81 FR 62818 - Rates for Interstate Inmate Calling Services

FEDERAL COMMUNICATIONS COMMISSION

Federal Register Volume 81, Issue 177 (September 13, 2016)

In this document, the Commission continues its reform of the inmate calling services (ICS) marketplace by responding to points raised in a petition filed by Michael S. Hamden, seeking reconsideration of certain aspects of the Commission's 2015 ICS Order. Specifically, the Commission amends its rate caps to better allow ICS providers to recover costs incurred as a result of providing inmate calling services, including the costs of reimbursing facilities for any costs they may incur that are reasonably and directly related to the provision of service. The Order also clarifies the definition of ``mandatory taxes and fees'' and addresses other arguments raised by Mr. Hamden.

[Federal Register Volume 81, Number 177 (Tuesday, September 13, 2016)]
[Rules and Regulations]
[Pages 62818-62826]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21637]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 64

[WCB: WC Docket No. 12-375; FCC 16-102]


Rates for Interstate Inmate Calling Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission continues its reform of the 
inmate calling services (ICS) marketplace by responding to points 
raised in a petition filed by Michael S. Hamden, seeking 
reconsideration of certain aspects of the Commission's 2015 ICS Order. 
Specifically, the Commission amends its rate caps to better allow ICS 
providers to recover costs incurred as a result of providing inmate 
calling services, including the costs of reimbursing facilities for any 
costs they may incur that are reasonably and directly related to the 
provision of service. The Order also clarifies the definition of 
``mandatory taxes and fees'' and addresses other arguments raised by 
Mr. Hamden.

DATES: The rules adopted in this document shall become effective 
December 12, 2016, except for the amendments to 47 CFR 64.6010(a) and 
(c), which shall become effective March 13, 2017.

FOR FURTHER INFORMATION CONTACT: Gil Strobel, Wireline Competition 
Bureau, Pricing Policy Division at (202) 418-1540 or at 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission Order on 
Reconsideration, released August 9, 2016. The full text of this 
document may be downloaded at the following internet address: https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-102A1.docx This document 
does not contain new or modified information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13.

I. Executive Summary

    1. In this order, we respond to the petition filed by Michael S. 
Hamden and amend our rate caps to improve the ability of providers to 
cover costs facilities may incur that are reasonably related to the 
provision of ICS.
     The Commission is statutorily mandated to ensure ICS rates 
are just, fair, and reasonable and to promote access to ICS by inmates 
and their families and friends. In response to

[[Page 62819]]

claims our prior decision not to include certain costs in our rate cap 
calculations threatens the further deployment of ICS, we are increasing 
the rate caps to reflect the costs facilities may incur that are 
reasonably related to the provision of ICS.
     Acting upon the current record, including Hamden Petition 
and other input received after the 2015 ICS Order, the Commission 
concludes that facilities may incur costs directly related to the 
provision of ICS. Providers and facilities claim the 2015 rate caps 
prevent them from recovering all of their reasonable costs. We now 
revise our rate caps to expressly account for the possibility of 
reasonable facility costs related to ICS.
     Our rate caps continue to reflect the difference in the 
per-minute costs between smaller facilities and their larger 
counterparts, thus ensuring providers are fairly compensated for their 
ICS costs.
     After reviewing the record and the Hamden Petition, we 
amend the definition of ``Mandatory Tax or Mandatory Fee.'' The amended 
definition eliminates confusion and more clearly reflects the 
Commission's decision to prohibit providers from marking up mandatory 
taxes or fees that they pass through to consumers, unless the markup is 
specifically authorized by statute, rule, or regulation.
     Having considered the Hamden Petition and the record as a 
whole, we deny all other aspects of the Petition. Specifically, we are 
not persuaded to reconsider our decision to refrain from regulating 
site commissions. Nor are we persuaded, based on the current record, of 
the need to further clarify the Single-Call Rule adopted in the 2015 
ICS Order.

