One Minute on How Washington and the Law Screw the Powerless

            Start the clock.

            After neglecting the issue for years, the FCC Democrats seek to reduce rip off in-mate calling rates to between 11 and 14 cents per minute.  See https://www.fcc.gov/document/fcc-takes-next-big-steps-reducing-inmate-calling-rates; https://www.fcc.gov/consumers/guides/inmate-telephone-service; http://arstechnica.com/tech-policy/2016/03/in-blow-to-inmates-families-court-halts-new-prison-phone-rate-caps;

 

            The two major inmate calling companies, which had offered incredibly lucrative kickbacks to jails, retain the services of the best counsel money can buy, roughly $600 an hour. 

            These quite talented counsel, one of whom I worked with many years ago, seek and secure an injunction on grounds that the FCC lacks lawful authority to interfere with the sweetheart contracts with jail administrators.

            The grant of an injunction typically means the court buys the telephone company’s legal arguments.  Put another way, the court won’t reject incredible rip off, kickbacks as unconscionable and void against public policy.  So it’s appears that if you’re in jail, you should have to pay up to $17 in fees for the privilege of making a telephone call and the rate should gross exceed by one cent per minutes or less cost of the call to people outside the pen.  How dare the FCC interfere with the “sanctity of contract!”

 

            Add to the mix a snarky and mean-spirited “I told you so” by a righteously indignant Republican FCC Commissioner. See https://www.fcc.gov/document/commissioner-pai-dc-circuit-staying-inmate-calling-rate-regulation

            Get the picture?

Why Should We Care? 

            We should care, because of the reverse logic used by counsel and accepted by the D.C. Circuit.  It goes like this: inmate calling services can offer incredibly generous kickbacks to jails, because they can charge incredible rates.  The FCC has no rate ceiling on interstate long distance calls having eliminated such a consumer safeguard based on a finding that robust competition would generate fair and cost-based rates.  Of course there are in jail monopolies which can charge anything they want in light of the now eliminated caps.  If the telephone companies offer a kickback, then no one complains other than the inmates and their families and why should we care about them.  They are convicted criminals and family members of convicted criminals.

 

            An FCC attempt to supersede a lawful contract exceeds the Commission’s lawful authority having deregulated long distance telephone service.  So the argument goes around in circles with no one apparently looking at the rates vis a vis the kickbacks.

            No one can argue that the rates are cost based and fair, but of course that doesn’t stop the Attorney General of Arkansas and others from cheering on the kickbacks. See  http://arkansasag.gov/news-and-consumer-alerts/details/rutledge-d.c.-circuit-grants-stay-of-costly-fcc-order.

            Instead they can make the argument that once willing parties have entered into a binding contract, the FCC cannot subvert it by identifying how cruel, unusual, harmful and the contract is.