Prison Phone Rates Set for Drastic Reduction Under New FCC Rules

The Federal Communications Commission has proposed new rules to reduce phone and video call rates for incarcerated people, a move that could dramatically reshape the business of prison telecom providers such as ViaPath Technologies and Aventiv Technologies. The proposed rules call for a drastic reduction in the cost of audio calls, impose brand-new caps on video services and prohibit providers from making commission payments to the jails and prisons in which they operate. The prospect of stricter regulation has been a major overhang for the industry. Bipartisan legislation that President Joe Biden signed into law in early 2023 gave the FCC broader authority to regulate the cost of audio and video communication services that are offered to inmates. Companies in the prison services industry have faced higher borrowing costs and narrowing options to refinance debt, in part because of increased regulatory risk, but also because several investors and major banks have been distancing themselves from the sector over environmental, social and governance concerns in recent years.