FCC lawyers no longer authorized to defend intrastate calling caps.

The Federal Communications Commission's new Republican leadership has decided not to defend FCC inmate calling rules that place a cap on intrastate calling rates.

Chairman Ajit Pai and fellow Republican Michael O'Rielly repeatedly opposed attempts to cap the phone rates charged to prisoners while Democrats held the FCC's majority. Republicans argued that the FCC exceeded its authority, and commission attempts to enforce rate caps have been stymied by a series of court decisions.

As a lawsuit filed by phone company Global Tel*Link heads for oral arguments on Monday in the DC Circuit US Court of Appeals, an FCC lawyer informed the court that the agency will no longer defend an intrastate calling cap. Since the FCC prison rate order was adopted by a 3-2 vote in October 2015, Democrats Jessica Rosenworcel and Chairman Tom Wheeler have left the commission, FCC Deputy General Counsel David Gossett noted in a brief filed yesterday.

"As a result of these changes in membership, the two Commissioners who dissented from the Order under review—on the grounds that, in specific respects, it exceeds the agency’s lawful authority—now comprise a majority of the Commission," Gossett wrote. Gossett is thus no longer authorized to defend the FCC's previous contention that it "has the authority to cap intrastate rates for inmate calling services" and cannot defend the FCC's assertion that it "lawfully considered industry-wide averages in setting the rate caps contained in the Order," he wrote.

Gossett said he will continue to defend other parts of the commission's October 2015 order, which also lowered the price of interstate calls, those that cross state lines. Despite the FCC's various losses, a 2013 decision to set interim rate caps of 21¢ to 25¢ per minute for interstate calls has survived court challenges. Prison phone companies acknowledged that the FCC has authority to ensure that interstate calling rates are "just and reasonable" under Title II, but they disputed the commission's authority over intrastate calls. (The FCC previously claimed it had jurisdiction over intrastate calls under Section 276 of the Communications Act.)

Prison phone companies also argue that the rate caps aren't high enough to recover the cost of "site commissions" the companies have to pay to correctional facilities.

The FCC's decision to stop defending the full order hurts the case for maintaining rate caps on intrastate calls in which both parties are in the same state, but it doesn't completely kill the case. The FCC is ceding 10 minutes of its allotted argument time to attorney Andrew Schwartzman, who is defending the rate caps on behalf of prisoners' rights groups.

The FCC's October 2015 decision sought to cut intrastate and interstate calling rates by nearly 50 percent, setting a limit of no more than $1.65 for most 15-minute calls. The rate caps ranged from 11¢ to 22¢ per minute on both interstate and intrastate calls from prisons. The FCC also placed caps on numerous ancillary charges that raise the cost of calling above the per-minute rate. The fee limits include $3 for making automated payments by phone or website; $5.95 for making payments with a "live agent;" and $2 for "paper bill fees."

In March 2016, prison phone companies were granted a stay that halted implementation of the new rate caps of 11¢ to 22¢ per minute, though the stay did not halt the new limits on ancillary fees.

The FCC then proposed new caps of 13¢ to 31¢ per minute in an apparent attempt to satisfy prison phone companies and the courts. But a November 2016 court decision stayed those rates until the case is decided.