Pai argued against[34] adoption of the FCC 2013 analysis[35] and proposed rulemaking regarding the high cost of inmate telephone calls, referred to as Inmate Calling Service (ICS) by the FCC. He submitted his written dissent in which he argued that the nature of the exclusive single carrier contract between private ICS providers and prison administrators, meant inmates cannot “count on market competition to keep prices for inmate calling services just and reasonable.”[36] (ICS has become a $1.2 billion telecommunications industry and the two largest providers in the United States were private equity-backed companies).[37][38]:23 Prior to the FCC’s imposition of rate caps on interstate prison and jail phone calls in February 2014, the largest ICS provider Global Tel-Link (GTL) – which has been profitably bought and sold by private equity firms such as American Securities and Veritas Capital – charged some of the highest rates in the US – up to $17.30 for a 15-minute call.[39] The 2013 FCC analysis,[35] described how, in some cases, long-distance calls are charged six times the rate on the outside.[34]
Acting Chairwoman Clyburn concurred with her order and both Jessica Rosenworcel and Pai dissented and issued statements. Pai opposed the FCC imposition of “safe harbor” of 12 cents with a cap of 21 cents on private ICS providers like GTL and CenturyLink Public Communications, arguing instead for a “simple proposal to cap interstate rates, with one rate for jails and a lower rate for prisons” that are cost-based to protect providers and ensure “some return on investment.” Pai also argued that the FCC was not well-equipped to micromanage rates at each and every prison.[36][40]
In 2015, Pai opposed rate caps on intrastate inmate calls over which courts have ruled the FCC has no jurisdiction,[41] notwithstanding rates as high as $54 per minute.[42] He raised concerns about the increased use of contraband cell phones in prisons.
In November 2016, the ICS providers won a halt on the unlawful regulations. Pai criticized Democrats for appealing.[43] Shortly after his January 23 confirmation as chairman, Pai withdrew support for the FCC case involving GTL and CenturyLink set for February 6, 2017, which had called for establishing FCC jurisdiction over rates set by states.[28][44] In June 2017, the US Court of Appeals struck down a large part of the FCC’s ICS order.[45]
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