DECISION ADOPTING INTERIM RATE RELIEF FOR INCARCERATED PERSON’S CALLING SERVICES

• Aug. 25, 2021 • Locations: United States of America -> California • Topics: Telephone Rates

Download original document:
Brief thumbnail

Document text

This text is machine-read, and may contain errors. Check the original document to verify accuracy.

ALJ/CF1/avs

Date of Issuance 8/23/2021

Decision 21-08-037 August 19, 2021
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to
Consider Regulating
Telecommunications Services Used
by Incarcerated People.

Rulemaking 20-10-002

DECISION ADOPTING INTERIM RATE RELIEF
FOR INCARCERATED PERSON’S CALLING SERVICES

401375687

-1-

R.20-10-002 ALJ/CF1/avs

TABLE OF CONTENTS
Title

Page

DECISION ADOPTING INTERIM RATE RELIEF
FOR INCARCERATED PERSONS CALLING SERVICES .........................................................2
Summary ..........................................................................................................................................2
1. Background...............................................................................................................................3
1.2 Procedural Background ...................................................................................................11
1.3 Public Comments Received ............................................................................................12
1.3.1. Public Comment Portal ............................................................................................12
1.3.1.1 Rates .........................................................................................................................13
1.3.1.2 Service Quality .........................................................................................................13
1.3.2
Public Participation Hearing Comments ..................................................................14
1.3.2.1 Rates .........................................................................................................................14
1.3.2.2 Service Quality .........................................................................................................15
2. Jurisdiction .............................................................................................................................15
3. Issues Before the Commission ...............................................................................................18
4. Defining “Incarcerated Persons Calling Services” for Purposes of this Decision .................19
4.1 Party Comments ..............................................................................................................20
4.2 Discussion .......................................................................................................................21
5. The Record Indicates High and Widely Varying Rates for IPCS in California ....................21
5.1 Staff Findings on IPCS Rates ..........................................................................................22
5.2 Cal Advocates’ Findings on IPCS Rates .........................................................................24
5.3. Parties Differ on the Cause and Significance of the High
and Widely Varying IPCS Rates in California...............................................................26
5.3.1
IPCS Provider Comments ........................................................................................26
5.3.2
Other Party Comments .............................................................................................28
5.4 Discussion: High and Widely Varying IPCS Rates in California
Reflect Locational Monopolies that Result in Unreasonable and Unjust Rates..............31
6. Providing Interim Rate Relief to IPCS Customers .................................................................40
6.1 Initial and Revised Staff Proposal for Interim Rate Relief ............................................41
6.1.1
Party Comments .......................................................................................................42
6.1.1.1
FCC 2013 Order Interim Rates of 21 and 25 Cents Per Minute ......................43
6.1.1.2
FCC Third Order Interim Rates of 14 and 16 Cents Per Minute ......................44
6.2 Party Proposals for an Interim Rate Cap of One to 11 Cents Per Minute ......................46
6.2.1
Provider Comments ..................................................................................................50
6.2 Implementation Timeline ................................................................................................50
6.3 Adopting an Interim Rate Cap of Seven Cents Per Minute ...........................................51
7. Providing Interim Relief from Ancillary Service Fees..........................................................61
7.1 Staff Proposal ..................................................................................................................63
7.2 Party Proposals ................................................................................................................64
7.2.1
Cal Advocates’ Proposal ..........................................................................................65
7.2.2
TURN’s Proposal .....................................................................................................69
7.3 Party Comments on Staff and Party Proposals...............................................................70

-i-

R.20-10-002 ALJ/CF1/avs

7.4

Discussion: Prohibiting All Ancillary Service Fees Except for Third-Party Financial
Transaction Fees and Government-Mandated Taxes and Fees .......................................72
8. Enforcement and Compliance Requirement ...........................................................................80
8.1 Party Comments ..............................................................................................................82
8.2 Enforcement Authorization for Instances of Non-Compliance ......................................83
9. Commission Environmental and Social Justice Action Plan ................................................83
10. Streamlining the R.20-10-002 Service List ............................................................................87
10.1 Transfer of Parties to “Information-Only” Status ..........................................................88
10.2 Updated R.20-10-002 Service List ..................................................................................89
11. Comments on Proposed Decision ...........................................................................................91
12. Assignment of Proceeding ....................................................................................................103
Findings of Fact ...........................................................................................................................103
Conclusions of Law .....................................................................................................................109
ORDER ........................................................................................................................................115

APPENDIX A - REVISED STAFF PROPOSAL Interim Rate
Relief for Inmate Calling Services

- ii -

R.20-10-002 ALJ/CF1/avs

DECISION ADOPTING INTERIM RATE RELIEF
FOR INCARCERATED PERSONS CALLING SERVICES
Summary
This decision adopts interim caps on intrastate rates for incarcerated
persons calling services (IPCS) of seven cents ($0.07) per minute for debit,
prepaid calls and collect calls. It prohibits the imposition of single-call, paper
bill, live agent, and automated payment fees in association with intrastate and
jurisdictionally mixed IPCS and requires the pass through, with no mark up, of
third-party financial transaction fees, up to a limit of $6.95 per transaction. It
allows the pass through, with no mark up, of government taxes and fees for
intrastate and jurisdictionally mixed IPCS. It prohibits the imposition of any
other type of ancillary fee or service fee not explicitly approved in this decision.
This decision applies to all telephone corporations providing intrastate IPCS in
the State of California.
This decision directs telephone corporations providing intrastate IPCS to
implement the adopted rate cap and ancillary fee requirements, submit a Notice
of Compliance, and submit an Interim Rate Compliance Report within 45 days of
issuance of this decision.1 It directs telephone corporations providing intrastate
IPCS to provide a Plan for Notification to all current and prospective customers
and account holders, draft notices of the adopted ancillary fee requirements,
terms and conditions, refund policies and customer service contacts for websites,
bill inserts, and marketing materials to the California Public Utilities
Commission (Commission) for review no later than 30 days from Commission
issuance of this decision. The notices must provide service-related information

For simplicity, this decision frequently shortens the phrase “telephone corporations providing
IPCS” to “IPCS providers,” but the phrases have identical meanings.
1

-2-

R.20-10-002 ALJ/CF1/avs

in English, Spanish and any other languages prevalent in incarceration facilities
and must inform the incarcerated of methods to lodge service quality complaints
with the Commission. This decision directs telephone corporations providing
intrastate IPCS not explicitly identified in this decision to take similar steps
within 45 days from executing a contract to provide IPCS in California.
These rate caps and ancillary fee requirements will remain in effect until
the Commission adopts a subsequent decision in this proceeding.
This proceeding remains open.
1.

Background
The California Public Utilities Commission (Commission) opened

Rulemaking (R.) 20-10-002 to Consider Regulating Telecommunications Services Used
by Incarcerated People on October 8, 2020. The purpose of this rulemaking is to
ensure that incarcerated people in California pay just and reasonable rates for
intrastate calling services, under just and reasonable terms and conditions. As
discussed in the Order Instituting Rulemaking (OIR), previous studies of
incarcerated person’s calling service (IPCS) rates found high and widely differing
rates charged in California.2 Egregiously high rates and fees and associated
practices impede incarcerated person’s ability to communicate with loved ones
and financially burden incarcerated persons and their families.
The criminal justice system places an undue financial burden on
low-income families and communities of color who face disproportionate rates of
incarceration through costs imposed on incarcerated people and their families as
part of being in prison or in jail. Studies show that as many as 34 percent of
families go into debt to stay in contact with an incarcerated family member and
We use the term “incarcerated persons” throughout this decision in place of the term
“inmates,” used in the OIR.
2

-3-

R.20-10-002 ALJ/CF1/avs

the cost of maintaining contact with incarcerated persons falls to families and
disproportionally on low-income women of color.3 However, incarcerated
people who have regular contact with family members are more likely to succeed
after release and have lower recidivism rates because they maintain vital support
networks.4 A 2015 study found that incarcerated people had a median annual
income of less than $20,000 prior to their incarceration.5
IPCS in California are generally provided by private communications
companies under contract with the entity that oversees or owns the correctional
or detention facility.6 While incarceration facilities may be owned or operated,
either in whole part, by a private company, the facilities still are ultimately
governed under contract with federal, state, county, or city government entities.7
Some 354 federal, state, and local correctional and detention facilities exist
in California, detaining or incarcerating some 172,543 – 183,011 persons.8
Root and Rebound, Comments on Order Instituting Rulemaking at 3, citing, Saneta deVuonopowell, Chris Schweidler, Alicia Walters, and Azadeh Zohrabi. “Who Pays? The True Cost of
Incarceration on Families.” Ella Baker Center for Human Rights, Forward Together, and
Research Action Design. September 2015, available as of this writing at:
http://www.whopaysreport.org/who-paysfull-report/.
3

Ibid; WC Docket No. 12-375, Third Report and Order, Order on Reconsideration, and Fifth Further
Notice of Proposed Rulemaking (FCC Third Order) at ¶¶ 35 -36.
4

Root and Rebound, Comments on Order Instituting Rulemaking at 4, citing Bernadette Rabuy
and Daniel Kopf. “Prisons of Poverty: Uncovering the pre-incarceration incomes of the
imprisoned” Prison Policy Initiative. July 2015, available as of this writing at
https://www.prisonpolicy.org/reports/income.html.
5

Public Advocates Office (Cal Advocates), Comments on Order Instituting Rulemaking at 2.

Ibid.

The 172,543 figure is based on a Commission Staff data request to IPCS providers
(December 2020). Adjusting this figure based on information posed online by incarceration
facilities results in an adjusted figure of approximately 183,011 incarcerated persons in
California, as of May 2021. The number of incarceration facilities currently operated also
fluxuates, as facilities open and close. For simplicity, this decision uses the 172,543 average daily
population throughout.
8

-4-

R.20-10-002 ALJ/CF1/avs

Commission Staff have identified the following total number of correctional
facilities in California and total incarcerated population in California:
Table 1: Summary of California Incarceration Facilities9
Governing
Authority
Federal
State
County/Local
Total

Approximate Number of
facilities
16
89
249
354

Estimated Average
Daily Population of
Incarcerated10
11,480
94,553
76,978
183,011

The Federal Bureau of Prisons operates federal prisons and detention
centers as well as federal immigrant detention facilities and military prisons.11
The State of California incarcerates individuals in state prisons, correctional
facilities, vocational institutions, medical facilities, four juvenile facilities, and
approximately 43 “Conservation Camps.”12 The California Department of
Corrections and Rehabilitation (CDCR) oversees these state facilities and
provides calling services to people who are incarcerated through a single
statewide contract currently held by the IPCS provider Global Tel*Link (GTL).13
The Staff December 2020 data request instructed IPCS providers to identify the governing
authority for each facility as state, local, or federal. The governing authority is the entity
responsible for the operation of the incarcerated in the facility.
9

Average Daily Population for some federal facilities were obtained from the Federal Bureau
of Prisons, accessed June 24, 2021, at https://www.bop.gov/.
10

Federal Bureau of Prisons locations accessed December 28, 2020 at
https://www.bop.gov/locations/list.jsp#. (See Scoping Memo for list of facilities.)
11

Cal Advocates, comments on Order Instituting Rulemaking at 3, citing California Department
of Corrections and Rehabilitation “Facility Locator,” (accessed October 22, 2020, and
December 28, 2020). https://www.cdcr.ca.gov/facility-locator/. Conservation camps house
incarcerated people who serve as a source of labor to support the state’s response to
emergencies such as fires, floods, and other natural or manmade disasters.
12

Cal Advocates, Comments on Staff Proposal at 4; (See also CDCR Contract ID C5610009,
available at: LPA Contract Details (ca.gov).)
13

-5-

R.20-10-002 ALJ/CF1/avs

California counties operate county jails for adults, including court holding
facilities, temporary holding facilities and long-term jails.14 California counties
also manage approximately 70 juvenile detention centers and camps.15
California cities also sometimes operate jails or holding facilities. Fifty-eight
county sheriffs and probation chiefs negotiate their contracts independently with
IPCS providers.16
This rulemaking builds on work by the Federal Communications
Commission (FCC) to regulate interstate incarcerated person’s communication
services. In 2012, the FCC opened a rulemaking In the Matter of Rates for Interstate
Inmate Calling Services, WC Docket No. 12-375. The FCC did so to address
concerns regarding a lack of competition in the incarcerated person’s
communication services market, which they said resulted in “locational
monopolies” serving a “captive consumer base of inmates.”17 The 2012 FCC
rulemaking resulted in a 2013 Report and Order and Further notice of Proposed

Public Policy Institute of California, “California County Jails: Just the Facts,” October 2018,
accessed December 28, 2020, at
https://www.ppic.org/wpcontent/uploads/JTF_CountyJailsJTF.pdf.
14

Board of State and Community Corrections, data and research, accessed December 28, 2020, at
https://www.bscc.ca.gov/m_dataresearch/.
15

Root and Rebound, Comments on OIR at 6.

Prison Policy Institute, Comments on OIR, citing First Report & Order ¶¶ 39-41, 28 FCC Rcd.
at 14128-30; Global Tel*Link v. FCC, 866 F.3d at 404 (GTL v. FCC, 866 F.3d) (“Once a long-term,
exclusive contract bid is awarded to an [inmate calling service] ICS provider, competition ceases
for the duration of the contract and subsequent contract renewals. Winning ICS providers thus
operate locational monopolies with a captive consumer base of inmates and the need to pay
high site commissions.”); and, Id. at 111, 28 FCC Rcd. at 14217 (Ajit Pai, dissenting) (“[W]e
cannot necessarily count on market competition to keep prices for inmate calling services just
and reasonable”).
17

-6-

R.20-10-002 ALJ/CF1/avs

Rulemaking (2013 Order) adopting interim interstate IPCS rate caps of $0.21 per
minute for debit and prepaid calls and $0.25 per minute for collect calls.18
In 2015, the FCC approved its Second Report and Order and Third Further
Notice of Proposed Rulemaking (2015 Order). In this, the FCC stated that “there is
little dispute that the [IPCS] market is a prime example of market failure.”19
Among other things, the FCC’s 2015 Order imposed or updated fee caps on both
interstate and intrastate inmate communication rates and ancillary fees.20
In 2017, the United States Court of Appeals for the District of Columbia
Circuit (D.C. Circuit) struck down the portion of the 2015 FCC Order that
attempted to impose intrastate rate caps as beyond the FCC’s statutory
authority.21 The D.C. Circuit also vacated the FCC’s 2015 rate caps, but the
ancillary service fee caps adopted in 2015 remained in place.22 The FCC
estimates that roughly 20 percent of IPCS calls nationally are interstate calls and
80 percent are intrastate calls.23
In California, Senator Holly Mitchell introduced Senate Bill (SB) 555 on
February 22, 2019, and the Legislature adopted SB 555 in September 2020. SB 555
capped rates for telephone communication services for incarcerated people at
five cents ($0.05) per minute and capped rates for video communications services
at twenty-five cents ($0.25) per minute. The bill prohibited several types of
See FCC Third Order at ¶ 13. The rate caps ordered by the FCC are also summarized in a FCC
Consumer Guide “Inmate Telephone Service,” accessed January 5, 2021, and available at
https://www.fcc.gov/sites/default/files/inmate_telephone_service.pdf.
18

2015 Order ¶¶ 3 (Nov. 5, 2015).

Ibid.

GTL v. FCC 866 F.3d at 412.
FCC Third Order at ¶ 14.

FCC Report and Order on Remand and Fourth Further Notice of Proposed Rulemaking (FCC 2020
Order on Remand) at ¶ 26.
23

-7-

R.20-10-002 ALJ/CF1/avs

ancillary fees, required any “site commissions” paid by IPCS providers to be
used solely for the benefit of incarcerated people, and required counties to award
contracts to providers offering the lowest cost for quality services.24 Penal Code
4025 authorizes sheriffs’ departments to place commissions collected from IPCS
providers in an inmate welfare fund that is to be used “primarily” for the benefit
of incarcerated people.25
Governor Newsom vetoed SB 555 in late 2020. The Governor’s veto
message said that he “strongly support[ed] the goals of the bill” but feared
reductions to the inmate welfare fund would have the “unintended consequence
of reducing important rehabilitative and educational programs for individuals in
custody.”26
In response to the COVID-19 pandemic, the FCC in mid- 2020 asked the
National Association of Regulatory Utility Commissioners (NARUC) and state
regulatory commissions to act on intrastate inmate communication services rates
to enable more affordable communications for the incarcerated and their
families.27 Shortly thereafter, NARUC asked state utility commissions to review
the rates and terms under which telecommunications services are provided to

Section 3(f)(1) of SB 555 defines “commission or other payment” as any payments made to
provide an incentive for the procurement of contracts, but does not include grants and other
payments that do not increase the cost of telephone calls or communications or information
services billed to consumers.”
24

SB 555, Section 1(b)(3).

Office of the Governor, SB 555 Veto Message, September 30, 2020, available as of this writing
at: https://www.gov.ca.gov/wp-content/uploads/2020/09/SB-555.pdf.
26

Letter from Ajit Pai to Brandon Presley (July 20, 2020), available as of this writing at:
https://docs.fcc.gov/public/attachments/DOC-365619A1.pdf.
27

-8-

R.20-10-002 ALJ/CF1/avs

incarcerated people “and act, where appropriate.”28 On October 8, 2020, the
Commission opened R.20-10-002.
On March 1, 2021, the CCDR announced it had negotiated a statewide
contract with the IPCS provider GTL to provide intrastate IPCS rates at the price
of $0.025 per minute to 90 state-run facilities, effective through 2026.29
On May 24, 2021, the FCC adopted a Third Report and Order, Order on
Reconsideration, and Fifth Further Notice of Proposed Rulemaking (FCC Third Order).
The FCC’s Third Order:
 Lowers interstate interim rate caps to new interim caps for
all calls of $0.12 per minute for prisons and $0.14 per
minute for jails with populations of 1,000 or more;
 For prisons and larger jails, reforms treatment of site
commission payments, allowing (1) revenue collection of
an additional $0.02 per minute for site commission
payments that are reasonably related to the facility’s cost of
enabling IPCS and where these result from contractual
obligations or negotiations; and, (2) the pass-through
without markup of any site commission payments

Nat’l Ass’n of Reg. Util. Comm’rs, NARUC Urges Members to Review Inmate Calling Rates
(July 23, 2020), available as of this writing at https://www.naruc.org/aboutnaruc/pressreleases/naruc-urges-members-to-review-inmate-calling-rates/.
28

Cal Advocates, Comments on Staff Proposal at 4; TURN, Comments on Staff Proposal at 12;
See also State of California, Department of Technology, Statewide Technology Procurement,
Department of Corrections and Rehabilitation and Global Tel*Link Corporation, Agreement
Number C5610009, Exhibit Tab 3 (Dec. 31, 2020) ($0.025 per minute); California Department of
Corrections and Rehabilitation, “California Department of Corrections and Rehabilitation
Announces Reduced Cost of Telephone Calls for Incarcerated Population,” News Release
(Mar. 1, 2021) https://www.cdcr.ca.gov/news/2021/03/01/california-department-ofcorrections-and-rehabilitation-announces-reduced-cost-of-telephone-calls-for-incarceratedpopulation/. CDCR contract available here:
https://caleprocure.ca.gov/PSRelay/ZZ_PO.ZZ_CTR_SUP_CMP.GBL?Page=ZZ_CTR_SUP_P
G&Action=U&SETID=STATE&CNTRCT_ID=C5610009
29

-9-

R.20-10-002 ALJ/CF1/avs

required under codified law or regulations up to a total
rate cap of $0.21 per minute;30
 For jails with populations less than 1,000, retains the
per-minute rate cap of $0.21 per minute adopted in 2013 for
all calls, and prohibits collection of revenues beyond that
level for site commissions;
 Reforms ancillary service charge rules for third-party
financial transaction and single-call fees by capping
allowable pass-through charges at $6.95 per transaction;31
 Reaffirms that the jurisdictional nature of a telephone call
for purposes of charging consumers depends on the
physical location of the originating and terminating
endpoints of the call;
 Updates the waiver application process to apply to an
individual facility or under a specific contract;32
 Caps international calling rates;
 Adopts a new mandatory data collection to gather data to
set permanent rates; and,
 Reaffirm providers’ obligations regarding access for
incarcerated people with disabilities.33

FCC Third Order at ¶¶ 100 – 168; See also FCC Third Order, footnote 304, which defines “law
or regulation” as “state statutes and laws and regulations that are adopted pursuant to state
administrative procedure statutes where there is notice and an opportunity for public comment such
as by a state public utility commission or similar regulatory body with jurisdiction to establish
inmate calling rates, terms and conditions”(emphasis added). FCC Third Order at ¶ 133 also
requires mandated site commissions to be indicated as a line item distinct from the applicable
per-minute rate component.
30

FCC Third Order at ¶¶ 209 – 216.

FCC Third Order at ¶ 171.

FCC Third Order (May 24, 2021).

- 10 -

R.20-10-002 ALJ/CF1/avs

1.2

Procedural Background

On November 9, 2020, 16 parties filed opening comments on the OIR and
on November 19, 2020, six parties filed reply comments.34 The assigned
Administrative Law Judge (ALJ) held a prehearing conference on
December 10, 2020, to discuss the issues of law and fact, determine the need for
hearing, set the schedule for resolving the matter, and address other matters. An
Assigned Commissioner’s Scoping Memo and Ruling (Scoping Memo) was issued on
January 12, 2021. On April 2, 2021, the assigned ALJ issued a Ruling Providing
Staff Interim Rate Relief Proposal for Comment (ALJ Ruling), containing a series of
questions for parties to address in their comments on a Staff Interim Rate Relief
Proposal (Staff Proposal).
On April 28, 2021, and April 29, 2021, the assigned ALJ held two remote
Public Participation Hearings (PPHs). Over 600 people observed the two PPHs
via live video stream, 120 people listened via telephone, and 85 individuals
commented. Additionally, as of May 3, 2021, 203 individuals submitted

Parties filing opening comments on the OIR include the Californians for Jail and Prison Phone
Justice Coalition (collectively, Justice Coalition, composed of five organizations, the Ella Baker
Center for Human Rights, Friends Committee on Legislation of California, the San Francisco
Financial Justice Project, Worth Rises, and the Young Women’s Freedom Center), the Center for
Accessible Technologies (CforAT), the Greenlining Institute, the Media Alliance, the Prison
Policy Initiative, Inc., Cal Advocates, Root and Rebound, The Utility Reform Network (TURN),
and the Youth Law Center. Communications services companies filing opening comments
include Charter Fiberlink CA-CCO, LLC, Time Warner Cable Information Services (California),
and Bright House Networks Information Services (California), LLC (Charter), Comcast Phone of
California (Comcast), Cox California Telecom, LLC d/b/a Cox Communications, Global
Tel*Link Corporation (GTL), Inmate Calling Solutions, LLC d/b/a IC Solutions, Network
Communications International Corp. d/b/a NCIC Inmate Communications, and Securus
Technologies, LLC (Securus). Parties filing reply comments on the Order Instituting
Rulemaking include Cal Advocates, Medial Alliance, Prison Policy Institute, Inc., TURN, the
Center for Accessible Technology, and AT&T Corporation (Pacific Bell Telephone Company
d/b/a AT&T California, AT&T Corp., Teleport Communications America, LLC, and SBC Long
Distance, LCC, d/b/a AT&T Long Distance).
34

- 11 -

R.20-10-002 ALJ/CF1/avs

comments on the public comment portal to R.20-10-002. Section 1.3 summarizes
public comments provided during the PPHs and on the R.20-10-002 public
comment portal.
On April 27, 2021, and April 30, 2021, 10 parties filed comments on the
Staff Proposal.35 On May 12, 2021, five parties filed reply comments.36
On May 4, 2021, the assigned ALJ issued a Ruling Describing Process to
Remove Most Telecommunications Carriers from Service List. We discuss this and
update the R.20-10-002 service list in section 9.
1.3

Public Comments Received

1.3.1.

Public Comment Portal

As of May 3, 2021, the R.20-10-002 public comment portal had received 203
written comments.37 Of these, 197 commented on excessive rates, including 54
comments in support of free phone calls, and nine comments regarding IPCS
customer service and dropped calls. While there were no comments from
individuals describing themselves as currently incarcerated, there were
two comments from formerly incarcerated persons. Commenters
overwhelmingly describe the financial hardships of maintaining contact with
their loved ones, especially during COVID-19 when in person visits are not
possible, and urge the Commission take action to reduce rates and fees.

Parties filing opening comments included NCIC Inmate Communications, Securus, GTL, Pay
Tel Communications Inc. (Pay Tel), MCI Communications Services LLC and MCI Metro Access
Transmission Services Corp. (Verizon), the Justice Coalition, Pay Tel, TURN, Cal Advocates,
PPI, and CforAT.
35

Parties filing reply comments included Securus, TURN, Cal Advocates, PPI, CforAT, and the
Justice Coalition.
36

As of this writing, public comments posted to the docket card of R.20-10-002 can be viewed
here: https://apps.cpuc.ca.gov/apex/f?p=401:68:0::NO:::
37

- 12 -

R.20-10-002 ALJ/CF1/avs

1.3.1.1 Rates
All but two commenters urge the Commission to lower and cap rates or
make calling free.38 There were no explicit comments supporting the Staff
Proposal. Commenters spoke about the high IPCS costs. One commenter states
that the “…financial burden is solely placed on family members.”39 Another
states “…with connection fees, costs are $150 per month…cost per minute is
actually $0.31.”40 Comments also address fees. “[T]he fee is $7.95 for deposits up
to $25 and $9.95 for $25 and above.”41 Another commenter states “…please
lower the cost of communications for incarcerated individuals, especially if they
have not been convicted.”42 And “…fees are completely outrageous, then you
add the connection fee, the per minute fee, add the time limit and families are
being taken advantage of during some of the most difficult circumstances in their
lives.”43 Another commenter says, “…eliminate all fees that are not the basic cost
of a call.”44 There were comments in support of free calls, calling plans and prepaid debit cards.
1.3.1.2 Service Quality
Twelve commenters describe service quality issues such as dropped calls,
and interruptions from prerecorded messages: “How do we correct the fact that
once we get through for a collect call, that the phone from our end won’t hang up

Comments submitted to public comment portal.

Public comment on R.20-10-002 Public Comment Portal, March 26, 2021.

Ibid.

Id., April 28, 2021.

Id., April 21, 2021.

Id. April 1, 2021.

Id. April 29, 2021.

