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Federal Register / Vol. 86, No. 142 / Wednesday, July 28, 2021 / Rules and Regulations determination of interstate revenue for purposes of universal service contributions that they have used in the past for this traffic. The Commissions actions today go only to the question of the appropriate jurisdictional treatment for purposes of determining the rates providers may charge for telephone calls to consumers. The Commissions actions neither limit the ability of providers to avail themselves of applicable proxies or safe harbors used for purposes of Universal Service Fund reporting nor suggest that providers have been incorrectly complying with the Commissions universal service contribution rules. Finally, the Commission takes this opportunity to remind providers that they are permitted but not required to pass through universal service charges to their end users. As the Commission explained in the 2020 ICS Order on Remand, where the Commission has jurisdiction under section 201b of the Act to regulate rates, charges, and practices of interstate communications services, the impossibility exception extends that authority to the intrastate portion of jurisdictionally mixed services where it is impossible or impractical to separate the services intrastate from interstate components and state regulation of the intrastate component would interfere with valid federal rules applicable to the interstate component. There is no dispute that the Commission has jurisdiction over providers interstate rates, and GTL does not dispute the Commissions authority to regulate jurisdictionally indeterminate services. Accordingly, to the extent that GTL and other providers find it impossible or impracticable to determine the actual endpoints, hence the actual jurisdictional nature of a call, they must treat that call as jurisdictionally indeterminate and must charge a rate at or below the applicable interstate cap.
46. The Commission rejects GTLs argument that the Commissions application of the end-to-end analysis violates the jurisdictional limitation in section 221b of the Act. That section has been narrowly interpreted to enable state commissions to regulate local exchange service in metropolitan areas . . . which extend across state boundaries. Section 221b, which refers to telephone exchange service says nothing about payphone service, which is separately defined in section 276 of the Act. Telephone exchange service is broadly defined as service within a telephone exchange or comparable service provided through a system of switches, transmission
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equipment, or other facilities or combination thereof by which a subscriber can originate and terminate a telecommunications service. Indeed, the statute recognizes and treats payphone service separately from exchange service in section 276a, which prevents Bell operating companyowned payphones from receiving subsidies from . . . telephone exchange service operations. The Commission has previously recognized this distinction, explaining that although states traditionally regulated payphones, including by setting local rates, that role was in the context of LECs providing local payphone service as part of their regulated service. By disallowing LEC payphones from receiving subsidies from their basic exchange service, the Commission emphasized that section 276 greatly changes the way in which states set local coin rates. In sum, the Act treats the exchange service in section 221b separate from payphone service in section 276, and the courts have narrowly interpreted section 221b to apply only to a states ability to regulate local exchange service. The Commission is therefore unpersuaded by GTLs argument that the Commission violated section 221b or acted in a manner precluded by the implementation of that provision by reiterating that providers of calling services for incarcerated people must charge their end users for interstate and intrastate calls based on the physical endpoints of the call.
47. The Commission is also unpersuaded by GTLs claim that the Commissions jurisdictional analysis might have some potential impact on state communications programs that depend on assessments of intrastate revenues or that the Commission is somehow limiting the ability of state commissions to use NPANXX as a jurisdictional proxy. GTL provides no evidence that applying an end-to-end analysis for purposes of complying with the federal interstate rate cap for inmate calling services charges would either interfere with state authority to use NPANXX as a proxy for determining which calls are within their jurisdiction or would somehow result in the reclassification of all telecommunications traffic that relies on NPANXX . . . as interstate. The Commission does not disturb state and local laws or regulations that use NPA
NXX or other proxies to determine, for example, the application of state fees and taxes. The end-to-end jurisdictional analysis that the Commission reaffirms today only affects what calling providers may charge incarcerated
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people and their loved ones for jurisdictionally indeterminant telephone calls, and as the Commission has indicated above, continued compliance with applicable state and local laws that are not in conflict with federal law remain unaffected.
2. GTLs Procedural Arguments Do Not Warrant Reconsideration 48. The Commission rejects GTLs claim that the Commission needed to provide additional notice and an additional opportunity for comment before it clarified in the 2020 ICS Order on Remand that providers must use the geographical endpoints of a call rather than the area code or NXX prefix of the calls recipient to determine whether the call is interstate or intrastate. The Commission rejects this claim on procedural grounds insofar as the Commission considered and responded to these arguments in the 2020 ICS
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04, paras. 5254. The Commission also rejects it on substantive grounds as discussed herein. GTL mischaracterizes the Commissions clarification as a new and unprecedented rule and a serious departure from prior practice.
On the contrary, after identifying confusion and debate in the record, the Commission reminded and clarified for providers the end-toend analysis it has traditionally used to determine whether a call is within its interstate jurisdiction to ensure that providers of calling services for incarcerated people do not circumvent or frustrate the Commissions ancillary service charge rules. Providers of calling services for incarcerated people have been on notice since the Commission adopted interstate rate caps in 2013 that they could not charge more than the capped amounts for interstate calls. By interpreting the rate cap rule as requiring that inmate calling services calls be classified based on their endpoints, the Commission applied the ordinary meaning of the term interstate as that term is defined in the Communications Act. The Communications Act defines interstate communication or interstate transmission as Communication or transmission A from any State, Territory, or possession of the United States other than the Canal Zone, or the District of Columbia, to any other State, Territory, or possession of the United States other than the Canal Zone, or the District of Columbia, B
from or to the United States to or from the Canal Zone, insofar as such communication or transmission takes place within the United States, or C
between points within the United States
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