II. Background

    2. This Order is the latest in a proceeding that began in 2012, 
when the Commission issued a notice of proposed rulemaking 78 FR 4369, 
January 22, 2013 in response to long-standing petitions seeking relief 
from certain ICS rates and practices. The Hamden Petition seeks partial 
reconsideration of the 2015 ICS Order, in which we adopted 
comprehensive reforms to the ICS market, including tiered rate caps for 
both interstate and intrastate ICS calls, and limits on ancillary 
service charges. In the 2015 ICS Order, we focused on our core 
authority over ICS rates, adopting rate caps in fulfillment of our 
obligation to ensure that compensation for ICS calls is fair, just, and 
reasonable. We capped ICS rates at levels that we found would be just 
and reasonable and would ensure that providers are fairly compensated, 
as required by the Act. In setting the rate caps, we declined to 
include the cost of site commissions, which are payments from 
facilities to providers, because we found that such payments are not a 
legitimate cost of providing ICS. We did not, however, prohibit 
providers from paying site commissions. Instead, we let providers and 
facilities negotiate over whether providers would make site commission 
payments and, if so, what payments are appropriate. Our approach 
offered ICS providers and facilities the freedom to negotiate 
compensation that is fair to each, while also ensuring that ICS 
consumers are charged rates that are fair, just, and reasonable.
    3. In addition to setting rate caps for interstate and intrastate 
ICS calls, we discussed what costs, if any, facilities incur that are 
reasonably attributable to ICS. Specifically, we considered whether we 
should expressly provide for recovery of such costs through an additive 
to the per-minute rate caps limiting the prices providers may charge 
inmates and their families. The record before us on this point was 
relatively limited. Moreover, the data we had was mixed regarding the 
costs, if any, facilities incur that are reasonably related to the 
provision of ICS. Some commenters argued that many of the activities 
that facilities claim as ICS-related costs are actually performed by 
ICS providers. Other commenters, however, asserted that correctional 
facilities incur a variety of costs related to ICS that providers do 
not. These costs included expenses related to ``call monitoring, 
responding to ICS system alerts, responding to law enforcement requests 
for records/recordings, call recording analysis, enrolling inmates for 
voice biometrics, and other duties.'' As we noted, ``[e]ven commenters 
asserting that facilities incur costs that are properly attributable to 
the provision of ICS do not agree on the extent of those costs.'' In 
the 2015 ICS Order, we declined to adopt a per-minute ``additive,'' 
because of our view that the costs facilities claimed to incur in 
allowing ICS were ``already built into our rate cap calculations and 
should not be recovered through an `additive' to the ICS rates.''
    4. Following the release of the 2015 ICS Order, four ICS providers 
filed petitions for stay before the Commission, including Global 
Tel*Link Corporation (GTL), Securus Technologies, Inc. (Securus), 
Telmate, LLC (Telmate), and CenturyLink. GTL and Telmate, in 
particular, argued that the Commission was required to include the 
costs of paying site commissions in the rate caps and that it set the 
rate caps below the documented costs of many ICS providers. The Wright 
Petitioners opposed the petitions, stressing the importance of the 
``overwhelmingly positive public interest benefits from the adoption of 
the [2013 ICS Order]'' and expressing concern that a stay of the 2015 
ICS Order would delay relief to consumers and harm the public interest.
    5. On January 22, 2016, the Wireline Competition Bureau (WCB or 
Bureau) issued an order denying the stay petitions of GTL, Securus, and 
Telmate. The Bureau found that the petitioners failed to demonstrate 
that they would suffer irreparable harm if the 2015 ICS Order was not 
stayed. The Bureau also was not persuaded that the petitioners were 
likely to succeed on the merits of their arguments or that a stay would 
be in the public interest. To the contrary, the Bureau noted that other 
parties--particularly ICS consumers--would likely be harmed if the 
relevant provisions of the 2015 ICS Order were stayed.
    6. After the Bureau issued its order denying the stay petitions, 
the providers appealed the 2015 ICS Order to the D.C. Circuit. On March 
7, 2016, the court stayed two provisions of the Commission's ICS rules: 
47 CFR 64.6010 (setting caps on ICS calling rates that vary based on 
the size and type of facility being served) and 47 CFR 64.6020(b)(2) 
(setting caps on charges and fees for single-call services). The D.C. 
Circuit's March 7 Order denied motions for stay of the Commission's ICS 
rules ``in all other respects.'' On March 23, 2016, the D.C. Circuit 
modified the stay imposed in the March 7 Order to provide that ``47 CFR 
64.6030 (imposing interim rate caps)'' be stayed as applied to 
``intrastate calling services. Final briefs from the parties are due to 
the Court on October 5, 2016, and oral arguments have not yet been 
scheduled.
    7. On January 19, 2016, Michael S. Hamden, an attorney who has both 
represented prisoners and served as a corrections consultant filed a 
Petition for Partial Reconsideration, seeking reconsideration of 
certain aspects of the 2015 ICS Order. Hamden asks the Commission to 
reconsider its decision not to prohibit providers from paying site 
commissions or, in the alternative, to mandate a ``modest, per-minute 
facility cost recovery fee that would be added to the rate caps.'' \1\ 
In short, Hamden, like several of the ICS providers, asserts that at 
least some portion of site commissions serves to reimburse facilities 
for reasonable costs

[[Page 62820]]

that facilities incur in providing ICS, and that excluding site 
commissions entirely from our rate cap calculations results in rates 
that are too low to allow providers to pay facilities for their 
reasonable ICS-related costs and still earn a profit. Hamden also asks 
the Commission to clarify ``the meaning of the terms `mandatory fee,' 
`mandatory tax,' and `authorized fee' as they are used in the [2015 ICS 
Order].'' Finally, Hamden seeks clarification that ICS providers 
``cannot circumvent the Second ICS Order's rule regarding charges for 
single-call services through the use of unregulated subsidiaries to 
serve as the companies that charge third-party transaction fees for 
such services.'' On February 11, 2016, the Commission's Consumer and 
Government Affairs Bureau (CGB) issued a Public Notice seeking comment 
on the Hamden Petition. Multiple parties submitted responses and 
oppositions to the Hamden Petition, including ICS providers, 
facilities, and the Wright Petitioners. Hamden also submitted a reply 
to the responses and oppositions on April 4, 2016. We now act on these 
filings.
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    \1\ Although never clearly stated, the Petition appears to seek 
to limit any payments to facilities to the proposed ``facility cost-
recovery fee'' that would be added to the per-minute rate caps.
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III. Discussion

    8. After reviewing the Hamden Petition, the arguments made in 
response to the Petition, and other relevant evidence in the record, we 
find that: (1) At least some facilities likely incur costs that are 
directly and reasonably related to the provision of ICS, (2) it is 
reasonable for those facilities to expect providers to compensate them 
for those costs, (3) such costs are a legitimate cost of ICS that 
should be accounted for in our rate cap calculations, and (4) our 
existing rate caps do not separately account for such costs. 
Accordingly, out of an abundance of caution, we increase our rate caps 
to better ensure that ICS providers are able to receive fair 
compensation for their services, including the costs they may incur in 
reimbursing facilities for expenses reasonably and directly related to 
the provision of ICS. Specifically, we increase our rate caps for debit 
and prepaid ICS calls to $0.31 per minute for jails with an average 
daily population (ADP) below 350, $0.21 per minute for jails with an 
ADP between 350 and 999, $0.19 per minute for jails with an ADP of 
1,000 or more, and $0.13 per minute for prisons. As discussed below, we 
also increase the rate caps for collect calls by a commensurate amount.
    9. We find that our revised rate caps will allow inmate calling 
providers to recover their costs of providing ICS even while 
reimbursing facilities for any costs they may incur that are reasonably 
and directly related to the provision of ICS.\2\ We also find that 
these rate caps will adequately ensure that rates for ICS consumers 
will be fair, just, and reasonable. Thus, we grant the Hamden Petition 
to the extent that it seeks an increase in the ICS rate caps to 
expressly account for reasonable facility costs.\3\ We also grant the 
Hamden Petition to the extent that it seeks a clarification of the 
definitions of the terms ``Mandatory Taxes'' and ``Mandatory Fees.'' We 
deny the Hamden Petition in all other respects.
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    \2\ As explained below, because we do not regulate site 
commissions in this order (and have not done so previously), any 
revenues derived under these rate caps may be passed through to 
facilities.
    \3\ As noted above, Hamden appears to favor an approach whereby 
the Commission would adopt an ``additive'' to our existing rate caps 
and prohibit providers from paying any site commissions beyond the 
additive. We maintain our view that prohibiting site commission 
payments is not necessary at this time. As we noted in the 2015 ICS 
Order, ``this approach is consistent with the Commission's general 
preference to rely on market forces, rather than regulatory 
intervention, wherever reasonably possible.'' Correctional 
authorities have every incentive to accept whatever commissions 
providers can pay within the rate caps given the benefits ICS 
confers on both facilities and inmates. In addition, we note that 
our approach obviates the need to address arguments challenging our 
authority to regulate site commission payments. Contrary to the 
suggestion in one dissent, although we have not elected to adopt the 
precise mechanism that Hamden appears to have advocated for 
``offset[ting]'' the facilities' claimed costs of providing access 
to ICS, our approach to ensuring that our rate caps adequately 
account for facilities' reasonable ICS-related costs is, at a 
minimum, a logical outgrowth of the Hamden Petition.
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A. The Rate Caps Should Account for Costs Reasonably and Directly 
Related to the Provision of ICS