- 13 -

R.20-10-002 ALJ/CF1/avs

after connecting?”45 And, “[w]hen the inmates have access to the phones, it is
often difficult to hear them because of the poor manner in which much of the
equipment is lackadaisically ‘maintained’ with no concern exercised by the
institutions or the service providers.”46 “These calls get disconnected all the time
because of the awful signal. When a call is disconnected, that is a call spent.”47
Another commenter describes that it is “[e]xtremely difficult for the elderly to
navigate calls.”48
1.3.2

Public Participation Hearing Comments

Eighty-five people provided comments during the PPHs held on April 28,
2021, and April 29, 2021. Most of the callers were friends and family of the
incarcerated and advocates. Four commenters identified themselves as currently
incarcerated, six commenters identified themselves as formerly incarcerated.
1.3.2.1 Rates
All PPH commenters support the Commission taking action to reduce
rates, cap rates or make calling free. There were two comments in support of the
Staff Proposal. One commenter spoke about calling her loved one, “…I have
found I am spending two or three times the amount I spend on rent just to talk to
him.”49 Another said “…these phone calls that we get a day, they cost us an
average of $10 to $12 a day for 30 minutes…definitely it’s money that we could
be using for other things.”50 Another caller said, “[a]ccess to reliable, affordable

Id., April 28, 2021.

Id., April 29, 2021.

Id. April 28, 2021.

Id., April 13, 2021.

Reporter’s Transcript (RT) 188:12.

RT 196: 11.

- 14 -

R.20-10-002 ALJ/CF1/avs

and consistent communication with family is critical in this pandemic for both
the mental and physical health of incarcerated individuals and their families.”51
A commenter spoke about paying over $21,000 in fees over two years.52
Commenters spoke about calls being dropped53 after prepaying for a 15-minute
call without getting refunds,54 inadequate or no disclosures of fees,55 and a lack
of billing records.56
1.3.2.2 Service Quality
PPH commenters made 15 comments related to service quality and billing.
Commenters spoke about calls being dropped after prepaying for a 15-minute
call with no refund, no or inadequate disclosures of fees, refund policies, and
call-recording practices,57 and a lack of billing records. Other comments
described the difficulties of navigating the telephone prompts, stated that
recorded messages played during calls interrupt and reduce call time, stated that
technologies are inconsistent and not user friendly, stated that phones and
equipment are out of order, and decried a lack of service quality protections.
2.

Jurisdiction
The California Constitution and the Public Utilities Code vest in the

Commission regulatory authority over public utilities, including telephone

RT 206: 12.

RT 239:24.

RT 203:8.

RT 73:15, 119:9-11, and 233:6-11.

RT 230:4

RT 100:16 – 26.

RT 104:4 – 14.

- 15 -

R.20-10-002 ALJ/CF1/avs

corporations.58 The Public Utilities Code defines “telephone corporations” as
“every corporation or person owning, controlling, operating, or managing any
telephone line for compensation within this state”59 and, in turn, defines “a
telephone line” to include “all conduits, ducts, poles, wires, cables, instruments,
and appliances, and all other real estate, fixtures, and personal property owned,
controlled, operated, or managed in connection with or to facilitate
communication by telephone, whether such communication is had with or
without the use of transmission wires.”60
The Commission has authority to ensure that all rates charged by a public
utility are “just and reasonable” by requiring a “showing before the [C]omission
that the… rate is justified.”61 In its consideration of rates, the Commission has
the authority to determine what is just and reasonable, and to disallow costs not
found to be just and reasonable.62 The Commission has plenary authority to
carry out this mandate.63 Additionally, some of the providers of IPCS in
California hold Certificates of Public Convenience and Necessity (CPCNs) and

Cal. Const., art. XII, §§ 3, 6; see also Pub. Util. Code, § 216, subd. (b) (“Whenever any . . .
telephone corporation . . . performs a service for, or delivers a commodity to, the public or any
portion thereof for which any compensation or payment whatsoever is received, that . . .
telephone corporation . . . is a public utility subject to the jurisdiction, control, and regulation of
the commission and the provisions of this part.”).
58

Pub. Util. Code, § 234, subd. a.

Pub. Util. Code, § 233.

Pub. Util. Code §§ 451, 454, subd. a.

Pub. Util. Code § 728.

Pub. Util. Code, § 701. The Commission may not, of course, exercise its authority where
preempted by federal law, see U.S. Const., art. VI, cl. 2, or where to do so would expressly
contradict state law, see Assembly v. Pub. Util. Com. (1995) 12 Cal. 4th 90, 103.
63

- 16 -

R.20-10-002 ALJ/CF1/avs

the Commission has the statutory authority to grant and to revoke CPCNs, to
condition the grant of CPCNs, and to regulate CPCN holders.64
This Commission has typically promoted market competition as a way to
achieve just and reasonable telecommunications rates for competitive local
exchange carriers, which IPCS is properly considered,65 but we have also
consistently recognized the need to regulate the rates of monopoly services.66 In
D.06-08-030, we adopted a Uniform Regulatory Framework (URF) providing for
the gradual elimination of rate regulation for most incumbent local exchange
carriers, and included competitive local exchange carriers in the definition of
“URF-Carrier.”67 However, Decision (D.) 06-08-030 states that the Commission
“retains the authority and firm resolve, should it see evidence of market power
abuses, to reopen this proceeding and promptly investigate any such abuses.”68
D.06-08-030 defines “market power” as “the ability of a company to sustain
prices at levels above those a market would produce by restraining the supply of
voice services to the market.”69
Since the sunsetting of Public Utilities Code Section 710 in January 2020,
the Commission has asserted its general authority over Voice over Internet

Pub. Util. Code, §§ 1001-1013.

See D.01-02-025, Order ## 5, 6; D.04-05- 049, Order # 3; D.06-06-017, Order ## 1, 3. See also 47
C.F.R. § 51.903(a). “A Competitive local exchange carrier is any local exchange carrier, as
defined in § 51.5, that is not an incumbent local exchange carrier.” The Commission has
previously defined carriers in similar categories, including a competitive local carrier and a
nondominant interexchange carrier.
65

See D.94-09-065, 1994 Cal. PUC LEXIS 681 at 50-51.

D.06-08-030, Order 13. See also D.07-09-019, Appendix A (Telecommunications Industry
Rules), Rule 1.14.
67

Id. at Conclusion of Law 32.

Id. at 52.

- 17 -

R.20-10-002 ALJ/CF1/avs

Protocol (VoIP) technology. In D.19-08-025, we deemed VoIP providers to be
“telephone corporations” pursuant to Public Utilities Code Section 234 and
“public utilities” subject to the Commission’s authority. We stated that “VoIP
providers clearly fit within the plain language of the definition of a public utility
‘telephone corporation’” and as such are subject to the Commission’s authority
under Public Utilities Code Section 451 to ensure that customers receive safe and
reliable service at just and reasonable rates.70 In D.20-09-012, the Commission
upheld D.19-08-025 and provided extensive discussion supporting its findings
and conclusions, including that VoIP providers are telephone corporations and
public utilities and as such subject to our jurisdiction and requirement to ensure
just and reasonable rates.71
3.

Issues Before the Commission
This decision addresses the following Phase 1 issues identified in the

Scoping Memo:
a. How should the Commission define IPCS?
b. Should the Commission examine the conditions of IPCS
market competition in California?
c. Should the Commission provide immediate interim relief
to meet the IPCS needs of incarcerated people and their
families at just and reasonable rates, including those with
communication disabilities. If so, how?
d. Should FCC regulations over interstate and international
calls inform the Commission’s approach to intrastate IPCS?
If so, how?

See D.19-08-025 at 9-10, citing Pub. Util. Code §§ 216, 234, 701 and Id. at 32 and Conclusion of
Law 6.
70

D.20-09-012 at 31- 41.

- 18 -

R.20-10-002 ALJ/CF1/avs

e. Should the Commission use some elements of FCC orders
but not others as models for ensuring just and reasonable,
and affordable, IPCS rates in California?
4.

Defining “Incarcerated Persons Calling Services”
for Purposes of this Decision
The Scoping Memo provides a working definition of “incarcerated persons

calling services” for the purposes of this proceeding.72 The Scoping Memo also
states that it seeks information on “all communication services under the
Commission’s jurisdiction, including (but not limited to) voice calling, [VoIP]
calling, video calling, texting, and all additional communications services serving
people with disabilities.” The ALJ Ruling asked if the Staff Proposal
appropriately defines IPCS for purposes of Staff’s Interim Rate Relief Proposal.
In their initial and Revised Staff Proposals, Staff state that their proposal is
only addressing rates for voice communication services but did not further
define this term.73
The Revised Staff Proposal (attached as Appendix A) notes that the FCC
Third Order defines “jails” as a facility of a local, state, or federal law
enforcement agency that is used primarily to hold individuals who are; (1)
awaiting adjudication of criminal charges; (2) post-conviction and committed to
confinement for sentences of one year or less; or (3) post-conviction and awaiting
transfer to another facility. The proposal states that the term also includes city,
county or regional facilities that have contracted with a private company to
manage day-to-day operations; privately-owned and operated facilities primarily
engaged in housing city, county, or regional incarcerated persons; and facilities
used to detain individuals pursuant to a contract with U.S. Immigration and
72

Scoping Memo at 23.

Revised Staff Proposal at 1, provided in Appendix A of this decision.

- 19 -

R.20-10-002 ALJ/CF1/avs

Customs Enforcement. The Revised Staff Proposal defines “prisons” as
including facilities that would otherwise fall under the definition of a jail but in
which most incarcerated persons are post-conviction or are committed to
confinement for sentences of longer than one year.74
Staff’s Revised Proposal recommends the Commission adopt the FCC’s
definition of prisons and jails for all detention facilities without explicitly or
implicitly exempting any facility type. Staff recommend that facilities included
in the Commission’s definition of “incarcerated person’s calling services” include
any local, state, or federal correctional or detention facility type operated in
California housing adults and/or juveniles, including but not limited to city and
county jails, federal and state prisons, correctional facilities, juvenile detention
facilities, holding centers, camps, psychiatric hospitals, immigration detention
centers, military jails, and tribal jails.
This decision adopts Staff’s recommended approach.
4.1

Party Comments

Securus and GTL object to the Scoping Memo’s reference to video calling,
text messaging, and other non-voice communication services as within the
definition of incarcerated person’s calling services.75
NCIC Inmate Communications recommends the Commission clarify that
voice communications as used in the Staff Proposals includes IPCS providers
using VoIP-enabled technology.76

Ruling Providing Staff Interim Rate Relief Proposal for Comment, Attachment A, April 2, 2021
(Staff Proposal).
74

Securus, Comments on Staff Proposal at 6; GTL Comments on Staff Proposal at 3.

NCIC Inmate Communications Comments on Staff Proposal at 3.

- 20 -

R.20-10-002 ALJ/CF1/avs

4.2

Discussion

The interim rate relief adopted in this decision applies to intrastate IPCS
provided to any local, state, or federal correctional or detention facility type
operated in California housing adults and/or juveniles, including but not limited
to city and county jails, federal and state prisons, correctional facilities, juvenile
detention facilities, holding centers, camps, psychiatric hospitals, immigration
detention centers, military jails and tribal jails.
We define intrastate IPCS for purposes of this decision as including (but
not limited to) voice and interconnected VoIP calling, including voice and VoIP
voice communications services serving people with disabilities. As discussed
above, IPCS providers providing such services are telephone corporations and
public utilities and as such are subject to our jurisdiction and the requirement of
Public Utilities Code Section 451 to ensure just and reasonable rates.
This decision does not address party comments regarding video calling,
text messaging, and other non-voice communication services. We will review
the definition of “incarcerated person’s calling services” adopted for purposes of
this decision later in this proceeding.
5.

The Record Indicates High and Widely
Varying Rates for IPCS in California
This section examines the results of Staff and Cal Advocate’s initial

investigations into the prices charged for IPCS in California incarceration
facilities. We find that IPCS providers charge widely varying and, in some cases,
excessively high prices in California for the same services, resulting in unjust and
unreasonable rates. Further, we find that IPCS providers operate locational
monopolies and, whether individually or collaboratively with incarceration
facilities, use their monopoly status within facilities to exercise market power.
As such, in later sections of this decision we exercise the Commission’s authority
- 21 -

R.20-10-002 ALJ/CF1/avs

and jurisdiction over telephone corporations under Public Utilities Code
Section 451 to regulate IPCS rates and fees.
This section begins by reviewing Staff and Cal Advocates’ findings
regarding IPCS prices in California. Next, we review parties’ interpretations of
these findings and conclude with our own discussion of their significance.
5.1

Staff Findings on IPCS Rates

Based on its data request to over 800 licensed and registered calling service
providers, the Staff Proposal identified six providers that serve the IPCS market
in California, providing calling services to approximately 354 incarceration or
detention facilities. The six providers identified by Staff are:
 Securus;
 GTL;
 IC Solutions;
 Legacy Inmate Communications; 77
 NCIC Inmate Communications; and,
 Pay Tel.
Staff found that intrastate IPCS per-minute rates in California are as high
as $1.75 per minute and connection fees or first minute rates are as high as $3.60
per minute. Staff also found that a 15-minute intrastate IPCS phone call in
California can cost the caller as much as $26.25 solely in per-minute charges,
excluding any other transaction fees.
The initial Staff Proposal provided Staff’s analysis of IPCS data. Staff’s
Revised Proposal (attached as Appendix 1 to this decision) updates Staff’s initial
proposal slightly, based on Staff’s analysis of the impact of adopting the 2021

Legacy Inmate Communications is in the process of exiting the IPCS market.

- 22 -

R.20-10-002 ALJ/CF1/avs

FCC Third Order rate caps of $0.14 per minute for jails and $0.16 per minute for
prisons:
Table 2: Staff Summary of Findings78
Incarcerated Person’s Calling Service Provision in California
Approximate number of facilities
Estimated inmate population
Facilities with rates over $0.21 per minute
Population affected by initial Staff Proposal
Facilities with rates over $0.16 per minute
Population affected by Staff’s Revised Proposal
Calling Service Rates
Highest per minute rate
Highest 1st minute rate
Ancillary Charges
Highest single-call rate
Highest automated payment charge
Highest third-party fee
Highest live agent fee
Highest paper bill fee

354
172,543
186
46,649
218
64,356
$1.75
$3.60
$3.00
$3.00
$6.95
$5.95
$2.49

Staff also identified the fees and charges included in IPCS service contracts
showing the extent of the various charges carriers currently provide. Staff found
that the per-minute charges summarized in Table 2 are only a portion of the fees
incarcerated persons are subject to. Staff found that most of the fees intrastate
IPCS providers are currently charging are not imposed in any other segment of
the telecommunication market in California.79
As a result of these and other findings, the Staff Proposal concludes that
intrastate IPCS providers are operating “monopolies and are charging inmates

Staff Proposal, Attachment A; Revised Staff Proposal, provided in Appendix 1 to this
decision, Attachment A.
78

Staff Proposal, Attachment B.

- 23 -

R.20-10-002 ALJ/CF1/avs

and their families unreasonable rates, which is unlawful.”80 Staff also assert that
the IPCS market “demonstrates market power abuse:”81
Staff was unable to identify any instance in which an inmate
or any person communicating with an [incarcerated person]
has a choice of service provider. Accordingly, [incarcerated
person’s] calling services providers are the sole providers
within any given detention center. In[carcerated persons] are
a captive customer class who have no choice in service
provider, and therefore, must pay exorbitant communication
service rates or forego communication with family or
friends.82
Based on their research, Staff recommend that the Commission take
immediate action to institute interim rate relief.
5.2

Cal Advocates’ Findings on IPCS Rates

Cal Advocates presents a detailed analysis of intrastate IPCS rates in
California to supplement Staff’s analysis. Cal Advocates bases its analysis on
data request responses from four of California’s largest IPCS providers- Securus,
GTL, IC Solutions, and NCIC Inmate Communications.83
Cal Advocates concludes that the average per-minute calling rates for
intrastate IPCS in California vary significantly by incarceration facility type
(prison, county, and local jails for example), with the highest rates often being
two to three times more expensive than the state-wide average rate. We
reproduce Cal Advocates’ summary findings in Figure 1 below:

Staff Proposal at 2.

Ibid.

Cal Advocates, Comments on Staff Proposal at 6; figures provided by Cal Advocates are as of
April 2021.
83

- 24 -

R.20-10-002 ALJ/CF1/avs

Figure 1: California Intrastate IPCS Pre-Paid Call Per-Minute Rates by
Facility Type84
$4.00

$3.65

$3.50
$3.00
$2.50
$2.00
$1.50
$0.91

$1.00
$0.31

As illustrated in Figure 1, Cal Advocates indicates that:
 Intrastate IPCS rates in county jails are about 996 and
82.4 percent higher, respectively, than those in state and
federal prisons in California.85
 Intrastate IPCS rates in local (city) jails are about 1,124 and
58.8 percent higher, respectively, than those in state and
federal prisons in California.86
 Intrastate IPCS rates in federal prisons in California are, on
average, 584 percent higher than the $.025 per minute rate
recently instated between the CDCR and GTL.87

Ibid.

Cal Advocates, Comments on Staff Proposal at 6, April 30, 2021.

Ibid.

- 25 -

Maximum

Average

Maximum

Average

Minimum
County Jail

Maximum

Average

Minimum
Local Jail

$0.21 $0.27

$0.025 $0.025 $0.025
Minimum
State Prison

Maximum

Average

$0.00

$0.17 $0.17 $0.21
Minimum
Federal Prison

$0.50

R.20-10-002 ALJ/CF1/avs

Cal Advocates presents the following summary table:
Table 3: Average Intrastate IPCS Pre-Paid Per-Minute Calling Rates by
Facility Type Compared to State Prison IPCS Calling Rates88

Facility Type
State Prisons
Federal Prisons
County Jails
Local Jails

Intrastate IPCS
Per-Minute Rate
$0.025
$0.171
$0.306
$0.274

Average $ Greater
than State Rate

Average Percent
Greater than State
Rate

$0.146
$0.281
$0.249

584%
1124%
996%

Based on its analysis, Cal Advocates concludes that IPCS rates are
“unreasonably high in both county and local jails in comparison with [IPCS]
rates in both state and federal prisons.”89
5.3.

Parties Differ on the Cause and Significance
of the High and Widely Varying IPCS Rates
in California

No party disputes Staff or Cal Advocates’ findings regarding IPCS prices
in California. Where party comments differ is on the cause and significance of
these prices. This section summarizes these opposing views.
5.3.1

IPCS Provider Comments

The basic contention of IPCS providers, led by Securus, is that high IPCS
rates are just and reasonable if they reflect the actual costs of providing calling
services within incarceration facilities. They allege that the costs of providing
calling services within incarceration facilities are high because the facilities
require additional security and monitoring features not required in commercial
markets, and they require or allow the payment of site commissions.90 The IPCS

Ibid.

Id. at 6.

See discussion in section 1 of this decision.

- 26 -

R.20-10-002 ALJ/CF1/avs

providers allege that smaller facilities cost more to serve because facilities have
varied needs and providers cannot leverage economies of scale. The IPCS
providers state that, taken together, this leads to higher costs and higher IPCS
rates.
Securus proposes that, for purposes of adopting interim rate relief, the
Commission should treat the FCC’s adopted rate caps as benchmarks and allow
providers to negotiate rates above these levels within a reasonable range or allow
a waiver application process. Further, the Commission should examine
providers’ actual costs and IPCS market bidding dynamics before adopting any
permanent rate caps according to Securus.91
The IPCS providers reject Staff’s conclusion that the IPCS market in
California is monopolistic and allows for the exercise of market power. Securus
states that the existence of at least six IPCS providers in California competing
through Request for Proposal (RFP) processes for IPCS contracts belies the
conclusion that providers exercise monopoly power to unilaterally set rates.92
Securus states that IPCS rates are “set in a collaborative manner with agency
customers”93 or “dictated” by the facilities. 94 Securus argues that “[t]he practice
of utilizing a competitive bidding process to select a sole provider has in fact
resulted in substantial rate reductions.”95

Securus, Comments on Staff Proposal at 3-5, 8-9.

Id. at 12.

Id. at 14.

Id. at 3.

Id. at 14. Securus provides no summary data to bolster this claim but may be referring to its
own statement that it has “invested in new technologies and infrastructure that have
substantially reduced its reliance on third-party single-call services, saving an average of
30 percent in total costs of each call” (Id. at 2).
95

- 27 -

R.20-10-002 ALJ/CF1/avs

In comments on the proposed decision, Securus argues that data from the
Prison Policy Initiative indicating that rates declined between 2018 and 2020 for
67 state systems reflects the existence of a competitive market.96 GTL states that
its actions to increase the affordability of calls and provide free calls reflect a
competitive market.97 Securus rejects the notion that it operates locational
monopolies, stating that “[c]orrectional facilities are not locational monopolies
and site commission payments are not locational rents or shared profits. Site
commissions instead are ’costs of doing business incurred by ICS providers.’”98
IPCS providers also argue that the IPCS market is not monopolistic
because government bodies are “free to award contracts to multiple vendors”
but decline to do so because awarding contracts to multiple providers would
“increase infrastructure installation, redundant security capabilities, training of
separate platforms, and increase amount to consumers.”99 GTL asserts that it has
recently improved the affordability of calls or provided free calls, which it states
is the “very antithesis of ‘abuse.’”100
5.3.2

Other Party Comments

Cal Advocates, TURN, CforAT, Prison Policy Institute, the Justice
Coalition and two calling service provider parties, NCIC Inmate
Communications and Verizon, agree with Staff’s conclusion that high and widely
divergent IPCS rates and a lack of provider choice for incarcerated people
indicates the existence of locational monopolies exercising market power.
96

Securus, Comments on Proposed Decision at 5.

GTL, Comments on Proposed Decision at 7.

Securus, Comments on Proposed Decision at 6, citing Global Tel*LinkvFCC, 866 F.3d 397, 413
(D.C. Cir. 2017).
98

Id. at 13.

100

GTL, Comments on Staff Proposal at 15.

- 28 -

R.20-10-002 ALJ/CF1/avs

CforAT states that IPCS rates are “extra-competitive,” or higher than they
would be in a competitive market.101 CforAT describes work of the Federal
Trade Commission and United States Department of Justice, which concludes
that a market where there are no reasonably interchangeable substitutes for a
product is a “monopoly market.”102 Because there are no reasonably
interchangeable substitutes and no ability for incarcerated persons to choose
their IPCS provider or negotiate with multiple IPCS sellers, CforAT concludes
the IPCS market in California functions as a monopoly.103 CforAt argues that
further indication of the absence of market competition in the IPCS market is the
imposition of ancillary service fees that do not exist in the commercial market.104
Verizon states there are indicators of potential market power abuse in the
high costs of intrastate IPCSs, including excessively high per-minute rates, the
exclusive way IPCS are offered in jail site facilities, the manner in which fees are
imposed for depositing monies into prepaid accounts, how fees are imposed to
return unused funds, and the fact that only one company provides IPCS to all
California state run facilities.105
TURN observes that the length of time that IPCS providers retain exclusive
rights to provide IPCS at a given facility indicates the existence of market power:
“[o]nce a long-term, exclusive contract bid is awarded to an I[P]CS provider,
101

CforAT, Comments on Staff Proposal at 3.

Id. at 3-4. CforAT states that the Federal Trade Commission undertook work to identify the
“relevant market” for a product, which it defined as all goods that are "reasonably
interchangeable" with a product, meaning that consumers view the other products as
substitutes for each other and would switch among those products in response to a change in
price.
102

103

Id. at 3-5.

104

Id. at 4-5.

105

Verizon, Comments on Staff Proposal at 3.

- 29 -

R.20-10-002 ALJ/CF1/avs

competition ceases for the duration of the contract and subsequent contract
renewals.”106 As observed by TURN, GTL has contracted for 20 years with
CDCR to provide IPCS to state-run prisons.107
In reply comments, CforAT argues that the IPCS market effectively
consists of two markets: one market for “the right to provide service to inmates
in confinement facilities,”108 and another for the IPCS services themselves, for
which the incarcerated and their loved ones are the customers. CforAt states that
because of this, incarcerated persons and their families are both direct and
indirect customers of intrastate IPCS. Citing Securus’s opening comments that
IPCS costs “are borne solely by the [IPCS] provider upfront in the process of
installing the platform and then are recouped over time through product usage,”
CforAT observes that incarcerated persons comprise Securus’s “sole form of
revenue, making them direct purchasers of intrastate IPCS.”109 CforAT further
observes that both providers and incarceration facilities gain revenue from
incarcerated persons and their families, undermining any conclusion that the
facilities themselves comprise the “market.”110 CforAT states that the United
States Department of Justice, the Federal Trade Commission, and this

TURN, Comments on Staff Proposal at 5, citing Global Tel*Link v. Fed. Comm. Comm’n.,
866 F.3d 397, 404 (D.C. Cir. 2017).
106

107

TURN, Comments on Staff Proposal at 5.

CforAT, Reply Comments on Staff Proposal at 5, citing Pay Tel, Comments on Staff Proposal
at 2.
108

CforAT, Reply Comments on Staff Proposal at 6, citing Securus, Comments on Staff Proposal
at 3, emphasis added by CforAT.
109

110

Ibid.

- 30 -

R.20-10-002 ALJ/CF1/avs

Commission have all rejected the notion that there can be “only one relevant
market.”111
CforAT contends that although Securus and GTL state that IPCS services
are more costly to provide than commercial calling services because of security
requirements and commission fees, these parties “do not demonstrate any nexus
between or provide any details regarding the costs of providing service to
incarceration facilities and the rates that they ultimately charge.”112 Because
“there is no record provided to justify the high rates charged to customers, and
no attempt to link the rates to the costs of providing service,” CforAT argues that
the Commission should reject these providers’ claims that the intrastate IPCS
rates they charge are reasonable.
5.4

Discussion: High and Widely Varying IPCS Rates
in California Reflect Locational Monopolies that
Result in Unreasonable and Unjust Rates

IPCS rates charged in California vary widely and are exorbitantly high, in
some cases, resulting in unjust and unreasonable IPCS rates for incarcerated
people and their families. As such, we exercise the Commission’s authority and
jurisdiction over telephone corporations, including VoIP providers, under Public
Utilities Code Section 451 to regulate IPCS rates and fees in California.
Neither Staff nor any party identified an instance in California where an
incarcerated person has a choice of IPCS provider. Incarcerated people are

Id. at 5, citing U.S. Department of Justice and the Federal Trade Commission, Horizontal
Merger Guidelines, at 7 (August 19, 2010), available as of this writing at
http://www.justice.gov/atr/public/guidelines/hmg-2010.pdf; D.16-12-025 at p. 44; and, Joint
Application for Approval Pursuant to Section 854(a) of Transfer of Control over Tracfone
Wireless, Inc., In the Matter of the Joint Application of TracFone Wireless, Inc. (U4321C),
America Movil, S.A.B. de C.V., and Verizon Communications, Inc. for Approval of Transfer of
Control Over TracFone Wireless, Inc., A.20-11-001 (Nov. 5, 2020).
111

112

Id. at 3.

