What families can expect to be charged under the new FCC rules

A new order from the Federal Communications Commission lowers existing caps on rates and fees in the prison and jail telephone industry.

by Andrea Fenster, June 10, 2021

On May 24, the Federal Communications Commission released a historic order lowering existing caps on rates and fees in the prison and jail telephone industry. The same document also signals the FCC’s intent to further lower rates in the future, and create additional rules governing this industry. The public is invited to comment on a wide range of topics.

The FCC’s newest order applies only to out-of-state calls, where the caller and called person are physically in different states, but not to in-state calls, where the caller and called person are physically in the same state. Importantly, the FCC says that companies must charge the out-of-state rate unless they know where the parties are physically located. Previously, many companies calculated rates based on area codes, which will no longer be allowed. (This means some third-party services that offer different phone numbers with a different area code to obtain better calling rates will no longer be effective).

These newly lowered caps go into effect October 26, 2021. Here is what families with incarcerated loved ones can expect to be charged:

Rate caps:

• For prisons: With one exception, out-of-state calls will not cost more than 14¢ per minute. Previously, rates were capped at either 21¢ or 25¢ depending on whether the call was collect or debit. The exception is that the FCC is allowing companies to charge higher rates if a mandatory state statute or regulation requires a commission payment to the facility, however, “in no event…can the total rate cap exceed $0.21 per minute.” (FCC Order at fn309).¹
• For jails with an average daily population of 1,000 or more: With one exception, out-of-state calls will not cost more than $0.16 per minute. Previously, rates were capped at either 21¢ or 25¢ depending on whether the call was collect or debit. The exception is that the FCC is allowing companies to charge higher rates if a mandatory state statute or regulation requires a commission payment to the facility, however, “in no event…can the total rate cap exceed $0.21 per minute.” (FCC Order at fn309).²
• For all other jails: Out-of-state calls can cost no more than 21¢ per minute. Currently, collect calls can cost up to 25¢ per minute at these jails, but when the new regulations take effect, collect calls and debit calls will both be capped at 21¢.

International rate caps:

• International calls from both prisons and jails will now be capped at the out-of-state rate that applies (above), plus the amount that the provider pays to an underlying wholesale carrier for the cost of the call. Prior to these rules, international calls were not subject to price caps. The exact caps will be hard to predict because the “underlying wholesale” cost is not widely known. But for context, calls from the United States to Mexico via one wholesaler, Twilio, cost between $0.013 and $0.045 per minute depending on the location within Mexico and whether it is to a cell phone. The prices for other countries vary and other wholesalers may have different prices, but the FCC’s intent is clearly to restrict price gouging by the providers.

Single calls:

• From both prisons and jails, single call products, like Text2Connect™ and PayNow™, will now be capped at $6.95 per call, plus the applicable per-minute rate. We have previously found that companies were charging $9.99-14.99 for a single telephone call.

Third-party financial transaction fees:

• In both prisons and jails, third-party financial transaction fees, like fees associated with Western Union and MoneyGram payments, will be capped at $6.95 per transaction. Currently, these fees can be as high as $9.99.