Prison’s in Arkansas are about to lose millions of dollars in revenue if the Federal Communication Commission votes this week to slash inmate landline rates. According to FCC Chairman Tom Wheeler and Commissioner Mignon Clyburn, the rule is to be changed making federal prison inmate’s calls no more than $1.65 for a time duration of 15 minutes. In addition, the rate caps range from 14 cents a minute to 22 cents a minute, depending on inmate population numbers. Though this proposal was brutally discourage, it doesn’t restrict prisons from collecting a commission on a phone call. This practice is expected to generate more than $3 million for the prison system this fiscal year.
“If the FCC does adopt this as a final rule, it will cost not only our state prison system in excess of a million dollars, but it will impact our county jails, which recoup fees from prisoners in a similar manner,” Gov. Asa Hutchinson said. “There is a cost impact to both the state and the counties that we’ll have to address.”
According to FCC, the prison phone service is a $1.2 billion enterprise for lockups. The state corrections department received above $1.7 million in commissions in fiscal 2015 that ended on June 30. According to Cathy Frye, Correction Department Spokesperson, the revenue from the prison system’s telecom contract for fiscal 2016 is around $3 million.
In addition, Community Correction is paid a 79% commission for all the inmate telephone calls within the state. Moreover, the Corrections Department receives 73% commission on both local and statewide calls and is expected to increase later but it depends solely on the cost of establishing a video system. The call rates in Arkansas are much lower than the national average of $3 for a 15 minute in-state call. Other states such as Minnesota charges $6.45 for 15 minute inmate calls.
Mayors of 14 major northeast cities including New York, asked Verizon to fulfill its promise of building up a high-speed internet network and home phone services. On October 1st, a letter to Verizon’s CEO, Lowell McAdam, had been sent by the mayors and they have urged the company to provide a brief explanation for why it is unable to provide a high-speed network and why it has not completed its FiOS internet network across the northeast.
Defending the same, Verizon has stated that it has met all the requirements and the present situation has been misinterpreted by the mayors. Verizon feels there has been some kind of miscommunication amongst the mayors. The letter has come at a point when Verizon has continued to negotiate a 3-year contract which is comprised of 39000 unionized workers recognized by Communication Workers of America and the International Brotherhood of Electrical Workers.
The unions of Verizon previously threatened that they will go on strike but later they decided not to do so when the contract expired. Regardless of this, neither party has been unable to agree on job security protection as well as an employee benefit. A million residents in the Northeast have been left without FiOS Internet service that was planned by Verizon, according to the letter sent by the mayor. Verizon failed to meet legislative and other deadlines and in some cases, to make the services available after which Verizon refused to build the network altogether.
In addition, the letter also says that Verizon has been abandoning its traditional copper-based network and has stopped providing needful services to its subscribers. In certain cases, it states, “traditional landline customers are experiencing frequent service outages, delays in repairs and installations, and forced migration to the inferior” products.
Defending their company, Verizon spokesperson, John J. Bonomo said, “Since Verizon started bargaining this year with the CWA, we’ve seen numerous half-baked and inaccurate letters and statements from union leaders regarding Verizon’s FiOS commitments and more. It’s all nonsense.” He also added, “The reality is that all of these misguided PR stunts are an attempt by union leaders to try and force the company to hire more union-represented employees which will, in turn, increase dues and revenues for the union. It won’t work.”
According to United States Telecom Association, the FCC needs to follow correct procedures if they somehow re-regulate special access. Earlier, a joint letter was filed by Birch Communications, BT Americans and Level 3 in which they claimed that the FCC has the power to adopt regulations governing rates for ILEC special access services. However, US Telecom stated that the FCC is unable to re-write existing laws and the filed letter “distorts the scope of the agency’s discretion, which is constrained by the Communications Act, the Administrative Procedure Act (APA), and the Commission’s own decisions, and mischaracterizes the level of deference that courts typically afford agencies under Chevron and another precedent that hold agencies to a considerably higher standard in carrying out their rulemaking responsibilities.”
US Telecom also stated that while the joint CLEC letter ordered the FCC to re-regulate Ethernet and thereby increase and enhance regulation over ILEC special access pricing, “”the current regulatory scheme has been in place for some time, and enterprise broadband services, in particular, were deregulated by a grant of forbearance almost a decade ago.”
A similar sentiment was echoed by Verizon in another filing last week regarding special access, US Telecom thereby claimed that there are other competitive options from cable and other competitors.
“Cable operators are growing their commercial services and have expanded to serve larger businesses,” US Telecom said. “CLECs and other competitive home phone service providers have become stronger through consolidation and continue to deploy networks, including last mile facilities to enterprise customer locations.”
Previously, the FCC used to conduct its collection of special access data but now it has to conduct a comprehensive analysis of the market.
“The FCC also set forth a detailed plan for using the data collection to gauge actual and potential competition before identifying a replacement regulatory framework for special access services,” US Telecom said. “Although the data do not reflect the most recent expansion into the enterprise broadband services marketplace by cable and other non-ILEC providers (and thus is already stale), there is no question that the data are relevant and thus must be analyzed and considered before any new regulations that disrupt the current regulatory scheme can be imposed. The FCC cannot step in and set prices without a fact-specific, full and fair analysis of the competitive landscape.”
Verizon is not very happy with Communications Workers of American as they earlier claimed that it had not given proper attention on its copper networks.
Verizon clarified in an FCC filing that CWA has misinterpreted a statement made in July by the company. It said it has invested a lot on its copper network and is still upgrading as needed.
Verizon clearly stated in an FCC filing: “As we explained in that letter, Verizon takes reasonable steps to ensure its copper network remains healthy and, contrary to CWA’s suggestions, has not engaged in widespread “de facto” retirement of copper. As part of that discussion, we wrote that Verizon since 2008 has spent more than $200 million on its copper network. CWA has seized on that comment, taken it out of context, and tried to use it to create the false impression that this was all of the money that Verizon has spent to keep copper in service.”
Verizon refuses to commit that more than $200 million is spent on maintaining its copper wire network. “Instead, that figure included only one category of capital investments, dedicated to copper infrastructure improvement and focused on proactive rehabilitation of copper facilities and related network support elements — i.e., cable, air pressure, batteries, etc.” said Verizon. “That figure does not represent all of the capital Verizon has invested in its copper network, nor does it include the significant expenses incurred in connection with the copper network, including maintenance and repair costs. Instead, those dollars were uniquely relevant to the issues the Commission then was considering.”
Nevertheless, copper maintenance is a constant topic of an argument between ILECs, CWA and CLECs that will deliver business services to all its users. At the end of second quarter of 2015, Verizon claimed it converted 51000 customers from copper to fiber which brings half of the total of 98000. It also stated that the full year goal is set to convert 200000 customers. According to customers, Verizon has drastically improved its copper services.