    10. The Commission has a statutory duty to set rates that are fair, 
just, and reasonable and to promote access to ICS by inmates and their 
families and friends. Accordingly, one of our goals is to ensure that 
inmates and their families have as much access as possible to this 
vital communications service. Some parties in the reconsideration 
proceeding have asserted that our prior decision not to include certain 
costs in our rate cap calculations could pose a risk to the continued 
deployment and development of ICS. Our reforms would not achieve their 
purpose if they resulted in less robust services for inmates and those 
who wish to communicate with them. As a result, out of an abundance of 
caution, we are increasing the rate caps to better reflect the costs 
that facilities claim to incur that are directly and reasonably related 
to the provision of ICS. This action better enables the Commission to 
achieve its twin statutory mandates of promoting deployment of ICS and 
ensuring that ICS rates are fair to both providers and consumers.
    11. As the Commission has repeatedly explained, providers should be 
able to recover costs that are ``reasonably and directly related to the 
provision of ICS'' through the ICS rates. The Commission has also 
recognized that correctional facilities may incur costs that are 
reasonably related to the provision of ICS. With both the Mandatory 
Data Collection and the 2014 ICS FNPRM, the Commission took steps to 
determine the costs involved in providing ICS. For example, in the 
Mandatory Data Collection, the Commission required ICS providers to 
submit their costs related to the provision of ICS, including costs 
related to telecommunications, equipment, and security. In addition, in 
the 2014 ICS FNPRM, the Commission sought comment on the ``actual 
costs'' that facilities may incur in the provision of ICS and the 
appropriate vehicle for enabling facilities to recover such costs. The 
Commission also sought comment on whether any such costs should be 
recoverable though the per-minute rates ICS providers charge inmates 
and their families.
    12. After considering a ``wide range of conflicting views'' 
regarding facilities' costs, we acknowledged, in the 2015 ICS Order, 
the possibility that facilities incur some costs to provide ICS. We 
concluded, however, that the record at that time ``indicate[d] that if 
facilities incurred any legitimate costs in connection with ICS, those 
costs would likely amount to no more than one or two cents per billable 
minute.'' We further concluded that the rate caps we adopted were 
``sufficiently generous to cover any such costs.'' Accordingly, we 
declined to adopt any of the proposals seeking an ``additive'' to our 
rate caps to cover facilities' costs.

B. The Hamden Petition and Underlying Record Demonstrate That the 
Existing Rate Caps May Not Adequately Account for Facility Costs

    13. With the benefit of the record developed since the 2015 ICS 
Order, we now conclude that at least some facilities likely incur costs 
directly related to the provision of ICS and that those costs may in 
some instances amount to materially more than one or two cents a 
minute.\4\ Providers and

[[Page 62821]]

facilities have claimed that the current rate caps prevent them from 
recovering all of their reasonable costs. Similarly, some parties have 
argued that our 2015 rate caps may not have been ``generous'' or 
conservative enough to cover all of the ICS-related costs that we 
expected providers to incur.
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    \4\ We continue to hold that site commission payments should not 
be considered in determining fair or reasonable rates, except to the 
extent those payments reflect costs facilities incur that are 
directly related to the provision of ICS. As we explained in the 
2015 ICS Order, ``[p]assing the non-ICS-related costs that comprise 
site commission payments . . . onto inmates and their families as 
part of the costs used to set rate caps would result in rates that 
exceed the fair compensation required by section 276 and that are 
not just and reasonable, as required by section 201.''
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    14. The Hamden Petition asks the Commission, among other things, to 
reconsider its decision not to ``mandate a modest, per-minute facility 
cost-recovery fee that would be added to the rate caps.'' 
Notwithstanding the debate regarding the nature and extent of the costs 
that correctional facilities incur, the Petition asserts that ``it 
seems clear that facilities do incur some administrative and security 
costs that would not exist but for ICS.'' Hamden notes that the idea of 
a cost recovery mechanism has gained support from a broad range of 
parties, including ``ICS providers, law enforcement, a state regulator, 
and some in the inmate advocacy community.'' Finally, Hamden concludes 
that ``[t]he lack of perfectly accurate data . . . does not preclude a 
rational cost recovery mechanism and a legally sustainable Order.'' As 
Hamden notes, ``[e]ven in the absence of absolute certainty regarding . 
. . facility administrative costs, the Commission can make a rational 
decision'' based on the record before us.
    15. In response to the Hamden Petition, we received comments from 
numerous parties agreeing that the existing rate caps do not adequately 
account for ICS costs that facilities may incur. While not all of the 
commenters agree with Hamden's preferred approach, many of the comments 
submitted assert that facilities incur costs greater than those we 
allowed for under our 2015 rate caps. For example, NSA states that 
``[i]n many cases, the duties performed by Sheriffs and jails are the 
same or similar in nature as the security features and duties found by 
the Commission as recoverable cost, including monitoring calls, 
determining numbers to be blocked and unblocked, enrolling inmates in 
voice biometrics service and maintenance and repair of ICS equipment.'' 
NSA acknowledges that providers perform security and administrative 
tasks ``in some cases,'' but asserts that in many other cases, those 
tasks fall to Sheriffs and jails, not providers. This view is supported 
by Pay Tel, which has asserted that ``jails, not ICS providers, perform 
the lion's share of administrative tasks associated with the provision 
of ICS and, more importantly . . . handle ALL of the monitoring of 
inmate calls.''
    16. NSA's arguments echo claims other parties have made in their 
filings before the D.C. Circuit. For example, representatives of state 
and local governments cite ``evidence that jails and prisons incur real 
and substantial costs in allowing access to ICS.'' More specifically, 
they contend that correctional facilities can spend ``over $100,000 a 
month to provide ICS privileges to inmates, most of which goes into the 
labor hours required to facilitate and monitor inmates' use of ICS.'' 
Similarly, Telmate has argued that our 2015 rate caps are not 
``sufficiently generous'' to cover the ``costs that facilities bear in 
providing ICS.''
    17. These arguments are consistent with earlier filings claiming 
that facilities may incur costs related to the provision of ICS that 
are ``non-trivial.'' Out of an abundance of caution, we now revise our 
rate caps to incorporate those costs more fully.

