Thursday, November 22, 2012

FCC Contemplates Regulating Prison Phone Rates To Counter Price-Gouging Of Prisoners

Once again, the private sector is proving to be its own worst enemy, issuing an engraved invitation for government regulation because of greed. The Federal Communications Commission (FCC) is considering regulating prison phone rates because of excessive price-gouging of prisoners. The price-gouging may be directly to the inmates themselves, or indirectly to their families when the calls are collect. A 15-minute local collect call may cost a prisoner's family as much as $6.20 in Colorado; a 15-minute interstate collect may cost a prisoner's family as much as $17 in Washington.

On November 14th, 2012, an FCC spokesman confirmed that Chairman Julius Genachowski circulated a proposal that would seek public comments on prison phone rules and rates. The end result may require that telecom providers cut the rates that prisoners pay to talk to their families on the phone. This is in response to a petition drive launched earlier in 2012 by a coalition of civil liberties and public interest groups urging the FCC to prevent prisons from charging "predatory" phone rates. The Hill did not identify the coalition group, but Think Progress identified it as the Prison Policy Initiative. At a November 15th phone justice rally in Washington D.C., they delivered signatures from 36,690 people across the country calling on the FCC to rein in excessive prison phone rates. A news video from RT America provides more detail:

The Prison Policy Initiative’s Drew Kukorowski explains how this works and why this is a problem:

Prison phone companies are awarded these monopolies through bidding processes in which they submit contract proposals to the state prison systems; in all but eight states, these contracts include promises to pay “commissions” — in effect, kickbacks — to states, in either the form of a percentage of revenue, a fixed up-front payment, or a combination of the two. Thus, state prison systems have no incentive to select the telephone company that offers the lowest rates; rather, correctional departments have an incentive to reap the most profit by selecting the telephone company that provides the highest commission. [Ed. Note: The eight states not requiring kickbacks are Nebraska, New Mexico, New York, Rhode Island, Michigan, South Carolina, California, and Missouri.]

The prison telephone market is structured to be exploitative because it grants monopolies to producers, and because the consumers — the incarcerated persons and their families who are actually footing the bills — have no comparable alternative ways of communicating.

Kukorowski's full report is available HERE, and it references a report from Prison Legal News entitled "Nationwide PLN Survey Examines Prison Phone Contracts, Kickbacks", published in 2011. Alaska gets mentioned in this latter report:

When the Alaska Dept. of Corrections (DOC) issued an RFP (Request For Proposal) in 2007, bidders were rated on a point system with 60% of the evaluation points assigned to cost. The RFP explicitly stated that 
“[t]he cost proposal providing the largest percentage of generated revenues ... to the state will receive the maximum number of points allocated to cost.” That is, the most important evaluation criterion was the commission rate.

On the other hand, the report also identifies Alaska as unique because prisoners can make local calls for free. This is verified in an interview with "Ted" in the Anchorage Correctional Complex, who states that "It's set up on the Evercom system [which has since become Securus], so it's basically you can call local landlines. You're not allowed to call any cell phones. If the call is local there is no charge. Long distance requires a charge to the phone you are calling". Nevertheless, the bidding process previously described provides a powerful incentive for price-gouging a constituency that's captive and vulnerable -- the prisoners and their families.

However, Alaska did contemplate charging prisoners $2.00 per call for local calls back in 2008: effort to impose a $2.00 fee on local calls from Alaskan prisons was scuttled as a result of public opposition. The Alaska DOC had announced that the fee would go into effect on September 1, 2008 under a new prison phone contract with Securus. Previously, prisoners could make local calls at no cost.

The Regulatory Commission of Alaska received a number of complaints concerning the $2.00 per-call charge and opened an investigation, stating “that doubt exists as to the reasonableness” of the fee. The proposed local call charge was withdrawn in January 2009, even though Securus had estimated that based on historical call volume the $2.00 fee “could add [gross] revenues of $4,661,808 annually.” Local calls remain free for Alaskan prisoners.

And Alaska is high-end when it comes to interstate calls:

Securus provides up to a 32.1% kickback in Alaska, but offers kickbacks of up to 60% in Maryland. Yet Securus’ interstate rate in Maryland (with almost double its Alaska kickback percentage) is less than half the interstate rate in Alaska. Securus partnered with Embarq to handle phone services in Texas’ prison system at $.26/minute for local and intrastate calls, and $.43/minute for interstate calls – using a “bundled” rate that includes a 40% kickback. [See: PLN, Feb. 2009, p.27; Nov. 2007, p.11]. Thus, for a 15-minute collect interstate call, Securus charges $6.45 in Texas prisons versus $7.50 in Maryland and $17.30 in Alaska. Such disparities further demonstrate the arbitrary nature of prison phone rates among the states, even when provided by the same company.

While it's true that phone companies’ costs associated with installing and maintaining secure prison phone systems exceed those of installing public telephones, this does not satisfactorily explain the widely variant rates charged in different jurisdictions. Considering that there is a correlation between prisoners who maintain contact with their families and those who are successful in staying out of prison after they are released, it seems like it would be in the public interest to make phone service even more available and affordable to prisoners and their families, with the only variables being the security status (maximum vs. minimun security) and the institutional behavior of the inmate. Phone access should be a privilege for inmates, but it shouldn't be a privilege available only to richer inmates. In addition, high phone charges encourage smuggling of cell phones into a prison.

All of this describes state prison systems. This problem is not quite so pronounced in the federal system. The federal Bureau of Prisons (BOP) has moved to a debit-based phone system called the Inmate Telephone System (ITS), in which prisoners pay for calls from their institutional accounts, though they can also make collect calls to approved numbers. The system has all of the usual security features but in most cases has resulted in savings to prisoners and their families. Rates are as low as $.06/minute for local debit calls and $.23/minute for long distance debit calls. However, collect long distance rates are still pricey at $2.45 + $.40/minute ($8.45 for a 15-minute interstate collect call). Intrastate rates are capped at 90% of the applicable state-regulated phone rates, which vary. BOP prisoners are limited to 300 minutes of calling time per month (400 in November and December), and phone calls are limited to 15 minutes. The ITS was implemented following a settlement in a federal class-action lawsuit.

The feds are actually onto something with their monthly minutes cap. Defenders of high phone charges claim they deter inmate abuse. However, a better way would be to use minutes caps, varying from 150 minutes per month for maximum security prisoners to as much as 500 minutes per month for minimum security prisoners. Also strictly limit the amount of time per call; no more than 15 minutes at a time. This will deter most inmates from abusing the privilege.

Deprivation of liberty is THE punishment. Any additional punishment levied in prison should be triggered by the behavior of the inmate in prison. Making an Alaskan inmate or his family spend $17.43 for a 15-minute collect call out of state is a form of punishment. If the private sector wants to avoid being regulated, it needs to start behaving more responsibly, rationally, and consistently.

1 comment:

  1. Too many Americans are in prison today, and it is very important to improve the penitentionary system. You seem to be a very informed person in this kind of legal issues. You can publish on Attorney Online . This is a category with prison legal news you can publish links to legal sites there. Moreover. Other people cam publish interesting news on this topic there.