rates, the ICS rules adopted by the
Commission should therefore require ICS providers to justify their rates and their costs. The rules should declare 
that rates for interstate ICS calls are unjust and unreasonable to the extent the rates exceed the reasonable costs of 
providing ICS, including a reasonable return.”).
16
Small Refiner Lead Phase-Down Task Force v. United States Environmental Protection Agency, 705 F.2d 506, 
549 (D.C. Cir. 1983) (emphasis in original); see also Prometheus Radio Project v. FCC, 652 F.3d 431, 450 (3d Cir. 
2011) (explaining that a proposal “not published in the Federal Register” expressing the views of a party but “not the 
Commission” does not satisfy the APA’s requirements); Shell Oil Co. v. EPA, 950 F.2d 741, 760 (D.C. Cir. 1991).
17
Inmate Calling NPRM, 27 FCC Rcd at 16642, para. 35; see Order at para. 59.
18
Cf. Time Warner Cable Inc. v. FCC, Nos. 11-4138(L), 11-5152(Con), slip op. at 61 (2d Cir. Sept. 4, 2013) 
(agency solicitation of comment on whether it “should adopt additional rules” to protect programming networks 
from retaliation did not provide adequate notice regarding a particular rule—the standstill rule—designed “to 
provide such protection”).
19
Small Refiner Lead Phase-Down Task Force, 705 F.2d at 549.
20
Time Warner Cable Inc., slip op. at 61.
21
See id. at 62.
Federal Communications Commission FCC 13-113
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ICS rates.
22
  And given ICS providers’ comments strenuously opposing a rate cap, it strains credulity to 
think that they would have chosen to stay silent about rate-of-return regulation had they realized it was a 
possible endpoint.
23
The Order also attempts to establish notice by citing a variety of paragraphs in which the 
Commission sought information about “costs.”
24
  But just because we sought information about “costs” as 
an input in evaluating eight discrete proposals does not mean that every possible “cost-based” solution is a 
logical outgrowth of the Inmate Calling NPRM,
25
let alone a cost-based solution as complex as the one 
contained in the Order.  The Order admits that “cost”-based ratemaking is itself ambiguous
26
and could 
mean ratemaking based on historical costs,
27
projected costs,
28
or even forward-looking modeled costs.
29
  
That not a single commenter to my knowledge (and the Order cites none) discussed these issues simply 
confirms that no one realized that granular rate-of-return regulation was imminent.
The Order lastly attempts to establish notice by pointing to various questions about how to 
establish rate caps.
30
  But no one doubts the notice for the rate caps adopted in the Order (rule 64.6030).  
The question is whether there was notice for an independent rule, the rate-of-return regulations contained 
in rule 64.6010.  And in my view there was not, given the lack of any discussion in the Inmate Calling
NPRM of requiring rates to be cost based (rather than simply capped), let alone any mention of rate-of-
return regulation.
Notice deficiencies extend to at least two further aspects of the rate-of-return system adopted by 
the Order.  First, the safe harbor adopted by the Order only makes sense as part of a rate-of-return 
                                                     
22
As such, the Order’s claim that the framework adopted by the Commission here was the subject of “extensive 
comments, reply comments, and ex parte submissions in the record” is simply wrong.  See Order at note 222.  
Indeed, the Order does not cite any submission from any service provider commenting on rate-of-return regulation.  
Instead, the lengthiest discussion of the subject comes from the Wright Petitioners themselves, who explained why 
rate caps (as proposed in the Inmate Calling NPRM) were superior to traditional rate-of-return regulation.  Martha 
Wright et al. Comments at 32 (“[T]he FCC has previously found that the adoption of price caps provide a powerful 
incentive for service providers to become more efficient. . . . The price cap regime was imposed because of a 
concern that traditional rate-of-return regulation did not result in sufficient incentives to improve efficiency. Indeed, 
the FCC’s previous reviews of rate-of-return regulation over many years led it to conclude that, under certain 
circumstances, rate-of return regulated firms have an incentive to raise rather than lower their costs by increasing 
investment in the asset base on which the regulated return is calculated well beyond the efficient level.”).
23
For all of these reasons, a generic request for comment on “any other proposals” is best seen as an indication that 
the agency may consider in a Further Notice any ideas raised in the record that are beyond the initial NPRM.  
Indeed, the Commission does just that with its Further Notice to extend today’s action to intrastate rates—a proposal 
that originated in comments and inspired discussion in the record (unlike rate-of-return regulation).
24
See Order at note 191 (citing Inmate Calling NPRM, 27 FCC Rcd at 16637–38, 16642–43, paras. 18–21, 25–26, 
37); id. at note 222 (citing Inmate Calling NPRM, 27 FCC Rcd at 16637–38, paras. 20, 22–23 & n.76).
25
See United Steelworkers of America, AFL-CIO-CLC v. Marshall, 647 F.2d 1189, 1221 (D.C. Cir. 1980), cert. 
denied sub nom. Lead Industries Ass’n, Inc. v. Donovan, 453 U.S. 913 (1981).
26
Order at para. 52; see also id. at para. 163 (seeking comment on whether the Commission should continue to 
measure cost for purposes of rate-of-return regulation based on “historical” or “forward looking” costs).
27
47 C.F.R. § 61.39 (setting forth tariffing parameters for historical “cost schedule” carriers).
28
47 C.F.R. § 69.106 (setting forth access charges for non-price cap incumbents based on their “projected annual 
revenue requirement,” i.e. their projected costs).
29
Verizon Comm. Inc. v. FCC, 535 U.S. 467, 500 (2002) (upholding the FCC’s decision to use a forward-looking 
cost model to establish “cost-based” rates).
30
See Order at note 222.
Federal Communications Commission FCC 13-113
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system—indeed, the safe-harbor rule explicitly ties itself to the rate-of-return ratemaking rule.
31
  And just 
as the Inmate Calling NPRM did not propose de facto rate-of-return regulation, so too did it fail to fairly 
apprise commenters that a safe harbor might be a part of that regulation.
32
Second, the Order extends rate-of-return regulation to ancillary charges, even though the Inmate 
Calling NPRM did not make any such proposal, did not propose capping or otherwise regulating such 
charges, and did not even contain the phrase “ancillary charges.”  At most, the Inmate Calling NPRM
observed that “there are outstanding questions with prepaid calling such as: how to handle monthly fees; 
how to load an inmate’s account; and minimum required account balance.”
33
  But the Commission didn’t 
make that comment—the Wright petitioners did.
34
  And the Inmate Calling NPRM repeated it not in the 
context of proposing to regulate such charges but as a counterweight to assertions that prepaid calling 
should be an “alternative to collect and debit calling.”
35
  At most, the questions posed in the Inmate 
Calling NPRM could form a basis for regulating ancillary charges related to prepaid calling if we were to 
make the offering of prepaid calling an alternative to other forms of regulation.
36
  But the Order does not 
take that step.  As the Second Circuit recently reminded the Commission, “[e]ven if it was the FCC’s 
intent to solicit comment on a [particular] rule, ‘an unexpressed intention cannot convert a final rule into a 
logical outgrowth that the public should have anticipated.’”
37
  Accordingly, the Inmate Calling NPRM
provides no basis for rate-of-return regulation of all ancillary charges.
The Order appropriately does not attempt to rely on the public notice titled “More Data Sought 
on Extra Fees Levied on Inmate Calling Services” to satisfy the notice-and-comment requirement with 
respect to ancillary charges.
38
  For one thing, that public notice did not seek to expand the scope of the 
Inmate Calling NPRM, but instead to “seek[] comment on certain issues raised in the Rates for Interstate 
Inmate Calling Services NPRM that is intended to refresh the record regarding rates for interstate ICS 
calling.”
39
  For another, that public notice could not have expanded the scope of the Inmate Calling
                                                     