- 31 -

R.20-10-002 ALJ/CF1/avs

effectively a captive customer class who have no choice in service provider and
the end result is that there are no reasonably available substitutes for
incarcerated persons and their families to choose from. This has resulted in
highly unequal and in some cases exorbitant rates for IPCS across incarceration
facilities and as compared to current commercial markets. Examining the IPCS
rate data provided by Staff and Cal Advocates, we find it unreasonable and
unjust that people incarcerated in county jails, local jails, and federal prisons in
California pay between 584 percent and 1,124 percent more than people
incarcerated in California state prison facilities to talk with their loved ones.
We are not persuaded by the IPCS providers’ arguments that high rates,
even exorbitantly high rates, are just and reasonable as long as they are based on
costs, including site commission costs. First, as CforAT noted , IPCS providers
had the opportunity to but did not file data summarizing the range of security or
other costs to IPCS providers. IPCS providers had the opportunity to but did not
link filed data on IPCS security costs to the rates they charge. IPCS providers
had the opportunity to but did not file data justifying the significantly higher
rates for county or city jails Cal Advocates identified.
Because the IPCS providers failed to file cost data to justify their claims, we
preliminarily conclude that a significant portion of the higher IPCS rates charged
in some incarceration facilities stem from revenue collected by providers to
recoup commission payments. According to the FCC, where they exist, site
commission payments are a significant factor contributing to high rates and can
account for 20 – 88 percent of IPCS costs.113 Because of the importance of site
commission fees in the IPCS market, it is worth examining this issue in detail.

113

Securus, Comments on Staff Proposal at 15, citing 2013 Order at ¶ 34.

- 32 -

R.20-10-002 ALJ/CF1/avs

As discussed earlier, California Penal Code Section 4025(d) authorizes, but
does not require, county sheriff’s departments to collect funds, or
”commissions,” from IPCS providers and place these funds in an “inmate
welfare fund” that is spent “primarily” for the benefit, education, and welfare of
incarcerated persons.114 Although the collection of site commissions is currently
lawful, this does not absolve this Commission from our obligation to ensure
access to just and reasonable calling service rates for incarcerated people and
their families. County collections of site commissions pursuant to Penal Code
Section 4025, if any, must be in accordance with IPCS providers‘ responsibility to
provide just and reasonable calling rates for all incarcerated persons in the State
of California, as required by Public Utilities Code Section 451. IPCS rates that are
584 percent to 1,124 percent higher than the $0.025 per minute rate offered in the
California state prison system are not just or reasonable and require our further
attention.
The FCC has found a locational monopoly to exist when a location owner
attempts to limit the entry of new competition to increase profitability and
Cal. Pen. Code, § 4025: “(a) The sheriff of each county may establish [an inmate welfare fund]
… (d) There shall be deposited in the inmate welfare fund any money, refund, rebate, or
commission received from a telephone company or pay telephone provider when the money,
refund, rebate, or commission is attributable to the use of pay telephones which are primarily
used by inmates while incarcerated. (e) The money and property deposited in the inmate
welfare fund shall be expended by the sheriff primarily for the benefit, education, and welfare
of the inmates confined within the jail. Any funds that are not needed for the welfare of the
inmates may be expended for the maintenance of county jail facilities. Maintenance of county
jail facilities may include, but is not limited to, the salary and benefits of personnel used in the
programs to benefit the inmates, including, but not limited to, education, drug and alcohol
treatment, welfare, library, accounting, and other programs deemed appropriate by the sheriff.
Inmate welfare funds shall not be used to pay required county expenses of confining inmates in
a local detention system, such as meals, clothing, housing, or medical services or expenses,
except that inmate welfare funds may be used to augment those required county expenses as
determined by the sheriff to be in the best interests of inmates. An itemized report of these
expenditures shall be submitted annually to the board of supervisors.”
114

- 33 -

R.20-10-002 ALJ/CF1/avs

demand a share of the profits in the form of a locational rent or commission
fee.115 Incarceration facilities typically limit provision of IPCS within a facility to
one provider and often collect commission fees for their own purposes pursuant
to Penal Code 4025. Thus, we find that IPCS providers operate locational
monopolies.
We find IPCS provider’s arguments that they do not operate locational
monopolies nor exercise market power unpersuasive for several reasons. First,
although one party points to a single RFP indicating that a single incarceration
facility may select more than one IPCS provider,116 no data provided
demonstrates that incarceration facilities have ever selected more than one IPCS
provider to serve the same facility. In general no party disputes Staff’s
conclusion that incarcerated people are a captive customer class who have no
choice in service provider.117 Incarceration facilities are limiting access to the
provision of calling services to a single ICPS provider, and thus “market
competition,” in any sense of the word, does not exist for incarcerated users.118
No competitive forces within incarceration facilities constrain providers from
charging rates that far exceed the costs such providers incur in offering service.119
Incarcerated people must purchase communications services from the facility’s

FCC Third Order at 31. See 2002 Pay Telephone Order, 17 FCC Rcd at 3252-53, para. 10; see
also GTL v. FCC, 866 F.3d at 404 (“Winning [inmate calling services] providers thus operate
locational monopolies with a captive consumer base of inmates . . . .”).
115

116

GTL, Comments on Staff Proposal at 12.

117

See D.19-05-023 at 17-19.

118

See D.04-05-020 at 41.

119

Ibid.

- 34 -

R.20-10-002 ALJ/CF1/avs

IPCS provider and face rates far higher than those charged to other Californians
or forego the service.120
Competition for RFPs as described by Securus and GTL and the existence
of at least six providers in California does not mean that the IPCS market is
functioning to provide just and reasonable rates for the incarcerated. We reject
arguments from Securus that rate declines in some state incarceration systems
between 2018 and 2020 indicate the market is competitive.121 IPCS rates could
have declined for any number of reasons during this period, including efforts to
forestall legislative or regulatory oversight, or other factors. We also reject GTL’s
assertion that its recent action to reduce rates and offer free calls is evidence of
market competition for the same reasons.122
Additionally, as CforAT described , the IPCS market is properly thought of
as consisting of two markets or two sets of consumers: providers “compete” for
the right to provide IPCS to the incarcerated, except that RFPs may be awarded
to the highest not the lowest bidder123 We agree with Securus that the selection
of a single IPCS provider per facility is not evidence of the exercise of market
power per se; instead, once selected, the IPCS provider, as the operator of the

14 FCC Rcd 2545, 2547, 2562; Implementation of Pay Telephone Reclassification &
Compensation Provisions of the Telecommunications Act of 1996, CC Docket No. 96-128, Order
on Remand and Notice of Proposed Rulemaking, 17 FCC Rcd 3248, 3262 ¶ 38, 3252-3253 ¶¶ 10,
12, (2002); See also GTL v. FCC 866 F. 3rd at 404; See also FCC Third Order at ¶¶ 7, 31, 107, 115,
147, 312.
120

121

Securus, Comments on Proposed Decision at 5.

122

GTL, Comments on Proposed Decision at 7.

See FCC Third Order at ¶ 112. “Without effective regulation, providers bidding for a facility’s
monopoly franchise compete to offer the highest site commission payments, which they then
recover through correspondingly higher rates charged to incarcerated people and their
families.”
123

- 35 -

R.20-10-002 ALJ/CF1/avs

locational monopoly, exercises the market power transferred to it by the
incarceration facility.
We reject Securus’s statement in comments on the proposed decision that
“[c]orrectional facilities are not locational monopolies and site commission
payments are not locational rents or shared profits. Site commissions instead are
‘costs of doing business incurred by ICS providers.’”124 In 2017 the D.C. Circuit
vacated the FCC’s 2015 Order and directed the FCC to reconsider its categorical
exclusion of site commission costs as discussed in that decision. The D.C. Circuit
also directed the FCC to “assess on remand which portion of site commissions
might be directly related to the provision of [IPCS] and therefore legitimate, and
which are not.”125
The FCC addressed this D.C. Circuit direction in the 2021 FCC Third Order
and determined that site commission payments by IPCS providers have two
components. One component “compensate[s] correctional facilities for the cost
they reasonably incur in the provision of inmate calling services, and [the other]
compensate[s] those facilities for the transfer of their market power over inmate
calling services to the inmate calling services provider.”126 The FCC concluded
that the first is “legitimate” cost of business127 that should be accounted for in
any rate cap, and the second is not:
To the extent that providers nonetheless offer site commissions
above th[e] level [required to cover the institution’s own costs to
provide IPCS], we regard that as a marketplace choice different in kind
from the scenario where site commissions at a given level are
124

Securus, Comments on Proposed Decision at 6.

125

GTL v. FCC, 866 F.3d at 414.

126

FCC Third Order at 107.

127

FCC Third Order at 127.

- 36 -

R.20-10-002 ALJ/CF1/avs

required by a statute or rule. Thus, if providers offer site
commissions at levels that are not recoverable under the [FCC’s]
interstate and international rate caps, we believe that they do so as a
matter of their own business judgment. Consequently, we do not
regard site commissions under the second scenario as a condition precedent
of doing business at correctional institutions.128
We intend to further examine IPCS bidding and contract conditions during
Phase II of this proceeding. Preliminarily, however, we concur with the FCC that
site commissions that are not required by statute do not constitute “costs of
doing business” that are necessary for the provision of IPCS in jails and prisons.
We discuss this issue further in section 6.3, below.
Our finding of the existence of locational monopolies and the exercise of
market power in the provision of IPCS in California aligns with the FCC’s recent
findings on a national scale. As mentioned in section 1, the FCC has previously
found IPCS providers operate “locational monopolies” serving a “captive
consumer base of inmates.”129 The FCC’s Third Order, adopted May 24, 2021,
similarly found that IPCS providers improperly exercise monopoly market
power on a national basis:
The reforms we adopt today reflect our findings, as detailed
below, regarding the monopoly power that each calling
service provider has over the individual correctional facilities
128

FCC Third Order at 120, emphasis added.

Prison Policy Institute, Comments on Order Instituting Rulemaking, citing First Report &
Order ¶¶ 39-41, 28 FCC Rcd. at 14128-30; GTL v. FCC, 866 F.3d at 404 (“Once a long-term,
exclusive contract bid is awarded to an ICS provider, competition ceases for the duration of the
contract and subsequent contract renewals. Winning I[P]CS providers thus operate locational
monopolies with a captive consumer base of inmates and the need to pay high site
commissions.”); and, Id. at 111, 28 FCC Rcd. at 14217 (Ajit Pai, dissenting) (“[W]e cannot
necessarily count on market competition to keep prices for inmate calling services just and
reasonable.”). See also FCC Third Order at ¶ 7, “[b]ecause correctional facilities generally grant
exclusive rights to service providers, incarcerated people must purchase service from ‘locational
monopolies’ and subsequently face rates far higher than those charged to other Americans.”
129

- 37 -

R.20-10-002 ALJ/CF1/avs

it serves; the numerous negative impacts the providers’
exercise of that market power has had on incarcerated people,
their families and communities, and society as a whole...130
The Commission has previously determined that providers of
telephone services to incarcerated people have monopoly
power in the facilities they serve [footnote 81]. We reaffirm
this long-established finding, one that applies equally not only
to the rates and charges for calling services provided to
incarcerated people, including ancillary services, but also to
providers’ practices associated with their provision of calling
services… incarcerated people have no choice in the selection
of their calling services provider [footnote 82]. The authorities
responsible for prisons or jails typically negotiate with the
providers of inmate calling services and make their selection
without input from the incarcerated people who will use the
service [footnote 83]. Once the facility makes its choice—often
resulting in contracts with providers lasting several years into
the future—incarcerated people in such facilities have no
means to switch to another provider, even if the chosen
provider raises rates, imposes additional fees, adopts
unreasonable terms and conditions for use of the service, or
offers inferior service [footnote 84]. On the contrary,
correctional authorities exercise near total control over how
incarcerated people are able to communicate with the outside
world [footnote 85] …. [N]o competitive forces within the
facility constrain providers from charging rates that far exceed
the costs such providers incur in offering service [footnote
87].131
Because correctional officials typically allow only one provider to
serve any given facility…there are no competitive constraints on a
provider’s rates once it has entered into a contract to serve a
particular facility [footnote 90]. The Commission has observed that
‘because the bidder who charges the highest rates can afford to offer
the confinement facilities the largest location commissions, the
130

FCC Third Order at ¶ 29.

131

FCC Third Order at ¶ 32.

- 38 -

R.20-10-002 ALJ/CF1/avs

competitive bidding process may result in higher rates’
[footnote 91]. Thus, even if there is ‘competition’ in the bidding
market as some providers assert, it is not the type of competition the
Commission recognizes as having an ability to ‘exert downward
pressure on rates for consumers’” [footnote 92].132
Based on a careful review of the record in this proceeding and informed by
the FCC’s actions, we conclude that IPCS providers in California operate as
locational monopolies within incarceration facilities and exercise market power
to charge unjust and unreasonable rates. We define “market power” in this case
as the ability of a company to sustain prices at levels above those a competitive
market would produce.133 Pursuant to Public Utilities Code Section 451, this
Commission is obligated to ensure access to communications services by all
Californians, including the incarcerated, at just and reasonable rates.
The following sections discuss the Staff Proposal and parties’ proposals for
the Commission to provide interim rate relief to the incarcerated while we
continue to work to identify permanent just and reasonable IPCS rates in
California.

132

FCC Third Order at ¶ 33.

See also CforAT comments noting a slightly different but not incompatible definition of
market power: “Market power is the ability of a seller to ‘raise price, reduce output, diminish
innovation, or otherwise harm customers as a result of diminished competitive constraints or
incentives.’” CforAT, Reply Comments on Proposed Decision at 3, citing U.S. Department of
Justice and the Federal Trade Commission, Horizontal Merger Guidelines, p. 22 (August 19,
2010), available as of August 9, 2021 at http://www.justice.gov/atr/public/guidelines/hmg2010.pdf.
133

- 39 -

R.20-10-002 ALJ/CF1/avs

Providing Interim Rate Relief
to IPCS Customers
Rates and fees for IPCS in California are currently unregulated. Based on

comments on the OIR and during the prehearing conference, the Scoping Memo
included the following issues:
 Should the Commission provide immediate interim relief
to meet the IPCS needs of incarcerated people and their
families at just and reasonable rates, including those with
communication disabilities? If so, how?
 Should FCC regulations over interstate and international
calls inform the Commission’s approach to intrastate IPCS?
If so, how?
 Should the Commission use some elements of FCC orders
but not others as models for ensuring just and reasonable,
and affordable, IPCS rates in California?
The April 2021 ALJ Ruling then requested party comment on the following
questions:
 Do parties agree with the Staff Proposal’s recommendation
for the Commission to adopt the FCC’s interim rate caps of
$0.21 per minute for debit and prepaid calls and $0.25 per
minute for collect calls for intrastate calling services on an
interim basis?
 Do parties agree with Staff’s proposal that if the FCC
further lowers its interstate rate caps, the Commission
should modify any adopted interim intrastate IPCS rates to
reflect the FCC’s updated rates?
 Should the Commission adopt Staff’s Interim Proposal for
Rate Relief? Why or why not?
This section presents Staff and parties’ proposed interim intrastate IPCS
rate caps to provide immediate relief to incarcerated people and their families. It
then reviews party comments on these proposals.

- 40 -

R.20-10-002 ALJ/CF1/avs

Based on careful review of the record in this proceeding, we adopt here an
interim rate cap of seven cents ($0.07) per minute for all intrastate IPCS calls in
California. Adopting an interim rate cap of $0.07 per minute provides immediate
rate relief to approximately 171,000 incarcerated people located at 343
incarceration facilities in California.134 This interim rate cap applies to all prisons
and jails in California and will remain in effect until we adopt a permanent IPCS
intrastate rate cap later in this proceeding.
6.1

Initial and Revised Staff Proposal
for Interim Rate Relief

Based on their review of IPCS data as summarized in Section 5, Staff assert
that the intrastate per-minute-of-use rates and ancillary service rates being
charged to incarcerated persons in California are unjust and unreasonable. To
address this, the initial Staff Proposal recommends the Commission adopt the
FCC’s 2015 Order interstate IPCS rate caps of $0.21 per minute for debit and
prepaid calls and $0.25 per minute for collect calls. The initial Staff Proposal
further recommends the Commission adopt the FCC’s 2021 rates when they
become formally adopted.135
The Revised Staff Proposal recommends that the Commission immediately
adopt the FCC’s 2021 Third Order rate caps of $0.14 per minute for debit,
prepaid, and collect calls from prisons and $0.16 per minute for debit, prepaid,
and collect calls from jails. These proposed levels include an FCC allowance for
revenue collection capped at $0.02 per minute for site commission payments
where these relate specifically to calling services and result from contractual

This is based on data requests received from IPCS providers in December 2020 and does not
reflect any subsequent rate changes.
134

135

Staff Proposal at 2.

- 41 -

R.20-10-002 ALJ/CF1/avs

obligations or negotiations between providers and facilities.136 The Revised
Proposal states that under the FCC’s Third Order rates of $0.14 per minute for
jails and $0.16 per minute for prisons, the price for a 15-minute intrastate IPCS
phone call would be reduced from as much as $26.25 to a range of $2.10-$2.40,
excluding ancillary fees.137 Over 64,000 incarcerated persons would see
immediate rate reductions under Staff’s Revised Proposal because 218 California
incarceration facilities currently have rates greater than $0.16 per minute.138
Staff recommends that the Commission adopt its Revised Proposal on an
interim basis until the Commission takes more permanent action in this
proceeding. Staff recommends that the Commission direct IPCS providers to
implement the adopted rate caps and submit a Notice of Compliance no later
than 30 days from Commission adoption of interim relief. Staff further
recommends that the Commission not adopt the FCC’s Third Order interim
interstate rate caps as permanent intrastate rate caps because “intrastate services
are generally less expensive to provide than interstate services.”139
6.1.1

Party Comments

Parties have widely divergent views on whether the Commission should
adopt or reject Staff’s Revised Proposal or adopt some other proposal.
Cal Advocates, TURN, CforAT, Prison Policy Institute, the Justice Coalition,
Verizon, and NCIC Inmate Communications broadly support Staff’s proposal.

Revised Staff Proposal at 1 (attached as Appendix A). The initial Staff Proposal at 2
recommends that we adopt the FCC’s 2021 rates when they become formally adopted, which
occurred on May 24, 2021. See also FCC Third Order at ¶¶ 100 - 147 for a discussion of site
commissions.
136

137

Revised Staff Proposal at 4.

138

Table 2, above. See also Revised Staff Proposal, Attachment A, in Appendix 1.

139

Revised Staff Proposal at 2.

- 42 -

R.20-10-002 ALJ/CF1/avs

All non-provider parties, however, additionally recommend that the
Commission adopt per-minute rate caps lower than proposed by Staff in either
its initial or Revised Proposal.
Securus, GTL, and Pay Tel generally support Commission adoption of the
FCC’s 2013 Order rates of $0.21 and $0.25 per minute included in the initial Staff
Proposal. However, these parties oppose Commission adoption of the FCC’s
Third Order rates of $0.14 and $0.16 per minute, as recommended in the Revised
Staff Proposal.
The next two sections review party comments on the FCC’s 2013 Order
and 2021 Third Order rate caps.
6.1.1.1

FCC 2013 Order Interim Rates of 21
and 25 Cents Per Minute

Except for Securus and CforAT, parties broadly support Commission
adoption of the FCC’s 2013 Order interim rate caps of $0.21 and $0.25 per minute
as interim intrastate IPCS rate caps in California, but non-provider parties also
suggest the Commission should adopt much lower rate caps. CforAT opposes
Commission adoption of the FCC’s 2013 Order interim rate caps, stating that
“Commission adoption of the Staff Proposal is preferable to a delay in imposing
rate caps but does not make the FCC rates reasonable."140
Securus argues that the Commission should use the FCC’s 2013 Order
interim rates of $0.21 and $0.25 per minute rates as “benchmarks” but allow IPCS
providers to recover reasonable costs for site commissions beyond those levels or
institute a waiver application process.141 Securus states that the FCC's 2013
Order interim rates exclude the costs of site commissions and are based on

140

CforAT, Comments on Staff Proposal at 7.

141

Securus, Comments on Staff Proposal at 5.

- 43 -

R.20-10-002 ALJ/CF1/avs

average costs that do not account for cost variation based on facility size.
Securus argues that the Commission should allow for full recovery of all IPCSrelated costs.142
Pay Tel supports adopting the FCC’s 2013 Order interim rates in
California, stating that it already charges the FCC’s 2013 Order interim rates for
intrastate IPCS in California. Pay Tel opposes any rate cap below this level.143
GTL supports Commission adoption of the FCC’s 2013 Order rate caps as does
NCIC Inmate Communications, who also urges adoption of the FCC’s Third
Order caps.144
6.1.1.2

FCC Third Order Interim Rates of 14
and 16 Cents Per Minute

In opening comments, NCIC Inmate Communications, Verizon, TURN,
CforAT, the Prison Policy Initiative, and the Justice Coalition support
Commission adoption of the FCC’s Third Order interim rate caps when the FCC
adopts these, as proposed in the initial Staff Proposal. NCIC Inmate
Communications states this would provide consistency for incarcerated persons
and their families.145 The Prison Policy Institute supports Commission adoption
of these rates on an interim basis “in the interest of speed and simplicity.”146
Pay Tel opposes Commission adoption of the FCC’s Third Order rate caps.
Pay Tel questions the data and methodology the FCC used to develop the Third
Order rates and states that these do not adequately account for the cost

142

Ibid.

143

Pay Tel, Comments on Staff Proposal at 5-7.

NCIC Inmate Communications, Comments on Staff Proposal at 4; GTL, Comments on Staff
Proposal at 4.
144

145

NCIC Inmate Communications, Comments on Staff Proposal at 4.

146

Prison Policy Institute, Comments on Staff Proposal at 2.

- 44 -

R.20-10-002 ALJ/CF1/avs

differential of different size facilities.147 Pay Tel states that jails have much higher
turnover rates than prisons, and much shorter average length of stays for the
incarcerated and contends that this results in higher costs for IPCS providers to
set up and close call-service accounts for a more frequently rotating population
of the incarcerated and fewer calling minutes over which to spread costs.148 Pay
Tel asserts that smaller facilities incur higher facility costs to administer and
monitor IPCS calls for security purposes and use site commission funds for this
purpose.149 Pay Tel also contests Staff’s assertion in both proposals that
“intrastate services are generally less expensive to provide than interstate
services.”150 Pay Tel states that “there is record evidence in the FCC’s I[P]CS
proceeding demonstrating that intrastate and interstate I[P]CS calls generally
cost the same to deploy.”151
Securus opposes Commission adoption of the FCC’s Third Order rate caps
of $0.14 and $0.16 per minute, stating, as does Pay Tel, that there are unresolved
issues with the FCC’s data and methodology. Securus asserts that the Third
Order inadequately addresses site commissions because it leaves in place the
2013 Order rate cap of $0.21 for smaller jails with average daily populations
below 1,000 but prohibits upward adjustment of this cap to account for site

147

Pay Tel, Comments on Staff Proposal at 6.

148

Id., Exhibit A at 18.

Id., Exhibit B (May 8, 2015), (“Notice of Ex Parte Presentation”) to Exhibit C at 3. Pay Tel cites
to summary data on incarceration facility costs included in the FCC’s 2016 Order, later vacated,
to support this assertion, see Id., Exhibit B (November 23, 2020, Comments of Pay Tel
Communications, Inc., in FCC’s WC Docket No. 12-375”) at 12-13 and 16- 17.
149

150

Revised Staff Proposal at 2.

Pay Tel, Comments on Staff Proposal at 8, referencing Comments of Pay Tel
Communications, Inc., In re Rates for Interstate Inmate Calling Services, WC Docket No. 12-375,
at 9–15 (filed Dec. 20, 2013).
151

- 45 -

R.20-10-002 ALJ/CF1/avs

commissions, even if the commission is mandated by state or local law.152
Securus argues the Commission should directly assess IPCS provider costs and
develop a unique rate proposal tailored to California’s needs. If the Commission
does adopt the FCC’s Third Order interim rates, Securus requests that this occurs
after the FCC regulations take effect or after removal of any stay on Third Order
requirements.153
6.2

Party Proposals for an Interim Rate Cap
of One to 11 Cents Per Minute

All non-provider parties (Cal Advocates, TURN, CforAT, Prison Policy
Institute, and the Justice Coalition) support Commission adoption of interim
intrastate IPCS rate caps lower than those adopted by the FCC in either its 2013
Order or its 2021 Third Order. These parties offer several proposals for
Commission consideration.
The Justice Coalition recommends that the Commission cap intrastate IPCS
rates at a maximum of $0.11 per minute as reflected in the FCC’s 2015 permanent
rates, adopted in the 2015 Order but later vacated by the D.C. Circuit.154
According to the Justice Coalition, the state of New Jersey adopted the FCC 2015
Order rates as its own intrastate IPCS rate cap in 2016.155 The Justice Coalition

Securus, Reply Comments on Staff Proposal at 13. The FCC’s Third Order at ¶¶ 100 - 120
identifies two classes of site commissions: those mandated by state or local law and those
requested by a correctional facility in an RFP process or prescribed in a contract and authorized.
152

Securus, Reply Comments on Staff Proposal at 15. Securus correctly observes that the courts
have stayed the FCC’s previous efforts to set interim rates and ultimately vacated the FCC’s
permanent rates adopted in 2015.
153

154

GTL v. FCC, 866 F.3d at 402, 415-416.

