FCC: ‘Everybody sues us about everything’

The Federal Communications Commission (FCC) says it is not worried about the threat of another legal battle as prison-calling companies promised a lawsuit to block new rate caps approved Thursday. 

“Oh golly. I think the rule of the FCC is make a decision, go to court. Everybody sues us about everything,” Chairman Tom Wheeler told reporters following a vote.  

{mosads}In a divided vote, the commission approved a plan to cap prison and jail calling rates and to discourage up-front payments that leading inmate-calling companies hand out to correctional facilities to win exclusive contracts. 

The four largest companies have threatened to sue to block the rules, arguing they would have a devastating effect on the $1 billion industry. Those companies make up about 90 percent of revenue in the inmate-calling industry. 

But the FCC is no stranger to legal battles. A quick search of the Pacer court filing system turns up at least 84 legal cases involving the FCC that are currently pending in appellate courts. 

Many of those are over a single issue. The most high-profile is the legal battle brewing over the commission’s net neutrality rules, in which the lawsuits of  nearly a dozen different companies and trade groups were consolidated into a single case to be argued in December. 

FCC staff has previously said it would not need to beef up its budget to take on the net neutrality court battle or any other, even as some Republicans have lamented that taxpayers are ultimately on the hook for the cost of defending the regulations. 

The commission’s attempt to drive down the cost of inmate phone rates has been ongoing for years. Interim rules previously approved to cap inmate calling rates were also challenged in court. While the court declined to stay the main rate cap, it issued a partial stay of other pieces of the rules. 

The two Republican commissioners voted against the new rules, arguing they go farther than the FCC’s authority allows. 

“Congress should decide the wrangling and determining whether we should or should not act. They should provide specific authority,” Commissioner Michael O’Rielly, a Republican, said. 

Amid the sustained legal threats, advocates have applauded the commission for pushing forward to limit rates that have been described as predatory and far exceed the price the general public would be charged. 

“We commend the FCC for completing this proceeding in the face of lawsuits and political pressure from those who profit from these abusive prison phone rates,” Public Knowledge said in a statement. 

The dominant inmate-calling companies such as Global Tel Link and Securus Technologies have targeted a portion of the order dealing with so-called kickbacks that they generally pay prisons to house the phones, rather than taking specific issue with the price caps.

Phone companies are required to ensure that their phone rates for inmate are reasonable and fair. One way they have justified higher-than-normal prices in the past is by factoring in the upfront commissions they pay prisons. But the new order would exclude those commissions when calculating reasonable phone rates. 

The inmate phone industry argues that model puts them in an untenable position in which they will still have to dole out the payments to prisons, but now there will be no way to recoup the costs.