PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON. Issued: November 10, 2004

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1 alj wpd PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON / ORIGINAL CASE NO T-CN INMATE CALLING SOLUTIONS, LLC 5883 Rue Ferrari San Jose, California Issued: November 10, 2004 Application and filing fee for a certificate of convenience and necessity to provide resold automated collect calling services to inmates of confinement institutions throughout the State of West Virginia. c **-- -_- - I I- 30-0q 4 RECOMMENDED DECISION On June 1, 2004, Inmate Calling Solutions, LLC (ICs), filed an application, duly verified, for a certificate of convenience and necessity to provide automated collect calling services to inmates of confinement institutions throughout the State of West Virginia, and for approval of rates and charges incidental thereto. ICs stated that all services will be offered twenty-four (24) hours per day, seven (7) days a week. ICs will provide correctional and confinement institutions with sophisticated premises equipment that permits inmates to make outgoing, collect-only calls without the assistance of a live operator. ICs's systems provide a number of controls and restrictions that serve to reduce or eliminate fraudulent use of telephone systems. These restrictions also provide the correctional institution with increased control over the use of the telecommunications services by inmates confined within. ICs's telephone instruments are placed in detention areas such as cell blocks or day rooms. Each instrument is connected to a central control unit which restricts and controls calls placed by inmates. ICs's system and services allow inmates to remain in contact with family and friends and other associates while still providing facility administrators with the necessary control over inmate communications. Automated collect-only calls may be placed by inmates within the confinement facility and these calls' are then routed over the facilities of the local exchange carrier serving the confinement facility and ICs's underlying carrier. ICs's system is designed so that calls are completed only to those called parties who specifically accept the charges for a call. Equipment utilized by ICs requires a positive response from the called party before the connection is established and billing can begin. ~n addition to call processing, ICs's systems offer restrictive call blocking and screening. These features provide the correctional facility Charleston

2 with the maximum degree of control over telecommunications services and help to minimize fraud. Call blocking prevents calls to directory assistance, "0-", 800 numbers, pay-per-call services and emergency numbers (including 911), in order to reduce prank calls and fraudulent use of long distance services. Access to other interexchange carriers is also denied. Call screening serves to eliminate harassing or threatening calls to individuals such as judges, sheriffs, witnesses or jury members. These two features also allow the institution to enforce telephone curfews (without manual intervention) by pre-setting the hours during which the system will process calls from a given telephone instrument. ICs's system collects and stores call detail information for each call. These call records are retrieved by ICs and are either billed through the called party's local exchange carrier under billing and collection agreements maintained by ICs or submitted for billing to the called party's local exchange carrier through ICs's billing agent. Depending on the specifications of each correctional institution, ICs's system may be customized to meet the call routing and blocking requirements of each institution. For billing inquiries, carriers are initially directed to ICs's billing agent whose toll-free number is printed on each customer bill. The billing agent is authorized to investigate complaints and. adjust customer bills within certain parameters set by ICs. Should an inquiry exceed the authority delegated to ICs, the customer is referred to ICs's in-house Customer Service Department for further assistance. ICs only offers institutional automated collect calling and does not intend to construct any facilities in West Virginia. ICs specifically requested a limited waiver of the Commission's Rules and Resulations for the Government of Telephone Utilities (Telephone Rulesl, such that ICs's inmate services may include the following end-user restrictions, to-wit: a. b. C. d. e. f. O-calls will not be allowed; 911 calls and calls to other emergency agencies will be denied; Calls to institution-specified numbers may be blocked to prevent inmate harassment (i.e., telephone numbers of judges, prosecutors, exspouses ) ; Call attempts which would bypass the system restrictions and safeguards by accessing an alternate carrier will be denied (i.e. calls to 950, loxxx, 800 access codes); System availability will be limited to the hours and days of the week deemed appropriate by the individual institution; Call duration of individual calls may be limited at the discretion of the institution; and g- Calls to special calling services such as 900 or 976 are denied. 2

3 i By Order dated June 1, 2004, ICs was required to give statewide notice of the filing of its application by publishing a copy of said Order once in a newspaper, duly qualified by the Secretary of State, published and of general circulation in nineteen (19) cities throughout West Virginia, making due return to the Commission of proper certification of publication. The notice directed that anyone desiring to make objection to the application must do so, in writing, within thirty (30) days after publication of said notice. The notice further provided that, if no protests were received within the thirty-day period, the Commission could waive formal hearing and grant the application based upon the evidence submitted in the application and the Commission's review thereof. By Order dated July 21, 2004, this matter was referred to the Division of Administrative Law Judges for a decision to be rendered on or before December 28, On August 16, 2004, ICs filed a letter advising the Commission of an address change for its regulatory contact. On September 17, 2004, the Commission received affidavits of publication indicating that the Notice of Filing had been published in the designated nineteen (19) cities. No protests were received to the application within the thirty-day response period, which expired on July 22, 2004, or as of the date of this Order. On October 25, 2004, ICs filed, pursuant to a Commission Staff request, certain supplemental information and a request for a waiver of certain Telephone Rules. ICs again requested, to the extent not already codified in Telephone Rule the certain exemption as set forth in its application previously filed herein on June 1, ICs also requested a waiver of the following additional Telephone Rules, or parts thereof to-wit: (1) That portion of Telephone Rule 11.3.f. which requires that "payphones shall prominently display a toll-free number where full refund, credit or reimbursement from the payphone service provider can be obtained in the event of overpayment"; (2) Telephone Rule 11.3.h. which provides that [playphones shall fully participate in the Enhanced program when the payphone is located in a service area covered by an Enhanced system; and (4) Telephone Rule 11.4, in its entirety, which addresses the "[ilnformation to be Displayed on Payphones." On October 29, 2004, ICs, pursuant to a Commission Staff request, filed revised Original Pages 4, 14, 15, 26, and 30 of its WV PSC Tariff No. 1 and a copy of its current financial statements, i.e., an unaudited Balance Sheet as of June 30, 2004, and an unaudited Statement of Net Loss for the Year Ended June 30, On November 4, 2004, Dana E. Schultz, Telecommunications Technician, Utilities Division, filed a Utilities Division Final Recommendation. Commission Staff recommended that ICs's application be granted and that ICs's request for a waiver of certain Telephone Rules also be approved. Charleston 3

