March 2015

After years of complaints from prison-rights groups and families of the incarcerated, the Federal Communications Commission is investigating the financial intricacies of the industry, which has been largely unregulated. At the core of the inquiry are the hundreds of millions of dollars in concession fees, known as commissions, paid by the phone companies to state and local prison systems in exchange for exclusive contracts. The fees help drive phone charges as high as $1.22 per minute, and the leading companies say they need to charge at least 20 cents per minute, compared with typical commercial rates of about 4 cents a minute.

In 2013, a total of $460 million in concession fees was paid to jails and prisons, and to state, county and local governments, according to the FCC. The fees are legal, and they cover a range of expenses within prisons as well as outside. The agency is expected to rule in 2015 on whether to ban the concession fees and limit the costs of prison phone calls. An analysis released in 2013 by the FCC said the fees “have caused inmates and their friends and families to subsidize everything from inmate welfare to salaries and benefits, states’ general revenue funds and personnel training.” It added, “The companies compete not based on price or service quality, but on the size of the commission.” The possibility of eliminating the fees has met fierce opposition from prisons and jails, sheriff’s departments and local officials. Some law enforcement groups have said changes could stoke inmate violence against prison guards because there might be less money for security.

The House Intelligence Committee unanimously approved the Protecting Cyber Networks Act (HR 1560), a bill that would allow companies to share cyberthreat information and make it easier for them to take defensive measures to counter such attacks. A Senate version of the bill passed out of its Intelligence committee 14-1 earlier in March.

The bill is supported by the National Cable & Telecommunications Association, which echoed its praise of the Senate bill. “NCTA commends the House Select Committee on Intelligence for its action marking up the bipartisan Protecting Cyber Networks Act (HR 1560)," the trade group said in a statement. "This action marks another step forward in our collective efforts to improve America’s cyber readiness by sharing threat indicators...We look forward to working with all members of the House to pass cybersecurity legislation that will improve our ability to protect consumers, our Internet infrastructure and America’s economy."

[Commentary] Every broadcaster dreads a visit by a Federal Communications Commission inspector, but broadcasters also know that the presence of the “Highway Patrol of the Airwaves” helps keep the playing field level and the participants honest. Violators of the FCC’s rules risk detection and know that a fine (or worse) may result. For longer than the FCC itself has existed, a network of field offices has been key to maintaining order on the airwaves by resolving interference disputes, shutting down unlicensed operators and providing valuable and dispassionate advice on the FCC’s rules and policies that help minimize ongoing spectrum conflicts. The FCC’s own website observes that its field offices are its “eyes and ears” on the ground.

Unfortunately, FCC Chairman Tom Wheeler is now circulating an order that effectively leaves the FCC in the dark. Earlier in March, Chairman Wheeler proposed to his colleagues to close more than half of the FCC’s field offices and cut field enforcement staff by almost two-thirds. New York City, Atlanta, Miami, Los Angeles, San Francisco, Chicago, Dallas and Columbia, Maryland: that’s the entire list of offices that would remain open. Slated for closure are offices near major cities like Seattle, Denver, Boston, Philadelphia and Houston. GPS outage in Honolulu? Chairman Wheeler says he’ll send a “Tiger Team” from Columbia, Maryland, to work on it. Sheriff department radios getting jammed in Tampa? Someone will be there within 24 hours, he told Rep Gus Bilirakis (R-FL). All technical enforcement for the entire nation will be handled by a cadre of just 33 FCC agents spread across only eight offices. Fortunately, there is still time for the FCC to reverse course and rethink its proposal to gut the field offices. Perhaps it took the proposal itself to help the agency realize just how valuable those who use radio frequencies believe the field offices to be. Most of all, at a time when it the FCC is pursuing policies that will inevitably create an environment where interference is more likely to occur, it must not devastate its field enforcement resources.

[Bob Weller is Vice President of Spectrum Policy at NAB]

Financial regulators and the banking industry are raising concerns about bipartisan legislation that would expand the public's access to government documents, according to lawmakers. Members of Congress have sought to clarify that their proposals to update the Freedom of Information Act (FOIA) would not erode protections that prevent the public from obtaining sensitive banking information that regulators see as part of their supervision of the financial sector. And while regulators and the banking industry have remained publicly silent, lawmakers are echoing their private warnings.

Before the House Oversight Committee approved a reform bill, Rep. Carolyn Maloney (D-NY) unsuccessfully attempted to attach a clarifying provision to the legislation. The regulator and industry concerns do not appear strong enough to stymie reform. Similar FOIA reform bills in the House and Senate have already made it through committee, and both received unanimous approval in their respective chambers in the 113th Congress. The worry surfaced late in 2014 and deals with one of the major provisions of the reform bills that would mandate a "presumption of openness" on the part of federal agencies. Rep Maloney voiced concerns that the presumption could specifically weaken Exemption 8 of FOIA, which prevents the public from obtaining examination or report material that regulators use during oversight of financial institutions. If that happened, she said, banks might be less candid with regulators, knowing the information could one day become public.