C. We Increase Our Rate Caps To Better Reflect Evidence in the Record

    18. In view of the further evidence and arguments we have received, 
we now reconsider our earlier rate caps insofar as they did not 
separately account for ICS costs that facilities may incur.\5\ 
Accordingly, we increase our rate caps to better reflect the costs that 
facilities incur that are reasonably related to the provision of ICS. 
In addition, consistent with our findings in the 2015 ICS Order and 
with the evidence in the record, we recognize that the per-minute costs 
associated with ICS are higher in smaller facilities than in larger 
ones. Thus, we increase our rate caps more for smaller facilities than 
for larger ones.\6\ Specifically, we rely on the analyses submitted by 
NSA and by Baker/Wood to increase our rate caps by $0.02 per minute for 
prisons, by $0.05 per minute for larger jails, and by $0.09 per minute 
for the smallest jails.\7\ In adopting these revisions to our rate 
caps, we once again rely on our core ratemaking authority.\8\
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    \5\ We do not, however, revisit the rate structure or overall 
methodology used in the 2015 ICS Order. Specifically, we reject 
Telmate's argument that our rate caps ``are based on a flawed 
methodology, and thus cannot be saved by the proposed rate 
increase[s].'' This argument addresses the fundamental structure of 
our rate caps and methodology and goes to the heart of our 2015 ICS 
Order. As such, the argument appears to be an untimely--and 
improperly presented--request for reconsideration of that order.
    \6\ Consistent with our conclusion in the 2015 ICS Order, we 
find that providers will need more time to transition all of the 
country's jails to the new rate caps than to transition prisons. 
Accordingly, we adopt a six-month transition period for jails, in 
order to ``give providers and jails enough time to negotiate (or 
renegotiate) contracts to the extent necessary to comply'' with our 
new rules.
    \7\ As explained below, Baker/Wood and NSA provided the most 
credible data regarding facilities' costs and we find that a hybrid 
of those two proposals yields the most reliable basis for 
determining how much we must increase our rate caps to ensure that 
providers can compensate facilities for the costs the facilities 
incur that are reasonably related to the provision of ICS. The rate 
increases we adopt today are also supported by the Pay Tel Proposal.
    \8\ Accordingly, and for the reasons described below, we do not 
prohibit or regulate site commission payments.
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    19. As noted above, in the 2015 ICS Order, we agreed with parties 
that argued that facilities' reasonable ICS-related costs likely 
amounted to no more than one or two cents per minute and did not 
require an adjustment to our rate caps. Upon further consideration, and 
with the benefit of an expanded record, we now conclude that we should 
increase our rate caps in light of claims that that some facilities may 
incur more significant costs that are reasonably related to the 
provision of ICS. After reviewing the Hamden Petition, and the record 
developed in response to the Petition, we find that facilities--
particularly smaller facilities--may face costs that are considerably 
higher than one or two cents per minute. Out of an abundance of 
caution, we increase our rate caps to account for this possibility and 
to better ensure that providers are fairly compensated for their 
reasonable ICS costs--including costs they may incur in reimbursing 
facilities for expenditures that are reasonably related to the 
provision of ICS--and that providers and facilities have stronger 
incentives to promote increased deployment of, and access to, ICS.\9\
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    \9\ Several parties have warned that access to ICS may be 
reduced if our rate caps fail to account for facilities' reasonable 
ICS-related costs.
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    20. The rate caps we adopted in the 2015 ICS Order were based on 
2012 and 2013 data that providers submitted in response to the 
Mandatory Data Collection. While we still find that the cost data from 
Mandatory Data Collection are an appropriate basis for constructing 
rate caps, we also recognize that due to our jurisdictional 
limitations, the Mandatory Data Collection only included cost 
information from providers, and not from facilities. Providers reported 
their own costs, but were not obligated to submit information about 
costs incurred by facilities. Indeed, there is no reason to believe 
that providers necessarily had access to the information needed to 
determine facility costs. As a result, the information on facilities' 
ICS-related

[[Page 62822]]