Justice Coalition, Comments on Staff Proposal at 6, citing Carly Sitrin. “Making Sure the Cost
of Phone Calls from Prison Isn’t Punishingly High.” NJ Spotlight News. July 5, 2016. Available
as of this writing at: https://www.njspotlight.com/2016/07/16-06-30-making-sure-the-cost-ofphone-calls-from-prison-isn-t-punishingly-high/.
155

- 46 -

R.20-10-002 ALJ/CF1/avs

recommends the Commission consider even lower rates, stating that “there are a
range of rate caps that are defensible, ranging from $0.009 per minute to $0.11
per minute.”156 The Justice Coalition states that prison and jail systems across the
country are currently charging rates of $0.009 per minute to $0.03 per minute.157
Commission adoption of a rate cap in this range would provide rate relief to all
incarcerated persons and their families in California, observes the Justice
Coalition, which none of the other proposals would accomplish. The Justice
Coalition also identifies the CDCR rate of $0.025 as a potential model in both its
opening and reply comments.158
The Justice Coalition further recommends the Commission require IPCS
providers to provide at least two free 15-minute calls per week to incarcerated
people, noting that the CDCR provides two free calls per month, but that no
standards in this area exist:
We heard from callers during the Public Participation
Hearings last month that there is no standard among facilities
with regards to the number and duration of free calls. We
urge the Commission to use its authority to standardize this
practice across the state and ensure that whether someone has
access to free calls does not depend on the facility where they
are incarcerated. This is especially important in light of the
ongoing impacts of COVID-19 and the suspension of inperson visits for over a year in many facilities. Phone calls are
people’s lifelines to staying in touch with their loved ones and
support networks outside.159
156

Justice Coalition, Reply Comments on Staff Proposal at 3.

Ibid. “In Illinois, prison phone calls run $0.009 per minute. In Dallas County, jail phone calls
run $0.0119 per minute. In New York City, where jail phone calls are free to families, the City
pays $0.03 per minute.”
157

Justice Coalition, Comments on Staff Proposal at 6; Justice Coalition, Reply Comments on
Staff Proposal at 3.
158

159

Justice Coalition, Reply Comments on Staff Proposal at 5.

- 47 -

R.20-10-002 ALJ/CF1/avs

CforAT and Cal Advocates provide similar recommendations regarding
provision of free calls in their reply comments.160
TURN states that it is appropriate for the Commission to “move
independently” from the FCC and act to approve lower rate caps than those
adopted by the FCC in adopting rates for incarcerated persons and their families
in California. In support of this, TURN observes that the FCC has clearly
affirmed that states may adopt rate caps lower than those set by the FCC, and the
D.C. Circuit explicitly removed FCC jurisdiction from dictating intrastate IPCS
rates.161
TURN proposes the Commission adopt a cap based on reducing the FCC’s
Third Order interstate rate caps by a percentage based on the logic that intrastate
calls are less expensive to provide than interstate calls. TURN suggests there are
ample California developments supporting a reduction of at least thirty percent
as an appropriate amount, including the March 2021 CDCR and GTL state prison
system contract for voice calling price of $0.025 per minute.162 Implementing
TURN’s recommendations would result in intrastate IPCS rate cap of $0.092 per
minute for prisons and $0.11 per minute for jails.
Cal Advocates calls intrastate IPCS rates “unreasonable and unaffordable”
and recommends the Commission cap intrastate IPCS rates in California at $0.05
per minute.163 Cal Advocates states that adopting an interim intrastate IPCS rate

CforAT, Reply Comments on Staff Proposal at 7; Cal Advocates, Reply Comments on Staff
Proposal at 3. These parties recommend the Commission require providers to provide a
minimum of 15 minutes of free calling service each month.
160

161

TURN, Comments on Staff Proposal at 11, citing Global Tel*Link v. FCC 866 F.3rd at 408-413.

162

TURN, Comments on Staff Proposal at 12. See also footnote 22 of this decision.

163

Cal Advocates, Comments on Staff Proposal at 7.

- 48 -

R.20-10-002 ALJ/CF1/avs

cap of $0.05 per minute would provide meaningful relief for incarcerated persons
and their families while the Commission evaluates a more permanent option.
Cal Advocates justifies its proposal in several ways. First, it refers to
SB 555, adopted by the California Legislature in September 2020 and vetoed by
Governor Newsom later that month. Second, Cal Advocates observes that some
California intrastate IPCS providers already offer rates below the $0.05 per
minute, including GTL, who as of March 2021 charges this rate to all 90
California state-run prison facilities. Third, Cal Advocates notes that 14 U.S.
states now have average intrastate IPCS voice calling rates of $0.05 cents per
minute or less in prisons.164 Fourth, Cal Advocates observes that the U.S.
Congress has introduced legislation that would require the FCC to establish
maximum rates and charges, including interim rate caps of $0.04 per minute for
debit or prepaid calling and $0.05 per minute for collect calling.165
CforAT and the Justice Coalition support Cal Advocates’ proposal for a
$0.05 per minute cap on intrastate IPCS rates. CforAT argues that, as the state
with the most incarcerated people, IPCS providers in California should be able to
leverage economies of scale to provide IPCS at lower cost than other smaller
states.166

Id. at 9, citing State of Phone Justice: Local Jails, State Prisons, and Private Phone Providers,
Peter Wagner and Alexi Jones, Prison Policy Initiative, February 2019, viewed 4/15/21.
https://www.prisonpolicy.org/phones/state_of_phone_justice.html. The 14 states are:
Illinois, New Hampshire, West Virginia, Maryland, Mississippi, Virginia, New York, New
Jersey, Minnesota, Missouri, Rhode Island, Delaware, Vermont, and Ohio.
164

Id. at 11, citing the proposed Martha Wright Prison Phone Justice Act,
https://www.govtrack.us/congress/bills/116/hr6389/text (accessed by Cal Advocates on
April 21, 2021).
165

Justice Coalition, Reply Comments on Staff Proposal at 4 “there is also a defensible record for
a rate cap of $0.05 per minute, based on comments filed with the FCC in Docket 12-375 in
response to proposed rate caps of $0.14 per minute for prisons and $0.16 per minute for jails.”
166

- 49 -

R.20-10-002 ALJ/CF1/avs

6.2.1

Provider Comments

Securus opposes Cal Advocates’ proposed $0.05 per minute rate cap.167
Securus argues that the variable rates among different correctional agencies
identified by Cal Advocates result from variable costs that reflect the needs of the
facility, the facility’s population, location and other factors that affect costs.168
Securus states that the FCC’s Third Order recognizes that costs vary between
differently sized facilities, which precludes a “one-size-fits-all” rate
prescription.169 Securus further contends that Cal Advocates’ proposal fails to
consider site commissions,170 and that parties more generally “continue to
erroneously compare I[P]CS rates to commercial telephone rates.”171
GTL, Pay Tel and NCIC Communications do not comment on
Cal Advocates’ proposal.
6.2

Implementation Timeline

The April 2021 ALJ Ruling asked parties to comment on the Staff’s
proposed implementation timeline of 30 days for any adopted interim rates.
Most provider parties request 90 days to implement any adopted rate caps,
stating that additional time was needed to renegotiate contracts with facilities
and provide required notice to the incarcerated. However, IPCS provider NCIC
Inmate Communications supports the 30-day implementation timeline and states
that “this should be enforced regardless of the timeline the current Inmate
Telephone Agreement (i.e. the amount of time left on the current Agreement’s

167

Securus, Reply Comments on Staff Proposal at 10.

168

Id. at 4.

169

Ibid.

170

Securus, Reply Comments on Staff Proposal at 3.

171

Ibid.

- 50 -

R.20-10-002 ALJ/CF1/avs

Initial Term or any Renewal Terms), to ensure consistency for incarcerated
persons and their families).”172 All non-provider parties support a 30-day
implementation timeline for any adopted rate caps.
6.3

Adopting an Interim Rate Cap
of Seven Cents Per Minute

Based on careful review of the record, we adopt an interim rate cap of
seven cents ($0.07) per minute for all intrastate IPCS calls in California.
Adopting an interim rate cap of $0.07 per minute provides immediate rate relief
to approximately 171,000 incarcerated people located at 343 incarceration
facilities in California. All telephone corporations that provide IPCS shall
implement the $0.07 per minute rate cap across each facility, contract and
account that it serves in California no later than 45 days from Commission
issuance of this decision. The interim rate cap applies to all prisons and jails in
California and will remain in effect until we adopt a permanent IPCS intrastate
rate cap later in this proceeding.
We base our adopted interim per-minute rate cap on the following
reasoning and information. First, we take official notice that the CDCR capped
intrastate IPCS rates in California prisons at $0.025 per minute earlier this year,
through 2026.173 This provides an interim benchmark of the costs of providing
IPCS at a reasonable rate. Notably, SB 81 (2007) phased out the collection of site
commissions by California prisons over four years. The CDCR and GTL
intrastate IPCS contract rate of $0.025 per minute thus excludes site commission
costs.
172

NCIC Inmate Communications, Comments on the Staff Proposal at 5.

Cal. Evid. Code, § 452, subd. (h) (“Judicial notice may be taken of . . . [f]acts and propositions
that are not reasonably subject to dispute and are capable of immediate and accurate
determination by resort to sources of reasonably indisputable accuracy.”).
173

- 51 -

R.20-10-002 ALJ/CF1/avs

Building on this fact, and using the best information before us, we reason
that it is unlikely that it costs IPCS providers more than double the cost of
providing call services to the California state prison system to provide IPCS to
jails of all sizes. 174 The FCC’s Third Order finds that it costs service providers
approximately 22 - 25 percent more to provide IPCS to jails with a population
greater than 1,000 as compared to prisons.175 Increasing the $0.025 rate achieved
between CDCR and GTL by the 22 - 25 percent potential cost difference level
identified by the FCC results in a rate of $0.031, potentially, for larger jails.
Doubling the $0.025 per minute rate achieved in the California state prison
system results in a potential rate of $0.05 per minute for all jails.
Notwithstanding the current exorbitant rates charged by some IPCS providers, a
doubling of costs between relatively similar incarceration facility locations is a
significant difference that a freely operating market could be expected to
eliminate, or at least to significantly reduce.
Second, we concur with Cal Advocates and CforAT that California IPCS
providers should be up to the challenge of matching or beating the $0.05 average
per minute rate achieved in other states’ prison systems for incarceration
facilities of all sizes. Other states are offering rates lower than their adopted
caps: for instance, a 2016 New Jersey bill capped in-state call rates at $0.11 per
minute but the rate posted for calls by New Jersey Department of Corrections as
of May 2021 is just $0.044 per minute.176 In Illinois, House Bill 6200 (effective
FCC Third Order at ¶ 148, summarizes the difficulty the FCC has had in identifying
legitimate provider security costs, despite FCC efforts to collect data on interstate IPCS costs
since 2012.
174

175

FCC Third Order at ¶ 50, footnote 145.

See https://www.njleg.state.nj.us/2016/Bills/PL16/37_.PDF. See also
https://www.state.nj.us/corrections/pages/OffenderInformation.html#Phone (accessed June 17, 2021).
https://www.prisonphonejustice.org/2018/IL/securus-contract-2018-2021/.
176

- 52 -

R.20-10-002 ALJ/CF1/avs

January 1, 2018) prohibited the state’s corrections department from charging
more than $0.07 cents per minute for calls but as of May 2021, the Illinois
Department of Corrections posted rates of $0.009 per minute (effective
July 1, 2018).177 Further, as discussed by the Justice Coalition, as of April 2021,
the rate for phone calls from jails in Dallas County, Texas is $0.0119 per minute,
and in New York City, where jail phone calls are free to families, the rate paid by
the city is $0.03 per minute.178
Thus, we conclude that $0.05 is a reasonable “base rate” to use to identify
an appropriate interim per-minute rate.
We are aware that some California counties currently rely on site
commission funds for rehabilitative/educational and other purposes pursuant to
Penal Code Section 4025.179 We therefore arrive at our proposed $0.07 per

See http://publici.ucimc.org/2019/04/illinois-prison-phone-rates-are-lowest-followinggrassroots-activism/ (available as of this writing).
177

Justice Coalition, Reply Comments on Staff Proposal at 3; See also Dallas County TX- Securus
contract – 2020 – 2025, available as of this writing at:
https://www.prisonphonejustice.org/2020/TX/tx-dallas-county-securus-contract-2020-2025/.
178

Legislative (Assembly Floor) analysis associated with SB 555 indicates that “[a]ccording to
the San Bernardino County Sheriff’s Department, ‘The elimination of a commission for
San Bernardino County Sheriff’s Department would end approximately $6 million revenue in
inmate welfare fund (IWF) annually. This fund pays for over 25 Sheriff's Department staff,
overhead, supplies and services as well as educational contracts from various institutions. The
staff and contracts paid by the IWF sustain approximately 30 programs for the incarcerated
population ranging from education classes, vocational classes, trauma therapy classes, job fairs
and resource fairs just to name a few.’” Legislative (Assembly Appropriations) analysis of
SB 555 states, “[i]n fiscal year 2017-2018, the Los Angeles County Sheriff’s Department (LASD)
reported it received just over $15 million in payments from its communications provider and
over $20 million dollars from canteen sales. LASD further reported it spent $37 million dollars
from the inmate welfare fund on vocation and rehabilitative services over the past several years,
including: $5 million dollars for Healthright 360 services over the past eight years; and
$1.2 million dollars for inmate legal assistance over the past five years. San Diego County
Sheriff’s Department (SDSD) reported it had approximately $7 million dollars in its inmate
welfare fund during FY 2017-18 and 93% of those funds were generated by canteen and
179

- 53 -

R.20-10-002 ALJ/CF1/avs

minute cap by adding $0.02 per minute to account for potential site commission
payments. This mirrors the FCC’s action in its Third Order, for jails with
populations larger than 1,000.180
The FCC’s Third Order retained a rate cap of $0.21 per minute for facilities
smaller than 1,000, based in part on its conclusion that it lacked sufficient data to
conclude that the $0.02 site commission level for facility IPCS costs was sufficient
to address higher costs for smaller facilities.181 However, we take a different
approach here. The $0.07 per minute interim rate provides a cushion beyond the
$0.05 per minute and lower rates achieved elsewhere, which reasonably provides
an opportunity for IPCS providers and incarceration facilities to transition to our
adopted rate cap. An interim intrastate IPCS rate cap of $0.07 per minute
imposes a cap nearly three times that recently instated by the CDCR. Adopting
an interim statewide cap at this level results less wildly divergent rates for the
incarcerated and their families in California and is reasonable.
We also do not follow Pay Tel’s recommendation to consider a higher site
commission adder for smaller facilities. Pay Tel serves the Siskiyou County Jail
in California, which has an average daily population of approximately 68
persons in 2020 and did not provide data specific to this facility.182 Although
Pay Tel claims that facility costs to provide IPCS are higher with populations of
less than 1000 incarcerated persons, Pay Tel appears to have relied on data from
the FCC’s 2016 Order, which was vacated. Pay Tel did not provide the source
communications charges. SDSD also reported it used approximately 82% of all revenue for
direct inmate services.”
180

FCC Third Order at ¶¶ 100, 105, 140 – 147.

Id. at ¶ 146: “We are not confident that the data we currently have can reasonably estimate
legitimate facility-related costs for smaller facilities.”
181

182

Pay Tel, Comments on Staff Proposal at 6.

- 54 -

R.20-10-002 ALJ/CF1/avs

data to support its claim and the record before us in this proceeding does not
persuade us that the cost to facilities to provide intrastate IPCS either increases or
decreases based on the size of the facility.
Although the FCC strictly limited eligible site commission payments to
those reasonably related to the facility’s cost of enabling IPCS and where these
result from contractual obligations or negotiations, we do not so limit eligible site
commission costs today. 183 We do not limit revenue collection within our perminute cap of $0.07 to only those costs related to a facility’s costs to provide IPCS
because we wish to allow a reasonable transition period or cushion for counties
to identify other funding sources for cost centers currently funded through
inmate welfare funds. Adopting a $0.07 per minute interim intrastate IPCS rate
balances this Commission’s obligation to ensure just and reasonable rates with
counties’ authority pursuant to Penal Code Section 4025 to collect commission
fees from IPCS providers and place them in an inmate welfare fund.

FCC Third Order at ¶ 126 discusses the FCC approach to determining just and reasonable
rates by focusing on recovering “prudently incurred investments and expenses that are ‘used
and useful’ in the provision of the regulated service for which rates are being set;” Id. at 127 “we
likewise find that contractually prescribed site commission payments that simply compensate a
correctional institution for costs an institution incurs to enable access for incarcerated people to
interstate and international inmate calling services can, at least at this time, be considered used
and useful in the provision of interstate and international inmate calling services.” Id. at ¶ 128
“we find that contractually prescribed site commission payments do not warrant recovery
insofar as they exceed the level needed to compensate a correctional institution for the costs (if
any) an institution incurs to enable interstate and international inmate calling services to be
made available to its incarcerated people;” See also Id. at ¶ 103. “Where a law or regulation
merely allows a correctional facility to collect site commissions… site commissions would also
fall into the category of site commission payments prescribed by contract, because the
correctional facilities and providers can negotiate, in their discretion, regarding how much the
providers will pay in site commissions.”
183

- 55 -

R.20-10-002 ALJ/CF1/avs

However we clarify that, like the FCC, we do not view all site commission
costs as essential or necessary costs to provide intrastate IPCS.184 Like the FCC,
we reason that, if collection of site commissions to support facility costs beyond
those incurred to enable IPCS were prohibited, facilities would not stop
providing IPCS to incarcerated people.185 Communication between incarcerated
people and their families, as well as with legal services, and other functions, is
simply too essential to reduce recidivism and prepare the incarcerated for
release. Thus, we will continue to review the question of site commissions as we
adopt a permanent rate later in this proceeding.

See FCC Third Order at ¶¶ 120 regarding site commissions that not required by regulation or
law: “we do not regard site commissions under the second scenario as a condition precedent of
doing business at correctional institutions;” Id. at ¶ 122, “we reject any claim that site
commission payments are somehow ‘required’ or determined by the correctional institution: we
find on this record that providers offer such payments voluntarily, in their own business
judgment.”
184

Id. at ¶ 128, “…we are not persuaded that a correctional institution would decline to make
inmate calling services available to its incarcerated people absent contractually prescribed site
commission payments above and beyond any amount necessary to recover the institution’s
costs to enable inmate calling services to be provided to its incarcerated people;” and Id. at ¶ 129
“Under our marketplace analysis of contractually prescribed site commission payments, we are
unpersuaded that site commission payments above the level needed to compensate a
correctional institution for costs the institution reasonably incurs to make interstate and
international inmate calling services available are required to ensure that incarcerated people
have access to those services. Instead, we conclude that such payments are a means (sometimes
the sole or at least primary means) by which a given provider seeks to overcome its competitors
to become the exclusive provider of multiple services, including nonregulated services, at a
correctional facility. And the record does not reveal that correctional institutions, in contracting
with providers that offer comparatively higher contractually prescribed site commission
payments, are somehow benefitting customers of interstate and international inmate calling
services as compared to the selection of some other provider. Rather, we conclude here that
given the anomalous nature of the inmate calling services marketplace, the primary benefits
flow to the chosen provider— which overcame its competitors and now has the exclusive ability
to serve the correctional facility—and the correctional facility itself (or the state or local
government more generally), which can avail itself of the revenue stream such site commission
payments provide, all to the detriment of interstate and international inmate calling services
customers.”
185

- 56 -

R.20-10-002 ALJ/CF1/avs

We decline to adopt the Staff Proposal today because the record supports
adopting the $0.07 per minute cap on an interim basis and doing so provides
immediate relief to a greater number of the incarcerated and their families. A
$0.07 per minute cap yields a charge of $1.05 for a 15-minute call as compared to
$2.10 and $2.40 for the rates proposed by Staff. We decline to adopt the FCC’s
2013 caps of $0.21 and $0.25 per minute for the same reasons.
In addition to providing immediate relief to the incarcerated and their
families, lower IPCS rates and fees may contribute to reduced recidivism by the
incarcerated by making calls more affordable. In turn, reductions in repeated
incarcerations benefits society by saving millions of dollars in incarcerationrelated costs annually.186 The ability to communicate with family may also help
reduce foster placement of the children of incarcerated people, benefitting
families, and providing cost savings to society at large.187
Securus and others argue that this Commission should wait to act to cap
per minute rates beyond those adopted in the FCC’s 2013 Order until we receive
detailed cost data from providers. We disagree. First, IPCS providers have had
ample opportunity to file in the record of this proceeding detailed or summary
cost data but have declined to do so. Provision of cost information in response to
discovery data requests does not constitute provision of cost information in the
record of this proceeding. We encourage IPCS providers to provide cost data in
Phase II of this proceeding as we consider adopting a more permanent rate cap.
Second, California statute and the courts provide this Commission with
discretion to determine and set just and reasonable rates using a variety of

186

FCC Third Order at ¶ 37.

187

Ibid.

- 57 -

R.20-10-002 ALJ/CF1/avs

methods.188 The $0.07 rate is based on the most reliable data before us pertinent
to California, specifically, as discussed above, the CCDR rate of $0.025 per
minute, the FCC’s finding that it costs IPCS providers approximately 22-25
percent more to provide IPCS to larger jails than to prisons, and the FCC’s
finding that a $0.02 adder reasonably accounts for site commission costs solely
related to providing IPCS.
Additionally, as the U.S. Supreme Court has recognized, a regulatory
body’s determination of future rates always involves an element of prediction:
Even monopolies must sell their services in a market where
there is competition for the consumer's dollar and the price of
a commodity affects its demand and use. This effect may be
predicted or projected, but it can be known only from
experience. The many detailed objections which the
Company makes to the Commission's computations of
probable yield would be answered by experience.189
In other words, to some degree, and particularly in this case where we do
not have good cost data, the determination of the “correctness” of rates set by a
regulatory commission can only be known “with experience,” i.e., over time, as
the rate is implemented across facilities and providers. We use a reasoned and
balanced approach to determine our adopted interim rate cap and will carefully
monitor any resulting market changes to determine the effect.
We note that despite eight years of data collection on interstate IPCS rates,
the FCC in its Third Order acknowledges that it has not yet been able to collect
standardized and what it considers to be complete and accurate IPCS cost data
Pub. Util. Code § 701; Wise v. Pacific Gas & Electric Co (1991) 77 Cal.App.4th 287, 293; See e.g.,
Re the Pacific Telephone and Telegraph Company Protestants (1968) D. 74917 at 56; D. 84-06-095
at 38-40. Most recently, as observed by CforAT in comments, this Commission similarly sought
data on comparable rates for Lifeline programs in other states and programs in D.20-10-006.
188

189

Market St. Ry. Co. v. Pub. Util. Com. (1945) 324 U.S. 548, 569.

- 58 -

R.20-10-002 ALJ/CF1/avs

by IPCS providers. The reasons the FCC offers for this include the failure of GTL
to submit data reflecting its actual costs,190 the absence of a standardized
approach for providers to allocate “indirect” and “direct” IPCS costs,191 and
providers’ failure to provide data as requested.192 Deferring action to address
current unjust and unreasonable IPCS rates until Commission staff are able to
collect and analyze detailed cost data across 354 incarceration facilities is an
unacceptable outcome for the incarcerated and their families and we decline to
take this step.
We do not adopt the $0.07 per minute rate cap as a benchmark above
which parties may apply a higher rate up to a reasonable limit or allow for IPCS
providers to apply for a waiver, as requested by Securus. Our goal in this phase
of the proceeding is to establish an interim rate based on the record we have
before us. Implementing a waiver process would likely cause unnecessary delay
in implementing the interim rate we establish in this decision and would impede
the provision of immediate relief for incarcerated persons and their loved ones.
Instead, we will focus on adopting a permanent rate later in this proceeding.
Finally, we do not at this time take up the suggestion of several parties to
require IPCS providers to provide incarcerated persons one free call per week or
month. The Commission may consider this issue again later in the proceeding.
We choose a 45-day implementation timeline for our adopted rate cap
because this is a reasonable period that allows for noticing and contract
renegotiations, where required, while timely providing relief to the incarcerated
and their families on an issue of longstanding importance.
190

FCC Third Order at ¶ 74.

191

FCC Third Order at ¶ 65.

192

FCC Third Order at ¶ 57.

- 59 -

R.20-10-002 ALJ/CF1/avs

We direct all telephone corporations providing intrastate IPCS as defined
here to implement our adopted rate cap of $0.07 per minute or less for intrastate
IPCS calls across all of their intrastate IPCS contracts, accounts, and facilities in
California no later than 45 days from Commission issuance of this decision. The
rate caps shall be applied to any and all existing account balances as of the date
of implementation, as well as any new account balances or new accounts opened
after that date.
Additionally, we direct all telephone corporations providing intrastate
IPCS in California to each submit a Notice of Compliance within 45 days of
Commission issuance of this decision confirming implementation of our interim
adopted intrastate IPCS rate cap of $0.07 per minute or less across all of their
intrastate IPCS contracts, accounts, and facilities in California, and including the
following information:
1. Attestation that the interim intrastate IPCS rates have

been implemented at any and all facilities served by the
carrier in California.
2. Copies of or links to carrier webpages where the interim

intrastate IPCS rates are presented for facilities located in
California.
3. Copies of notices provided to facilities of the interim

intrastate IPCS rates.
4. Copies of notices to incarcerated persons of the interim

intrastate IPCS rates.
We direct all telephone corporations providing IPCS to fully disclose the
adopted rates on their websites, bills, and in marketing material by no later than
45 days from Commission issuance of this decision and to maintain information
on the adopted rate clearly and prominently on their websites.

- 60 -

R.20-10-002 ALJ/CF1/avs

We direct all IPCS providers as defined in this decision to provide their
draft notices of the adopted rates, terms and conditions, refund policies and
customer service contacts for websites, bill inserts, and marketing materials to
the Commission for review no later than 30 days from Commission issuance of
this decision. All IPCS providers shall provide a Plan for Notification to all
current and prospective customers and account holders to the Commission for
review no later than 30 days from Commission issuance of this decision. The
notices shall provide service-related information in English, Spanish and any
other languages prevalent in incarceration facilities and shall inform the
incarcerated of methods to lodge service quality complaints with the
Commission as discussed in section 11 below.
Telephone corporations providing IPCS not explicitly identified in this
decision must provide a Notice of Compliance to the Commission no later than
45 days after executing a contract to provide IPCS in California, and must
provide draft notices of the adopted rates, terms and conditions, refund policies
and customer service contacts for websites, bill inserts, and marketing materials
to the Commission for review no later than 30 days after executing a contract to
provide IPCS in California.
IPCS providers shall submit the required information via email to the
Director of the Communications Division at cddirector@cpuc.ca.gov.
All telephone corporations providing intrastate IPCS in California as
defined here must comply with the requirements of this decision.
7.