31
See Rule 64.6020(a) (“A Provider’s rates are presumptively in compliance with section 64.6010 (subject to 
rebuttal) . . .”).
32
As before, the only party to argue for a safe harbor in the context of rate-of-return regulation was the National 
Association of State Utility Consumer Advocates.  See NASUCA Comments at 5–6 (discussing a “benchmark” rate 
similar to the safe harbor rate adopted in the Order).
33
Inmate Calling NPRM, 27 FCC Rcd at 16641, para. 33; Order at para. 90 (relying on this observation for purposes 
of complying with the Administrative Procedure Act).  The Order also relies on a few disparate filings made 
between 2008 through 2013 that mention ancillary charges and the need for some sort of regulation of them.  See
Order at note 338.  But expecting the public to piece together a hodgepodge of comments strewn over several years 
is hardly the fair notice required by the Administrative Procedure Act and does not make “clear that the agency [is] 
contemplating a particular change.”  CSX Trans. v. Surface Trans. Bd., 584 F.3d 1076, 1081 (D.C. Cir. 2009).
34
Inmate Calling NPRM, 27 FCC Rcd at 16641, para. 33 (“Petitioners note that . . .”); seeMartha Wright et al.
Alternative Wright Petition Reply at 29–30.
35
Inmate Calling NPRM, 27 FCC Rcd at 16641, para. 33 (noting that prepaid ICS calling is offered “usually at a 
discount” to collect or debit calling).
36
The Inmate Calling NPRM asked the following questions:  “If these issues can be sufficiently addressed, is 
prepaid calling a viable ICS option?  Do any ICS providers currently offer prepaid calling?  What are some other
concerns or considerations with prepaid calling?”  Id. (footnote omitted).
37
Time Warner Cable Inc., slip op. at 61 (quoting Council Tree Commc’ns, Inc. v. FCC, 619 F.3d 235, 254 (3d Cir. 
2010) (internal quotation marks omitted)).
38
Order at note 338 (“To be clear, we are not suggesting that this Bureau-level request itself provided notice with 
respect to ancillary charges . . . .”).
39
Rates for Interstate Inmate Calling Services, WC Docket No. 12-375, Public Notice at 2 (Wireline Comp. Bur. 
June 26, 2013).
Federal Communications Commission FCC 13-113
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NPRM given that the Wireline Competition Bureau cannot propose rules on its own.
40
  For yet another, 
that public notice was not published in the Federal Register until July 15, just two days before comments 
and nine days before replies were due.
41
  An agency must provide commenters “enough time with enough 
information,”
42
so that “[t]he opportunity for comment [is] a meaningful opportunity.”
43
  Two days for 
comments and one more week for replies is surely insufficient.
B.
Lack of notice is not the Order’s only legal infirmity.  Also problematic is the fact that the record 
evidence simply does not support the Commission’s one-size-fits-all approach or its chosen safe harbor 
and rate cap.
The Commission establishes an across-the-board safe harbor of 12 cents a minute and an across-
the-board cap of 21 cents a minute for debit calls at all correctional institutions.  It does not matter 
whether an ICS provider is serving a prison with thousands of inmates or a county jail with fewer than 
twenty beds.  The same safe harbor and cap applies.
Yet the record is replete with evidence that the costs
44
of serving a statewide prison system are 
different than the costs of serving large county jails, which in turn are much different than the costs of 
serving small jails, secure mental health facilities, and juvenile detention centers.
45
  One provider’s cost 
study, for example, shows that it costs 12 cents more a minute to serve midsize jails than statewide 
prisons or the largest jails—and the cost of serving the smallest jails tops $1.39 a minute.
46
  Another 
provider shows that the average cost of serving jails is almost 20 percent higher than that of serving state 
prisons, and the highest-cost jail the company serves costs 20 percent more than the most expensive 
prison.
47
  Again, the smallest institutions like jails with fewer than 100 beds, secure mental health 
                                                     
40
See 47 C.F.R. § 0.291(e).
41
See 78 Fed. Reg. 42034 (July 15, 2013).
42
Prometheus Radio Project v. FCC, 652 F.3d 431, 450 (3d Cir. 2010).
43
Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1101 (D.C. Cir. 2009) (Rural Cellular Ass’n I).
44
For purposes of making apples to apples comparisons, all cost data discussed here exclude site commissions, 
which the Order recognizes may be an underinclusive approach given that correctional institutions themselves often 
incur costs to provide ICS and those costs may need to be included in any cost-of-service estimates.  See Order at 
note 203.
45
See, e.g., Pay Tel Reply at 8 (“Generally speaking, the inherent and fundamental differences between state prison 
and county jail calling result in increased costs to providers servicing local facilities.”); NCIC Comments at 3–4 
(“The Market Analysis explored by Petitioners using the Federal Bureau of Prisons and Department of Correction 
facilities to determine their benchmark rates completely disregards the diversity of specific service costs relating to 
city holding facilities, county jails and privately owned facilities.”); CenturyLink Comments at 7 (“There is an 
incredibly wide variance in the costs associated with providing interstate ICS to different facilities.”); Global 
Tel*Link Comments at 6–7 (“Petitioners’ desire to impose a one-size-fits-all approach in the form of nationwide 
rate caps is wholly at odds with the enormous variability among correctional institutions across the United States.”); 
Letter from Glenn B. Manishin, Counsel for Telmate, LLC, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 
12-375, at 1 (July 26, 2013) (“[T]here are substantial differences in terms of scale, capacity, broadband costs and 
inmate ‘churn’ between larger state department of corrections (‘DOC’) systems and the thousands of smaller county 
and municipal jails served by ICS providers like Telmate.”).
46
See Expert Report of Stephen E. Siwek on behalf of Securus Technologies, Inc., WC Docket No. 12-375, at 3, 5 
(Mar. 25, 2013) (Siwek Report) (calculated by subtracting site commissions from costs and dividing by the number 
of minutes), available at http://go.usa.gov/jM7V.
47
Letter from John E. Benedict, Vice President – Federal Regulatory Affairs & Regulatory Counsel, CenturyLink, 
to Marlene H. Dortch, Secretary, FCC, WC Docket No. 12-375, at 2–3 (Aug. 2, 2013) (CenturyLink Report) (noting 
(continued….)
Federal Communications Commission FCC 13-113
7
facilities, and juvenile correctional facilities are in a whole other category of costs; for these facilities, 
costs “vary widely” and go up to 70.9 cents per minute.
48
  Even the 2008 cost study relied upon by the 
Commission showed an increase in the average per-minute cost of 20 percent when it was adjusted to 
include small facilities “whose traffic characteristics cause them to represent locations at which cost 
recovery is unlikely.”
49
Why does the cost of ICS vary widely between prisons, large jails, and smaller correctional 
institutions?  The record suggests several explanations.  One is that the majority of costs for ICS are fixed 
and do not vary with the length or number of calls.  As such, the fewer minutes of use at a given facility, 
the greater the average cost per minute.
50
  This means that the average cost per minute in a jail can be 
much higher than the average cost per minute in a prison, both because of size differences and because 
phone calls made by prison inmates tend to last longer on average than calls placed by those in jail.
51
  
Another explanation is that jails experience a significantly heavier turnover of inmate populations than do 
prisons: 62.2 percent per week in jails versus just 1.01 percent in prisons.
52
  Because the costs for setting 
up payment features such as debit account creation and maintenance and for activating security features 
such as approved calling lists are incurred for each new inmate, even jails comparable in size to prisons 
are likely to cost more to serve.
53
  Yet another explanation is that inmates in jails are more likely than 
inmates in prison to use free telephone services—to call an attorney, for example—increasing the costs of 
service while reducing the volume over which fixed costs can be spread.
54
The Order sets out five reasons for ignoring this variability and adopting a single set of safe 
harbors and a single set of caps to apply to all facilities.  None of them carry the day, in my view.  First, 
the Order asserts that the 2008 cost study submitted by ICS providers reported average costs across a 
(Continued from previous page)                                                            
CenturyLink’s per-minute costs of 11.6 cents for prisons on average, 13.7 cents for jails on average, 18.8 cents for 
the highest cost prison, and 22 cents for the highest cost jail).
48
Id. at 2.
49
Don J. Wood, Inmate Calling Services Interstate Call Cost Study, CC Docket No. 96-128, at 4–5 (Aug. 15, 2008) 
(Wood Report), available at http://go.usa.gov/jMA4; see also Telmate Comments at 15 (reporting that average per-
minute costs for prepaid calling are 40 percent higher for “county” facilities than the average for “all” facilities but 
not explaining whether those costs include site commissions).
50
Wood Report at 5; Letter from Marcus W. Trathen, Counsel for Pay Tel Communications, Inc., to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 12-375, Attach. at 4 (July 23, 2013) (Pay Tel Report); see also, e.g., 
CenturyLink Comments at 7.
51
See Siwek Report at 8 (average length of interstate call made in state prisons is 12.51 minutes compared to 7.10 
minutes in small jails).
52
Letter from Marcus W. Trathen, Counsel for Pay Tel Communications, Inc., to Marlene H. Dortch, Secretary, 
FCC, WC Docket No. 12-375, at 1 (July 3, 2013).
53
Letter from Marcus W. Trathen, Counsel for Pay Tel Communications, Inc., to Marlene H. Dortch, Secretary, 
FCC, WC Docket No. 12-375, Attach. (Aug. 1, 2013) (“In the jail market, Pay Tel’s typical customer accepts calls 
for less than a week and then closes his prepaid account and requests a refund of any available balance.  Conversely, 
at the prison level, a single account remains in place anywhere from six months to several years.”).
54
Telmate Comments at 15 (reporting that 21 percent of minutes from county facilities are free vis-à-vis 12 percent 
of minutes from all facilities); Letter from Marcus W. Trathen, Counsel for Pay Tel Communications, Inc., to 
Marlene H. Dortch, Secretary, FCC, WC Docket No. 12-375, Attach. (Aug. 1, 2013) (“Jails require ICS providers to 
provide free calls to specific telephone numbers (e.g., bail bondsmen, public defenders, etc.), . . . 33% of inmates 
who are booked make only free calls and are then released (meaning ICS providers do not see a penny for provision 
of services to these inmates) . . . .” (emphasis in original)).
Federal Communications Commission FCC 13-113
8
variety of facilities, rendering appropriate a single safe harbor and a single cap.
55
  But that study did not
claim that costs were the same across all facilities; indeed, the supplements to that study showed that the 
costs of providing service varied significantly from one facility to the next.
56
  Using the same 15-minute 
methodology as the Order, the lowest per-minute debit rate at a facility was 7.1 cents, the highest was 
$1.59, the unweighted average was 30.6 cents, and the standard deviation was 32.6 cents.  For collect 
calls, the lowest was 12.9 cents, the highest was $2.05, the unweighted average was 42.8 cents, and the 
standard deviation was 42.3 cents.
57
Second, the Order suggests that because we have adopted a “uniform rate” for public payphones, 
a single safe harbor and cap is suitable here as well.
58
  But different records justify different rules.  In the 
public payphone context, the Commission found insufficient evidence that costs varied significantly from 
one payphone to the next
59
where the number of calls varied by up to 46 percent at a particular location.
60
  