costs before the Commission came from filings received in response to 
the 2014 ICS FNPRM.\10\ Unlike the responses to the Mandatory Data 
Collection, however, which required providers to quantify various costs 
incurred in providing ICS, facilities' responses to the questions in 
the 2014 ICS FNPRM about facility costs were purely voluntary and 
consisted mostly of more general, narrative descriptions. The paucity 
of quantitative data made facility costs more difficult to measure than 
providers' costs, a problem exacerbated by disputes in the record 
regarding which of the costs involved in providing ICS could reasonably 
be attributed to providers, and which could reasonably be attributed to 
facilities. This led us to discount claims that facilities faced costs 
that should be recovered through the ICS rates.
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    \10\ Providers did submit information about total site 
commission payments made to facilities, but, as noted above, we did 
not take those payments into account in setting our rate caps. 
Indeed, we still find that the bulk of site commission payments 
should not be considered in calculating the rate caps because most 
of the money providers pay to facilities is not directly related to 
the provision of ICS. We also note that it is likely that the costs 
submitted by providers include other costs that are not reasonably 
related to the provision of ICS. In our decision today, however, we 
conclude that the costs that facilities incur that are reasonably 
related to the provision of ICS may be more than de minimis and we 
therefore increase our rate caps to better accommodate those costs.
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    21. Given these limitations, we relied almost completely on 
submissions from providers and their representatives to arrive at an 
estimate of facilities ICS-related costs in the 2015 ICS Order. In 
contrast, the approach we adopt today relies largely on proposals 
submitted by parties representing a much more diverse range of 
interests. The Baker/Wood Proposal, for example, was submitted by 
Darrell Baker, the Director of the Utility Services Division of the 
Alabama Public Service Commission, and Don Wood, an economic consultant 
for Pay Tel Communications who also has done work for other ICS 
providers. And the NSA proposal is based on data the NSA collected from 
individual sheriffs regarding the costs they incur to provide security 
and perform administrative functions necessary to allow ICS in jails, 
including the salaries and the benefits for the officers and employees 
performing ICS-related duties. We find these two proposals provide a 
sounder basis for determining facilities' ICS-related costs than did 
the provider-generated proposals we relied on in 2015.\11\
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    \11\ We have also taken account of arguments that correctional 
authorities and ICS providers have raised to the D.C. Circuit 
concerning our decision in the 2015 Order not to separately account 
for potential facility costs when calculating the rate caps.
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    22. The rate caps we adopt today are based on a hybrid of the 
Baker/Wood and NSA Proposals. The Baker/Wood proposal is premised on 
Baker's view that ``some form of facility cost recovery is critical,'' 
and is supported by Baker's and Wood's independent reviews of cost 
support data. The NSA Proposal is based on the NSA's cost survey, which 
gathered information on the costs to sheriffs of providing security and 
administrative functions necessary to allow ICS in jails, including the 
salaries and the benefits for the officers and employees performing the 
ICS-related duties. Both of these proposals merit significant 
consideration, particularly given that they arrive at similar 
conclusions: Baker and Wood recommend adopting a cost recovery 
mechanism of $0.07 per minute for jails with ADP less than 349, $0.05 
for jails with ADP between 350 and 999, $0.05 for jails with ADP 
between 1000 and 2500 ADP, and $0.03 for prisons; NSA, for its part, 
supports the adoption of a cost recovery mechanism in the range of 
$0.09 to $0.11 per minute for facilities with ADP less than 349, $0.05 
to $0.08 for facilities with 350 to 2499 ADP, $0.01 to $0.02 per minute 
for jails with ADP greater than 2500, and $0.01 to $0.02 per minute for 
prisons. Not only are the two proposals fairly consistent with each 
other, they are notably closer to each other than they are to most 
other proposals in the record, including those that we relied on in the 
2015 ICS Order.
    23. Even given the similarities between the NSA and Baker/Wood 
Proposals, we acknowledge that the record on what the costs facilities 
actually incur in relation to ICS is still imperfect. Nonetheless, we 
find that the record is sufficient to warrant an increase in the rate 
caps. As state and local governments have explained in their court 
filings, even faced with ``less-than-ideal data,'' it is the 
Commission's obligation to ``determine as best it can ICS-related 
facility costs.'' Thus, based on the information in the record, 
including, in large part, the recommendations submitted by NSA and by 
Baker/Wood, we increase the rate caps by $0.02 for prisons, and $0.09, 
$0.05, and $0.05, respectively, for small, medium, and large jails. 
This translates into revised debit/prepaid rate caps of $0.13 per 
minute for prisons, $0.19 per minute for jails with an ADP greater than 
1000, $0.21 for jails with ADP between 350 and 999, and $0.31 per 
minute for jails with ADP below 350. It also leads to revised collect 
rate caps of $0.16 per minute for prisons, $0.54 per minute for jails 
with ADP greater than 1000, $0.54 per minute for jails with ADP between 
350 and 999, and $0.58 per minute for jails with ADP less than 350.\12\ 
To arrive at these numbers, we compared the Baker/Wood and NSA 
proposals and, in order to produce a conservative rate, took the higher 
additive rate of the two proposals.\13\ In the instance where even the 
low end of NSA's proposed rate range was greater than the rate proposed 
by Baker and Wood, we selected the lower end of the NSA rate range to 
better account for the suggestions of both proposals.\14\
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    \12\ As we did in the 2015 ICS Order, we adopt a separate rate 
cap tier for collect calling, as well as a two-year step-down 
transitional period that will decrease the collect rates over time 
and, by 2018, will bring the collect rates down to the debit/prepaid 
rates we adopt today. This is consistent with the Commission's prior 
actions in adopting a separate collect calling rate tier based on 
data indicating that collect calls were more expensive than other 
types of ICS calls and on the Commission's decision to encourage 
correctional institutions to move away from collect calling.
    \13\ Our decision on reconsideration rests on a desire to take a 
cautious approach that minimizes any concerns that our rate caps 
fail to allow for fair, just, and reasonable compensation. Indeed, 
the very decision to reconsider our earlier order is prompted by our 
view that it is better to err on the side of caution than to risk 
undercompensating providers and facilities for their reasonable 
costs that are directly related to ICS. Consistent with this 
approach, when the NSA and Baker/Wood Proposals differed, we opted 
for the choice that resulted in the higher rate cap. This decision 
is informed, in part, by the fact that NSA's proposal already 
reflects an effort to reduce rates below the levels that the raw 
data might support, absent any analysis or refinement. As explained 
above, however, our rate caps provide a ceiling, and we expect that 
in many instances providers will charge rates far below the maximums 
permitted under our rate caps.
    \14\ NSA proposed a rate increase of $0.09-$0.11 per minute for 
the smallest jails, while Baker/Wood proposed adding only $0.07 per 
minute for those facilities. Given that the low end of NSA's 
proposed rate range was higher than the rate proposed by Baker/Wood, 
we took the lowest number proposed by NSA (i.e., $0.09/minute).
---------------------------------------------------------------------------

    24. The approach we use to increase the rates to the levels we 
adopt today has the primary advantage of being supported by two 
separate and independent sets of data. It has the additional advantage 
of being supported by credible, independent participants in this 
proceeding, including Baker, an objective public service employee who 
has participated in this proceeding and has been working on inmate 
calling reform at the state level,\15\ and Wood, an

[[Page 62823]]

outside economic consultant to Pay Tel whom seven ICS providers engaged 
to prepare a joint report that was filed with the Commission. Our 
approach is also based on data provided by the NSA, which, as an 
organization representing sheriffs, is well situated to understand and 
estimate the costs that facilities face to provide ICS.\16\
---------------------------------------------------------------------------

    \15\ In the Baker/Wood Proposal, Baker and Wood state that 
Baker's ``experience with ICS in Alabama informs his view that some 
form of facility cost recovery is critical. He explained that the 
APSC regularly inspects ICS at jails and prisons in Alabama and is 
therefore very familiar with the activities and responsibilities 
that facility personnel undertake in administering ICS and in 
monitoring inmate calls. He concludes that facilities incur costs 
associated with ICS and should be provided an opportunity to recover 
their costs.''
    \16\ While agreeing with our assessment that NSA is well-
equipped to gauge facilities' costs, one dissenting commissioner 
nonetheless faults us for relying (in part) on NSA's estimates of 
those costs. In claiming that ``the rate increases set forth in this 
Order are insufficient to cover the facility-administration costs'' 
that jails incur in providing access to ICS, this commissioner 
relies on raw data from the NSA survey that NSA itself reasonably 
elected to discount when estimating jails' actual costs. NSA treated 
its survey data as ``inputs'' that, once ``compared to and tested 
by'' information elsewhere in the record, could be refined to 
generate more reliable estimated ranges of facilities' reasonable 
costs of providing access to ICS. Those ranges are the cost data we 
find credible--particularly given that, as noted above, the NSA and 
Baker/Wood Proposals arrive at similar conclusions. Thus, contrary 
to the dissent's contention that our rate caps, as revised in this 
Order, are ``confiscatory,'' we are confident that they fall well 
within the zone of reasonableness.
---------------------------------------------------------------------------