4 DISCUSSION In this proceeding, the undersigned Administrative Law Judge concludes that ICs has satisfied the requirements for the issuance of a certificate of convenience and necessity to provide automated collect calling service to inmates of confinement institutions throughout the State of west Virginia and has demonstrated that the blocking and screening capabilities, which allow ICs, in conjunction with the correctiona.1 or confinement facilities, to control inmate access to telecommunications services, reduce fraudulent use of its services and prevent harassing calls to persons outside the correctional facilities, are reasonable and should be approved. Additionally, for the same reasons, ICs's request for a waiver of certain specified Telephone Rules, or portions) thereof, should be granted. FINDINGS OF FACT 1. Cm June 1, 2004, Inmate Calling Solutions, LLC, filed an application for a certificate of convenience and necessity to provide automated collect calling service to inmates of confinement institutions throughout the State of West Virginia, and for approval of rates and charges inclidental thereto and as contained in its proposed tariff filed with the application. ICs also requested the waiver, in whole or in part, of certain specified Telephone Rules. (See, Application filed June 1, 2004; Letter and supplemental information filed October 25, 2004). 2. 1:CS gave notice of the filing of its application in accordance with the Commission's requirements, making statewide publication in nineteen (3.9) cities in West Virginia. (See, Affidavits of publication filed September 17, 2004). 3. No protests were received to the application within the thirtyday respons'e period, which expired on July 22, 2004, or as of the date of this Order. (See, case file generally). 4. 1:CS filed revised tariff sheets reflecting certain Staffrecommended changes. (See, October 29, 2004 filing). 5. Commission Staff recommended that the certificate of convenience and necessity be granted, as amended, and that ICs's request for a waiver, in whole or in part, of certain specified Telephone Rules also be granted. (See, Utilities Division Final Recommendation filed November 4, 2004.). CONCLUSIONS OF LAW 1. 1:t is reasonable to grant a certificate of convenience and necessity t.o Inmate Calling Solutions, LLC, to provide automated collect calling services to inmates of confinement institutions throughout the State of West Virginia, and to approve the rates and charges incidental thereto, without need for a hearing Charles&

5 - 2. It is also reasonable to approve the blocking and screening capabilities, which allow ICs, in conjunction with the correctional or confinement facilities to control inmate access to telecommunications services, reduce fraudulent use of its services and prevent harassing calls to persons outside the correctional facilities and to also approve, for like reasons, ICs's request for a waiver of certain specified Telephone Rules, or portions thereof. ORDER IT IS, THEREFORE, ORDERED that the application filed by Inmate Calling Solutions, LLC, on June 1, 2004, for a certificate of convenience and necessity to provide automated collect calling services to inmates of confinement institutions throughout the State of West Virginia, be, and hereby is, approved, provided, however, that the authority hereby granted relates only to the provision of automated collect calling services to inmates of confinement institutions throughout the State of West Virginia, and does not grant authority to provide local exchange telecommunications services. ICs is required to commence operations within the State of West Virginia within one (1) year from the date this Order becomes final, otherwise the authority hereby granted shall be deemed null and void. IT IS FURTHER ORDERED that the rates applied for, as amended on October 29, 2004, be, and the same hereby are, approved for all services provided on and after the date that this Order becomes final. IT IS FURTHER ORDERED that the ICs's request for a waiver, in whole or in part, of Telephone Rules , 11.3.f., 11.3.h., and 11.4., be, and hereby is, granted. IT IS FURTHER ORDERED that Inmate Calling Solutions, LLC, shall file with the Commission's Tariff Office an original and at least five (5) copies of a proper tariff reflecting the rates approved herein, within thirty (30) days of the date that this Order becomes final. IT IS FURTHER ORDERED that this matter be, and hereby is, removed from the Commission's docket of open cases. The Executive Secretary is hereby ordered to serve a copy of this order upon the Commission by hand delivery, and upon all parties of record by United States Certified Mail, return receipt requested. Leave is hereby granted to the parties to file written exceptions supported by a brief with the Executive Secretary of the Commission within fifteen (15) days of the date this order is mailed. If exceptions are filed, the parties filing exceptions shall certify to the Executive Secretary that all parties of record have been served said exceptions. If no exceptions are so filed this order shall become the order of the Commission, without further action or order, five (5) days following the expiration of the aforesaid fifteen (15) day time period, unless it is ordered stayed or postponed by the Commission. 5

6 - Any party may request a waiver of the right to file exceptions to an Administrative Law Judge's Order by filing an appropriate petition in writing with the Secretary. No such waiver will be effective until approved by order of the Commission, nor shall any such waiver operate to make any Administrative Law Judge's Order or Decision the order of the Commission sooner than five (5) days after approval of such waiver by the Commission. MKM:JPC:tab a.wpd Melissa K. Marland Chief Administrative Law Judge 6