In contrast, the record here specifically demonstrates that the costs of service are higher at jails than in 
prisons and even higher at small correctional institutions.
61
  And call volumes vary much more 
dramatically with ICS.  Small institutions might have only about 1,200 monthly minutes of use whereas 
prisons have up to 15,000 times as much traffic.
62
Third, the Order dismisses the importance of small jails, stating that “[f]acilities of these sizes 
hold only a very small share of inmates nationally.”
63
  Hence, the Order concludes that cost data for these 
facilities “do not necessarily reflect the costs of serving [the] vast majority of inmates that generate nearly 
all calls.”
64
  This might be a good argument for exempting such facilities from the safe harbor and rate 
                                                     
55
See Order at para. 81 (“ICS providers themselves submitted a single set of costs for the multiple providers 
participating in the ICS Provider Data Submission, regardless of the differing sizes of the correctional institutions 
they served.”).
56
See Letter from Stephanie A. Joyce, Counsel to Securus Technologies, Inc., to Marlene H. Dortch, Secretary, 
FCC, CC Docket No. 96-128, Attach. (Aug. 22, 2008); Report of Several Providers of Inmate Telephone Service, 
CC Docket No. 96-128 (Oct. 15, 2008).
57
Id. (redacted numbers reverse-engineered from unredacted information).
58
Order at para. 81 (citing Implementation of the Pay Telephone Reclassification and Compensation Provisions of 
the Telecommunications Act of 1996, CC Docket No. 96-128, Third Report and Order, and Order on 
Reconsideration of the Second Report and Order, 14 FCC Rcd 2545, 2613, para. 149 (1999) (Payphone Third 
Report and Order)); see also id. at note 280 (noting that “[t]he use of averaged rates and data is common in the 
communications industry and telecommunications regulation”).
59
Payphone Third Report and Order, 14 FCC Rcd at 2613–15, paras. 149–53 (noting that while payphone costs 
may differ from one location to the next, “there is no support in the record for MCI’s assertion that the fixed costs at 
a marginal payphone location will be significantly different from the fixed costs at an average payphone location” 
and verifying “that a marginal location can support an average payphone”).
60
Payphone Third Report and Order, 14 FCC Rcd at 2607–08, para. 140 (noting the number of monthly calls per 
payphone ranged from 478 to 700 in the record).
61
The Order’s primary response to this record evidence appears to be the assertion of one party that “technical 
innovations in the provision of prison phone services imply that variation in costs at different facilities has largely 
been eliminated.”  Order at para. 81 (quoting Martha Wright et al. 2013 Comments, Exh. C at 5 (Bazelon Report)).  
The problem with that assertion is that the commenter never discussed the variation in costs between state prisons, 
county jails, and small correctional institutions but instead focused on the variation in rates among state prisons.  
See Bazelon Report at 15–16 (“The underlying costs of providing prison phone service may vary somewhat state by 
state, but nothing that would support the variation [in rates] reported in Table 1.”).
62
See Siwek Report at 2 (reporting that the “low 10” institutions had between 885 and 1,668 minutes of calling each 
month, whereas state prisons had between 2,488,244 and 120,643,191 minutes).
63
Order at para. 26.
64
Id.
Federal Communications Commission FCC 13-113
9
cap.  But so long as the Commission insists on subjecting small jails to each, it cannot refuse to take into 
account the uncontroverted cost data for small jails on the grounds that they don’t house many inmates.
65
  
Indeed, the Commission’s deliberate refusal to take account of different costs of serving different types of 
facilities defines arbitrary decision-making.
66
  The Order, moreover, ignores the reality that a substantial 
percentage of facilities covered by our rules will in fact be small jails.  After all, most jails in our nation 
have fewer than 100 inmates, and about 35 percent of jails house fewer than 50.
67
Fourth, the Order suggests that setting uniform safe harbors and caps without regard to the size 
of the facility being served is reasonable because “ICS providers typically use uniform rates when they 
serve multiple correctional facilities with differing cost and demand characteristics under a single 
contract”
68
and thus “even if a provider may under-recover at some facilities, it may over-recover at 
others.”
69
  Such assertions might have some relevance if the Order only regulated state prison systems 
(where statewide contracts appear to be the norm) or if small facilities were only covered if part of a 
larger contract.  But the Order insists that its safe harbors and caps apply to all correctional institutions, 
without exception, and there is absolutely no evidence in the record that jails in different counties are 
covered under the same contracts or that county jails are covered under the same contracts as state 
prisons.
Indeed, the Order conspicuously does not claim (and cannot claim) that ICS providers set 
uniform rates across all of the facilities they serve.  The record evidence contradicts such a claim 
generally,
70
and there is zero evidence in the record that ICS providers set uniform rates across local jails 
in different counties.  Moreover, the Order contains no credible explanation for why any provider would 
continue to serve any county jail where it is unable to recoup all of its costs.  After all, providers are under 
no legal obligation to provide inmate calling services to any particular correctional facility.  Should they 
make the rational business decision to withdraw from facilities where they would have to operate at a 
                                                     
65
To be fair, the Order includes some small jail data in calculating the collect call rate cap.  See Order at note 307.  
But that does not change the fact that, even in that calculation, the higher cost of serving small jails is offset by 
averaging with the cost of serving larger facilities, nor does it address the propriety of applying the other caps to 
small jails.
66
See United States Telephone Ass’n v. FCC, 188 F.3d 521, 525 (D.C. Cir. 1999) (finding FCC’s rate determination 
arbitrary and capricious where agency eliminated outlying data points in reaching a judgment and did not explain 
“why the outliers were unreliable or their use inappropriate”).
67
U.S. Dep’t of Justice, Office of Justice Programs, Bureau of Justice Statistics, Census of Jail Facilities (2006), 
available at http://dx.doi.org/10.3886/ICPSR26602.v1.
68
Order at note 280.  The Order supports this claim by pointing to a contract with the state of California’s prison 
system, another with the state of Nebraska’s prison system, and a third with U.S. Immigration and Customs 
Enforcement at the Department of Homeland Security.  See id. at note 226 (citing ICS contract between Public 
Communications Services, Inc. and Nebraska Department of Correctional Services, dated July 8, 2008, available at
http://www.prisonphonejustice.org/Prison-Phone-Kickbacks.aspx?state=Nebraska); id. at note 280 (citing State of 
California, California Technology Agency, IWTS/MASS Agreement Number OTP 11-126805, available at
http://prisonphonejustice.org/Prison-Phone-Kickbacks.aspx?state=California, and citing note 493, which in turn 
cites Letter from Glenn Manishin, Counsel to Telmate, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 12-
375, at 2 (filed July 26, 2013)).  Although note 493 also cites two additional comments, those comments discuss 
“postalized” rates within a facility (i.e., the same rates for local and long-distance calls), not uniform rates across 
facilities.
69
Order at note 301.
70
For example, the letter touted by the Order for its discussion of a contract with U.S. Immigration and Customs 
Enforcement at the Department of Homeland Security goes on to explain the different rates that same ICS provider 
offers for state prisons and county jails.  See Letter from Glenn Manishin, Counsel to Telmate, to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 12-375, at 2 (filed July 26, 2013).
Federal Communications Commission FCC 13-113
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loss, inmates in those facilities ultimately will suffer.
71
  And even if a provider for some reason chooses to 
engage in cross-subsidization between prisons and county jails, uniform safe harbors and caps mean that 
long-term prison inmates will be forced to subsidize the calls of short-term jail inmates.
Fifth, the Order suggests that because the safe harbor and cap are set conservatively, they already 
account for cost variances across facilities.
72
  Unfortunately, calling a measure “conservative” 34 times 
doesn’t make it so.
73
Consider the cap on debit rates.  The Order primarily relies on Pay Tel’s cost data to establish a 
cap of 21 cents per minute.
74
  But Pay Tel’s average costs were 20.8 cents.  Unless this is a most unusual 
situation in which no jails have above-average costs—a Bizarro Lake Wobegon—a cap of 21 cents almost 
certainly means that a significant number of small jails will be capped at below-cost rates.  Other 
evidence in the record leads to a similar conclusion.  The Siwek Report points to smaller correctional 
facilities where costs average $1.39 per minute, a figure almost seven times the rate cap.
75
  And 
CenturyLink reports that its highest-cost large jails cost 22 cents a minute to serve, not including an 
additional 4 cents for more recent security features.
76
  Moreover, CenturyLink explains that smaller jails 
with 100 or fewer inmates “are much costlier to serve, with CenturyLink’s costs to serve as high as [70.9 
cents] per minute.”
77
So the evidence in the record demonstrates that a rate cap for debit calls of 21 cents 
per minute is not a conservative approach—it is arbitrarily low as applied to jails.
So too with the cap on collect rates.  The 25 cent cap here is based on a 24.6 cent average cost of 
service in 2008.
78
  Right off the bat, this means costs in many facilities are likely to be above the cap, as is 
true for the cap on debit rates.  And the 24.6 cent average is only true if you both assume the average call 
lasts 15 minutes and include only the 25 least expensive locations in that study.  Using the actual average 
call length (12 minutes), the average cost jumps to 27.8 cents per minute.  Including the three highest cost 
locations, the average cost jumps to 28.3 cents.  Taking into account both of these adjustments pushes the 
average cost up to 33.6 cents.  So based on a full and fair review of the record, average costs of the 
facilities in that study are more than 34 percent above the cap.  And even that assumes that costs have 
                                                     