    25. Given that we find NSA's cost data to be credible we disagree 
with commenters who suggest the contrary. Andrew Lipman, in particular, 
denigrated NSA's cost survey for including only three months of data 
from only about five percent of NSA's members.\17\ NSA convincingly 
defends its cost survey in its Opposition to the Hamden Petition, 
however, arguing that ``[t]he Commission fails to explain . . . why 
these criticisms doom the NSA cost survey data even though they all 
equally apply to the cost recovery data and analysis performed by GTL's 
cost consultant, which the Commission apparently accepts.'' NSA also 
argues that the Commission ``fails to explain why it entirely ignores 
the data provided by other parties that show a much higher facility 
compensation fee than one or two cents per minute.'' We agree with 
NSA's arguments and find that NSA's cost survey is a credible (though 
imperfect) source of data regarding the costs facilities incur in 
relation to ICS. We are particularly persuaded by NSA's point that the 
criticisms of the NSA cost survey made by Andrew Lipman, and recited in 
the 2015 ICS Order, apply with equal force to other proposals, 
including the analysis performed by GTL's cost consultant that 
supported the one to two cent estimate that informed our decision in 
the 2015 ICS Order. Moreover, we note that Pay Tel, which has no 
affiliation with NSA, has rebutted many of the arguments raised by 
Lipman and concluded that NSA's survey results constitute a ``robust 
and significant data set.''
---------------------------------------------------------------------------

    \17\ We note as well that Lipman did not identify his client, 
except as ``certain clients with an interest in the regulation of 
inmate calling services,'' when filing prior to the 2015 ICS Order. 
Lipman has subsequently acted as counsel to Securus.
---------------------------------------------------------------------------

    26. We are confident that the new rate caps we adopt today will 
ensure that inmates and their families have access to ICS at rates that 
are fair to consumers, providers, and facilities.\18\ By adjusting the 
rate caps to better account for the reasonable costs that facilities 
may incur in connection with ICS, we ensure that providers will be able 
to charge rates that cover all of their costs that are reasonably 
related to the provision of ICS.\19\ Based on our analysis of the data 
providers submitted to the Mandatory Data Collection, the new rates 
should allow virtually all providers to recover their overall costs of 
providing ICS.\20\ To come to this conclusion, we calculated each 
provider's cost per minute, by tier, based on their reported numbers. 
We then compared each provider's cost per minute to our new rates for 
each tier. The difference between these two amounts allowed us to 
calculate the net impact that each provider will face as a result of 
our new rate caps. Our analysis indicates that the new rate caps will 
allow all but one provider to recover its costs, on average.\21\ 
Although we conclude that virtually all providers will be able to 
recover their legitimate ICS costs (including a reasonable return on 
capital) under the new rate caps, we reiterate that our waiver process 
remains available to any providers that find that the rate caps do not 
result in fair compensation for their services.\22\
---------------------------------------------------------------------------

    \18\ In sum, we agree with Hamden that reconsideration of our 
rates will ``pave the way for the comprehensive reform that the 
Commission has promised, that ICS consumers deserve, and that the 
ICS industry needs, while also ensuring that facilities will 
continue to facilitate ICS and that providers will earn a reasonable 
return on their investments.''
    \19\ Indeed, although recognizing that the revised rate caps 
will ``ensure that ICS consumers avoid paying unjust, unreasonable 
and unfair ICS rates,'' the Wright Petitioners assert that our 
revised rate caps are so conservative as to be ``well above'' 
providers' costs.
    \20\ Based on Commission analysis, this is true for nearly 100 
percent of the ICS market, and all of the largest ICS providers. As 
noted above, there is only one small provider that might not be able 
to cover all of its ICS-related costs under the new rate caps.
    \21\ Our analysis of the data indicates that some providers may 
lose money on collect calls, but more than make up for any lost 
revenue with profits from debit and prepaid calls. In the 2015 ICS 
Order, we recognized that collect calling represents a small and 
declining percentage of inmate calls. The record further suggests 
that collect calls will continue to decline to a negligible share of 
ICS calls. In light of that, we are not concerned about losses that 
are recovered and that we predict will continue to decrease in the 
future. Providers will be able to recover their costs as a whole 
under our rate caps. Moreover, as noted above, we continue to be 
concerned that allowing the rate caps for collect calls to remain 
higher than the caps for other ICS calls on an ongoing basis would 
create incentives for providers to drive consumers to make collect 
calls. Such a result would drive up the costs of ICS for the average 
consumer and, therefore, would not be in the public interest.
    \22\ We also reiterate that ``[i]f any provider believes it is 
being denied fair compensation . . . due, for example, to the 
interaction of our rate caps with the terms of the provider's 
existing service contracts--it may . . . seek preemption of the 
requirement to pay a site commission, to the extent that it believes 
that such a requirement is a state requirement and is inconsistent 
with the Commission's regulations.''
---------------------------------------------------------------------------

D. We Amend the Definition of ``Mandatory Tax or Mandatory Fee''

    27. In the 2015 ICS Order, we defined a Mandatory Tax or Mandatory 
Fee as ``a fee that a Provider is required to collect directly from 
Consumers, and remit to federal, state, or local governments.'' In his 
Petition, Hamden asks us to clarify these definitions. After 
considering the Hamden Petition, the record developed in response to 
that petition, and the text of the 2015 ICS Order, we now amend the 
definition of Mandatory Tax or Mandatory Fee to read: ``A fee that a 
Provider is required to collect directly from consumers, and remit to 
federal, state, or local governments. A Mandatory Tax or Fee that is 
passed through to a Consumer may not include a markup, unless the 
markup is specifically authorized by a federal, state, or local 
statute, rule, or regulation.'' The amended definition more clearly 
captures the Commission's decision to allow carriers to collect 
applicable pass-through taxes, but to prohibit markups, other than 
those specifically authorized by law.\23\
---------------------------------------------------------------------------

    \23\ This rule allows providers to collect Universal Service 
fees, and similar government taxes and fees, from consumers and 
remit the funds to the relevant government entity, in keeping with 
existing federal and state requirements. As the 2015 ICS Order makes 
clear, we distinguish between such taxes and fees and site 
commission payments.
---------------------------------------------------------------------------

    28. In his petition, Hamden claims that there has been 
``confusion'' regarding the Commission's definitions of the terms 
``authorized fee,'' ``mandatory tax,'' and mandatory fee'' in the 2015 
ICS Order, and regarding ``what fees and taxes the Commission intended 
to include as permissible under those terms.'' Although some commenters 
assert that the terms ``Mandatory Tax'' and ``Mandatory Fee'' were 
adequately defined by the 2015 ICS Order, other parties are open to 
further clarification from the Commission. The Wright Petitioners, for 
example, assert that ``Mr. Hamden's comments regarding the 
clarification of the rules associated with the definition of 
`Authorized Fee,' `Mandatory Tax,' and `Mandatory Fee' do merit further 
consideration.''

