Criminal Justice

Crime Pays—for Phone Companies


Crime Pays—for Phone Companies

Photo illustration by 731; Photograph by Image Source/Getty Images

Calling home costs just pennies a minute for most Americans. Not so for the 1.4 million locked up in state prisons. They pay as much as $17 for a 15-minute call. Fed up, more than 200 inmates and relatives wrote to U.S. Federal Communications Commission Chairman Julius Genachowski this past summer pleading for his help. “Hello, does anybody hear me out there?” asked David Wrobleski, who’s serving a life sentence in Michigan. “Over the years, I have lost most of my contact with my family and friends due to the increased cost of a telephone call from the prison setting. I come from a very poor family.”

In exchange for exclusive deals to provide service to inmates, phone companies typically turn over a portion of their billings to prisons. Forty-two states collected $152 million in commissions in 2008, with the average being 42 percent of the calling charges, according to a recent FCC filing. That system perversely encourages prison officials to award contracts to the highest bidders, say some 30 groups spanning the political spectrum. The American Civil Liberties Union, the NAACP, the pro-life American Values, and the American Conservative Union are among those now pressing the FCC to act on a petition filed by prisoners and family members almost 10 years ago and cut what they say are “exorbitant” rates. The groups want the charges capped at 20¢ to 25¢ a minute.

The $1.2 billion business is dominated by two private equity-backed companies, Dallas-based Securus Technologies and Global Tel*Link of Mobile, Ala. Together they account for about 80 percent of the market. In FCC filings, the companies said security features required by jail officials jack up the cost of providing the service and that states rely on the commissions to fund operations. The states’ take goes toward recreational and library supplies in Massachusetts, maintenance of county jails in Arkansas, and a victim compensation fund in Texas, Global Tel*Link said in an Oct. 3 filing. If commissions are slashed, local governments could ask taxpayers to make up the difference for operations, says Fred Wilson, a spokesman for the National Sheriffs’ Association.

Eight states don’t take a cut of the phone contracts, and rates there are lower. When New Mexico’s ban on the commissions took effect in 2001, the cost of a 20-minute call dropped from as much as $8 to as little as 65¢, says Arthur Bishop, a spokesman for the New Mexico Public Regulation Commission. The federal government charges its prisoners 6¢ a minute—a rate that covered costs and produced $34 million in profits in 2010, according to the U.S. Government Accountability Office. Caroline Harris, a spokeswoman for American Securities, the New York private equity firm that owns Global Tel*Link, declined to comment. So did Michael Millican, a spokesman for New York-based Castle Harlan, which owns Securus.

Genachowski called the prison pricing a “serious issue for families, communities, security” in a Twitter Q&A this past summer and said the FCC is “preparing next steps.” He declined to provide details. Pointing to research that links lower recidivism rates with regular contact between inmates and their families, Democratic Representatives Bobby Rush of Illinois, Henry Waxman of California, and Keith Ellison of Minnesota are urging Genachowski to act soon. Said Rush in an e-mail: “It shouldn’t take the FCC one more decade to ensure that prison phone services are priced in line with their true costs and made more affordable.”

The bottom line: Most states get a cut of the money inmates spend on phone calls, which can cost $1 a minute; in 2008 the states’ take was $152 million.

Shields is a reporter for Bloomberg News in Washington.

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