71
Although the Order quotes a single ICS provider that occasionally serves small facilities at a loss when it 
“represent[s] that community or . . . ha[s] a lot of facilities in that area,” Order at note 301, it is naïve to expect that 
charitable intentions will lead ICS providers to serve all the small institutions with below-cost rates.
72
See, e.g., Order at para. 62 (“We set our interim safe harbor at conservative levels to account for the fact that there 
may be cost variances among correctional facilities.”); id. at para. 79 (noting that the data underlying the cap 
calculation “represent the highest cost of a per-minute collect call in the record, and includes cost data from 
locations with varying cost and call volume characteristics” (indirectly citing Wood Report at 4)); id. at note 230 
(“[W]e are not simply ‘calling’ our measures conservative . . . but rather are relying on record evidence in a 
conservative fashion.”).
73
Cf. Inigo Montoya, The Princess Bride (Act III Communications 1987) (“You keep using that word.  I do not 
think it means what you think it means.”).
74
Order at para. 76.
75
The fact that average costs in the Siwek Report (referred to by the Order as the cost study submitted by Securus, 
see Order at para. 77) were below the cap does nothing to establish that 21 cents per minute is a reasonable cap as 
applied to jails when that same study shows that costs in small jails averaged $1.39 a minute.
76
CenturyLink Report at 3.
77
Id.  This information, as well as other data described above, simply cannot be squared with the Commission’s 
claim that the interim rate caps were established “us[ing] the highest costs in the record.”  Order at para. 74; see also
id. at note 230 (“[T]he rates we set for the safe harbor and cap reflect costs that exceed the cost data that any party 
submitted in the record.”).
78
Order at para. 78.
Federal Communications Commission FCC 13-113
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held steady over the past five years.  The record, however, shows that the cost of security measures such 
as biometric voice scanning and real-time monitoring have actually increased over time.
79
Next, consider the safe harbor.  It is based on the prison rates of seven states that have eliminated 
site commissions.  No data for jails (service to which, again, requires higher per-minute costs) was used to 
calculate the safe harbor, even though that benchmark applies to jails.  It is therefore not surprising that 
the safe harbor is below the average per-minute costs of serving jails.
Additionally, the safe harbor of 12 cents does not make sense even as applied to prisons.  While 
acknowledging that rates charged for services do not necessarily correlate with the costs,
80
the item 
nevertheless concludes that a subset of seven states that have eliminated site commissions in prisons 
“provides a reasonable basis for establishing a conservative proxy for cost-based rates.”
81
  And yet, the 
safe harbor is based on averaging, so some prison rates in these states will by definition come out above 
the benchmark.  So it is that rates in Michigan and Rhode Island are above the benchmark even though 
both states have adopted the reforms the Order suggests are necessary to correlate rates with costs.
82
  
(Ironically, even though the rates in Rhode Island are used to compute the safe harbor, ICS providers 
there cannot continue to charge those rates going forward given that they are not only above the safe 
harbor but also above the cap.)
The Commission’s calculations also skew the average rate of these seven states lower than it 
actually is.  For example, the Order assumes the average ICS calls lasts 15 minutes (rather than 12
83
) 
because it “anticipate[s] that call durations would tend to increase under our rates.”
84
  And the Order
rounds the average rate down (which would place the average rate itself outside the safe harbor) rather 
than up.  Taking the less aggressive approach in each situation would have yielded safe harbors two cents 
                                                     
79
See, e.g., Pay Tel Report at 3 (noting that the use of continuous biometric identification, once unavailable, now 
costs Pay Tel 1.93 cents per minute); CenturyLink Report at 2 (asserting that “current generation security features” 
require payments of 4 cents a minute to third-party software vendors); Securus Supplement at 5–6 (Mar. 27, 2013) 
(“Another area in which Securus’s costs have gone up is software development.  Because of the unique nature of 
inmate telephone services, in 2012 alone Securus spent over $4.5 million on the development of safety, security, and 
investigative software for its inmate telephone systems.”); Securus Reply (Declaration of Kelly Solid) (Apr. 22, 
2013) (describing the proprietary THREADS software program that mines inmate calling data “to predict, prevent, 
or address activity that would be harmful to inmates or the general public,” such as apprehending an escapee or 
preventing attempts to assassinate law enforcement officials”).
80
Record evidence suggests that the rates charged in many jurisdictions do not correlate with the costs.  Even in 
states that have adopted reforms, there is evidence that ICS providers have raised ancillary charges to offset revenue 
losses from low interstate calling rates.  See, e.g., Michael S. Hamden Ancillary Charges PN Comments at 5 
(asserting that “New Mexico ICS providers also generate revenue through imposing a wide variety of charges to 
establish pre-paid accounts and to maintain those accounts”); Michael S. Hamden Ancillary Charges PN Reply at 1. 
Cf. MCI Telecomm. Corp. v. FCC, 143 F.3d 606, 609 (D.C. Cir. 1998) (“The Commission never explained why a 
market-based rate for coinless calls could be derived by subtracting costs from a rate charged for coin calls. If costs 
and rates depend on different factors, as they sometimes do, then this procedure would resemble subtracting apples 
from oranges.”).
81
Order at para. 62.
82
To try to get out of this box, the item later concludes that something must be rotten in the States of Michigan and 
Rhode Island.  See Order at notes 235, 237.  But it cites no evidence in support of that assertion.  Furthermore, if 
this is true, then it begs the question of why these two states were used to calculate the safe harbor in the first place.  
Cf. id. at note 237 (“A statistical analysis of the state rate data would also lead to exclusion of these two states.”).
83
The average duration in California prisons was 12.1 minutes in 2010, Bazelon Report at 14, and the average call 
duration across Securus-served facilities was 11.63 minutes in 2012, Siwek Report at 8.
84
Order at note 232.
Federal Communications Commission FCC 13-113
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higher than those adopted in the Order.
85
  And again, the result would be even higher for jails (two 
additional cents higher), where the average call lengths are even shorter and less price elastic.
86
Considering all these facts together, I believe that the decision to establish a safe harbor and cap 
that applies to all correctional institutions, regardless of their size and regardless of their nature, is 
arbitrary.  I also believe that the specific safe harbor and cap chosen by the Commission are not supported 
by substantial evidence.  By ignoring the differences between prisons and jails (among other things), the 
Commission has “fail[ed] to consider an important aspect of the problem” before us.
87
  And by setting a 
safe harbor and cap that is unreasonably low for jails, especially smaller ones, the Commission has made 
a decision that “runs counter to the evidence” in the record.
88
To be sure, the Order affixes an “interim” label on the safe harbor and the cap as well as the rate 
structure and rate levels adopted.  Perhaps this is meant to invoke courts’ “particularly deferential” review 
of interim rules.
89
  The problem is that such deference is premised on “[a]voidance of market disruption 
pending broader reforms”
90
and the agency “act[ing] to maintain the status quo so that the objectives of a 
pending rulemaking proceeding will not be frustrated.”
91
  Neither factor obtains here.  In fact, the interim 
rules in this case will significantly disrupt the market given that 21 state prison systems (and the Federal 
Bureau of Prisons) have interstate rates above the cap and another 11 have rates above the safe harbor, not 
to mention the thousands of jails and smaller facilities with ICS that will be affected.  This approach is 
intended to perturb, not preserve, the status quo.
92
Nor does the “interim” designation bridge the evidentiary gap that will persist until the 
completion of the mandatory data collection appended to the Order.
93
  The data collection seeks the costs 
                                                     