[[Page 62824]]

    29. After further review, we agree with Hamden that we should 
clarify the definition of Mandatory Tax and Mandatory Fee. While the 
definitions of these terms were clear from the text of 2015 ICS Order, 
we take this opportunity to amend our rules to more clearly track the 
language and intent of the 2015 ICS Order. The prohibition against 
markups that we adopted in the 2015 ICS Order is an important part of 
our efforts to ensure that the rates and fees end users pay for ICS are 
fair, just, and reasonable. Thus, we now amend 47 CFR 64.6000 to read: 
``Mandatory Tax or Mandatory Fee means a fee that a Provider is 
required to collect directly from Consumers, and remit to federal, 
state, or local governments. A Mandatory Tax or Fee that is passed 
through to a Consumer may not include a markup, unless the markup is 
specifically authorized by a federal, state, or local statute, rule, or 
regulation.''

E. We Deny All Other Aspects of the Hamden Petition

    30. As previously noted, the Hamden Petition asks the Commission to 
reconsider or clarify two additional aspects of the 2015 ICS Order. 
First, Hamden urges the Commission to reconsider its treatment of site 
commissions.\24\ Second, Hamden asks that the Commission clarify that 
ICS providers cannot use unregulated subsidiaries to circumvent the 
rule regarding charges for single call services. After considering 
Hamden's arguments, as well as the rest of the record, we deny both 
requests.
---------------------------------------------------------------------------

    \24\ As noted above, Hamden asks that the Commission consider 
adopting an additive to the ICS rate caps as an alternative to 
banning all payments to facilities. We address that alternative at 
length in the discussion above and increase our 2015 rate caps to 
better accommodate facilities' ICS-related costs. We find no other 
changes to our rate caps are warranted. Nor do we find any need to 
regulate site commissions at this time.
---------------------------------------------------------------------------

1. There Is No Need To Regulate Site Commissions at This Time
    31. In the 2015 ICS Order, we affirmed the Commission's previous 
finding that ``site commissions do not constitute a legitimate cost to 
the providers of providing ICS'' and, accordingly, did not include site 
commission payments in the cost data we used in setting our rate caps. 
Furthermore, although we encouraged states and correctional facilities 
to curtail or prohibit such payments, we concluded that ``we do not 
need to prohibit site commissions in order to ensure that interstate 
rates for ICS are fair, just, and reasonable and that intrastate rates 
are fair.''
    32. Hamden now seeks reconsideration of this conclusion, arguing 
that the Commission should ``prohibit payments to facilities in all 
forms.'' In the absence of such a ban, Hamden argues, ``facilities will 
continue to demand, and ICS providers will continue to pay site 
commissions . . . .'' Hamden also expresses concern that if providers 
are unwilling or unable to pay site commissions, ICS services ``may be 
curtailed, especially in smaller, less profitable facilities.''
    33. Several commenters oppose Hamden's request. ICSolutions, for 
example, asserts that we lack the legal authority to regulate site 
commissions.\25\ NCIC contends that prohibiting or capping site 
commissions will result in facilities being unable to recover their 
ICS-related costs, which, in turn, will lead to a reduction in inmate 
access. Finally, the Wright Petitioners argue that, even if the 
Commission were to ban site commissions, it is likely that providers 
and correctional facilities would simply ``seek new and innovative ways 
to funnel additional funds in connection with entering into their 
exclusive contracts.''
---------------------------------------------------------------------------

    \25\ As was the case in the 2015 ICS Order, we need not reach 
these arguments, given our decision to let facilities and providers 
negotiate a reasonable approach to facility costs, subject only to 
providers' obligations to adhere to our rate caps. In addition, as 
discussed above, we have raised the rate caps to a level that should 
ensure that providers are able to earn a reasonable profit even 
after compensating facilities for any costs they incur that are 
reasonably related to the provision of ICS. This should help ensure 
that facilities recover the costs they incur that are directly 
related to the provision of ICS.
---------------------------------------------------------------------------

    34. After reviewing the Hamden Petition and the subsequent record, 
we are not persuaded to reconsider our decision to refrain from 
regulating site commissions. We are not convinced, based on the current 
record, that regulation of site commissions is necessary or in the 
public interest. As we noted in the 2015 ICS Order, the ``decision to 
establish fair and reasonable rate caps for ICS and leave providers to 
decide whether to pay site commissions--and if so, how much to pay--is 
supported by a broad cross-section of commenters . . . underscor[ing] 
the reasonableness of our approach.'' Based on the record on 
reconsideration, as well as the record in the underlying proceeding, we 
find that the prudent course remains to ``focus on our core ratemaking 
authority in reforming ICS and not prohibit or specifically regulate 
site commission payments.'' \26\
---------------------------------------------------------------------------

    \26\ Our commitment to maintain our approach to site commission 
payments is further bolstered by our decision today to increase the 
rate caps to ensure that providers are able to compensate facilities 
for the reasonable costs they incur that are directly related to the 
provision of ICS. Our decision to increase our rate caps to better 
account for facilities' costs does not require us to cap or limit 
site commission payments. In other words, nothing in our rules, as 
revised by this Order, restricts a provider's ability to distribute 
as it chooses whatever revenue it collects under the adopted rate 
caps.
---------------------------------------------------------------------------

2. There Is No Need To Further Clarify the Single-Call Rule Adopted in 
the 2015 ICS Order
    35. In the 2015 ICS Order, we held that ``for fees for single-call 
and related services and third-party financial transaction fees, we 
allow providers to pass through only the charges they incur without any 
additional markup.'' Hamden asserts that the Commission should clarify 
that the rule adopted in the 2015 ICS Order that single-call service 
costs must be passed through to end users with no additional markup may 
not be circumvented by providers using unregulated subsidiaries 
imposing ``excessive financial transaction fees.''
    36. Most commenters disagree with Hamden's requested 
clarifications. Several commenters assert that the rule regarding 
charges for single call services is adequately defined in the 2015 ICS 
Order, and as a result, no clarification is needed.
    37. Having reviewed the arguments on both sides of the matter, we 
agree with the majority of commenters that there is no need to clarify 
the rule regarding single-call service costs. We are not persuaded, 
based on the current record, that the clarifications Hamden seeks are 
either necessary or in the public interest. Additionally, we reiterate 
our finding from the 2015 ICS Order that ``a major problem with single-
call and related services is that customers are often unaware that 
other payment options are available, such as setting up an account . . 
. . We encourage providers to make clear to consumers that they have 
other payment options available to them.'' We find that no further 
action is necessary at this time, particularly given that we already 
have sought further comment on third-party financial transactions and 
potential fee-sharing.

