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FCC can finally hammer predatory prison phone companies, thanks to a bill that just passed

A brand new law (just awaiting the President’s signature) will allow the Federal Communications Commission to directly regulate rates in the notoriously predatory prison calling industry. Under the threat of having to provide a solid product at a reasonable price, companies may choose to stop there and open the market to a generation of more compassionate and forward-thinking suppliers.

Prison appeal systems are dependent on the state and the prison system and generally run the gamut of quite well to terribly bad. With a literally captive customer base, companies had no real reason to innovate, and financial models involving bribes to prisons and states incentivized revenue at all costs.

Inmates are routinely charged exorbitant rates for simple services like phone calls and video calls (an upsell), and have even had their visitation rights waived, leaving chargeable calls the only option. Needless to say, this particular financial burden falls disproportionately on people of color and those with low incomes, and it’s a billion dollar industry.

It’s been that way for a long time, and former FCC commissioner Mignon Clyburn spent years trying to change it. When I spoke with her in 2017, before she left the agency, she called an inmate calling her “the clearest, most egregious type of market failure I’ve ever seen in as a regulatory body”. It was an issue she spent years working on, but she gave a lot of credit to Martha Wright-Reed, a grandmother who had organized and represented the struggle to reform the system until her death.

And it is after Martha Wright-Reed that today’s bill is named. It’s a simple bill, giving the FCC the power to “ensure just and reasonable charges for advanced telephone and communications services in correctional and detention facilities.” It does this by making some minor but important changes to the Communications Act of 1934, which (among other things) established the FCC and is regularly updated for this purpose. (The bill has passed the House and Senate and will almost certainly be signed by President Biden soon, when the spending bill festivities, Volodymyr Zelenskyy’s visit and the holiday speech pass.)

“The FCC has acted aggressively for years to address this terrible problem, but we have been limited in how far we can adjust the rates for calls made within state lines,” the president said. of the FCC, Jessica Rosenworcel, in a press release. “Today, through the leadership of Senators Duckworth, Portman and their bipartisan coalition, the FCC will be granted the power to close this glaring, painful and damaging loophole in our incarcerated phone pricing rules.” (She also thanked Wright-Reed, as well as Clyburn.)

Free Press collected a number of other comments from interested parties, all praising the legislation for curbing “prison profiteering” and generally benefiting inmates rather than continuing to treat them as a source of work or easy money.

While it’s great that costs will come down as soon as the FCC can put in place and pass a rule on the matter, the effect will likely be greater than just cost savings.

Most companies in place today will likely face significantly reduced revenues as well as increased scrutiny as the FCC requires reporting and takes any other action it deems necessary to enforce the new rules. It wouldn’t be at all surprising if many of these companies exit when things are going well.

Introducing regulation into a space like this, dominated for years by legacy vendors, could well bring about a changing of the guard – something we’ve seen in advance with some states embracing new models like this of Amelio. The startup started out as a way to send postcards to inmates for free, but soon they built a modern digital video calling infrastructure that’s much cheaper and easier to use than the old ones.

Now operating in three states, Ameelio’s service can also serve as a foundation for activities such as education and legal advocacy in correctional facilities because the cost is so much lower and access is easier. (As indeed the founders discovered and went on to found Emerge Career.)

A group of shady companies rushing out means a market opportunity as states jostle for suppliers – Ameelio will no doubt be looking to fill some of these gaps, but the next few years will likely see other companies stepping in to take part as good.

The prison system that we have is in dire need of reform in general, but it will happen bit by bit, as we see here.

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