85
Specifically, the average rate for collect calls would have been 16 cents (rounded up from 15.21 cents) and for 
debit/prepaid calls 14 cents (rounded up from 13.03 cents).
86
See CenturyLink Comments at 11 (noting that call lengths in jail do not appear to be particularly sensitive to 
price).  The average call length was 10.45 minutes for midsize jails and 7.1 minutes for small jails.  Siwek Report at 
8.  For midsize jails, the average rate for collect calls would have been 17 cents (rounded up from 16.03 cents) and 
for debit/prepaid calls 14 cents (rounded up from 13.57 cents).  For small jails, the average rate for collect calls 
would have been 20 cents (rounded up from 19.02 cents) and for debit/prepaid calls 16 cents (rounded up from 
15.58 cents).
87
Motor Vehicle Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
88
Id.  The Order sets up a straw man by arguing that under my approach, “the averaging of relevant record data” 
would never be allowed.  See Order at note 230.  The permissibility of averaging costs depends upon the particular 
market and particular record at issue.  And my position, as explained in detail above, is that relying on an average-
cost approach is arbitrary in light of the nature of the market for ICS and the record compiled in this proceeding.  By 
contrast, where providers are required by law to serve all locations within a geographic area, then an average-cost 
approach could well have merit.
89
Rural Cellular Ass’n I, 588 F.3d at 1105; see also Rural Cellular Ass’n v. FCC, 685 F.3d 1083, 1095 (D.C. Cir. 
2012).
90
Rural Cellular Ass’n I, 588 F.3d at 1106 (quoting Competitive Telcomms. Ass’n v. FCC, 309 F.3d 8, 14 (D.C. Cir.
2002)).
91
MCI Telecomms. Corp. v. FCC, 750 F.2d 135, 141 (D.C. Cir. 1984).
92
Given that today’s Order is not an interim rule as envisioned by these precedents, I need not broach the question 
of whether Congress intended courts to apply a more deferential standard to interim rules.  Cf. FCC v. Fox 
Television Stations, Inc., 556 U.S. 502, 515 (2009) (rejecting a change in the standard of deference where “statute 
makes no distinction . . . between initial agency action and subsequent agency action undoing or revising that 
action”).
93
It is worth noting too that interim rules can remain in place for a significant period of time.  Compare Special 
Access for Price Cap Local Exchange Carriers; AT&T Corporation Petition for Rulemaking to Reform Regulation 
of Incumbent Local Exchange Carrier Rates for Interstate Special Access Services, WC Docket No. 05-25, RM-
(continued….)
Federal Communications Commission FCC 13-113
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of all ICS providers to serve all their facilities, including how joint and common costs are apportioned 
among facilities, as well as certain rate and usage information.
94
  With this cost information, the 
Commission could determine how to adequately address the cost variability shown in the present record.  
But without it, the cart at this point stands in front of the horse.
95
For all of these reasons, I fear the Order invites protracted litigation, which may tie up the agency 
for years to come and delay any hope of reducing the most egregious ICS rates in the near term.
96
II.
Leaving aside the Order’s legal infirmities, I cannot support an Order that we cannot administer 
with consequences we cannot control.  I would have supported action to institute simple and reasonable 
rate caps.  But this item instead combines de facto rate-of-return regulation for ICS providers at all 
correctional institutions in America, which we will not be able to administer effectively, with a flawed 
rate cap that will result in county jails, secure mental health facilities, and juvenile detention centers 
scaling back their security measures or even terminating inmate calling services entirely.
A.
To understand the challenges of administering the Order, consider what it requires.  First, each 
ICS provider must adjust its interstate ICS rates and ancillary charges so that they are “cost based.”  If the 
Commission determines those rates are not cost based, it may reduce an ICS provider’s rates, impose 
forfeitures, and require refunds.  Second, each ICS provider must determine whether all of those cost-
based rates fall beneath the safe harbor or any of those cost-based rates rise above the cap.  Third, each 
(Continued from previous page)                                                            
10593, Report and Order, 27 FCC Rcd 10557, 10558, 10561, paras. 1, 7 (2012) (suspending certain rules on an 
“interim” basis and stating that a data collection will commence by October 22, 2012), with Comment Deadlines 
Extended in Special Access Proceeding, WC Docket No. 05-25, RM-10593, Public Notice (July 31, 2013) (noting 
that the Office of Management and Budget has not yet approved the special access data collection and collection 
will not likely commence until “the end of this year or early next year”).
94
Order at para. 125.
95
I do not suggest that the Commission must “assemble perfect data” before acting nor that the Commission must 
set an “exquisitely granular rate[,] unsullied by any taint of averaging,” as hyperbolically suggested by the Order.  
See Order at notes 230, 308; cf. infra Part III.  But I do insist that any solution adopted actually be supported by the 
record.  So do the courts.  See State Farm, 463 U.S. at 43 (agency “must examine the relevant data and articulate a 
satisfactory explanation for its action including a rational connection between the facts found and the choice made”) 
(internal quotation marks and citation omitted).  If the record contains uncontroverted evidence that the costs of 
serving different correctional institutions varies widely, as it does here, the Commission must either tailor its 
solution to that evidence or defer action until it obtains new evidence.  It is arbitrary and capricious for the 
Commission to set aside the record evidence (by averaging) and adopt far-reaching regulations in the hope that later 
data will justify them.
96
I tend to doubt the Order’s severability clause will help the Commission avoid or escape the thicket.  That clause 
notes that even though “[a]ll of the rules . . . are designed to work in unison,” “[i]f any of the rules is declared 
invalid or unenforceable for any reason, it is our intent that the remaining rules shall remain in full force and effect.”  
Order at para. 127.  Practically speaking, of course, the severability clause may mean nothing at all.  After all, some 
rules (like the safe harbor) make no sense without others (like the requirement that all interstate ICS rates be cost-
based).  And courts do not accept without question agencies’ assessments of what rules can stay and what rules can 
go.  Perhaps for these reasons, we rarely include such clauses when we adopt rules and have done so only three 
times in the last decade by my count.  See Implementation of the Commercial Advertisement Loudness Mitigation 
(CALM) Act, MB Docket No. 11-93, Report and Order, 26 FCC Rcd 17222, 17241, n.139 (2011); Connect America 
Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, 26 FCC 
Rcd 17663, 18149, para. 1405 (2011); 2006 Quadrennial Regulatory Review – Review of the Commission’s 
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 
1996 et al., MB Docket No. 06-121 et al., Report and Order and Order on Reconsideration, 23 FCC Rcd 2010, 2018, 
para. 12 (2008) (subsequent history omitted).
Federal Communications Commission FCC 13-113
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ICS provider must report annually on the rates charged, minutes billed, calls disconnected, and other 
information for each correctional institution it serves.  And fourth, each ICS provider must document its 
costs for the past year and report those costs to the Commission on an institution-by-institution basis.  
Together these requirements amount to the imposition on ICS providers of all-out rate-of-return 
regulation, with its requisite cost studies, separations, cross-subsidizations, tariffing, and other 
accoutrements.  I’ll address each piece in turn.
1.
First, all interstate ICS rates and all ancillary charges must be cost based.
97
  In this context, this 
means that rates must be based on “historical costs that are reasonably and directly related to the 
provision of ICS” plus some return on investment.
98
  To calculate this, an ICS provider must record and 
document its costs of providing service.  It must distinguish between eligible costs (such as “costs of the 
equipment housed in the confinement facility,” the costs of “originating, switching, and the transport and 
termination of calls,” “the costs of recording and screening calls,” the costs of “blocking mechanisms,” 
the costs of “biometric caller verification,” the costs of “storage of inmate call recordings,” and the costs 
of “billing and collection”
99
) and ineligible costs (such as some, but not all, site commissions
100
).  If the 
provider uses the same equipment or personnel to provide ICS and another service (for example, if a jail 
requires that ICS be integrated with commissary ordering), the provider must figure out some way to 
unbundle the eligible costs from the ineligible costs.  For capital investments, the provider must determine 
an amortization schedule, a depreciation method, the appropriate rate of return, and a tax rate.  After 
answering all these questions, the ICS provider will presumably have determined its historical costs.
But there’s more.  While some costs will be tied to the provision of a service at a particular 
facility, many ICS costs today are joint and common costs, such as corporate operating expenses 
(including the cost of complying with FCC rules) or the cost of a centralized inmate calling recording 
platform that serves multiple facilities.  For these costs, the ICS provider must apportion them among the 
prisons, jails, and other correctional institutions it serves and between ICS and “ancillary” services in a 
just and reasonable manner.  Then, at least for ICS, the provider must separate the costs of interstate 
service from the costs of intrastate service since only interstate costs can factor into interstate rates.  And 
then the ICS provider must translate those interstate, eligible costs into per-call and per-minute rates.
To administer this same process for incumbent rate-of-return carriers, the Commission has rules 
spanning at least five different parts of the Code of Federal Regulations.  Part 64 explains how carriers 
must allocate costs between eligible and ineligible services.
101
  Part 32 explains how carriers should 
account for their different categories of expenses.
102
  Part 36 explains how carriers should separate their 
interstate costs from their intrastate costs.
103
  Part 65 explains how carriers should calculate their rates of 
return.
104
  And Part 69 explains how carriers should translate their interstate costs into interstate rates.
105
  
