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The FCC can finally hammer predatory prison phone call companies, thanks to just-passed bill • TechCrunch

A brand-new law (awaiting only the president’s signature) will let the Federal Communications Commission directly regulate rates in the notoriously predatory prison calling industry. Under the threat of having to provide a solid product for a reasonable price, companies may opt to call it a day and open up the market to a more compassionate and forward-thinking generation of providers.

Prison calling systems depend on the state and the prison system, and generally have run the gamut from good enough to shockingly bad. With a literally captive customer base, companies had no real reason to innovate, and financial models involving kickbacks to the prisons and states incentivized income at all costs.

Inmates are routinely charged extortionate rates for simple services like phone calls and video calls (an upsell), and have even had visitation rights rescinded, leaving paid calls the only option.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 this way for a long time, and former FCC commissioner Mignon Clyburn spent years trying to change it. When I talked with her in 2017, before she left the agency, she called inmate calling “the clearest, most glaring type of market failure I’ve ever seen as a regulator.” 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 fight to bring reform to the system right up until she died.

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

“The FCC has for years moved aggressively to address this terrible problem, but we have been limited in the extent to which we can address rates for calls made within a state’s borders,” said FCC chairwoman Jessica Rosenworcel in a statement. “Today, thanks to the leadership of Senators Duckworth, Portman and their bipartisan coalition, the FCC will be granted the authority to close this glaring, painful, and detrimental loophole in our phones rate rules for incarcerated people.” (She also thanked Wright-Reed, as well as Clyburn.)

Free Press has collected a number of other comments from interested parties, all lauding the legislation for curbing “carceral profiteering” and generally benefiting inmates rather than continuing to treat them like a source of labor or easy cash.

While it’s great that costs will go down as soon as the FCC can put together and pass a rule on the matter, the effect will probably be greater than just savings.

Most companies in place today will all but certainly face vastly reduced revenues along with increased scrutiny as the FCC requires reports and takes any other measures it decides are necessary to enforce the new rules. It would not be surprising at all if plenty of these companies just get out while the gettin’s good.

The introduction of regulation into a space like this, dominated for years by legacy providers, may well cause a changing of the guard — something we’ve seen advance notice of with some states embracing new models like Ameelio’s. The startup began as a way to mail postcards to inmates for free, but soon they had built a modern digital video calling infrastructure that’s far cheaper and easier to operate than the legacy ones.

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

A bunch of shady companies in a hurry to leave means a market opportunity as states scramble to find providers — no doubt Ameelio will be looking to fill some of those gaps, but the next few years will probably see other companies stepping in to take part as well.

The prison system we have is in dire need of reformation in general, but that will happen piece by piece, as we see happening here.

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