Providing Interim Relief from
Ancillary Service Fees
As with per-minute rates, the Commission does not currently regulate

ancillary fees charged in connection with IPCS in California. However, the OIR

- 61 -

R.20-10-002 ALJ/CF1/avs

noted reports of high ancillary fees and this topic is included in the Scoping
Memo. The April ALJ Ruling asked:
 Do parties agree with the Staff Proposal’s recommendation
for the Commission to cap ancillary service charges for
intrastate inmate calling services, using the FCC’s adopted
interim caps as the model?
 Do parties agree with the Staff Proposal’s recommendation
that the Commission prohibit carriers from charging any
other intrastate calling service fees or ancillary service fees
not specified in the Staff Proposal’s summary of FCC
interstate ancillary service charge caps?
This section reviews Staff’s proposal for interim relief from IPCS ancillary
service fees, additional party proposals, and party comments and adopts several
interim requirements for intrastate IPCS ancillary fees.
We prohibit the imposition of any automated payment fees, paper
bill/statement fees, live agent fees, and single-call fees in association with
intrastate and jurisdictionally mixed calls and require intrastate IPCS providers
to directly pass through third-party financial transaction fees to consumers with
no markup, and to cap these fees at a limit of $6.95 per transaction. We restrict
collection of mandatory government taxes and fees in association with intrastate
and jurisdictionally mixed calls to pass through without markup and prohibit
IPCS providers from charging any other ancillary service fees not identified and
explicitly approved here. We require IPCS providers to implement our adopted
ancillary fee requirements within 45 days of Commission issuance of this
decision, to fully and clearly disclose the rates and fees adopted here on their
websites, in billing, and in any marketing materials within 45 days, and to
submit these materials and a Plan of Notification for Commission review within
30 days of issuance of this decision.

- 62 -

R.20-10-002 ALJ/CF1/avs

7.1

Staff Proposal

In its initial Staff Proposal, Staff recommends that the Commission cap
ancillary service fees as the FCC did in its 2015 Order and prohibit carriers from
charging any other ancillary service fees not specified.193 Staff observe that the
FCC capped several ancillary service fees and generally prohibits providers from
imposing IPCS fees other than those specified in its rules. The FCC’s 2015 Order
adopted the following caps on interstate IPCS ancillary service fees:
 Automated payment fees: Limited to a maximum of $3.00
per use;
 Paper bill fee: Caps fees for paper bills at $2.00 per
statement.
 Live agent fee: Caps single live operator interaction fees at
$5.95 per interaction.
 Mandatory pass-through government taxes and fees:
Prohibits markups on either category of charges.
 Single-call and related services: Where no prepaid or debit
inmate calling services account has been established, the
FCC prohibits providers from charging more than the exact
fee the third-party charges for these transactions, with no
markup;
 Third-Party Financial Transaction Fees: Limits third-party
fees that can be passed on to consumers to the exact fees,
with no markup.
Staff’s Revised Proposal recommends that the Commission prohibit singlecall service fees instead of limiting charges to the exact third-party fees for those
services with no markup, as done in the FCC’s 2015 Order. The Revised Staff
Proposal explains this recommendation as follows:
In written comments to the online portal, comments were
submitted regarding fees, including the single-call service fee.
193

Staff Proposal at 3.

- 63 -

R.20-10-002 ALJ/CF1/avs

Most notable were those I[P]CS customers that provided
examples of being charged the fee multiple times in an effort
to complete a single 15-minute phone call. In more than one
instance customers indicated being disconnected multiple
times during their call and then being charged the single-call
service fee each time they tried to reconnect. In these
examples the single-call service fee of $3.00 was likely charged
at least three times and totaled $9.00 or more.194
Staff recommends the Commission act on an interim basis until the
Commission takes more permanent action later in this proceeding. Staff further
recommends that a later phase of this proceeding:
…evaluate the relevance of all ancillary charges for I[P]CS by
examining competitive telecommunications providers
operating in the open market to determine if any of these
I[P]CS ancillary charges are levied by competitive
telecommunications providers. There is little reason to believe
that the costs of a credit card transaction or speaking with a
live agent are higher for an I[P]CS provider or any more
reasonable to charge to incarcerated persons than the general
public being serviced by other telecommunications
corporations operating in the open market in California.195
7.2

Party Proposals

Cal Advocates and TURN recommend the Commission go beyond the
ancillary fees caps adopted by the FCC and recommended by Staff. These parties
state there is no indication that the current FCC ancillary caps are based on costs
of service. Instead, these parties contend that the FCC caps were adopted in 2015
based on a single state's data.196

194

Revised Staff Proposal at 2.

195

Ibid.

Cal Advocates, Comments on Staff Proposal at 15, citing 2015 Order at ¶ 156, indicating the
caps were based on the Alabama Public Service Commission’s approach.
196

- 64 -

R.20-10-002 ALJ/CF1/avs

7.2.1

Cal Advocates’ Proposal

Cal Advocates recommends the Commission fully prohibit three types of
fees—automated payment fees, paper bill/statement fees, and live agent fees—
and strictly enforce the FCC’s single-call and related services and third-party
financial transaction fees.
We provide Cal Advocates’ proposal alongside the FCC’s 2015 Order
ancillary fee requirements. We indicate updates to the FCC’s 2015 ancillary fee
requirements, as adopted in the Third Order, in italics:
Table 4: Cal Advocates’ Proposals for Ancillary Services Fees
and FCC Current Rate Caps197
Item
No.

Ancillary
Service Charge

FCC 2015 Order Rate
Caps198

Cal Advocates' Proposed
Rates

Automated
payment fees
Paper bill/
statement fee
Live agent fee

$3.00 per use

Single-call and
related services

Third-party
financial
transaction fees

IPCS providers pass
through exact transaction
fees charged by thirdparty providers, with no
additional markup up to a
cap of $6.95 per transaction,
plus the adopted, perminute rate
IPCS providers pass
through exact transaction
fees charged by thirdparty providers, with no

This charge should be
prohibited
This charge should be
prohibited
This charge should be
prohibited
In addition to adopting the
FCC's requirements, the
Commission should enforce
this order through robust
enforcement actions

2
3

$2.00 per use
$5.95 per use

197

Cal Advocates, Comments on Staff Proposal at 16.

198

47 CFR §64.6020.

- 65 -

In addition to adopting the
FCC's requirements, the
Commission should enforce
this order through robust
enforcement actions

R.20-10-002 ALJ/CF1/avs

additional markup, up to a
cap of $6.95 per transaction.

We provide the following overview of the rationale Cal Advocates
included with its proposal:
Prohibition of Automated Payment Fee: As defined by the FCC,
automated payment fees are charges by IPCS providers for various types of
transactions, including “credit card payment, debit card payment, and bill
processing fees, including fees for payments made by interactive voice response
(IVR), web, or kiosk.”199 These fees are incurred when people who are
incarcerated or their families use a credit or debit card to fund their IPCS
accounts for future calls.200
Cal Advocates observes that retail stores also process payments through
debit/credit cards but do not charge customers automatic payment fees. This
principle should apply to IPCS providers, Cal Advocates states. Cal Advocate
states that fifteen state prison systems have eliminated automated
payment/automated deposit fees entirely and that GTL does not currently
impose this fee on incarcerated persons in multiple facilities in California.201

199

Cal Advocates, Comments on Staff Proposal at 16, citing FCC Title 47 of CFR § 64.6000(a)(1)

Ibid, footnote 64. Cal Advocates states that IPCS accounts can generally “be accessed by
people who are incarcerated as well as their friends and family who can add money to the
account.”
200

Id. at 15-16, citing Prison Policy Institute study, Since You Asked: Can Correctional Facilities
Negotiate Phone Contracts that Prohibit Deposit Fees? (Yes! Many Do.), Peter Wagner, Prison Policy
Institute, November 20, 2020, viewed by Cal Advocates on 4/23/21; GTL response to Cal
Advocates’ Data Request 03, Question 2.
201

- 66 -

R.20-10-002 ALJ/CF1/avs

Prohibition of Paper Bill/ Statement Fee: Paper Bill/Statement Fees are
fees “associated with providing I[P]CS customers paper billing statements.”202
Cal Advocates observes that customers outside of IPCS facilities receive paper
bills or statements, such as utility bills or bank statements, without paying
additional fees; further, many customers lack access to broadband service to
access online statements. Individuals who are incarcerated and their families
should also have the same option to receive paper bills or statements for free,
Cal Advocates contends. Cal Advocates states that New Jersey has prohibited
IPCS providers from imposing this fee since 2015.203
Prohibition of Live Agent Fee: Live Agent Fees are associated “with the
optional use of a live operator to complete [Incarcerated Person’s] Calling
Services transactions,”204 including setting up an account, adding money to an
account, or assisting with making a call.205 Cal Advocates, as well as CforAt and
Commission Staff, observe that telecommunications and other utilities provide
customer service outside of IPCS facilities for free. Cal Advocates and others
argue it is unreasonable for ICS providers to charge this fee.
Robust Enforcement of Single-Call and Related Services Fees:
Single-Call and Related Services Fees are “billing arrangements whereby an
[incarcerated person's] collect calls are billed through a third-party on a per-call
basis, where the called party does not have an account with the Provider of
[Incarcerated Person’s] Calling Services or does not want to establish an

202

Ibid., citing FCC Title 47 of CFR § 64.6000(a)(4).

203

Ibid., citing 2015 Order, at 83, ¶ 162.

204

Ibid., citing FCC Title 47 of CFR § 64.6000(a)(3).

205

Ibid., citing FCC 2020 Order on Remand ¶ 42, FCC Rcd. 8485, 8500-01 (August 7, 2020).

- 67 -

R.20-10-002 ALJ/CF1/avs

account.”206 The FCC’s Third Order requires an IPCS provider to pass through
the transaction fee charged by the third-party provider, with no markup, to their
customers, up to a limit of $6.95.207
Cal Advocates states there are indications that IPCS providers “may have
undisclosed contracts/agreements with third-party companies to inflate
third-party transaction prices to their advantage.208 Cal Advocates recommends
the Commission require IPCS providers to pass through the single-call fee with
no additional markup, prohibit undisclosed deals that inflate third-party
transaction prices, and enforce this requirement by adopting robust enforcement
provisions in Phase II of this proceeding.
Robust Enforcement of Third-Party Financial Transaction Fees:
Third-party financial transaction fees are fees “charged by third parties to
transfer money or process financial transactions to facilitate a Consumer's ability
to make account payments via a third party,”209 such as Western Union or
Moneygram. People who are incarcerated and their families may not have bank
accounts and sometimes pay their bills by money transfer via Western Union or
Moneygram. The FCC’s Third Order requires IPCS providers to directly pass

206

Id. at 18, citing FCC Title 47 of the CFR Section 64.6000 (a)(2).

207

Ibid., citing FCC Title 47 of the CFR Section 64.6020 (b)(2).

Ibid., citing in Ashley Albert, et. al., vs. Global Tel*Link Corp. “Plaintiffs alleged that in 2020,
Securus and GTL implemented the “single-call” option. These single calls charged a high flat
rate to accept a one-time collect call from people who are incarcerated. Plaintiffs further alleged
that Securus and GTL were able to charge these high single-call prices by agreeing to eliminate
competition between themselves and setting the same inflated single-call prices.” See
https://www.classaction.org/media/albert-et-al-v-global-tel-link-corp-et-al.pdf.
208

209

Ibid., citing FCC Title 47 of the CFR Section 64.6000 (a)(5).

- 68 -

R.20-10-002 ALJ/CF1/avs

through these third-party financial transaction fees to consumers with no
markup, up to a limit of $6.95 per transaction.210
Cal Advocates states there are indications that “Western Union and
MoneyGram collect a portion of this fee, which Western Union calls a ‘revenue
share’ or ‘referral fee,’ on behalf of the I[P]CS providers.”211 Cal Advocates
therefore recommends the Commission require I[P]CS providers to pass through
third-party financial transaction fees with no additional markup, prohibit
revenue sharing deals, and enforce this requirement through robust enforcement
provisions in Phase II of this proceeding.
7.2.2

TURN’s Proposal

TURN urges the Commission to “move independently” from the FCC on

ancillary service fees.212 TURN recommends the Commission reduce the
ancillary fee caps adopted by the FCC by 30 percent to account for the lower
costs to provide intrastate services as compared to interstate services, particularly
those related to call set up or connection. TURN recommends the Commission
clarify that no other fees may be imposed or charged for any capped or
prohibited services.213 TURN states that:
Based on prior comments, public comment in the docket and
numerous callers during the Public Participation Hearings, as
discussed above, the Commission can and should
acknowledge that the fees assessed on customers are creating
hardship for Californian families. The 2013 FCC rate caps are

210

Id. at 19, citing FCC Title 47 of the CFR Section 64.6000 (b)(5).

Ibid., citing Prison Policy Institute State of Phone Justice, available as of this writing at
https://www.prisonpolicy.org/phones/state_of_phone_justice.html.
211

212

TURN, Reply Comments on Staff Proposal at 15.

213

TURN, Comments on Staff Proposal at 15; TURN, Reply Comments at 14.

- 69 -

R.20-10-002 ALJ/CF1/avs

too high to address these hardships and are several years
old.214
7.3

Party Comments on Staff
and Party Proposals

NCIC Inmate Communications supports Staff’s initial ancillary fee cap
proposal but urges the Commission to go further in two ways. First NCIC
Inmate Communications urges the Commission to clarify that “per-call
transaction fees for single-payment calls will not be permitted. This was an error
on the part of the FCC and this has been abused by providers charging between
$2.00 and $13.10 for a transaction fee on a single-call.”215 NCIC Inmate
Communications also states that the “FCC made an oversight when allowing
providers to pass-through third-party transaction fees, such as Western Union's
and MoneyGram's processing fees. They opened the door to allowing providers
to pass through credit card billing costs, which has resulted in some providers
adding an additional 5 percent fee on top of the transaction fees.”216
In comments on the proposed decision, NCIC Inmate Communications
states that third-party financial organizations are charging anywhere from three
to five percent credit card transaction fees directly to family members, not IPCS
providers, due to an FCC definitional oversight that allows “credit card charges”
to be passed through as part of “financial transaction fees.”217 NCIC Inmate
Communications urges the Commission to prohibit this. NCIC Inmate
Communications also recommends that the Commission prohibit per-call

214

TURN, Reply Comments on Staff Proposal at 14.

215

NCIC Inmate Communications, Comments on Staff Proposal at 4.

216

Ibid.

217

NCIC Inmate Communications, Comments on Proposed Decision at 4.

- 70 -

R.20-10-002 ALJ/CF1/avs

transaction fees of any type, including for single-payment calls.218 NCIC did not
comment on Cal Advocates’ proposal.
Prison Policy Institute states that the Commission has jurisdiction to
impose ancillary fees lower than those adopted by the FCC and, with TURN,
observes that the FCC has affirmed this several times.219 Prison Policy Institute
recommends the Commission prohibit single-call products that “steer end-users
to incur automated payment fees on a per-call basis.”220
Prison Policy Institute discusses what it calls “loopholes” in the FCC
ancillary service fee rules that allow “double-dipping,” which it suggests the
Commission should prohibit. Prison Policy Institute states that it has
documented a provider charging both a $3.00 automated payment fee and
passing through their own payment-card processing fees.221
Pay Tel and Verizon support adopting the ancillary service caps adopted
in the FCC’s Third Order, with Verizon further urging the Commission to “find a
long-term approach that prevents incarcerated individuals from paying fees that
are not connected with legitimate calling costs.”222 CforAT observes that
“[p]articipants at the Public Participation Hearings described significant
confusion and bill shock regarding ancillary service fees.”223
Securus and GTL support Staff’s proposal to adopt the FCC’s 2013 Order
ancillary fee caps but argue that most ancillary service fees cannot be separated
218

NCIC Inmate Communications, Comments on Staff Proposal at 4.

Prison Policy Institute, Comments on Staff Proposal at 4, citing the FCC Third Order at ¶ 218
and the FCC 2020 Order on Remand at ¶ 47; TURN, Comments on Staff Proposal at 16.
219

220

Prison Policy Institute, Id. at 5.

221

Ibid.

222

Verizon, Comments on Staff Proposal at 5.

223

CforAT, Comments on Staff Proposal at 8.

- 71 -

R.20-10-002 ALJ/CF1/avs

between interstate versus intrastate calls. These providers interpret this as
meaning that authority over most IPCS service fees is “jurisdictionally mixed”
and therefore subject to the FCC’s rules.224
GTL asserts that its billing systems “record and access ancillary service
charges with respect to the underlying action… exclusive of how the deposited
monies are ultimately used, i.e., for an interstate or intrastate call.”225 GTL states
that it can only definitely classify single-call and related service fees as
“interstate” or “intrastate,” and therefore the Commission should adopt the
FCC’s ancillary service caps.226
In reply comments, CforAT asserts that, contrary to the assertions of
Securus and GTL, the Commission can apply existing methods other than the use
of actual revenue data to determine the percentage of ancillary service fees that
are intrastate.227
7.4

Discussion: Prohibiting All Ancillary Service
Fees Except for Third-Party Financial
Transaction Fees and Government-Mandated
Taxes and Fees

We adopt interim caps and prohibitions on intrastate IPCS ancillary
service fees in several ways. First, we prohibit the imposition of any automated
payment fees, paper bill/statement fees, live agent fees, and single-call fees in
association with intrastate and jurisdictionally mixed calls. Second, we require
intrastate IPCS providers to directly pass through third-party financial
transaction fees to consumers with no markup, and excluding any credit card
224

Securus, Comments on Staff Proposal at 19.

225

GTL, Comments on Staff Proposal at 22.

226

CforAT, Reply Comments on Staff Proposal at 8.

CforAT, Reply Comments on Staff Proposal at 9, citing MetroPCS v. Picker, No.18-17382, slip
op. at 10 (9th Cir. Aug. 14, 2020).
227

- 72 -

R.20-10-002 ALJ/CF1/avs

charges, and to cap these fees at a limit of $6.95 per transaction. Third, we
restrict collection of mandatory government taxes and fees in association with
intrastate and jurisdictionally mixed calls to pass through without markup.
Fourth, we prohibit IPCS providers from charging any other ancillary service
fees not identified and explicitly approved here in association with any intrastate
or jurisdictionally mixed IPCS call.
There are no indications that the current uncapped ancillary fees charged
in connection with IPCS calls are just or reasonable. No party provided data on
the record that demonstrating this. Prohibiting and capping intrastate ancillary
fees on an interim basis provides immediate and significant relief to all
incarcerated persons and their families and is reasonable based on the record in
this proceeding. As noted by CforAT, this Commission heard significant
confusion and customer complaints about IPCS ancillary fees during our April
28, 2021 and April 29, 2021 PPHs, making clear that the current ancillary fees are
a major burden to families of the incarcerated as they strive to stay in
communication with their loved ones.228
We adopt several of Cal Advocates’ proposed requirements as opposed to
those contained in the Staff Proposal because the record does not indicate why
the incarcerated and their families should pay service fees not required in
commercial calling services, including automated payment fees, paper
bill/statement fees, and live operator fees. The costs for these services are
included in most commercial calling rates and we have no record discussing why
such costs should not be similarly included in intrastate IPCS calling rates.

228

See Section 1.3 of this decision.

- 73 -

R.20-10-002 ALJ/CF1/avs

We prohibit all per-call transaction fees for single-payment calls as
recommended by Staff’s Revised Proposal, NCIC Inmate Communications and
other parties because of the indications of potential abuse of this fee as discussed
above.
We require the pass-through with no markup, and excluding any credit
card charges, of third-party financial transaction fees, up to a limit of $6.95 per
transaction, as adopted in the FCC’s Third Order. The FCC adopted this limit
based on indications that some providers were abusing the FCC’s 2013 Order by
collaborating with third parties to agree on higher third-party transaction fees for
IPCS, some portion of which the third-party would return to the IPCS provider.
We respond to NCIC Inmate Communication’s comments on the proposed
decision by modifying the definition of this fee to clarify that it excludes the passthrough of any credit card charges. Additionally, although TURN recommended
reducing this and other fees by 30 percent, no party recommended prohibiting
this fee. Therefore, we allow this fee but apply the same constraints as adopted
in the FCC’s Third Order.229 This is reasonable given the other requirements
adopted here.
To avoid potential abuse, we also specify that government-specified
mandatory taxes or fees must be passed-through without markup.230 Although
the FCC allows markup of passed-through government mandatory taxes or fees
if the markup is authorized by a local statute, rule, or regulation, we are not
aware of instances where such markup is permitted in California and so prohibit
this here.231
229

FCC Third Order at ¶¶ 209 – 210.

230

2020 Order on Remand at ¶ 14.

231

Id. at ¶ 14, ¶ 61.

- 74 -

R.20-10-002 ALJ/CF1/avs

Although providers prefer that we cap ancillary fees as done in the FCC’s
2015 Order, we concur with Cal Advocates, the Prison Policy Institute, TURN,
and CforAT that this Commission has the authority to act independently of the
FCC to regulate intrastate IPCS ancillary service fees.
As found by the FCC, ancillary service charges generally cannot be
practically segregated between interstate and intrastate jurisdiction except in the
limited number of cases where, at the time a charge is imposed and the consumer
accepts the charge, the call to which the service is ancillary is clearly an
interstate-only or an intrastate-only call.232 For “jurisdictionally mixed” services
where it is impossible or impractical to separate the service’s intrastate from
interstate components, the FCC has stated that state law or requirements that
impose fees lower than the FCC are “specifically not preempted by [FCC]
actions.”233 As the FCC states:
The interim reforms we adopt in this Report and Order apply
to interstate and international inmate calling services rates
and certain ancillary services charges imposed for or in
connection with interstate or international inmate calling
services [footnote 680 omitted]. To the extent that a call has
interstate as well as intrastate components, the federal
requirements will operate as ceilings limiting potential state
action [footnote 681 omitted]. To the extent a state allows or
requires providers to impose or charge per-minute rates or
fees for the affected ancillary services higher than the caps
imposed by our rules, that state law or requirement is
preempted except where a call or ancillary service fee is
purely intrastate in nature… [footnote 682 omitted]. To the
232

2020 Order on Remand at ¶ 28.

TURN, Reply Comments on Staff Proposal at 15, citing at FCC Third Order at 97, ¶ 218; 2020
Order on Remand, para. 47 (2020) (stating that “to the extent a state allows or requires an
inmate calling services provider to impose fees lower than those contained in our rules, that
state law or requirement is not preempted by our action here”); See also Third Order at ¶ 271, ¶
254; 2020 Order on Remand at ¶ 217.
233

- 75 -

R.20-10-002 ALJ/CF1/avs

extent that state law allows or requires providers to impose rates or
fees lower than those in our rules, that state law or requirement is
specifically not preempted by our actions here [footnote 683
omitted].234
We conclude that the Commission is not preempted from imposing
intrastate rates or fees lower than those adopted by the FCC, including with
regards to calls with interstate and intrastate components, where federal
requirements operate as ceilings. We find that ancillary service charges generally
cannot be practically segregated between interstate and intrastate jurisdiction
except where, at the time a charge is imposed and the consumer accepts the
charge, the call to which the service is ancillary is a clearly interstate-only or an
intrastate-only call. It is within this Commission’s authority and jurisdiction to
adopt lower ancillary fee caps than those adopted for interstate IPCS and to
require IPCS providers to adhere to our adopted fee requirements for intrastate
and jurisdictionally mixed ancillary services.
To our knowledge, and as stated by GTL, the only ancillary fee that can
practicably be identified with a particular call is the single-call service fee, which
we prohibit here in association with intrastate calls. Therefore, the only ancillary
fees that IPCS providers operating in California may impose are the third-party
financial transaction fee, with the restrictions adopted here, and single-call fees
clearly associated with an interstate call. Our prohibition of automated payment
fees, paper bill/statement fees, live agent fees, and single-call fees in association
with intrastate and jurisdictionally mixed IPCS effectively “caps” these fees at
zero ($0.0) dollars and thus any imposition of these fees in association with
jurisdictionally mixed IPCS services is prohibited.

234

FCC Third Order at ¶ 217.

- 76 -

R.20-10-002 ALJ/CF1/avs

Following the FCC, we define ancillary service charges as any charge
consumers may be assessed for, or in connection with, IPCS that are not included
in the per-minute charges assessed for such individual calls. Specifically:
 Automated payment fees: means credit card payment,
debit card payment, and bill processing fees, including fees
for payments made by interactive voice response, web, or
kiosk;
 Single-call fees (and related services): means billing
arrangements whereby an incarcerated person’s collect
calls are billed through a third-party on a per-call basis,
where the called party does not have an account with the
IPCS provider or does not want to establish an account;
 Live agent fee: means a fee associated with the optional
use of a live operator to complete IPCS transactions;
 Paper bill/statement fee: means fees associated with
providing customers of IPCS an optional paper billing
statement;
 Third-party financial transaction fee: means the exact fees,
with no markup, and excluding any credit card charges, up
to a cap of $6.95 per transaction, that IPCS providers are
charged by third- parties to transfer money to an IPCS
customer account; and,
 Mandatory government taxes or fee: means a government
authorized, but discretionary, fee which an IPCS provider
must remit to a federal, state, or local government, and
which an IPCS provider is permitted, but not required, to
pass through to consumers for or in connection with
intrastate IPCS, with no markup.
As with our adopted rate cap, we choose a 45-day implementation timeline
because this is a reasonable period that allows for contract renegotiations and
noticing, where required, while timely providing relief to the incarcerated and
their families on an issue of longstanding importance.