                                                     
97
See Rule 64.6010.
98
Order at para. 52.
99
Id. at note 196.  Notably, the Order only states that these costs are “likely” eligible.
100
Id. at note 203.
101
47 C.F.R. Part 64, Subpart I (Allocation of Costs).
102
47 C.F.R. Part 32 (Uniform System of Accounts for Telecommunications Companies).
103
47 C.F.R. Part 36 (Jurisdictional Separations Procedures; Standard Procedures for Separating 
Telecommunications Property Costs, Revenues, Expenses, Taxes and Reserves for Telecommunications 
Companies).
104
47 C.F.R. Part 65 (Interstate Rate of Return Prescription Procedures and Methodologies).
105
47 C.F.R. Part 69 (Access Charges).
Federal Communications Commission FCC 13-113
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But this Order leaves most of the questions on how to actually implement such regulation wholly 
unanswered.  For example, must ICS providers follow the principles of Part 32 accounting, or may they 
employ Generally Accepted Accounting Principles (GAAP)?  Should the rate of return be the same as for 
rural incumbent local exchange carriers (11.25 percent) or should it reflect the ICS market?  And what 
adjustments to rate-of-return accounting are necessary given that ICS providers compete against each 
other for contracts that last only a few years (by contrast, rate-of-return principles were developed to 
police state-granted monopolies)?
Complicating this exercise for ICS providers is that most are not free to adjust their rates 
unilaterally.  Instead, most ICS rates are subject to contracts between the ICS provider and the 
correctional institution—contracts that will remain in place even after the Order becomes effective.
106
  As 
such, an ICS provider must renegotiate existing contracts or pursue other legal recourse, all in the next 90 
days,
107
in addition to calculating new, cost-based rates for interstate ICS calls and ancillary charges.
If an ICS provider’s rates are challenged, things get even more complicated.  The Commission 
may investigate their rates, whether or not inmates file complaints.  ICS providers bear the burden of 
production in all such cases, meaning they must submit all documentation necessary to prove that their 
rates are just and reasonable.  And ICS providers will usually bear the burden of proof.
108
  The 
Commission must then evaluate on a facility-by-facility basis which costs are legitimate and which are 
not, and determine whether it agrees with the way the ICS provider accounted for its costs, separated 
them, and translated them into rates.
If the Commission disagrees with the ICS provider’s accounting after the fact, the provider must 
lower its rates.  In ordering rate changes, the Commission reserves the right to decide that “[s]ome 
averaging of costs must occur” so that it may “require that an ICS provider be fairly compensated on the 
basis of either the whole of its ICS business or by groupings that reflect reasonably related cost 
characteristics, and not on the basis of a single facility it serves.”
109
  In other words, after the Commission 
looks at the costs of serving each of a provider’s facilities, it might order an ICS provider to start cross-
subsidizing—charging inmates at one facility more in order to reduce the cost of serving another facility.  
But the Order provides no guidance as to when the Commission may impose this remedy.
In some cases, the Commission may order refunds and forfeitures, but the Order does not 
mention how the former would be implemented.  How far back would refunds go?  How long must ICS 
providers track who paid how much at a particular rate?  If an inmate has already left the jail or prison, 
must the ICS provider track him or her down?  May the ICS provider include the cost of administering 
refunds in its rates going forward?  None of these questions is asked, much less answered.
2.
Second, the Order establishes both a safe harbor (of 12 cents minute) and a cap (of 21 cents) for 
debit and prepaid calls, and a higher safe harbor (14 cents) and cap (25 cents) for collect calls.
110
  For ease 
of discussion, let’s focus on a provider’s debit rates.
Take first the safe harbor.  To qualify for it, an ICS provider’s rates must be 12 cents a minute or 
less.  But having rates at a particular facility or within a particular state below 12 cents is not sufficient—
                                                     
106
Order at para. 100 (“Nothing in this Order directly overrides such contracts.”).
107
Note that the effective date of the Order is 90 days after publication in the Federal Register.  For ease of 
exposition, I assume that such publication will occur shortly after release.
108
Order at para. 121.  The ICS provider always bears the burden of proof for ancillary charges.  For ICS rates, the 
burden may shift to complainants if the provider meets the safe harbor, as discussed below.
109
Order at para. 123.
110
Notably, there is no safe harbor for, and no cap on, ancillary charges.
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the safe harbor applies only if all of an ICS provider’s rates are below 12 cents.
111
  If the rates for a single 
facility are above that benchmark, the ICS provider will not qualify for the safe harbor at any facility.  
Because there is uncontroverted evidence in the record that the cost of serving many county jails is far 
above 12 cents a minute,
112
this means that one of two things will happen.  Either ICS providers will 
continue to provide service to county jails and none of them will qualify for the safe harbor, so it will be a 
dead letter.  Or in order to qualify for the safe harbor, ICS providers will stop providing service to 
numerous jails across the country.
113
Moreover, the “safe harbor” is a bit of a misnomer since it provides no refuge from complaints.  
The Order explicitly states that “[p]arties can file a complaint challenging the reasonableness of interstate 
ICS rates” even if those rates are within the safe harbor.
114
  If those rates are challenged, the Commission 
will have to decide whether they are cost-based and may reduce a provider’s rates even further below the 
safe harbor.  To be sure, the provider will benefit from a rebuttable presumption that its rates are just and 
reasonable, but rebuttable means that the safe harbor isn’t really safe.
Next, turn to the cap of 21 cents.  If any of an ICS provider’s cost-based rates are above the cap, 
the Commission’s message appears to be “too bad.”  Unless the Commission decides to grant a special 
dispensation, providers serving county jails will be subject to what is perhaps best described as negative 
rate-of-return regulation.  Under the Order, a provider cannot charge cost-based rates at a small jail with 
above-average costs unless and until the Commission grants a waiver for “extraordinary circumstances.”  
In deciding whether to grant such a waiver, the Commission may examine not just the costs of serving 
that one facility, but its costs of serving each and every facility, including “costs directly related to the 
provision of interstate ICS and ancillary services; demand levels and trends; a reasonable allocation of 
common costs shared with the provider’s non-inmate calling services; and general and administrative cost 
data.”
115
Given that the record shows that the cost of serving jails, and especially small jails, can be 
significantly higher than 21 cents a minute, there are sure to be many jails, juvenile correctional 
institutions, and secure mental health facilities, with costs above the cap.
116
  Given that the Order requires 
ICS providers to charge below-cost rates at such facilities until the Commission says otherwise, either 
providers will stop serving smaller jails or the waiver requests will come in swiftly.  And given that our 
country has 2,859 jails, of which 1,681 have fewer than 100 beds and 1,129 have fewer than 50 beds,
117
                                                     
111
Order at notes 226, 429.
112
See supra Part I.B.
113
Theoretically, an ICS provider could raise rates in some facilities (such as the prisons of New York and New 
Mexico) in order to reduce rates below cost in others (e.g., county jails). But the Order offers no meaningful 
guidance as to when (and to what extent) such cross-subsidization would be permissible, other than to say that “ICS 
providers should not read this Order as providing a basis to increase rates” unless “necessary to ensure recovery of 
costs directly and reasonably related to the provision of ICS on a holding-company level.” Order at note 19; see 
also id. at note 225. So the Commission has put a Sword of Damocles over the ICS providers that continue to serve 
jails, as the Commission could well decide after the fact that a provider’s decision to cross-subsidize is unjust and 
unreasonable.  So while, as explained earlier, it is naïve to expect that charitable intentions will lead ICS providers 
to serve all small correctional institutions with below-cost rates, expecting them to serve institutions where they will 
lose money and where doing so may invite enforcement action by the Commission is less an indication of naïveté 
than wishful thinking.
114
Id. at para. 120.
115
Id. at paras. 82–83.
116
As I explain above, the cap is not “conservative,” and I do not see the basis for the Order’s “expect[ation] that the 
rates of most facilities, whether jails or prisons, large or small, should fall below this rate.”  Id. at para. 77.
117
U.S. Dep’t of Justice, Office of Justice Programs, Bureau of Justice Statistics, Census of Jail Facilities (2006), 
available at http://dx.doi.org/10.3886/ICPSR26602.v1.
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the waiver requests might apply to hundreds or thousands of facilities across the country.
118
  I cannot see 
how the Commission will process these waivers in an effective or timely manner considering our limited 
resources.  Indeed, recent experience counsels otherwise.
119
And assume that the Commission finds, after a grueling review, that an ICS provider has justified 
its waiver request.  What then?  Presumably the provider may, at that point, raise its rates above the cap.  
But how can the ICS provider recoup the revenues it lost while the Commission required it to charge 
below-cost rates?  The short answer is it cannot.  And thus the rate-of-return regulations adopted in the 
Order are a one-way ratchet—all designed to lower rates regardless of the consequences.
3.
Third, each ICS provider must file by April a list of the interstate and intrastate rates it charges at 
each correctional institution it serves, as well as the “their charges to consumers that are ancillary to 
providing the telecommunications piece of ICS.”
120
  This is effectively a tariffing requirement that allows 
the Commission to scrutinize the rates of all providers, especially given that ICS providers must update 
these filings every year going forward.  May an ICS provider change its rates between filings?  Perhaps.  
Will the Commission require providers to update their filing if they do?  Not yet.  But will the 
Commission likely cast a skeptical eye on rate increases between filings?  Almost certainly.  And where 
we will get the resources to review the effectively tariffed rates at each of the thousands of correctional 
institutions in America?  I don’t know.  In order to administer the rules contained in this Order, the 
Commission may need to create its own Bureau of Prisons.
4.
Finally, there is the massive data collection.  Each ICS provider must document its costs for the 
past year and report them to the Commission on an institution-by-institution basis.  Those costs must be 
broken down into five separate categories (connections, equipment, maintenance, security, and ancillary), 
which must be apportioned among three methods of cost accrual (fixed, per call, and per minute), and 
which must then again be divided between direct costs and joint and common costs.  In addition, ICS 
providers must report the costs for establishing, maintaining, and closing debit and prepaid accounts, for 
sending paper statements, and for calling wireless phones, as well as the rates they charge for these 
services.  And ICS providers must report “data on their interstate and intrastate long distance and local
demand (i.e., minutes of use) and . . . apportion the minutes of use between interstate and intrastate 
calls.”
121
  For jails alone, that’s 122,937 separate pieces of information.
122
  How we will review that 
information, check it for errors, and analyze it within a reasonable time frame is a mystery.
                                                     