IV. Procedural Matters

A. Paperwork Reduction Act

    38. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. Therefore, it does not contain any new or 
modified information collection burdens for small business concerns 
with fewer than 25 employees, pursuant to the Small Business Paperwork 
Relief Act of 2002,

[[Page 62825]]

Public Law 107-198, see 44 U.S.C. 3506(c)(4).

B. Congressional Review Act

    39. The Commission will send a copy of this Order in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A).

C. Final Regulatory Flexibility Analysis

    40. As required by the Regulatory Flexibility Act of 1980, see 5 
U.S.C. 604, the Commission has prepared a Final Regulatory Flexibility 
Analysis (FRFA) of the possible significant economic impact on small 
entities of the policies and rules, as proposed, addressed in this 
order. The FRFA is set forth in Appendix C of the Order.

V. Ordering Clauses

    41. Accordingly, it is ordered that, pursuant to sections 1, 2, 
4(i)-(j), 201(b), 215, 218, 220, 276, 303(r), 403, and 405 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i)-(j), 
201(b), 215, 218, 220, 276, 303(r), and 403, 405 and sections 1.1, 1.3. 
1.427, and 1.429 of the Commission's rules, 47 CFR 1.1, 1.3, 1.427, and 
1.429, the Petition for Reconsideration filed by Michael S. Hamden on 
January 19, 2016, IS GRANTED IN PART, and is otherwise DENIED, as 
described above.
    42. It is further ordered that part 64 of the Commission's Rules, 
47 CFR part 64, is AMENDED as set forth in Appendix A of the Order. 
These rules shall become effective December 12, 2016, except for the 
amendments to 47 CFR 64.6010(a) and (c), which shall become effective 
March 13, 2017.
    43. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, SHALL SEND a 
copy of this Order on Reconsideration to the Chief Counsel for Advocacy 
of the Small Business Administration.

List of Subjects in 47 CFR Part 64

    Claims, Communications common carriers, Computer technology, 
Credit, Foreign relations, Individuals with disabilities, Political 
candidates, Radio, Reporting and recordkeeping requirements, 
Telecommunications, Telegraph, Telephone.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 64 as follows:

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

0
1. The authority citation for part 64 is revised to read as follows:

    Authority:  47 U.S.C. 154, 254(k); 403(b)(2)(B), (c), Pub. L. 
104-104, 110 Stat. 56. Interpret or apply 47 U.S.C. 201, 218, 222, 
225, 226, 227, 228, 254(k), 276, 616, 620, and the Middle Class Tax 
Relief and Job Creation Act of 2012, Public Law 112-96, unless 
otherwise noted.

Subpart FF--Inmate Calling Services

0
2. Revise Sec.  64.6000 paragraph (n) to read as follows:


Sec.  64.6000  Definitions.

* * * * *
    (n) Mandatory Tax or Mandatory Fee means a fee that a Provider is 
required to collect directly from consumers, and remit to federal, 
state, or local governments. A Mandatory Tax or Fee that is passed 
through to a Consumer may not include a markup, unless the markup is 
specifically authorized by a federal, state, or local statute, rule, or 
regulation;
* * * * *

0
3. Effective December 12, 2016, amend Sec.  64.6010 by revising 
paragraphs (b) and (d) through (f) to read as follows:


Sec.  64.6010  Inmate Calling Services rate caps.

* * * * *
    (b) No Provider shall charge, in any Prison it serves, a per-minute 
rate for Debit Calling, Prepaid Calling, or Prepaid Collect Calling in 
excess of:
    (1) $0.13;
    (2) [Reserved]
* * * * *
    (d) No Provider shall charge, in the Prisons it serves, a per-
minute rate for Collect Calling in excess of:
    (1) $0.16 after the December 12, 2016;
    (2) $0.15 after July 1, 2017; and
    (3) $0.13 after July 1, 2018, and going forward.
    (e) For purposes of this section, the initial ADP shall be 
calculated, for all of the Correctional Facilities covered by an Inmate 
Calling Services contract, by summing the total number of inmates from 
January 1, 2015, through the effective date of the Order, divided by 
the number of days in that time period;
    (f) In subsequent years, for all of the correctional facilities 
covered by an Inmate Calling Services contract, the ADP will be the sum 
of the total number of inmates from January 1st through December 31st 
divided by the number of days in the year and will become effective on 
January 31st of the following year.
    4. Effective March 13, 2017, revise Sec.  64.6010(a) and (c) to 
read as follows:


Sec.  64.6010 Inmate  Calling Services rate caps.

    (a) No Provider shall charge, in the Jails it serves, a per-minute 
rate for Debit Calling, Prepaid Calling, or Prepaid Collect Calling in 
excess of:
    (1) $0.31 in Jails with an ADP of 0-349;
    (2) $0.21 in Jails with an ADP of 350-999; or
    (3) $0.19 in Jails with an ADP of 1,000 or greater.
* * * * *
    (c) No Provider shall charge, in the Jails it serves, a per-minute 
rate for Collect Calling in excess of:

----------------------------------------------------------------------------------------------------------------
                                                                   Collect rate    Collect rate    Collect rate
                                                                  cap per MOU as  cap per MOU as  cap per MOU as
                    Size and type of facility                      of effective     of July 1,      of July 1,
                                                                       date            2017            2018
----------------------------------------------------------------------------------------------------------------
0-349 Jail ADP..................................................           $0.58           $0.45           $0.31
350-999 Jail ADP................................................            0.54            0.38            0.21
1,000+ Jail ADP.................................................            0.54            0.37            0.19
----------------------------------------------------------------------------------------------------------------


[[Page 62826]]

* * * * *
[FR Doc. 2016-21637 Filed 9-12-16; 8:45 am]
 BILLING CODE 6712-01-P