In Part 1 of this multi-part series dated 10/22/13, I identified several of the many issues raised in this latest rulemaking by the Alabama Public Service Commission. The PSC's Order issued October 1 proposes significantly more extensive regulatory control of ICS providers. In this second article, I discuss some key issues regarding Video Visitation Service, ICS Rates, and Site Commissions.
Video Visitation Service
The PSC is proposing to classify this offering as an inmate calling service (“ICS”) (to conform to the FCC acronym) subject to the PSC’s jurisdiction. According to the proposed order, rates charged by ICS providers for video visitation substantially exceed those charged by “non-ICS” providers. Nonetheless, the order concludes that non-ICS providers of video visitation services should be certificated and regulated.
It appears that the intention is to bring enhanced service providers under the regulatory umbrella in Alabama even if they do not provide standard telecommunications (non video) calling services. To my knowledge, no other utility regulatory agency in the U.S. has sought to bring video conferencing in general or video visitation in particular under its control. How would these providers react to such an order from a utility regulatory agency? How enforceable would this be?
Maximum rates would be reduced and a mandatory change in rate design would be imposed. All calls, whether collect or prepaid, whether local or toll, would be capped at $0.25 per minute with no operator charge.
Industry input thus far has recommended only that such a rate design be authorized as an additional option to the current caps thus providing more flexibility for facility management and providers. If the agency plans to regulate rates, it is possible that specific rate caps are the more workable solution, no matter how arbitrary the rates themselves may be.
The FCC’s decision to impose historic rate regulation as a means of setting individual carrier interstate prices will result in an initial avalanche of adversarial proceedings and a subsequent backlog of pending cost filings which the FCC has neither the knowledge nor manpower to analyze. Given that prospect, the FCC would do well to follow Alabama’s proposed example. However imperfect this or any rate cap is, it is far more rational, efficient, and enforceable than the FCC’s new regulatory scheme. Remember that the FCC has its sights set on pre-empting state regulation of ICS.
Unlike the new FCC rules, which simplistically and generically condemn all commissions paid to confinement facilities , Alabama proposes to leave the issue of financing inmate programs to the facilities themselves.
This is eminently sensible. There is of course always room for fraud and abuse. But that is not within the power of any utility regulatory agency to influence. That issue belongs to government law enforcement. Site commissions and the decision as to whether they should or should not be imposed are legislative, NOT regulatory decisions.
A regulatory agency cannot legislate costs. It can, however, legislate rates. The FCC appears to believe that it can justify its rates by wishing costs away. Carriers who best manage their own costs within the limits of the rates set by a regulator are more likely to succeed in the institutional services industry. Despite arguments to the contrary, this is a highly competitive market. Regulators best serve confined populations and their families by providing incentives to the industry to maximize efficiency (in a word, to reduce costs on their own.)
Watch for Part 3 to cover Monthly Statements, Alabama Specific Web Page, and Quarterly Reports.