- 77 -

R.20-10-002 ALJ/CF1/avs

We direct all telephone corporations providing intrastate IPCS to
implement our adopted rate ancillary fee requirements across all of their IPCS
contracts, accounts, and facilities in California, no later than 45 days from
Commission issuance of this decision. The ancillary fee requirements must be
applied to any existing account balances as of the date of implementation, as well
as any new account balances or new accounts opened after that date. Intrastate
IPCS providers are prohibited from applying any other type of ancillary or
service fee or charge other than those explicitly approved here.
We direct all telephone corporations providing intrastate IPCS to submit a
Notice of Compliance within 45 days of Commission issuance of this decision
confirming implementation of the interim ancillary fee requirements adopted
here across all of their intrastate IPCS contracts, accounts, and facilities in
California. The Notice of Compliance should be emailed to the Director of the
Communications Division at cddirector@cpuc.ca.gov, and must include the
following information:
1. Attestation that the interim intrastate ancillary service fee
requirements adopted here have been implemented at any
and all facilities served by the carrier in California.
2. Copies of or links to carrier webpages where the interim
intrastate ancillary service fee requirements adopted here
are presented for facilities located in California.
3. Copies of notices provided to facilities of the interim
intrastate ancillary service fee requirements adopted here.
4. Copies of notices to incarcerated people of the interim
intrastate ancillary service fee requirements adopted here.
We direct all telephone corporations providing intrastate IPCS to fully
disclose the adopted ancillary fee schedules on their websites, bills, and in
marketing material by no later than 45 days from Commission issuance of this

- 78 -

R.20-10-002 ALJ/CF1/avs

decision and to maintain the adopted ancillary fee requirements clearly and
prominently on their websites. Disclosures of fee schedules and all related
notices shall provide service-related information in English, Spanish and any
other languages prevalent in incarceration facilities and shall inform the
incarcerated of methods to lodge service quality complaints with the
Commission as discussed in section 11 below.
We direct all telephone corporations providing IPCS to submit an Interim
Rate Compliance Report to the Commission’s Director of the Communications
Division at cddirector@cpuc.ca.gov no later than 45 days from Commission
issuance of this decision and on a quarterly basis thereafter while the interim
rates adopted here are in effect. Each IPCS provider’s Interim Rate Compliance
Report must include a revenue breakdown of billed interstate and intrastate
minutes of use, and a revenue breakdown of billed ancillary interstate and
intrastate fees over a period of thirty days.
We direct all telephone corporations providing IPCS to provide a Plan for
Notification to all current and prospective customers and account holders and
their draft notices of the adopted ancillary fee requirements, terms and
conditions, refund policies and customer service contacts for websites, bill
inserts, and marketing materials to the Commission for review no later than 30
days from Commission issuance of this decision. The Plan and draft notices shall
include disclosures of fee schedules and service-related information in English,
Spanish and any other languages prevalent in incarceration facilities and shall
inform the incarcerated of methods to lodge service quality complaints with the
Commission as discussed in section 11 below.
All IPCS providers operating in California as defined here must comply
with the requirements of this decision. IPCS providers not explicitly identified in
- 79 -

R.20-10-002 ALJ/CF1/avs

this decision must provide a Notice of Compliance to the Commission no later
than 45 days after executing a contract to provide IPCS in California, and must
provide a Plan for Notification, draft notices of the adopted rates, terms and
conditions, refund policies and customer service contacts for websites, bill
inserts, and marketing materials to the Commission for review no later than
30 days after executing a contract to provide IPCS in California. The Plan and
notices shall include disclosures of fee schedules and service-related information
in English, Spanish and any other languages prevalent in incarceration facilities,
and shall inform the incarcerated of methods to lodge service quality complaints
with the Commission as discussed in section 11 below.
Such IPCS providers must also submit an Interim Rate Compliance Report
to the Commission’s Director of the Communications Division no later than 45
days from executing a contract to provide IPCS in California, and on a quarterly
basis thereafter while the interim rates adopted here are in effect. Each IPCS
provider’s Interim Rate Compliance Report must include a revenue breakdown
of billed interstate and intrastate minutes of use, and a revenue breakdown of
billed ancillary interstate and intrastate fees over a period of thirty days.
As necessary, we will consider adjustments to our adopted interim
ancillary fee requirements and interim rates as we consider adopting permanent
requirements later in this proceeding.
8.

Enforcement and Compliance Requirement
The Commission and its Staff have enforcement authority to ensure

compliance with this decision. Resolution T-17601 establishes a citation and
enforcement program for California telecommunication providers. It authorizes
the Commission’s Communication Division to issue penalties to
telecommunications providers for failure to submit filings, notices, reports, and

- 80 -

R.20-10-002 ALJ/CF1/avs

other items as directed in Commission resolutions, decisions, orders, and the
Public Utilities Code. Penalties are $1,000 for the first event, with each
subsequent notice increasing the penalty amount by an additional $200.
Resolution T-17601 adopts noticing, appeal, and other provisions.235
The Commission additionally retains enforcement authority for noncompliance with its decisions, orders, and resolutions pursuant to Public Utilities
Code Sections 701, 702, 2101, 2107, and 2108, amongst others.236
Telecommunications enforcement actions outside of the citation program
established in Resolution T-17601 occur primarily through issuance and adoption
of resolutions.
With regards to compliance and enforcement, the April 2021 ALJ Ruling
asked, “[i]s the Commission’s current citation process (Resolution T-17601) and
enforcement authority (Public Utilities Code Sections 701, 2101, 2107) sufficient
to ensure compliance with the Staff Proposal?”
This decision affirms Commission Staff’s authority to impose fines on
telephone corporations for failure to comply with this decision, in a manner
consistent with authority previously delegated to staff in Resolution T-17601 and
as otherwise set forth below.

Resolution T-17601. Approval of a Citation Program to Enforce Compliance by Telecommunications
Carriers with the Commission’s Resolutions, Decisions, Orders, and the Public Utilities Code and
Authorizes Staff to Issue Citations; Procedure for Appeals of Citations. Issued June 22, 2018.
Available here:
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K795/216795045.PDF.
235

Public Utilities Code Section 2107 states that any public utilities, including telephone
corporations, that violates or fails to comply with any Commission order, in a case in which a
penalty has not otherwise been provided, is subject to a penalty of not less than five hundred
dollars ($500), nor more than one hundred thousand dollars ($100,000) for each offense.
Section 2108 states that every violation of a Commission order, and in case of a continuing
violation each day’s continuance thereof shall be considered a separate and distinct offense.
236

- 81 -

R.20-10-002 ALJ/CF1/avs

8.1

Party Comments

The Justice Coalition, Securus, and NCIC Inmate Communications
comment that the Commission’s existing citation process and enforcement
authority is sufficient.
Cal Advocates states that the Commission’s existing citation process and
enforcement authority is not sufficient, and the Commission should revise
Resolution T-17601 to identify specific violations related to IPCS interim rate
relief and the amount of each penalty.237 Cal Advocates recommends the
Commission set a penalty of $1,000 per violation per facility for an IPCS provider
charging over an adopted rate cap or for collecting any unauthorized ancillary
fees.238 Cal Advocates further recommends the Commission clarify whether
violations would be determined by Staff audits or based on consumer
complaints.
Cal Advocates states that some IPCS providers may have been skirting the
intent of the FCC’s 2015 Order adopting ancillary service fees by cooperating to
charge higher than normal single-call and third-party financial transaction fees
(see section 7.3). As a result, Cal Advocates urges the Commission to vigorously
enforce any single-call or third-party financial transaction fee requirements by
adopting robust enforcement provisions in Phase II of this proceeding.239
Cal Advocates argues the Commission should utilize Public Utilities Code
Section 734 to require IPCS providers to make reparations for excess charges.
TURN supports consideration of Cal Advocates’ proposals. GTL, the
Prison Policy Initiative, Pay Tel, and Verizon did not respond to this question.
237

See Resolution T-17601 at pages 3-4, Appendix A, and Appendix C.

238

Cal Advocates, Comments on Staff Proposal at 21.

239

Id. at 18-19.

- 82 -

R.20-10-002 ALJ/CF1/avs

8.2

Enforcement Authorization for
Instances of Non-Compliance

We authorize the Commission’s Communications Division to assess fines
pursuant to Resolution T-17601 and Public Utilities Code Sections 2107 and 2108
for any IPCS provider’s failure to comply with this decision.
In the case of non-compliance with this decision’s requirement for
submittal of Notices of Compliance, as well as the Plan for Notification to all
current and prospective customers and account holders, draft notices of the
adopted ancillary fee requirements, terms and conditions, refund policies and
customer service contacts for websites, bill inserts, and marketing materials to
the Commission discussed in Section 7.4, Staff shall refer to Resolution T-17601
for guidance.
In the case of non-compliance with this decision’s rate and ancillary fee
requirements, Staff shall develop a resolution proposing fines as authorized
pursuant to Public Utilities Code Sections 2107 and 2108.
The record in this proceeding indicates instances of apparent
circumvention of the intent of the FCC’s interstate IPCS rate caps and ancillary
fee requirements. Thus, it is useful to affirm Staff and this Commission’s
authority to enforce the interim rate caps and ancillary fee requirements adopted
here. The Commission is intent on ensuring compliance with this decision and
will investigate and act on any effort to circumvent the requirements adopted
here. We may consider additional enforcement enhancements to ensure
compliance with this decision later in this proceeding.
9.

Commission Environmental and
Social Justice Action Plan
In 2015, people of color accounted for about 71 percent of people in jails

and 79 percent of people in prisons in California, although people of color
- 83 -

R.20-10-002 ALJ/CF1/avs

comprise about 61 percent of California’s population. African Americans are
particularly overrepresented in incarceration facilities in California. African
Americans comprise just six percent of California’s population, but represent
approximately 20 percent of people in jail and about 28 percent of people in
prison.240
Table 5: Race and Ethnicity in California Jails and Prisons241
Ethnicity/
Race

Percent of
Jail
Population

Percent of
Prison
Population

Percent of
State
Population

Rate
incarcerated
per 100,000
ages 15-64
(jails)
901

Rate
incarcerated
per 100,000
ages 15-64
(prisons)
2,224

African
American
Native
American
Latinx
White
Asian/
Pacific
Island

461

1,033

41
29
2

44
21
1

38
39
15

313
216
36

556
276
34

African American women are also overrepresented in California jails and
prisons. Of the state’s 5,849 female prisoners in 2017, 26 percent were African
American although only 6 percent of California’s adult female residents are.
African American women are imprisoned at a rate of 171 per 100,000—more than
five times the imprisonment rate of white women, which is 30 per 100,000.

Source: Incarceration Trends in California, Vera Institute of Justice (2019)
https://www.vera.org/downloads/pdfdownloads/state-incarceration-trends-california.pdf
(accessed June 28, 2021).
240

241

Ibid.

- 84 -

R.20-10-002 ALJ/CF1/avs

Imprisonment rates for Latinx women and women of other races are 38 and 14
per 100,000, respectively.242
As discussed in section 1, as much as 34 percent of families go into debt to
stay in contact with an incarcerated family member and the cost of maintaining
contact with incarcerated persons falls disproportionally on low-income women
of color.243 A 2015 study found that incarcerated people had a median annual
income of less than $20,000 prior to their incarceration.244
In 2018, the Commission adopted an Environmental and Social Justice Action
Plan (ESJA Plan).245 The Plan identifies Environmental and Social Justice (ESJ)
communities as those where residents are predominantly communities of color
or low-income, underrepresented in the policy setting or decision-making
process, subject to a disproportionate impact from one or more environmental
hazards, likely to experience disparate implementation of environmental
regulations and socio-economic investments in their communities, and, as
including the top 25 percent of disadvantaged communities in California,246 all
242

Public Policy Institute of California, “Just the Facts,” California’s Prison Population

https://www.ppic.org/publication/californias-prison-population/ (accessed June 28, 2021).
Root and Rebound, Comments on Order Instituting Rulemaking at 3, citing, Saneta
deVuono-powell, Chris Schweidler, Alicia Walters, and Azadeh Zohrabi. “Who Pays? The True
Cost of Incarceration on Families.” Ella Baker Center for Human Rights, Forward Together, and
Research Action Design. September 2015, available at: http://www.whopaysreport.org/whopaysfull-report/ (accessed June 28, 2021).
243

Root and Rebound, Comments on Order Instituting Rulemaking at 4, citing Bernadette
Rabuy and Daniel Kopf. “Prisons of Poverty: Uncovering the pre-incarceration incomes of the
imprisoned” Prison Policy Initiative. July 2015, available at
https://www.prisonpolicy.org/reports/income.html (accessed June 28, 2021)
244

California Public Utilities Commission Environmental and Social Justice Action Plan
(Commission ESJA Plan). V. 1.0, February 21, 2019, available here:
https://www.cpuc.ca.gov/ESJactionplan/ (accessed June 28, 2021).
245

As identified by Cal EPA’s CalEnviroScreen, available here:
https://oehha.ca.gov/calenviroscreen (accessed June 28, 2021).
246

- 85 -

R.20-10-002 ALJ/CF1/avs

California Tribal lands, low-income households with household income below
80 percent of area median income, and, low-income census tracts with household
incomes less than 80 percent area or state median income.247
The Commission’s ESJA Plan is guided by the following definition of
environmental and social justice:
Environmental and social justice seeks to come to terms with,
and remedy, a history of unfair treatment of communities,
predominantly communities of people of color and/ or
low-income residents. These communities have been
subjected to disproportionate impacts from one or more
environmental hazards, socio-economic burdens, or both.
Residents have been excluded in policy setting or decisionmaking processes and have lacked protections and benefits
afforded to other communities by the implementation of
environmental and other regulations, such as those enacted to
control polluting activities.248
Goals 1, 3 and 6 of the ESJA Plan are relevant for this rulemaking:
Goal 1: Consistently integrate equity and access
considerations throughout CPUC proceedings and other
efforts.
Goal 3: Strive to improve access to high-quality water,
communications, and transportation services for ESJ
communities.
Goal 6: Enhance enforcement to ensure safety and consumer
protection for ESJ communities. 249
This decision advances the Commission’s ESJA Plan goals by affirming the
importance of just and reasonable rates for calling services for the incarcerated
and their families, who are disproportionally represented by people of color in

247

ESJA Plan at 9.

248

Id. at 6.

249

Id. at 16-18.

- 86 -

R.20-10-002 ALJ/CF1/avs

California, particularly Black Californians. This decision affirms Commission
enforcement authority to ensure compliance with this decision and indicates that
subsequent decisions may enhance Staff enforcement authority, as needed.
Subsequent decisions in this rulemaking will examine issues of service quality
for the incarcerated and their families and work to mitigate or eliminate
deficiencies.
10.

Streamlining the R.20-10-002 Service List
The OIR for this proceeding listed as respondents all telephone

corporations holding a CPCN approved by the Commission, including
Competitive Local Carriers, Competitive Local Resellers, Local Exchange
Carriers, Interexchange Carriers, and Interexchange Resellers. The OIR also
named as respondents Digital Voice Service Registrants that do not require a
CPCN. The Commission broadly identified respondents to this proceeding
because we had not yet identified which telecommunications carriers operating
in California were providing IPCS.
Pursuant to Rule 1.4(d) of the Commission’s Rules of Practice and
Procedure, all respondents are automatically designated as parties. As a result, as
of May 4, 2021, some 842 entities were parties to this proceeding. However, a
December 2020 Commission Staff data request identified only six providers of
IPCS in California and as of May 4, 2021, only 14 parties had participated in the
proceeding by filing a substantive pleading.
A large service list complicates service of proceeding documents to parties
due to email size limits. Additionally, a number of companies not providing
IPCS requested to be removed from the service list.
To address these issues, the assigned ALJ issued a Ruling Describing Process
to Remove Most Telecommunications Carriers from Service List on May 4, 2021. The

- 87 -

R.20-10-002 ALJ/CF1/avs

ruling identified 39 entities that the assigned ALJ proposed would retain their
party status. These included 14 active parties that had filed substantive
pleadings, including four IPCS providers, five additional providers of IPCS as
identified by Staff that had not as of that date filed substantive pleadings, and
20 telecommunications companies providing service to administrative centers of
incarceration facilities but not to the incarcerated.
The ruling also identified four telecommunications providers that had
indicated their interest in the proceeding but not filed substantive pleadings.
The ruling indicated that the assigned ALJ would transfer these four entities to
“information only” status unless they emailed the ALJ with a different request
within 15 days. The ruling also indicated that any party not identified in the
ruling would be removed from the service list unless it emailed the ALJ within
15 days.
10.1 Transfer of Parties to
“Information-Only” Status
This decision updates the list of parties to R.20-10-002. No party contacted
the assigned ALJ within 15 days of the ruling requesting to retain party status.
However, the assigned ALJ received an emailed from a representative of several
small Local Exchange Carriers that requested to remain on the service list in
“information only” status. These parties also stated that the ruling had
incorrectly indicated that some of them provide telecommunications to the
administrative centers of some incarceration facilities, namely Calaveras
Telephone Company, the Ponderosa Telephone Co., the Winterhaven Telephone
Company, Happy Valley Telephone Company, and the Hornitos Telephone
Company. However, we have been unable to independently verify this and thus
retain these companies as parties for the time being. Additionally, the ruling

- 88 -

R.20-10-002 ALJ/CF1/avs

erred by not identifying Verizon as a party; Verizon filed a substantive pleading
on April 30, 2021.
We direct the Commission’s Process Office to move the following parties
to information only status no later than 15 days from Commission issuance of
this decision:
 Charter Fiberlink CA-CCO, LLC, Time Warner Cable
Information Services (California), LLC, and Bright House
Networks Information Services (California), LLC;
 Cox California Telecom, LLC;
 AT&T Corporation (collectively Pacific Bell Telephone
Company d/b/a AT&T California, AT&T Corp., Teleport
Communications America, LLC, and SBC Long Distance,
LCC d/b/a AT&T Long Distance);
 Comcast Phone of California, LLC
10.2 Updated R.20-10-002 Service List
We direct the Commission’s Process Office to remove all parties not
indicated below from the R.20-10-002 service list no later than 15 days from
Commission issuance of this decision:
 Securus Technologies, LLC;
 Global Tel*Link (GTL);
 Inmate Calling Solutions, LLC;
 NCIC Inmate Communications;
 Pay Tel Communications, Inc.;
 Legacy Inmate Communications, Inc.;
 Public Communications Services, Inc.;
 Telmate, LLC;
 Value-Added Communications, Inc.;
 Californians for Jail and Prison Phone Justice Coalition;
 Center for Accessible Technologies;
- 89 -

R.20-10-002 ALJ/CF1/avs

 Greenlining Institute;
 Media Alliance;
 Prison Policy Initiative, Inc.;
 Public Advocates Office;
 Returning Home Foundation;
 Root and Rebound;
 The Utility Reform Network;
 Youth Law Center;
 MCI Communications Services LLC and MCI Metro Access
Transmission Services Corp. (Verizon);
 Intelletrace, Inc.;
 Southern California Edison;
 Frontier California Inc.;
 Citizens Telecommunications Company of California Inc.;
 Frontier Communications of the Southwest Inc.;
 Frontier Communications Online and Long Distance Inc.;
 Frontier Communications of America, Inc.;
 Cal-Ore Telephone Co.;
 Ducor Telephone Company;
 Foresthill Telephone Co.;
 Kerman Telephone Co.;
 Pinnacles Telephone Co.;
 Sierra Telephone Company, Inc.;
 The Siskiyou Telephone Company;
 Volcano Telephone Company;
 Calaveras Telephone Company;
 Ponderosa Telephone Co.;
 Winterhaven Telephone Company;
- 90 -

R.20-10-002 ALJ/CF1/avs

 Happy Valley Telephone Company; and,
 Hornitos Telephone Company.
11.

Comments on Proposed Decision
The proposed decision of ALJ Cathleen A. Fogel in this matter was mailed

to the parties in accordance with Section 311 of the Public Utilities Code.
Comments allowed under Rule 14.3 of the Commission’s Rules of Practice and
Procedure were filed on July 29, 2021 and August 2, 2021 by CforAT, NCIC
Inmate Communications, the Justice Coalition, GTL, Securus, TURN, Cal
Advocates, and Prison Policy Initiative and reply comments were filed on
August 9, 2021 by Cal Advocates, CforAT, TURN, GTL, Securus, the Prison
Policy Initiative, and the Justice Coalition.
We have in some instances modified the final decision in response to
parties’ comments, which we discuss below.
A. Claims that the $0.07 rate Fails to Account for Varying Costs based on
the Size, Characteristics and Needs of Incarceration Facilities
In comments on the proposed decision, Securus contends that the $0.07 per
minute rate is “principally based on the price offered by the largest provider to
serve the state’s entire prison system…. [and] fails to account for the fact,
demonstrated in the record, that costs, and hence rates, vary significantly based
on the size, characteristics and needs of the facility.”250 GTL makes similar
claims that the decision ignores the different sizes, needs and costs of various
facilities.251
We disagree with these comments. Section 6.3 above states that “it is
unlikely that it costs IPCS providers more than double the cost of providing call

250

Securus, Comments on Proposed Decision at 3.

251

GTL, Comments on Proposed Decision at 6 and 9.

- 91 -

R.20-10-002 ALJ/CF1/avs

services to the California state prison system to provide IPCS to jails of all sizes”
(emphasis added). We agree that costs to provide IPCS to jails and prisons of
varying sizes, populations and with different security needs may vary and our
method of arriving at the $0.07 per minute rate explicitly considers and accounts
for this. GTL and Securus did not provide cost data on this topic.
B. Claims that the $0.07 per Minute Rate Cap is Confiscatory and
Constitutes a “Taking”
GTL contends in comments that the decision is “confiscatory,” and “would
violate the Takings Clause.”252 Securus contends that for providers serving
smaller facilities, “the rate cap is below cost and confiscatory.”253
GTL states that “[r]eview of whether a rate is confiscatory must be
“viewed in its entirety” to look at the “total effect” on the regulated business
[footnote omitted]. The [proposed decision] conducts no such evaluation
[footnote omitted]. If it did, it would reflect that the proposed rate cap and
ancillary service fee prohibitions/ limitations do not allow IPCS providers to
recover their costs of providing IPCS, and certainly do not take into
consideration the amounts and rates of site commissions IPCS providers
currently are obliged to pay under binding contracts.”254 Securus makes similar
assertions that the “interim rate cap does not enable Securus to recover its costs,
including the costs of site commissions as required by GTL v. FCC, and is thus
confiscatory.”255 GTL additionally asserts that the decision did not “consider
whether the prohibitions/limitations on ancillary service fees would permit…

252

Id. at 13.

253

Securus, Comments on Proposed Decision at 7.

254

GTL, Comments on Proposed Decision at 13-14.

255

Securus, Comments on Proposed Decision at 12.

- 92 -

R.20-10-002 ALJ/CF1/avs

recovery. The [proposed decision]’s treatment of ancillary service fees will
not.”256
We disagree with these GTL and Securus assertions. First, this decision is
based on the record before us. All IPCS provider parties to this proceeding have
had the opportunity to file as part of the record cost data to back up these and
similar claims, but they have not done so.257 IPCS providers provision of data
during discovery in response to data requests, to either Cal Advocates or this
Commission’s Communication Division, is not part of the record258 and as such
we have no basis to corroborate these parties’ claims that the $0.07 rate is
confiscatory and constitutes a “taking.” Despite providers claims to the contrary,
the rate data before us, provided by the Staff Proposal and non-provider parties’
comments, suggests that the $0.07 rate is not confiscatory and does not constitute
a taking.
While Securus cites to the case of Ponderosa Tel. Co. v. Cal. Pub. Util.
Comm259 to support its claim that the rate of $0.07 is confiscatory, it fails to
acknowledge that in that same case, the Court of Appeals states “[t]he burden is
on petitioners to show the rate of return (or cost of capital) established by the
[Commission] was clearly confiscatory. That is, there must be a clear showing

256

GTL, Comments on Proposed Decision at 11.

Rule 10.1 of the Commission’s Rules of Practice and Procedure (Rules) provide for discovery from
parties. However, to form part of the record of this proceeding, parties would have needed to append cost
data to opening or reply comments on the Staff Proposal, with a request to file confidential data under
seal pursuant to Rule 11.4. if needed, or to have filed a motion for leave to file evidence (Rule 13.6),
exhibits (Rule 13.7), or prepared testimony (Rule 13.8), or to have filed a motion to hold evidentiary
hearings (Rule 11.1).
257

Securus, Comments on Proposed Decision at 12 notes that Securus produced to Cal
Advocates a “comprehensive cost study” that it provided to the FCC.
258

Securus, Opening Comments on Proposed Decision at 7, fn. 30, citing Ponderosa Tel. Co. v. Cal.
Pub. Util. Comm. (2019) 36 Cal.App.5th 999, 1015.
259

- 93 -

R.20-10-002 ALJ/CF1/avs

the rate of return was ‘so “unjust” as to be confiscatory,’ such as by
demonstrating the rate is so unreasonably low it will threaten the utility’s
financial integrity by impeding the utility’s ability to raise future capital or
adequately compensate current equity holders.”260
Additionally, there is a zone of reasonableness within which this
Commission can establish a rate as long as it is higher than a confiscatory rate:
“[a] rate of return lower than the utility asserts is necessary may nevertheless be
reasonable or within a range of reasonableness, constitutionally speaking, if it is
‘higher than a confiscatory level.’”261 “[M]erely asserting in general language
that rates are confiscatory is not sufficient.... [I]n order to invoke constitutional
protection, the facts relied on must be specifically set forth and from them it must
clearly appear that the rates would necessarily deny to plaintiff just compensation
and deprive it of its property without due process of law.”262 Thus, by failing to
submit cost data to the record to demonstrate that the rate of $0.07 is
unreasonably low, Securus, GTL and the other ICPS provider parties have failed
to meet the burden of proof required for us to consider modifying this interim
rate. The IPCS provider parties are encouraged to provide such data in Phase II
of this proceeding for our consideration in setting permanent rates.
Regarding Securus and GTL’s assertions that the $0.07 per minute rate cap
will not allow them to cover site commission costs, we similarly do not have data
in the record of this proceeding to confirm or dispute this assertion. As
discussed in section 5.4 above, we do not view site commission costs beyond the
260

Ponderosa Tel. Co. v. Cal. Pub. Util. Comm .(2019) 36 Cal.App.5th 999, 1019.

Ibid, citing Duquesne Light Co. v. Barasch (1989) 488 U.S. 299, 308; Fed. Power Com. v. Hope
Natural Gas Co. (1944) 320 U.S. 591, 585-586.
261

Pub. Serv. Com. of Montana v. Great Northern Utilities Co. (1933) 289 U.S. 130, 136-137, (italics
added.)
262

- 94 -

R.20-10-002 ALJ/CF1/avs

level necessary to contribute to facilities’ actual costs to provide IPCS to the
incarcerated as necessary for the provision of calling services. Nonetheless, we
recognize that site commissions are components of the IPCS providers’ existing
contracts and have already included this consideration in setting the rate cap of
$0.07. We expect that the implementation time-period provided for here will
allow IPCS providers to renegotiate contracts that currently provide for site
commission payments that would exceed the $0.07 per minute rate we adopt
here. No IPCS provider contends in comments that it would be unable to
accomplish this.
C. Claims that the $0.07 Per Minute Rate Would Require Providers to
Reduce Services to the Incarcerated and/or Transfer Certain Costs of
Providing Services to Incarceration Facilities.
NCIC Inmate Communications contends that the $0.07 per minute rate
combined with the elimination of most ancillary service fees is “far below our
cost of providing service” and will result in NCIC having to eliminating access to
a live account representative, instead requiring family members to use its
website for information and to maintain their accounts.263 More generally, NCIC
Inmate Communications asserts that “providers” will no longer be able to pay
commissions, will have to pass on overhead costs such as bandwidth charges,
maintenance, and installation costs to facilities, and will be forced to restrict the
number of phones, available calling hours per day to encourage the incarcerated
to use non-regulated services such as video calling, text messages and email.264
We are cognizant that our adopted $0.07 per minute rate cap and ancillary
fee requirements may result in changes to contracts and possibly services, but

263

NCIC Inmate Communications, Comments on Proposed Decision at 3.

