Why the FCC voted to cap 'predatory' prison phone rates

For the more than 2.7 million children who have at least one parent who is incarcerated, phone calls and video visits can often be a lifeline, helping people connect with relatives in prisons across the country.

But the small, highly-secretive industry that makes that technology possible also holds a near monopoly on contracts with jails and state prisons, allowing them to charge families rates that can reach thousands of dollars a year.

On Thursday, the Federal Communications Commission (FCC) stepped in, voting 3-2 to cap rates on all phone calls made from jails and state prisons, taking a more decisive step to ease a burden that falls particularly on inmates’ families, advocates say.

Until now, families have paid as much as $16 or $17 for a 15-minute call to someone in a local jail, and up to $6 or $7 for a call to a state prison, according to data from the Human Rights Defense Center's Campaign for Prison Phone Justice. The new cap slashes prices by more than two-thirds. It also caps additional fees and service charges that can greatly increase the cost of a call, sometimes forcing families to choose between paying the bills and basic necessities such as groceries and electricity, regulators say.

Regulators previously voted to cap rates for state-to-state calls in 2013, though the FCC’s action discourages – but doesn’t curb – so-called “site commissions” that allow prisons and jails reap a large percentage of the income from the phone systems.

“There’s no more excuses, no more justification for inaction, that puts every other priority of this agency above the well being of our children,” says FCC commissioner Mignon Clyburn, who has long championed capping inmates' phone rates, during the sometimes-emotional hearing. “It has preyed on our most vulnerable for far too long,” she says.

With Ms. Clyburn calling the system “an egregious market failure,” the regulators voted to cap both in-state and state-to-state phone calls at $1.65 for a 15-minute call. Inmates’ families at state and federal prisons will pay 11 cents a minute for such calls, while smaller local jails with less than 350 inmates – which tend to incur the largest amount of expenses in providing phone service – will charge 22 cents a minute.

“It’s certainly an enormous improvement over previous rates,” says Alex Friedmann, associate director of the Human Rights Defense Center, who expected the FCC to impose the cap. Compared to the 2013 change, he says, “this one will have a much broader and more significant impact, this is a very welcome change.”

But there’s still the issue of site commissions, where a small number of phone providers – dominated by industry giants such as Dallas-based Securus Technologies and Global Tel-Link, headquartered in Alabama – return anywhere from 30 to more than 90 percent of their profits to county sheriffs and state corrections agencies in exchange for an exclusive contract.

Advocates say these payments essentially amount to kickbacks that allow phone companies to increase their rates, while the Louisiana Public Service Commissioner called them “worse than any payday loan scheme," saying that they often benefit local sheriffs.

“Nothing says that corrections agencies have to request commissions and nothing says companies have to give them – there’s nothing in the law that says that,” says Mr. Friedmann. “Most government contracts are based on lowest cost.... It’s what we do when we pick contracts to build roads, we don’t pick the highest bid.”

Some phone companies also say regulators should tackle the issue of site commissions paid particularly to local jails, but argue that the FCC’s rate cap could cripple their industry. “Rates are high because people want commissions,” Brian Oliver, the chief executive of Global Tel*Link, told NPR, saying the FCC’s cap could cut his revenues by as much as half.

So far, 10 states – including New York, New Jersey and Ohio – and the District of Columbia, have banned the commissions and lowered their rates to levels below the cap the FCC set, according to Bernadette Rabuy, policy and communications associate at the Prison Policy Initiative, an advocacy group based in Massachusetts.

But local sheriffs, who oversee smaller county jails, say the commissions help pay for the costs associated with running the phone systems, including monitoring all phone calls for security purposes. They’re considering banning phone calls altogether, Jonathan Thompson, CEO of the National Sheriffs Association told NPR. They have also threatened to sue to preserve the commissions, which advocates say is a possibility.

“They’re correct, phone service is a privilege not a right, but that being said, every correctional facility provides phone service,” says Friedmann of the Human Rights Defense Center. “[It’s used] not just for prisoners but for their families and children on the outside,” he adds, noting that phone monitoring is a key way jails keep tabs on inmates.

Some jails have heralded video-visitation technology, which allows families to connect with incarcerated relatives via a Skype-like service, calling it the wave of the future, and in some cases as a replacement for both phone calls and in-person visits. But many families of inmates lack Internet access, while those that do often find connections to be inconsistent and glitchy, according to Ms. Rabuy of the Prison Policy Initiative (PPI).

“We really just don’t think it makes sense, because what ends up happening is that sheriffs say families will be able to save time, but for this demographic especially, no one can afford it," forcing many families to use the technology only at local jails, which makes it far less convenient, she says.

The organization partnered with a comedy group on a series of videos to explain the issues with the technology modeled on Apple’s “I’m a Mac” ads, featuring one person representing Skype and one person representing the video technology.

The technology is often provided by companies such as Securus that also provide prison phone service, with the company sometimes picking up the tab in order to give the jails an incentive. But only about 10 percent of jails have adopted it so far.

There’s also a culture difference between jails and prisons – which can incarcerate people for a far longer period – advocates say.

“Rates and commissions tend to be higher in jail, because prisons are run by people who read magazines with ‘Best Practices’ in the title, while jails are often run by elected officials and their college roommates, so they approach these things very differently,” says Peter Wagner, PPI’s executive director. “You send someone to prison for three years, you’re going to have deal with [their] mother.”

The federal regulators say the issue of preserving family ties is exactly why they have long wanted to tackle prison phone systems. Phone calls and in-person visits have a significant impact on what people do once they’re released, FCC Commissioners Clyburn and Jessica Rosenworcel emphasized on Thursday, with research showing that even a single prison visit can reduce a person’s chance of recidivism by 13 percent.

The commission’s history with phone rates date back to 2003, when Martha Wright, a grandmother in Washington who often struggled with paying for her own medication and raising the funds to call her two grandchildren in prison, petitioned the FCC to change the phone rates.

Ms. Wright died last year, after seeing the FCC finally vote to cap the rates for state-to-state calls. Several regulators said their move to finally cap the rates across the board is due in large part to her efforts.

Her grandson, Ulandis Forte, said she talked with him regularly after he was incarcerated for murder. But as he was moved repeatedly over 18 years to a series of prisons run by the Corrections Corporation of America in New Mexico, Arizona, and Ohio, her phone bills kept rising.

“It was just so unjust that the pain that my grandmother had to go through, because she’s the one who had to pay the bills, she’s the one who had to pick up the phone and fight with, you know, could she afford to talk to me,” he said in 2013. Standing with his grandmother just after the FCC’s order passed, he vowed to continue her efforts.

“Since I’ve been home these 10 months, I feel like ... I can’t do enough for her, because she’s been everything for me, and she continues to be there for me,” he said. “I just want to be able to pick up the torch and just keep it moving.”

[Editor's note: This article has been updated to better reflect Alex Friedmann's affiliation with the Human Rights Defense Center. It also misidentified the corporate headquarters of Global Tel*Link, which is in Alabama.]