Strolberg_dh3.doc

October 25, 1999

Byron P. Strolberg #32234
16A-29B
PO Box 14
Boise, ID 83707

Re: Inmate Telephone Services

Dear Mr. Strolberg:

This letter is in response to your “initial petition” that was received by the Commission on July 27, 1999. As indicated in my letter of August 4, 1999, the Commission determined to treat your petition as an informal complaint. This letter addresses the issues raised in your complaint.

Your complaint raises several issues. More specifically, your complaint alleges that inmate pay telephone services provided at Idaho Department of Correction (DOC) facilities violate both federal and state laws. In particular, your complaint asserts that: (1) the rates charged by the inmate telephone service provider(s) are unfair and unreasonable; (2) long-distance services from DOC facilities constitute a monopoly and violate federal and state anti-trust laws; and (3) inmates are precluded from obtaining access to other long-distance carriers as required by provisions of the federal Telephone Operator Consumer Services Improvement Act (TOCSIA). 47 U.S.C. §§ 226(b)(1)(E) and 226(c)(1)(B). In all the instances mentioned above, the complaint maintains that these illegal situations have been “approved by the Public Utilities Commission.”

Let me first address the interplay between federal and state law and the history of pay telephone regulations. The Idaho Commission does not regulate out-of-state (interstate) calls or the rates for those calls. The rates and practices regarding interstate calls are regulated by the Federal Communications Commission (FCC). The Idaho Commission’s regulatory jurisdiction is restricted to telephone calls originating and terminating in Idaho. Idaho Code §§ 61-121(2), 62-603(13).

The FCC in 1984 and the Idaho Commission in 1985 opened the pay telephone market to allow private payphone providers to compete with the existing telephone companies. Consequently, private payphone providers and telephone companies were able to solicit “premise owners” (the owners of the property where payphones are located) for permission to install payphones and provide the telecommunication services to those payphones. Thus, payphone providers were free to contract with premise owners to install payphones and to establish “commissions” (paid to the premise owner) for placing the payphone on the owner’s property. Despite the advantages of competition, opening the payphone market resulted in some undesirable consequences such as unreasonably high rates, blocking access to other carriers, and denying customers notice of the charges and the identity of the carrier. These adverse results lead to passage of the federal Telephone Operator Consumer Services Improvement Act (TOCSIA) discussed below.

In 1988, the Idaho Legislature enacted the Telecommunications Act by adding a new chapter to Title 62 of the Idaho Code. This new chapter created a “modified” form of regulation for telephone companies providing other than “basic local exchange services” in Idaho, e.g., long-distance services. See Idaho Code §§ 62-601 et seq. One important distinction between the Commission’s Title 62 authority and its traditional Title 61 authority is that the Commission does not possess rate setting authority over Title 62 services, i.e., long-distance intrastate calls. Accordingly, the Commission does not exercise regulatory authority over the long-distance rates charged by AT&T or U S WEST pursuant to Idaho Code § 62-604(2)(a). Although the Commission no longer has rate setting authority over Title 62 services, the Commission does retain jurisdiction to perform other regulatory functions such as resolving customer complaints, resolving disputes between telephone companies, and administrating the Idaho Universal Service Fund. See Idaho Code §§ 62-610, 610A through 610F, 62-614, and 62-616.

Following passage of the Idaho Telecommunications Act, AT&T in 1988 and U S WEST Communications in 1989 removed their long-distance services from the Commission’s Title 61 rate setting authority and moved those services to Title 62. It is our understanding that DOC has currently selected AT&T as its long-distance carrier for intrastate and interstate calls at its Boise facilities. Consequently, the Commission no longer “approves” the rates for AT&T or U S WEST long-distance services within Idaho.

Although the Commission does not regulate the long-distance rates charged by U S WEST or AT&T, these companies are required to “file with the Commission, for information purposes, tariffs or price lists which reflect the availability, price and terms and conditions” for such long-distance services. Idaho Code § 62-606. The reason long-distance carriers are required to file their rates with the Commission (as opposed to the Commission approving their rates) is so the Commission’s Consumer Staff may “for information purposes” investigate complaints and advise customers whether they have been accurately charged the appropriate rate(s) for telecommunication services. Oftentimes this “filing” requirement is mistakenly interpreted to mean that the Commission still “approves” rates. Unfortunately, such an interpretation is incorrect.

In addition to changes in state law, the federal law governing telecommunication services has significantly changed in recent years. In 1996, Congress enacted the federal Telecommunications Act of 1996. Among other things, Section 276 of the federal Act permits all payphone providers to pay the premise owner a fee or commission based on the cost of the payphone and the amount of both local and long-distance usage. Huber, et al., Federal Telecommunications Law (2d Ed. 1999) § 5.2.2 at p. 421. After enactment of the federal Act, the FCC deregulated the payphone industry both on an interstate and intrastate basis. Id. § 8.4.4 at 689.

Let me now turn to the issue regarding the inability of inmates to select their own long-distance carriers instead of the carrier selected by DOC. Section 226(c) of TOCSIA generally requires that every telephone aggregator (such as a payphone provider) allow customers using their payphones to access long-distance carriers of their choice. For example, even if a payphone is set up to use a specific carrier such as MCI, the payphone may not block the caller from accessing another carrier via an access code (10+10-XXX) or an 800/888 number. However, Section 226(a) defines an “aggregator” payphone as a pay telephone “available to the public or transient users of its premises.” The FCC has issued rules that the definition of “aggregator” does not apply to inmate-only payphones in correctional institutes. As the FCC elaborated in 1996, “neither TOCSIA nor our rules require telephones for use only by prison inmates to be unblocked. Thus, callers from these facilities are generally unable to select the carrier of their choice; ordinarily they are limited to the carrier selected by the prison.” In the matter of Billed Party Preference for InterLATA 0+ Calls, 11 F.C.C.R. 7274, ¶48 (1996). In a 1997 opinion, the federal District Court for Idaho found that inmate-only pay telephones are excluded from the requirement that users of payphones be able to access a carrier of their choice. I have enclosed the federal magistrate’s decision (adopted by the District Court) for your information.

In summary, the Commission does not set the rates for interstate calls, no longer sets the rates for long-distance intrastate calls, and does not approve nor compel premise owners to select a specific payphone provider. The premise owner (in this instance DOC) is free to select a payphone provider and/or long-distance service provider of its choice. Thus, the Commission has not—because it cannot—“approve” the actions alleged in your complaint.

I hope you find this information adequately addresses the issues raised in your complaint and clears up any misunderstanding about the Commission’s regulatory authority over inmate telephone services.

Sincerely,

Jean Young
Utilities Compliance Investigator

Enclosure

Vld/L:Strolberg_dh
Byron P. Strolberg #3223
October 25, 1999
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