118
The Order suggests that because the three largest ICS providers “account for over 90% of ICS provided in the 
country,” processing waiver requests will not be a problem.  Order at note 270.  But that statistic is irrelevant for 
these purposes.  The vast majority of ICS minutes come from state and federal prisons, where providers are unlikely 
to require waivers.  The question instead is whether the Bureau has the capacity to process waivers covering the 
country’s 2,859 jails, each of which may face different costs of service.
119
Cf. Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed 
Rulemaking, 26 FCC Rcd 17663,17842, para. 544 (2011) (directing the Wireline Competition Bureau to process 
waivers filed by Tribal or insular carriers for certain new universal service rules to complete review within 45 days 
of the record closing).
120
Order at para. 116.
121
Id. at para. 125.
122
The calculation is 43 pieces of information collected from each of the 2,859 jails in the United States.  U.S. Dep’t 
of Justice, Office of Justice Programs, Bureau of Justice Statistics, Census of Jail Facilities (2006), available at
http://dx.doi.org/10.3886/ICPSR26602.v1.
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What is more, the mere fact of this data collection means that the safe harbor is ephemeral.  Even 
if an ICS provider qualifies for the safe harbor (an uncertain proposition for the reasons described above), 
it must submit data that the Commission may well use to require that provider’s rates to be reduced even 
further.
123
As if all these administrative problems were not enough, the Commission proposes to expand 
these same rules to local and intrastate services.  This novel interpretation of section 276 would empower 
the Commission to preempt the role of state regulatory commissions in overseeing local and intrastate 
long-distance rates.
124
  And it would foist even more work on our already-crowded plate.
5.
The Order rejects the rate-of-return label for its approach, instead terming it alternately a “rate 
cap regulatory regime[],”a “rate cap approach,” “rate caps . . . similar to rate benchmarks,” a “rate cap 
framework,” “rate caps under a framework,” a “kind of variant on rate caps,” “rate caps that include a 
safe harbor mechanism,” “a system that relies on rate caps as well as potential complaints that rates are 
not based on costs,” or even “caps and . . . other steps to ensure that rates reflect costs.”
125
  But whatever 
it’s called, the name matters less than the substance.  And the substance of the Order is de facto rate-of-
return regulation.
At its core, rate-of-return regulation is about limiting the profits providers make by tying rates to 
historical costs plus a rate of return; it’s the regulatory equivalent of a cost-plus contract.
126
  As outlined 
above, that’s exactly what the Order requires:  “[I]nterstate ICS rates . . . must be cost-based,”
127
and costs 
are defined as “historical costs”
128
plus a “reasonable return on investment.”
129
  The fact that the Order
also caps the rates of ICS providers does not convert this rate-of-return regulation into something else; 
indeed, the Commission has used caps to supplement rate-of-return regulation before.
130
In rebuttal, the Order suggests that its approach is “fundamentally different than rate-of-return 
regulation” because it “does not rely on a prescribed rate of return, ex ante review, tariff filings, or 
compliance with cost accounting rules.”
131
  Set aside for the moment whether this assertion is true—
whether, for example, the Order does not rely on tariff filings (despite the annual rate-filing requirement) 
                                                     
123
Order at note 433.
124
An ICS provider in today’s market usually plays three separate roles under the statute: a payphone service 
provider (providing the equipment to connect to the network), a local exchange carrier (providing the connection to 
the local network), and an interexchange carrier (providing the connection beyond the local area).  We have never 
before suggested that section 276 allows us to evaluate whether intrastate rates and practices are just and reasonable 
(a la section 201) for local exchange carriers and interexchange carriers just because they connect to a payphone.
125
Order at para. 59 & notes 195, 222, 224, 280.
126
See Policy and Rules Concerning Rates for Dominant Carriers, CC Docket No. 87-313, Second Report and 
Order, 5 FCC Rcd 6786, 6787, 6789, paras. 1, 22 (1990) (Price Cap Order).
127
Order at para. 50; see also id. at para. 119 (“we require ICS providers to charge cost-based rates and charges”); 
id. at para. 120 (“we require all interstate ICS rates and charges to be cost-based”).
128
Id. at para. 52.
129
Id. at para. 53.
130
See 47 C.F.R. § 69.104 (prescribing caps for the subscriber line charge for rate-of-return carriers).
131
Order at note 195.  I note that I cannot find any source—and the Order cites none—suggesting that all (let alone 
any) of the proffered regulatory methods are necessary requirements of rate-of-return regulation.  By my reading, 
the Commission has used these methods in numerous circumstances, sometimes as part of rate-of-return regulation 
and sometimes not.  See, e.g., Price Cap Order, 5 FCC Rcd at 6787–91, paras. 5–37 (maintaining the use of these 
methods for price-cap regulation).
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or does not require compliance with cost accounting rules (despite the fact that ICS providers must 
allocate their costs as specified in the Order) or does not require ex ante review (despite the fact that 
carriers may not charge cost-based rates above the cap without ex ante review).  The larger problem with 
this argument is that it seeks to sell a bug of the Order as a feature—the lack of clarity over how the 
Commission will implement its rate-of-return regulation (such as the prescribed rate of return) will lead to 
less certainty and more ex post decision-making.  After all, ICS providers are not going to be able to 
choose whatever rate of return they desire; the Order even suggests that the 11.25 percent rate of return 
assumed by ICS providers “likely” overstates the cost of capital.
132
  As the Commission goes about 
implementing this Order, it eventually will have to reveal to service providers what their rate of return 
may be.  In short, whatever label the Order slaps on this package of new rules, it cannot deny that the 
contents constitute de facto rate-of-return regulation.
133
B.
Turning from administrative difficulties to unintended consequences, I believe, as set forth above, 
that the rates in the item are below the costs of serving most jails (the majority of jails in our nation hold 
fewer than 100 inmates), secure mental health facilities, and juvenile detention centers.  This arbitrarily 
low rate will impede the continuing deployment of current-generation security measures and the 
development of next-generation security techniques.  The end result will be more crime.  Over time, I also 
fear that ICS providers will reduce service to some facilities and entirely eliminate service to others.
No one disputes that public safety and security are important.  Although many use ICS only for 
its intended purposes—staying in touch with friends and family—not all inmates are so benign.  Some 
“[i]nmates utilize the telephone to communicate with individuals in the community to conspire and carry 
out serious criminal activities” such as intimidating witnesses and crime victims or coordinating gang 
activity.
134
  Indeed, the Order appropriately notes that “security features, such as call recording and 
monitoring . . . advance the safety and security of the general public.”
135
And yet, security does not come cheap.  ICS providers are constantly developing and deploying 
new security techniques, many of which are required just to keep pace with the tactics of certain inmates.  
For example, “inmates try to hide their identities through pin sharing, pin stealing, and/or three-way calls” 
in 1 out of every 14 calls, and biometric identification technologies have allowed for increased detection 
of such activities.
136
  The cost of these new techniques may be significant, adding two to four cents per 
minute on top of the other costs (including call monitoring and recording) of a call.
137
  If an ICS 
                                                     