264

Ibid.

- 95 -

R.20-10-002 ALJ/CF1/avs

these comments do not persuade us to modify our approach. These assertions
are speculative at this juncture and no data has been provided to support the
assertion that the rate of $0.07 and the ancillary fee provisions will require the
changes NCIC Inmate Communications asserts.
Moreover, we find alarming NCIC Inmate Communications’ comment that
changes will be made to encourage the incarcerated to use non-regulated
services. We are concerned that the IPCS providers will attempt to make voice
communication inaccessible in order to force incarcerated persons and their
loved ones to use more expensive communication services such as video calling.
We strongly discourage the IPCS providers from taking such measures in order
to circumvent the interim relief this decision provides. We will work with
providers in Phase II of this proceeding to assess impacts on the industry and
individual facilities as we move towards adopting a permanent rate cap.
D. Claims that the Decision is “Insufficiently Deferential” to Other
Agencies and Branches of Government and Does Not Consider Impacts
on Public Safety or the Incarcerated of Decreases in Site Commissions
GTL contends that the decision is “insufficiently deferential to the agencies
and branches of government that are closer to and actively involved in
considering how to balance the competing interests involved with site
commissions and IPCS rates generally.”265 GTL contends that local
administrators are best positioned to assess the need for site commissions and
the legislature intends to revisit SB 555 in the coming legislative session. For
these and other reasons, GTL recommends we decline to adopt the decision,
because the “current regulatory regime, is functioning well to provide just and

265

GTL, Comments on Proposed Decision at 14.

- 96 -

R.20-10-002 ALJ/CF1/avs

reasonable rates.”266 Securus similarly contends that Penal Code 4025 places no
limits on the amount of site commissions that local authorities may seek, and this
Commission has no authority to limit their discretion by capping their revenue
source.267
As discussed throughout this decision, we disagree that the current regime
is functioning to provide just and reasonable rates. We respect local government
and the state legislature’s authority, and welcome further action or discussions
with both. Nonetheless, we are obligated under Section 451 of the Public Utilities
Code to ensure just and reasonable calling service rates for all Californians,
including the incarcerated, and disagree that Penal Code 4025 limits our ability
and obligation to ensure the provision of such rates to the incarcerated.
GTL also asserts that the decision does not consider potential impacts on
the incarcerated from decreases in site commission fees that currently fund
rehabilitation and educational programs, or on public safety, due to a rate cap
that insufficiently considers varied local incarceration facility factors.268 We
disagree. Again, this decision is based on the record before us. Neither
providers nor incarceration facilities provided data demonstrating that this
decision would negatively impact these factors.
As stated earlier, we are obligated under Public Utilities Code Section 451
to ensure just and reasonable calling service rates for all Californians, including
the incarcerated. This obligation does not allow us to defer the setting of
reasonable rates in response to parties with a financial interest in the
continuation of current rates. We expect that the ICPS providers and
266

Id. at 2-3.

267

Securus, Comments on Proposed Decision at 11.

268

Id. at 10.

- 97 -

R.20-10-002 ALJ/CF1/avs

incarceration facilities will make the necessary adjustments to ensure compliance
with the $0.07 rate cap we establish here.
We will consider modifications to the rate and fee schedules adopted in
this interim decision in Phase II of this proceeding as we consider a more
permanent rate cap.
E. Request to Establish A Waiver Process
Securus requests that we establish a waiver process similar to the FCC’s
waiver process “where the IPCS provider has the opportunity to demonstrate to
the [Commission] that its reasonably-incurred costs to provide service at a
facility exceed those rates.”269 GTL similarly asserts that a waiver process should
be implemented.270
We decline to adopt a waiver process in this phase of the proceeding as
our goal is to establish an interim rate based on the record we have before us.
Implementing a waiver process would likely cause unnecessary delay in
implementing the interim rate we establish in this decision and would impede
the provision of immediate relief for incarcerated persons and their loved ones.
We will consider implementing a waiver process in Phase II of this proceeding.
F. Claims that the Decision is Arbitrary and Capricious and Lacks
Substantial Evidence
Securus alleges in its comments that the decision is arbitrary and
capricious and lacks substantial evidence and that, “without explanation or
justification,” we take a different approach than the FCC.271 GTL also argues that

269

Securus, Opening Comments on Proposed Decision at 1-2.

270

GTL, Opening Comments on Proposed Decision at 12.

271

Securus, Opening Comments on Proposed Decision at. 7-9.

- 98 -

R.20-10-002 ALJ/CF1/avs

the interim rate cap and limits on ancillary service charges are arbitrary and
unworkable.272
We disagree with these assertions. As has been noted, “[a] party
challenging a [Commission] finding for lack of substantial evidence must
demonstrate that, based on the evidence before the [Commission], a reasonable
person could not reach the same conclusion.“273 Securus and GTL presented no
evidence which persuades us that the rate cap of $0.07 is not supported by the
record before us.
As we discuss in Section 6.3 above, we decline to adopt the FCC’s interim
rates as Staff proposed because the record in this proceeding demonstrates that a
lower rate is more reasonable. We further explain that we utilize the rate of
$0.025 per minute established in the CDCR contract with GTL as a benchmark.
We then double this rate to $0.05 account for the cost to serve smaller facilities
and add an additional $0.02 to account for site commissions. The record before
us supports adoption of this lower rate and provides immediate relief to
incarcerated persons and their families while allowing IPCS providers to recover
their reasonable costs related to the provision of IPCS services.
G. Request to Establish Complaint Reporting System or Require Providers
in their Compliance Notices to Report if it Holds a CPCN
Prison Policy Initiative observes that Section 1013(a) of the Public Utilities
Code requires telephone corporations that exert monopoly power to hold a

272

GTL, Opening Comments on Proposed Decision at 8-11.

Ponderosa Tel. Co. v. Cal. Pub. Util. Com., 36 Cal.App.5th 999, 1015 (2019) citing to Pacific Gas &
Elec. Co. v. Pub. Util. Com. (2015) 237 Cal.App.4th 812, 838.
273

- 99 -

R.20-10-002 ALJ/CF1/avs

CPCN.274 As a result, the Prison Policy Initiative requests that the Commission
require IPCS providers to include in their Notice of Compliance either: (i) a
certification that the company holds a valid CPCN and will maintain such
certificate for as long as it provides intrastate IPCS in California, or (ii) a detailed
explanation of any exemption the company claims from the requirements of
Section 1001. The Prison Policy Institute also requests that the Commission
direct Commission Staff to establish a complaint reporting system that customers
would be notified of through the required Plan of Notification.275
We do not adopt the Prison Policy Initiative’s first recommendation at this
time as we intend to revisit the issue of CPCNs and classification of IPCS
providers in Phase II of this proceeding. Additionally, while we concur with
Prison Policy Initiative’s recommendation that the Plan of Notification (and
notifications themselves) inform the incarcerated of methods to lodge service
quality complaints with the Commission, and require this in the final decision,
we do not order Staff to establish a new complaint reporting system for this
purpose. Instead, we provide the following information regarding the
Commission’s existing Consumer Affairs Branch.
Consumers can file complaints by phone or in writing with the
Commission’s Consumer Affairs Branch. To file a complaint via phone with the
Commission’s Consumer Affairs Branch, consumers must call 1-800-649-7570
from Monday – Friday, 8:30 a.m.-4:30 p.m. Representatives are available to assist
in the language of their choice. Representatives can answer questions and,
Prison Policy Initiative, Comments on Proposed Decision at 1-2. Section 1013(a) states that
“[t]elephone corporations that the Commission determines have monopoly power or market
power in a relevant market or markets shall have a certificate of public convenience and
necessity and shall not be eligible for designation as registered telephone corporations.”
274

275

Id. at 2.

- 100 -

R.20-10-002 ALJ/CF1/avs

depending on the issue can contact their utility provider directly to facilitate
problem resolution.
To file a complaint in writing there are three options:
1. Online at: https://appsssl.cpuc.ca.gov/cpucapplication/
2. By fax: 415-703-1158
3. Mail to:
California Public Utilities Commission
Consumer Affairs Branch
505 Van Ness Avenue
San Francisco, CA 94102-3298
Written complaints are evaluated and, if applicable, submitted to the
utility as an Informal Complaint. For more information, please visit the CAB
website at https://www.cpuc.ca.gov/about-cpuc/divisions/news-and-publicinformation-office/consumer-affairs-branch.
H. Claims that the Decision’s Ancillary Service Requirements for
Jurisdictionally Mixed Services are Preempted by FCC Regulations
Securus claims that the decision’s prohibition of most jurisdictionally
mixed ancillary service fees conflicts with FCC requirement in this area.276 This
claim is without merit. To advance its argument, Securus first mischaracterizes
the FCC 2020 Order and then fails to acknowledge the FCC Third Order, which
clarified parts of the FCC 2020 Order.277
There is no question that most providers can easily identify the end points
of call and thus a call’s jurisdictional nature, as discussed in the FCC 2020 Order:
… GTL argues that the “jurisdictional nature of calls themselves is
easily classified as either interstate or intrastate based on the call’s
points of origin and termination,”[footnote omitted] and Securus
276

Securus, Comments on Proposed Decision at 13.

277Ibid,

citing the FCC 2020 Order at ¶ 53.

- 101 -

R.20-10-002 ALJ/CF1/avs

asserts that an inmate calling services provider knows the
jurisdiction of a call because it is “from a known originating
telephone number to a single, known terminating number.”[footnote
omitted]278 [and]… As Securus points out, “wireless carriers can
determine the locations of their customers at the time of each call, so
it is possible to establish the jurisdiction of each individual call.”279
However, in the rare cases when a provider cannot definitively determine
the end points of a call, the FCC 2020 Order clarifies that the provider should
treat the call as jurisdictionally mixed and thus subject to the FCC’s ancillary
service requirements adopted for interstate calls at that time. Notably, the FCC
provides this clarification out of a general concern for “attempts to exploit the
dual regulatory environment and evade our rules.”280
As discussed in section 7.4, however, in the 2021 FCC Third Order, the
FCC definitively states that for “jurisdictionally mixed” services where it is
impossible or impractical to separate the service’s intrastate from interstate
components, state law or requirements that impose fees lower than the FCC are
“specifically not preempted by [FCC] actions.”281 Thus, when the end-points of a
call cannot be definitely determined, the call should be classified as
jurisdictionally mixed, and the adopted ancillary service fee requirements
adopted here apply. The FCC Third Order does not preempt the restrictions we
adopt here for jurisdictionally mixed ancillary charges.
I. Commitment to Address Video Services in Phase II
278

FCC 2020 Order at ¶ 52.

279

Id. at ¶ 53.

280

Id. at ¶ 48.

- 102 -

R.20-10-002 ALJ/CF1/avs

TURN and Cal Advocates request that the Commission state our
commitment to address video services for incarcerated persons in Phase II of this
proceeding. We intend to review video services in Phase II of this proceeding.
12.

Assignment of Proceeding
Martha Guzman Aceves is the assigned Commissioner and

Cathleen A. Fogel is the assigned ALJ in this proceeding.
Findings of Fact
1. As of this decision, six telephone corporations provide intrastate IPCS to
354 incarceration and detention facilities in California— Securus, GTL, IC
Solutions, Legacy Inmate Communications, NCIC Inmate Communications, and
Pay Tel— serving an incarcerated population of over 172,000.
2. Intrastate per-minute rates charged by these six IPCS providers are as high
as $1.75 per minute and connection fees or first minute rates are as high as $3.60
per minute.
3. A 15-minute intrastate phone call in California can cost the caller as much
as $26.25 solely in per-minute charges, excluding any other transaction fees.
4. Average and maximum pre-paid call per-minute rates vary widely
between federal prisons, state prisons, county jails and local jails in California.
5. The CDCR announced a IPCS contract with GTL on March 1, 2021 with a
rate of $0.025 per minute.
6. As of April 2021, average and maximum call rates for federal prisons in
California are $0.17 and $0.21 per minute (prepaid).
7. As of April 2021, average and maximum call rates for California county
jails are $0.31 and $3.65 per minute (prepaid).
8. As of April 2021, average and maximum call rates for local (city) jails are
$0.27 and $0.91 per minute (prepaid).
- 103 -

R.20-10-002 ALJ/CF1/avs

9. As of April 2021, average IPCS call rates in county and local jails are about
996 and 1,124 percent higher per minute, respectively, than the IPCS rate
available in California state prisons.
10. As of April 2021, average IPCS call rates in county and local jails are about
82 and 59 percent higher per minute, respectively, than the IPCS rates available
in federal prisons in California.
11. IPCS rates charged in California vary widely and are exorbitantly high, in
some cases, resulting in unjust and unreasonable IPCS rates for incarcerated
people and their families.
12. It is unreasonable and unjust that people incarcerated in county jails, local
jails, and federal prisons in California pay between 584 percent and 1,124 percent
more than people incarcerated in California state prison facilities to talk with
their loved ones.
13. No party provided data justifying the significantly higher rates for county
or city jails or summarizing costs to provide security functions.
14. Where they exist, site commission payments are a significant factor
contributing to high rates and can account for 20 – 88 percent of IPCS costs.
15. A portion of high IPCS rates in California stem from revenue collected by
providers to recoup commission payments.
16. Virtually all incarceration facilities in California utilize one telephone
corporation to provide voice IPCS such that incarcerated persons and their
families in California have no viable alternative.
17. The IPCS market consists of two markets and sets of consumers: providers
that compete for the right to provide IPCS to the incarcerated, and the
incarcerated and their families.

- 104 -

R.20-10-002 ALJ/CF1/avs

18. Once selected, IPCS providers, whether individually or collaboratively
with incarceration facilities use their locational monopoly status within facilities
to exercise market power.
19. The FCC’s 2013 Order capped interstate IPCS rates at $0.21 per minute for
debit and prepaid calls and $0.25 per minute for collect calls.
20. The FCC’s 2021 Third Order lowers interstate IPCS rate caps to $0.12 per
minute for debit, prepaid, and collect calls from prisons, and $0.14 per minute for
all calls from jails with populations over 1,000; allows revenue collection of an
additional $0.02 per minute for site commission payments that are reasonably
related to the facility’s cost of enabling IPCS, if these result from contractual
obligations or negotiations; and, allows the pass-through without markup of any
site commission payments required under codified law or regulations up to a
total rate of $0.21 per minute.
21. The FCC’s Third Order retains a per-minute rate cap of $0.21 per minute
for all calls from jails with populations less than 1,000.
22. The March 2021 CDCR contract of $0.025 per minute provides a
benchmark of the costs of providing intrastate IPCS at reasonable rates in
prisons.
23. The FCC’s Third Order indicates it costs service providers approximately
22 to 25 percent more to provide IPCS in jails with populations greater than 1,000
as compared to prisons.
24. As of April 2021, 14 U.S. states have average intrastate IPCS rates of $0.05
or less in prisons.
25. As of April 2021, the rate for phone calls from prisons in Illinois is $0.009
per minute, in Dallas County, Texas, the rate for phone calls from jails is $0.0119

- 105 -

R.20-10-002 ALJ/CF1/avs

per minute, and in New York City, where jail phone calls are free to families, the
rate paid by the city is $0.03 per minute.
26. Some California counties currently use funds from site commissions for
rehabilitative and educational purposes for the incarcerated and for unrelated
purposes.
27. Adopting an interim intrastate IPCS rate of $0.07 per minute balances this
Commission’s obligation to ensure just and reasonable rates for services offered
by telephone corporations with counties’ authority to collect site commission fees
pursuant to Penal Code Section 4025.
28. Adopting an interim intrastate IPCS rate cap of $0.07 per minute results in
less wildly divergent IPCS rates for the incarcerated and their families across
different facilities in California.
29. Adopting an interim rate cap of $0.07 per minute provides a cushion for
counties to identify other funding sources for cost centers currently funded
through site commissions.
30. Adopting an interim rate cap of $0.07 per minute results in immediate
relief to approximately 171,000 incarcerated people located at 343 incarceration
facilities in California, and their families.
31. Incarcerated people who have regular contact with family members are
more likely to succeed after release and have lower recidivism rates because they
maintain vital support networks.
32. Reduced recidivism benefits society by saving millions of dollars in
incarceration-related costs annually.
33. The FCC’s Third Order states that the FCC has not yet been able to collect
standardized and accurate cost data from all telephone corporations providing
IPCS.
- 106 -

R.20-10-002 ALJ/CF1/avs

34. The FCC has adopted interim caps on several ancillary fees as follows:
a. Automated payment fees: These fees are limited to a
maximum of $3.00 per use;
b. Paper bill fee: Paper bill fees are capped at $2.00 per
statement; and,
c. Live agent fee: Single live operator interactions are capped
at $5.95 per interaction;
d. Single-call service (collect) (and related service): Where no
prepaid or debit inmate calling services account has been
established, telephone corporations providing IPCS are
precluded from charging more than the exact fee the
third-party charges for these transactions up to a limit of
$6.95 per transaction, with no markup;
e. Third-party financial transaction fees: The amount of
third-party fees that an inmate calling service provider can
pass on to consumers are limited to the exact third-party
fees, with no markup, up to a limit of $6.95 per transaction;
f. Mandatory pass-through of government taxes and fees:
Markups on either category of charges is prohibited unless
the markup is authorized by a local statute, rule, or
regulation.
35. We are not aware of instances where markup of mandatory pass-through
of government taxes and fees is permitted in California.
36. Providers are currently imposing some 35 ancillary fees in connection with
IPCS.
37. Most ancillary service fees and charges found in connection with the IPCS
market are not imposed in any other segment of the telecommunications market
in California.
38. Incarcerated persons and their loved ones have been charged multiple
single-call service fees while attempting to complete a single 15-minute phone
call.

- 107 -

R.20-10-002 ALJ/CF1/avs

39. Fifteen state prison systems have eliminated automated
payment/automated deposit fees.
40. As of April 2021, GTL does not impose an automated payment/automated
deposit fee on incarcerated persons in multiple facilities in California.
41.

Customers not residing in incarceration facilities typically receive paper

utility bills or bank statements without paying additional fees.
42. Many customers lack access to broadband service to access online
statements.
43. Most telephone corporations and other utilities provide customer services
for free, including services such as speaking with a live agent to set up an
account, adding money to an account, or assisting with making a call.
44. Single-call service providers or third-party financial transaction companies
have charged incarcerated people higher-than-typical fees for such services and
then returned some portion of these higher fees to telephone corporations
providing IPCS.
45. IPCS providers did not provide information or evidence to justify the
imposition of ancillary service fees not required by commercial calling services
on incarcerated persons and their families.
46. The ancillary fees assessed on IPCS customers create hardship for families
and adopting the FCC’s Third Order ancillary fee caps in California is
insufficient to address these hardships.
47. Ancillary service charges generally cannot be practically segregated
between interstate and intrastate jurisdiction except in the limited number of
cases where, at the time a charge is imposed and the consumer accepts the
charge, the call to which the service is ancillary is clearly an interstate-only or an
intrastate-only call.
- 108 -

R.20-10-002 ALJ/CF1/avs

48. The only ancillary fee permitted by the FCC for interstate IPCS calls that
can practicably be identified with a particular call is the single-call service fee.
49. Prohibiting automated payment fees, paper bill/statement fees, live agent
fees, and single-call fees in association with intrastate and jurisdictionally mixed
IPCS is equivalent to capping these fees at zero ($0.0) dollars.
50. As of May 2021, there were over 800 parties, mostly telephone
corporations, on the service list for this proceeding, but only a small number of
parties had actively participated in the proceeding or provide IPCS.
51. A service list larger than 800 complicates service of proceeding documents
to parties due to email size limits and is not necessary for this case.
52. It is reasonable to require IPC providers to provide customer notices and
disclosures regarding adopted rate and ancillary service fee requirements in
English, Spanish and other languages prevalent in incarceration facilities, and to
inform the incarcerated of methods to lodge service quality complaints with the
Commission.
53. IPCS providers had ample opportunity to file in the record of this
proceeding detailed and/or summary cost data but have declined to do so.
Conclusions of Law
1. The California Constitution and the Public Utilities Code vest in the
Commission) regulatory authority over public utilities, including telephone
corporations.
2. Public Utilities Code Sections 216, 233, 234, 451, 454(a) and 701 vest in the
Commission the obligation to ensure that the rates, terms and conditions charged
by telephone corporations to provide intrastate IPCS are just and reasonable.
3. Telephone corporations providing IPCS voice services, including via VoIP
technologies, are public utilities subject to our jurisdiction.

- 109 -

R.20-10-002 ALJ/CF1/avs

4. Pursuant to Public Utilities Code Section 451, unjust or unreasonable
charges demanded or received by utilities are unlawful.
5. For purposes of this decision, the Commission should define intrastate
IPCS as voice calling services provided to any local, state, or federal correctional
or detention facility type operated in California housing adults and/or juveniles,
including but not limited to city and county jails, federal and state prisons,
correctional facilities, juvenile detention facilities, holding centers, camps,
psychiatric hospitals, immigration detention centers, military jails and tribal jails,
including, but not limited to, voice and interconnected VoIP calling, and voice
and VoIP communications services serving people with disabilities.
6. The Commission has the authority to investigate market power abuses on
the part of public utilities and to regulate rates where monopolies exist or where
competition is prohibited or does not otherwise exist.
7. Incarcerated people are a captive customer class with no alternative choice
of IPCS service provider once a given facility has selected a single provider.
8. Providers of IPCS in California operate locational monopolies in the
facilities they serve and exercise market power.
9. California Penal Code Section 4025(d) authorizes, but does not require,
county sheriff’s departments to collect site commissions from telephone
corporations providing IPCS and to place these funds in an inmate welfare fund
that is spent primarily for the benefit, education, and welfare of incarcerated
persons.
10. The lawful collection of site commission funds pursuant to Penal Code
Section 4025(d) does not absolve this Commission from its obligation to ensure
access to just and reasonable calling service rates for incarcerated people and
their families pursuant to Public Utilities Code Section 451.
- 110 -

R.20-10-002 ALJ/CF1/avs

11.

County sheriff’s departments’ collections of site commission funds

pursuant to Penal Code Section 4025, if any, must be in accordance with the
provision of just and reasonable calling rates for incarcerated persons and their
families pursuant to Public Utilities Code Section 451.
12. IPCS rates that are 584 percent to 1,124 percent higher than the $0.025 per
minute rate offered in state prisons in California are neither just nor reasonable.
13. The Commission should exercise its authority and jurisdiction over
telephone corporations, including VoIP providers, to regulate intrastate IPCS
rates and fees in California.
14. This Commission has the discretion to determine and set just and
reasonable rates using a variety of methods.
15. It is reasonable to adopt a $0.07 per minute cap on an interim basis.
16. The Commission should adopt an interim rate cap of seven cents ($0.07)
per minute for all intrastate IPCS voice calls in California.
17. The Communications Act of 1934, as amended, allocates jurisdiction over
intrastate communications services to the states and jurisdiction over interstate
and international communications services to the FCC.
18. The Commission is not preempted from imposing intrastate rates or fees
lower than those adopted by the FCC, including with regards to calls with
interstate and intrastate components, where federal requirements operate as
ceilings.
19. Ancillary service fees other than the single-call service fee pertain to
jurisdictionally mixed services because it is impossible or impractical to separate
the service’s intrastate from interstate components.

- 111 -

R.20-10-002 ALJ/CF1/avs

20. For jurisdictionally mixed ancillary services, FCC requirements do not
preempt state law or regulations as long as the state requirements impose lower
fees.
21. It is within this Commission’s authority and jurisdiction to adopt lower
ancillary fee caps than those adopted by the FCC for interstate IPCS and to
require IPCS providers to adhere to our adopted caps in the case of all purely
intrastate as well as all jurisdictionally mixed ancillary services.
22. Unregulated intrastate IPCS ancillary fees contribute to total IPCS charges
that are unjust and unreasonable.
23. It is reasonable for the Commission to prohibit or cap ancillary fees
imposed in association with intrastate and jurisdictionally mixed IPCS on an
interim basis as follows:
(a) Prohibit single-call service fees;
(b) Prohibit automated payment/automated deposit fees;
(c) Prohibit live agent fees;
(d) Prohibit paper bill fees;
(e) Limit third-party financial transaction fees to the pass
through of the exact third-party fee, with no markup, and
excluding any credit card charges, up to a cap of $6.95 per
transaction; and,
(f) Prohibit the markup of any mandatory pass-through
government taxes and fees.
24. The Commission should prohibit telephone corporations providing
intrastate IPCS from imposing any IPCS ancillary service fees or charges greater
than or other than those specified here, except for single-call fees imposed on
interstate calls.

- 112 -

R.20-10-002 ALJ/CF1/avs

25. The Commission should require telephone corporations providing
intrastate IPCS to implement the rate caps and ancillary fee requirements
adopted here no later than 45 days from issuance of this decision.
26. The Commission should require each telephone corporation providing
intrastate IPCS to submit via email to the Director of the Communications
Division (cddirector@cpuc.ca.gov) within 45 days of Commission issuance of this
decision a Notice of Compliance confirming implementation of the interim rate
cap of $0.07 per minute and the ancillary fee requirements adopted here across
all of their intrastate IPCS contracts, accounts, and facilities in California, and
including the following information:
(a)

Attestation that the interim ancillary service fee
requirements adopted here have been implemented at
any and all facilities served by the carrier in California.

(b)

Copies of or links to carrier webpages where the interim
ancillary service fee requirements adopted here are
presented for facilities located in California.

(c)

Copies of notices provided to facilities of the interim
ancillary service fee requirements adopted here.

(d)

Copies of notices to incarcerated people of the interim
ancillary service fee requirements adopted here.