132
Order at note 203.
133
The Order also tries to ditch the rate-of-return label by noting that the safe harbor and cap are based on averages 
and claiming that “the use of average cost data is not common in rate of return regulation because a provider’s rates, 
although often averaged across its own facilities, are generally premised on that provider’s individual costs.”  Order
at note 280.  That just proves the point, though, since the requirement that each ICS provider’s rates be cost based 
apparently means “averag[ing] across its own facilities, . . . that provider’s individual costs.”  See, e.g., id. at note 
301 (suggesting an ICS provider may average its costs among its facilities in establishing rates); id. at para. 83 
(suggesting that an ICS provider seeking a waiver must average its costs among its facilities in establishing rates).
134
Letter from Danielle Burt, Counsel for JLG Technologies, to Marlene H. Dortch, Secretary, FCC, WC Docket 
No. 12-375, Attach. A at 3 (July 30, 2013) (JLG Ex Parte Letter); see also Statement of Commissioner Ajit Pai,
Promoting Technological Solutions to Combat Contraband Wireless Device Use in Correctional Facilities, GN 
Docket No. 13-111, available at http://go.usa.gov/jM75.
135
Order at para. 2.
136
JLG Ex Parte Letter at 1 (reporting that “JLG’s biometric based 3-way call detection technology detected at least
one 3-way call on 3.8% of the suspicious calls that its systems uncovered”).
137
JLG Ex Parte Letter at 1 (reporting that JLG charges ICS providers 2 cents a minute for its technology); Pay Tel 
Report at 3 (noting third-party expenses for biometric analysis of 1.93 cents a minute); CenturyLink Report at 2 
(noting a cost of 4 cents a minute for “current generation technologies”).
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provider’s costs of providing service are already just below or at the cap (as is likely the case at some 
jails), these security features will likely never be deployed since there will be no way for the ICS provider 
to recover the additional costs without going through the trouble of seeking a waiver from the 
Commission.  And what about those jails where the cost of providing service is just above the cap?  Far 
from taking on additional security costs, many of them will aim to reduce costs to get under the cap, and 
existing security measures could end up being jettisoned in the process.
Those who protect our safety day in and day out agree that maintaining security measures are 
vital.  The National Sheriffs’ Association explains that “dangerous individuals in local jails . . . try to 
continue their criminal activities on the outside while they are incarcerated,” “contact witness[es] with 
wrongful intent,” “call their victims,” and “plot and plan criminal enterprises . . . with startling regularity, 
literally every day.”
138
  The sheriff of Rock County, Wisconsin, writes that current technology measures 
have “uncover[ed] information that assisted with the prosecution of an attempted homicide,” “led to 
countless drug investigations, and dramatically reduced the amount of contraband that enters our 
facility.”
139
  The sheriff’s office of Deschutes County, Oregon, explains that recording calls and verifying 
the voice of the caller before connecting a call have “reduced the amount of witness tampering and 
violations of no-contact orders.”
140
And they too believe that burdensome rate regulation, like that adopted today, will undermine that 
security.  The California State Sheriffs’ Association argues that rate regulation “would seriously hamper 
the ability of California Sheriffs to effectively secure and manage their jails.”
141
  The sheriff of Marion 
County, Oregon, explains that such regulation “will have serious impacts on the safety and security of 
correctional facilities.”
142
  The Captain of the Detention Division of the Elmore County Sheriff’s Office, 
Idaho, fears the “extremely detrimental” effects of losing the security measures he calls “critical for the 
safety of staff and inmates, as well as for the continued reduction and prosecution of crimes.”
143
  And the 
sheriff’s office of Coconino County, Arizona, believes that unduly low rates will end the “technological 
advances and free services that have been so effective in the prevention and prosecution of crimes. . . . 
The only ones to benefit are those people involved in criminal activity, as preventing and prosecuting 
crime will become much more difficult.”
144
  Indeed, the record contains overwhelming opposition to 
today’s Order from our nation’s sheriffs.
145
  These are front-line perspectives from those who put their 
lives on the line every day to keep us safe.  While the Commission must take into account the interests of 
inmates and their families, we must also do what’s right for crime victims, witnesses, and other law-
abiding Americans.
                                                     
138
Comments of Sheriff Larry D. Amerson, President, National Sheriffs’ Association.
139
Comments of Robert D. Spoden, Rock County Sheriff, Janesville, Wisconsin.
140
Comments of Captain Michael Espinoza, Deschutes County Sheriff’s Office, Bend, Oregon.
141
Comments of Keith Royal, Sheriff, Nevada County, and President, California State Sheriffs’ Association.
142
Comments of Jason Myers, Marion County Sheriff, Salem, Oregon on behalf of the Oregon State Sheriffs’ 
Association.
143
Comments of Rob “Lynn” McCallum, Captain, Detention Division, Elmore County Sheriff’s Office, Mountain 
Home, Idaho.
144
Comments of Kurt Braatz, Commander, Detention Services, Coconino County Sheriff’s Office, Flagstaff, 
Arizona.
145
See also Comments of John Buncich, Lake County Sheriff, Lake County, Indiana; Comments of Todd L. 
Thomas, Chief Deputy of Corrections, Thurston County Sheriff’s Office, Olympia, Washington; Comments of 
Vaughn Killeen, Executive Director, Idaho Sheriffs’ Association; Comments of Craig Roberts, Sheriff, Clackamas 
County Sheriff’s Office, Portland, Oregon; Comments of Robert D. “Bobby” Timmons, Executive Director, 
Alabama Sheriffs Association.
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Moreover, when faced with this loss of security measures, America’s smaller correctional 
institutions will then be put to a choice: endanger the public or eliminate service.  In the words of the 
Oregon State Sheriffs’ Association:  “If correctional facilities cannot ensure that inmate phone calls do 
not present threats to the safety of the facility and the public, many will choose—or be forced—to restrict 
phone access or remove phones entirely.”
146
  Ironically, this means that some of the inmates and families 
today’s Order is meant to serve may soon be prevented from connecting with one another at any price.
III.
The Order’s approach was not inevitable.  I proposed to my colleagues that we cap interstate 
calling rates for prisons at 19 cents a minute for debit calls, with higher rates for collect calls and for ICS 
provided at the largest jails in the country.
147
  There is APA notice for such an approach:  The Alternative 
Wright Petition proposed capping the interstate rates of ICS providers, and so did the Inmate Calling
NPRM.
148
  The record evidence supports that approach, too.  The highest cost in the record of providing 
current service to a prison is 18.8 cents a minute,
149
and there is no evidence in the record that the cost of 
serving state prisons—the largest correctional institutions where ICS providers experience the greatest 
economies of scale—exceeds 19 cents a minute.  And that approach is administratively feasible.
150
  For a 
bright line eliminates the need for cost studies, investigations, and tariffs and grants an actual safe harbor 
to all those providers below the cap.  And the consequences of my proposal are easily foreseen:  The 
elimination of the most egregious rates in the country at prison payphones without any loss of security or 
access.
* * *
In conclusion, I very much hope that my concerns about today’s Order prove to be unfounded.  I 
hope that these rules will be easy to administer.  I hope no inmates will lose access to calling services.  
And I hope that security inside and outside of prisons does not suffer.  But because I can only make these 
statements out of hope rather than belief, I must respectfully and regretfully dissent.
                                                     
146
Comments of Jason Myers, Marion County Sheriff, Salem, Oregon on behalf of the Oregon State Sheriffs’ 
Association; see also Comments of Vaughn Killeen, Executive Director, Idaho Sheriffs’ Association (“If the FCC 
enacts price caps which severely reduce or eliminate the financial incentive of private telephone companies to 
provide inmate phone service (and the security features that are imperative to such services), some jails will simply 
be unable to afford to provide phone services to inmates at all.”).
147
Because the record contains widely varying information on the costs of serving the country’s smaller jails, and 
we lack detailed data regarding the costs of serving juvenile correctional institutions and secure mental health 
facilities, I would have deferred consideration of rate caps for those facilities until after our Further Notice of 
Proposed Rulemaking.
148
Indeed, the Order does not dispute that there was notice for such an approach—appropriately so.  In the Inmate 
Calling NPRM, we asked “[i]f the Commission decides to implement rate caps in the ICS market how should we?”, 
noted that “parties argue that differences between correctional facilities including size, location, security levels, 
facility age and staffing levels will not allow a one size fits all solution,” and then asked “[h]ow can the Commission 
establish a solution that addresses the many variations among confinement facilities?”  Inmate Calling NPRM, 27 
FCC Rcd at 16638, paras. 22–23.  Applying one per-minute cap to prisons, applying another to large jails, and 
deferring consideration of rates involving small correctional institutions responds directly to these questions.
149
CenturyLink Report at 2 (noting that the cost to serve its most expensive prison is 18.8 cents a minute).
150
Notably, this simple cap would not have required rate-of-return regulation for those with rates at or below the cap 
(thus eliminating the need for a safe harbor), would not have required tariffing, would not have applied to those 
facilities that are most likely to have costs above the cap, and would have allowed those serving high-cost facilities 
covered by the cap to seek a waiver based on their costs without any cross-subsidy requirements.