27. The Commission should direct all telephone corporations providing
intrastate IPCS to fully disclose the rate caps and ancillary fee requirements
adopted here on their websites, bills, and in marketing material by no later than
45 days from Commission issuance of this decision, and to maintain information
on the adopted rate clearly and prominently on their websites. The Commission
should require that such notices and disclosures of fee schedules and services are
provided in English, Spanish and any other languages prevalent in incarceration
facilities, and should require that the notices inform the incarcerated of methods

- 113 -

R.20-10-002 ALJ/CF1/avs

to lodge service quality complaints with the Commission as discussed in section
11 of this decision.
28. The Commission should require all telephone corporations providing
intrastate IPCS to submit an Interim Rate Compliance Report to the
Commission’s Director of the Communications Division at
cddirector@cpuc.ca.gov no later than 45 days from Commission issuance of this
decision, and on a quarterly basis thereafter while the interim rates adopted here
are in effect, and should require that report include a revenue breakdown of
billed interstate and intrastate minutes of use, and a revenue breakdown of billed
ancillary interstate and intrastate fees over a period of thirty days.
29. The Commission should require all IPCS providers to provide a Plan for
Notification to all current and prospective customers and account holder, their
draft notices of the adopted rates, terms and conditions, refund policies and
customer service contacts for websites, bill inserts, and marketing materials to
the Commission Communications Director for review no later than 30 days from
Commission issuance of this decision. These should include disclosures of fee
schedules and service-related information in English, Spanish and other
languages prevalent in incarceration facilities, and should inform the
incarcerated of methods to lodge service quality complaints with the
Commission as discussed in section 11 of this decision.
30. The Commission should affirm the authority of the Commission’s
Communications Division to assess fines for lack of compliance with this
decision pursuant to Resolution T-17601 and Public Utilities Code Sections 2107
and 2108, referring, in the case of violations of this decision’s requirement for
submittal of draft and final Notices of Compliance and related materials, to
Resolution T-17601 for guidance and, in the case of violations of this decision’s
- 114 -

R.20-10-002 ALJ/CF1/avs

rate and ancillary fee requirements, should direct Staff to develop a resolution
proposing fines pursuant to Public Utilities Code Sections 2107 and 2108.
31. The Commission should remove from the service list to R.20-10-002
telephone corporations that do not provide IPCS and parties that have not filed
substantive pleadings, should retain as parties those entities listed in Section 9.2
of this decision, and should transfer from “party” to “information only” status
those entities listed in section 9.1 of this decision.
32. Provision of cost information in response to discovery data requests does
not constitute provision of cost information in the record of this proceeding.
O R D E R
IT IS ORDERED that:
1. This decision applies to intrastate incarcerated person’s voice calling
services provided to any local, state, or federal correctional or detention facility
type operated in California housing adults and/or juveniles, including but not
limited to city and county jails, federal and state prisons, correctional facilities,
juvenile detention facilities, holding centers, camps, psychiatric hospitals,
immigration detention centers, military jails and tribal jails, and including but
not limited to voice and Voice Over Internet Protocol (VoIP) calling, and voice
and VoIP voice communications services serving people with disabilities.
2. Interim caps on intrastate rates for incarcerated persons calling services in
California of seven cents ($0.07) per minute for debit, prepaid, and collect calls
are adopted.
3. The following requirements for all ancillary service fees associated with
the provision of intrastate and jurisdictionally mixed incarcerated person’s
calling services in California are adopted: (a) imposition of any single-call, paper
bill, live agent, and/or automated payment fees is prohibited; (b) collection of
- 115 -

R.20-10-002 ALJ/CF1/avs

third-party financial transaction fees is limited to the pass through of the exact
fee only, with no mark up, and excluding any credit card charges, up to a cap of
$6.95 per transaction; (c) collection of government-mandated taxes and fees is
limited to the pass through of the exact fee only, with no mark up; and, (c)
imposition of any other type of ancillary service fee or service charge not
explicitly approved here is prohibited.
4. No later than 45 days from Commission issuance of this decision, all
telephone corporations providing intrastate incarcerated person’s calling services
(IPCS) as defined in this decision are:
a. Directed to implement interim caps on intrastate rates for
all IPCS calls of seven cents ($0.07) per minute for debit,
prepaid, and collect calls no later than 45 days from
Commission issuance of this decision and to apply the rate
cap to any existing account balances as of the date of
implementation, as well as any new account balances or
new accounts opened after that date;
b. Prohibited from implementing any single-call, paper bill,
live agent, and automated payment fees in association with
the provision of intrastate and/or jurisdictionally mixed
IPCS;
c. Limited in the collection of third-party financial transaction
fees to the pass through of the exact fee only, with no mark
up, and excluding any credit card charges, up to a cap of
$6.95 per transaction;
d. Limited in the collection of government-mandated taxes
and fees to the pass through of the exact fee only, with no
mark up;
e. Prohibited from imposing any other type of ancillary fee or
service charge not explicitly approved here;
f. Directed to each email a Notice of Compliance to the
Director of the Communications Division at
cddirector@cpuc.ca.gov confirming implementation of the

- 116 -

R.20-10-002 ALJ/CF1/avs

interim rate cap of $0.07 per minute and the ancillary fee
requirements adopted here across all of their IPCS
contracts, accounts, and facilities in California and
including the following information:
i.

Attestation that the interim ancillary service fee
requirements adopted here have been implemented at
any and all facilities served by the carrier in California;

ii.

Copies of or links to carrier webpages where the interim
ancillary service fee requirements adopted here are
presented for facilities located in California;

iii.

Copies of notices provided to facilities of the interim
ancillary service fee requirements adopted here;

iv.

Copies of notices to incarcerated people of the interim
ancillary service fee requirements adopted here;

g. Directed to fully disclose the rate caps and ancillary fee
requirements adopted here on their websites, bills, and
marketing material in English, Spanish and any other
language prevalent in the incarceration facilities, including
informing the incarcerated of methods to lodge service
quality complaints with the Commission, and to maintain
information on the adopted rate and ancillary fee
requirements clearly and prominently on their websites;
and,
h. Directed to each email an Interim Rate Compliance Report
(Report) to the Director of the Communications Division at
cddirector@cpuc.ca.gov, and on a quarterly basis thereafter
while the interim rates adopted here are in effect, and
include in the Report a revenue breakdown of billed
interstate and intrastate minutes of use, and a revenue
breakdown of billed ancillary interstate and intrastate fees
over a period of thirty days.
5. All telephone corporations providing intrastate incarcerated person’s
calling services as defined in this decision are directed to email to the Director of
the Communications Division at cddirector@cpuc.ca.gov a Plan for Notification
to all current and prospective customers and account holders, draft notices
- 117 -

R.20-10-002 ALJ/CF1/avs

describing the adopted rates and ancillary fee requirements, terms and
conditions, refund policies and customer service contacts for websites, bill
inserts, and marketing materials for review no later than 30 days from
Commission issuance of this decision, including fee schedules and servicerelated information in English, Spanish and other languages prevalent in
incarceration facilities that include informing the incarcerated of methods to
lodge service quality complaints as discussed in section 11 of this decision.
6. Telephone corporations providing intrastate incarcerated person’s calling
services (IPCS) not explicitly identified in this decision must email to the Director
of the Communications Division at cddirector@cpuc.ca.gov a Notice of
Compliance with this decision to the Commission no later than 45 days after
executing a contract to provide IPCS in California, must maintain information on
the adopted rate and ancillary fee requirements clearly and prominently on their
websites in English, Spanish and other languages prevalent in the incarceration
facility, including informing the incarcerated of methods to lodge service quality
complaints with the Commission as discussed in section 11 of this decision, and
must email to the Director of the Communications Division at
cddirector@cpuc.ca.gov draft notices of the adopted rates, ancillary fee
requirements, terms and conditions, refund policies and customer service
contacts for websites, bill inserts, and marketing materials for review no later
than 30 days after executing a contract to provide IPCS in California.
7. We authorize the California Public Utilities Commission’s
Communications Division to assess fines pursuant to Resolution T-17601 and
Public Utilities Code Sections 2107 and 2108 for lack of compliance with this
decision, referring, for violations of this decision’s requirement for submittal of
draft and final Notices of Compliance and related materials, to Resolution
- 118 -

R.20-10-002 ALJ/CF1/avs

T-17601, and, for violations of this decision’s rate and ancillary fee requirements,
Staff should develop a resolution proposing fines as authorized pursuant to
Public Utilities Code Sections 2107 and 2108.
8. The Commission’s Process Office shall move the following parties to
Rulemaking 20-10-002 to “information only” status no later than 15 days from
Commission issuance of this decision:
a. Charter Fiberlink CA-CCO, LLC, Time Warner Cable
Information Services (California), LLC, and Bright House
Networks Information Services (California), LLC;
b. Cox California Telecom, LLC;
c. AT&T Corporation (collectively Pacific Bell Telephone
Company d/b/a AT&T California, AT&T Corp., Teleport
Communications America, LLC, and SBC Long Distance,
LCC d/b/a AT&T Long Distance); and,
d. Comcast Phone of California, LLC.
9. The Commission’s Process Office shall remove all parties not indicated
below or in Ordering Paragraph 8 from the Rulemaking 20-10-002 service list no
later than 15 days from Commission issuance of this decision:
a. Securus Technologies, LLC;
b. Global Tel*Link (GTL); Inmate Calling Solutions, LLC;
c. NCIC Inmate Communications;
d. Pay Tel Communications, Inc.;
e. Legacy Inmate Communications, Inc.;
f. Public Communications Services, Inc.;
g. Telmate, LLC;
h. Value-Added Communications, Inc.;
i. Californians for Jail and Prison Phone Justice Coalition;
j. Center for Accessible Technologies;
k. Greenlining Institute;
- 119 -

R.20-10-002 ALJ/CF1/avs

l. Media Alliance;
m. Prison Policy Initiative, Inc.;
n. Public Advocates Office;
o. Returning Home Foundation;
p. Root and Rebound;
q. The Utility Reform Network;
r. Youth Law Center;
s. MCI Communications Services LLC and MCI Metro Access
Transmission Services Corp. (Verizon);
t. Intelletrace, Inc.;
u. Southern California Edison;
v. Frontier California Inc.;
w. Citizens Telecommunications Company of California Inc.;
x. Frontier Communications of the Southwest Inc.;
y. Frontier Communications Online and Long Distance Inc.;
z. Frontier Communications of America, Inc.;
aa. Cal-Ore Telephone Co.;
bb. Ducor Telephone Company;
cc. Foresthill Telephone Co.;
dd. Kerman Telephone Co.;
ee. Pinnacles Telephone Co.;
ff.

Sierra Telephone Company, Inc.;

gg. The Siskiyou Telephone Company;
hh. Volcano Telephone Company;
ii.

Calaveras Telephone Company;

jj.

Ponderosa Telephone Co.;

kk. Winterhaven Telephone Company;
ll.

Happy Valley Telephone Company; and,

mm. Hornitos Telephone Company.
- 120 -

R.20-10-002 ALJ/CF1/avs

10. Rulemaking 20-10-002 remains open.
This order is effective today.
Dated August 19, 2021, at San Francisco, California.

MARYBEL BATJER
President
MARTHA GUZMAN ACEVES
CLIFFORD RECHTSCHAFFEN
GENEVIEVE SHIROMA
DARCIE L. HOUCK
Commissioners

- 121 -

R.20-10-002 ALJ/CF1/avs

APPENDIX A
REVISED STAFF PROPOSAL
Interim Rate Relief for Inmate Calling
Services
The original Staff proposal recommending the California Public Utilities Commission (CPUC) apply the
Federal Communications Commission’s (FCC’s) interstate inmate calling service1 (ICS) rates to
intrastate communications services utilized by incarcerated persons detained in California2 until the
CPUC adopts permanent rates at the conclusion of D.20-10-002 was issued on April 2, 2021.
Since that time, the CPUC has received comments from parties, held two Public Participation Hearings
(PPHs) where it received numerous public comments, and the FCC has adopted3 revised per minute
rates for prisons and jails. In response to this input and new interstate service rates Staff has modified its
proposal, most notably, to reflect the new FCC adopted per minute rates of $0.14 for prisons and $0.16
for jails.4 Staff also eliminated the single-call service charge from the list of authorized ancillary service
charges.
In written comments to the online portal, comments were submitted regarding fees, including the
single-call service fee. Most notable were those ICS customers that provided examples of being
charged a connection fee multiple times to complete a single 15-minute phone call. In more than one
instance, commenters indicated being disconnected multiple times during their call and then being
charged the single-call service fee each time they tried to reconnect. In these examples the single-call
service fee of $3.00 was likely charged at least three times and totaled $9.00 or more.
The FCC also expressed concerns regarding ancillary service charges. Specifically, the FCC found
that single-call services were used by providers to inflate charges, and noted evidence suggesting
some providers are in revenue sharing agreements with third parties for single-call service, thus
avoiding the FCCs cap on pass-through fees for single-call services.5
Staff recognizes the sensitivity in the use of the term ‘inmate’ in this Staff Proposal, however, we use
the term to be consistent with FCC as the framework is adopted and use the term ‘incarcerated’ as
appropriate.
1

As described in the January 12, 2021 Assigned Commissioner’s Scoping Memo and Ruling at 23 - 24, we
define “inmate communication services” as applying to any local, state, or federal correctional or
detention facility type operated in California housing adults and/or juveniles, including but not limited
to city and county jails, federal and state prisons, correctional facilities, juvenile detention facilities,
holding centers, camps, psychiatric hospitals, immigration detention centers, military jails and tribal
jails.” See also footnote 11. For purposes of this proposal, Staff is only addressing rates for voiceonly communication services.
3 FCC Third Report and Order, Order on Reconsideration, and Fifth Further Notice of Proposed
Rulemaking (Fifth NPRM) (May 24, 2021).
2

Federal Register, Vol. 85, No. 206 ¶ (Friday, October 23, 2020).

Fifth NPRM ¶ 212, at page 96.

-1-

R.20-10-002 ALJ/CF1/avs

To protect ICS consumers from potential fee abuse, Staff recommends the prohibition of the singlecall service fee as part of its interim relief proposal.
At the recent PPHs, the CPUC also heard from the public that an incarcerated person or family
member is charged multiple ancillary fees such as a transaction fee, a single-call fee, and a live agent
fee, etc. In the end, $20 deposited into an account may only provide the caller with a few minutes of
calling because most of their funds have been unreasonably consumed by “ancillary charges.”
Staff further recommends that the CPUC evaluate the relevance of all ancillary charges for ICS in
the next phase of this proceeding by examining competitive telecommunications providers operating
in the open market to determine if any of these ICS ancillary charges are levied by competitive
telecommunications providers, or whether they are reasonably required for the provision of such
services. There is little reason to believe that the costs of a credit card transaction or speaking with a
live agent are higher for an ICS provider or any more reasonable to charge to incarcerated persons
than the general public being serviced by other telecommunications corporations operating in the
open market in California.
In the first Staff proposal we recommended the CPUC update interim rates if the FCC adopts new per
minute of use ICS rates. On May 20, 2021, the FCC adopted new interim rate caps; we have therefore
updated the Staff proposal to reflect these new rates. However, the FCC’s new interim order also
included a separate and distinct rate for facilities of less than 1,000 incarcerated persons. This rate was
not included in the original FCC framework and we do not recommend including this separate rate
here. Staff does not find sufficient justification to further distinguish the rates charged at facilities in
California nor has the FCC presented any compelling data that would cause us to believe that costs are
more than 30 percent higher for these facilities.
With these limited modifications, Staff recommends the CPUC adopt Staff’s proposal and require
carriers to implement it within 30 days of the CPUC’s decision to ensure those incarcerated in
California receive immediate rate relief.
RATES ARE UNREASONABLE
Staff collected ICS data from carriers providing ICS in California. The carriers furnished this
information in response to a data request sent to over 800 licensed and registered service providers in
California. Six companies6 responded to the data request indicating that they provide ICS. Staff
considers these six companies to represent the total number of ICS providers in California as these
same companies are participating in the FCC’s ICS proceeding.7 The data provided in response to
the data request shows that intrastate per-minute rates are as high as $1.75 per minute and connection
fees or first minute rates are as high as $3.60 per minute. (See Attachment A). A 15-minute
6

Securus Technologies, LLC, Global Tel*Link Corporation, Inmate Calling Solutions, LLC, Legacy Inmate
Communications, Network Communications International Corporation, and Pay Tel Communications, In c.
7 WC Docket No.12-375.

-2-

R.20-10-002 ALJ/CF1/avs

intrastate phone call in California can cost the caller as much as $26.25 in per-minute charges only,
excluding any other transaction fees.
MONOPOLY SERVICE
There are two distinct markets for ICS; a market wherein providers bid on Requests For Proposals
from facilities or jurisdictions to be the sole provider at the facility, and a market for the end user of
the telecommunication services. Accordingly, ICS providers are the sole providers within any given
detention center. Staff was unable to identify any instance in which an incarcerated person or any
person communicating with an incarcerated person has a choice of service provider. Incarcerated
persons are a captive customer class with no choice among multiple service providers, and therefore,
must pay exorbitant communication service rates or forego communication with family or friends.
Pursuant to Public Utilities (Pub. Util.) Code Sections 451 and 454(a), the Commission has a duty to
ensure that the rates charged for all utility services, including those provided to incarcerated persons,
are just and reasonable. Any unjust or unreasonable charge demanded or received by a utility is
unlawful.8 The CPUC has traditionally regulated the rates of utility monopolies such as the
incumbent local exchange carriers (ILECs), who were given exclusive franchise service territories.
Regulation of rates for these monopolies continues where competition is prohibited or does not
otherwise exist.9 The CPUC regulates monopoly utilities providing telecommunications, water, gas,
and electricity to ensure that the rates these utilities charge are just and reasonable. ICS providers
similarly operate as monopolies and are charging incarcerated persons and their families unreasonable
rates, which is unlawful.
Therefore, the CPUC should regulate ICS rates unless or until such time that incarcerated persons
have competitive choice in their communications services, or at least on an interim basis, until the
CPUC concludes the current proceeding.
PROPOSAL FOR INTERIM RELIEF
Despite having lessened regulation of communications service providers, the CPUC retained its
authority to investigate market power abuses.10 Staff finds that the ICS market demonstrates market
power abuse. Incarcerated persons and their families are being charged unreasonable rates with no
viable alternative. The FCC similarly determined that the ICS market is a prime example of market
failure.11 Therefore, regulation of ICS rates is warranted and the CPUC must ensure that the intrastate
rates ICS providers charge are just and reasonable.
CD Staff recommends the CPUC adopt the FCC’s ICS rates as intrastate calling service rates for those
8

Pub. Util. Code Section 451.

See D.07-09-018, at 43-44.

See D.06-08-030, Conclusion of Law 32.

FCC 20-111, Report and Order on Remand and Fourth Further Notice of Proposed Rulemaking (2020 Order on
Remand) (August 7, 2020), ¶ 2.
11

-3-

R.20-10-002 ALJ/CF1/avs

services utilized by incarcerated persons detained in California until the CPUC adopts permanent rates
at conclusion of R.20-10-002.
The FCC is currently addressing ICS rates and charges in WC Docket No.12-375. On May 20, 2021,
the FCC adopted new interim rate caps of $0.14 per minute for prisons12 and $0.16 per minute for jails13
with 1,000 or more incarcerated people for interstate calls. These FCC rates include a $0.02 per minute
allowance for site commissions where these result from contractual obligations or negotiations with
incarceration facilities.14 In the original Staff Proposal, staff indicated that if the FCC further lowers its
rates for ICS, the CPUC’s interim rates should be modified to reflect those new rates. Staff recommends
the CPUC adopt the FCC rate caps of $0.14 per minute for prisons and $0.16 per minute for jails.15
Staff does not recommend the CPUC adopt the interim rate cap of $0.21 per minute for jails with an
average daily population below 1,000 as there is no supporting data in the record for the assertion
showing a cost differential between providing service to small and large facilities.
IMPACT OF INTERIM RATES ON PER MINUTE OF USE RATES
In response to the data request, carriers have reported offering ICS to approximately 354 facilities16 in
California. Based on this data, Staff estimates that 218 facilities and over 64,000 incarcerated persons
would see immediate rate reductions from the interim rates, as they have rates that exceed $0.16 per
minute (See Attachment A).
Under Staff’s proposal, the price for a 15-minute phone call would be reduced from as much as $26.25
to a range of $2.10-$2.40.
FCC 64.60000 defines prisons as including facilities that would otherwise fall under the definition of
a jail but in which the majority of inmates are post-conviction or are committed to confinement for
sentences of longer than one year.
12

FCC 64.60000 defines jails as a facility of a local, state, or federal law enforcement agency that is used
primarily to hold individuals who are; (1) Awaiting adjudication of criminal charges;
(2) Post-conviction and committed to confinement for sentences of one year or less; or
(3) Post-conviction and awaiting transfer to another facility. The term also includes city, county or
regional facilities that have contracted with a private company to manage day-to-day operations;
privately-owned and operated facilities primarily engaged in housing city, county or regional inmates;
and facilities used to detain individuals pursuant to a contract with U.S. Immigration and Customs
Enforcement.
13

Fifth NPRM, ¶ 3, page 3. The Fifth NPRM additionally allows providers to pass on site commission
payments that are mandated by federal, state, or local law to consumers without any markup (Ibid.)
14

For the purposes of California, Staff recommends the Commission adopt the FCC’s definition of
prisons and jails for all detention facilities. Staff does not explicitly or implicitly recommend
exempting any facility type. Facilities include any local, state, or federal correctional or detention facility
type operated in California housing adults and/or juveniles, and including but not limited to city and
county jails, federal and state prisons, correctional facilities, juvenile detention facilities, holding centers,
camps, psychiatric hospitals, immigration detention centers, military jails and tribal jails.
15

Represents approximately 354 addresses identified in the data request by the six carriers.

-4-

R.20-10-002 ALJ/CF1/avs

FCC RATES ARE NOT APPROPRIATE FOR LONG TERM
Staff finds the FCC rates to be unreasonable for long term intrastate rates. Traditionally,
telecommunications service usage is predominantly intrastate in nature— 70-80 percent of all calls are
often considered intrastate.17 Therefore, due to the percentage of usage, intrastate rates have a far
greater impact on ones’ regular and ongoing communication.
ANCILLARY SERVICES
The FCC generally prohibits providers from imposing any ancillary service charges in connection
with ICS other than those specified in its rules, and generally prohibits providers from imposing
charges greater than the FCC’s applicable ancillary service fee caps. The FCC has adopted interim
rate caps for the following services18 or charges. Staff recommends the CPUC adopt the rate caps
below, not including the single-call service fee, on an interim basis:
 Automated Payment Fees: The FCC limits these fees to a maximum of $3.00 per use.
 Third-Party Financial Transaction Fees: The FCC limits the amount of third-party fees that
an ICS provider can pass on to consumers to the exact third-party fees, with no markup.
 Live agent fee: The FCC caps single live operator interaction at $5.95 per interaction.
 Paper bill fee: The FCC caps fees for paper bills at $2.00 per statement.
 Mandatory Pass-Through Government Taxes and Fees: The FCC prohibits markups on
either category of charges.
Staff also recommends that the CPUC prohibit carriers from charging any other service fees or
ancillary service fees not specified above. Although not exhaustive, Staff has developed a list from
the data requests of other services and charges being assessed in connection with ICS (see Attachment
B). This list shows the extent of the various charges carriers currently provide and indicates that the
“per-minute-of-use charges” are only a portion of the fees incarcerated persons are charged. For
example, some ICS providers are charging a Transaction Processing Fee and a Prepaid Refund
Processing Fee, both of which Staff recommends the CPUC prohibit.
OTHER INMATE’S COMMUNICATION SERVICES
At this time, Staff does not recommend that interim relief include rates for other communications
services, such as text or video communication.19 Staff does not have the necessary relative pricing
data to determine the reasonableness of these and other non-voice communication service rates at
this time. However, Staff recommends that any adopted permanent rates and regulations include
these other services.

FCC 2020 Order on Remand at 10.

Fifth NPRM.

Other inmate communication services may include but not be limited to incarcerated person’s
messaging, incarcerated person’s video messaging, remote video visitation, in-person video visitation,
voicemail, tablet use for messaging, photo sharing, music or video entertainment or internet access.
19

-5-

R.20-10-002 ALJ/CF1/avs

TIMELINE FOR IMPLEMENTATION OF INTERIM RATES
Staff recommends the CPUC adopt interim rates as soon as is practically possible. Further, Staff
recommends that the CPUC direct carriers to implement the new rates within 30 days of adoption,
and order that these interim rates remain in effect until the CPUC adopts permanent rates at the
conclusion of R.20-10-002.
COMPLIANCE
Staff recommends that the CPUC require carriers to file a Notice of Compliance20 with the
Communications Division at cddirector@cpuc.ca.gov within 30 days of the interim rates being
adopted. This Notice should include the following:





Attestation that the interim rates have been implemented at any and all facilities served
by the carrier in California.
Copies of or links to carrier webpages where the interim intrastate rates are presented
for facilities located in California.
Copies of notices provided to facilities of the interim calling rates.
Copies of notices to incarcerated persons of the interim calling rates.

CPUC Communication Division Compliance and Report Filing Cover Sheet

-6-

R.20-10-002 ALJ/CF1/avs

Attachment A
Data Request Summary of Information
The chart below is a summary of information collected through the Communications Division data
request.

Inmate Calling Service Provision in
California
Approximate number of facilities
Estimated incarcerated person’s population
Facilities with rates over $0.16 per minute
Population affected by interim rates

354
172,5431
218
64,356

Calling Service Rates
Highest per minute rate
Highest 1st minute rate

$1.75
$3.60

Ancillary Charges
Highest single-call rate
Highest automated payment charge
Highest third-party fee
Highest live agent fee
Highest paper bill fee

$3.00
$3.00
$6.95
$5.95
$2.49

In further analysis, Staff identified and rectified a calculation error (Previously 159,572).

-1-

R.20-10-002 ALJ/CF1/avs

Attachment B
Other Inmate’s Calling Service Fees
and Charges
Below is a list of other fees and charges identified as included in inmate calling service contracts.
 Carrier access fee
 Cost recovery fee
 Billing statement fee
 Surcharge (non-government)
 Close out fee
 Percent transaction fees
 Connect Charge
 1st Minute fee
 One-time Friends and Family Prepaid Collect Account Set-Up Fee
 Prepaid Collect Account Replenish Fee
 State Cost Recovery Fee
 Location Validation Fee
 Transaction Processing Fee
 Prepaid refund processing fee
 Western Union Debit Refund Processing Fee
 Minimum funding amount of $25
 Account setup fee
 Securus refund fee
 Securus funding transaction fee
 Minimum funding amount
 Kiosk deposit fee
 Percent charge for Western Union fee
 Release debit card fee
 Pre-paid collect service
 Walk in, internet money transfer fee
 Web transaction fee
 Bail deposit credit, cash and live operator fee
 Wireless administration fee.
 Inmate transfer fee
(END OF ATTACHMENTS)

(END OF APPENDIX A)

- B1 -