On August 26, 2024, the Federal Communications Commission (FCC) published its final rule in the Federal Register, formalizing rulemaking that the agency issued the previous month which significantly reduces the cost of phone and video calls made by people held in prisons and jails nationwide. It is the latest development in a decades-long campaign to rein in predatory price gouging by prison telecom companies.

Phone rates in state prisons were limited to $.06 per minute, and per-minute rates in local jails dropped to no more than $.12. The FCC imposed interim caps on the cost of video calls equal to $.16 per minute in prisons and $.11 to $.25 per minute in jails. The order included a number of other measures to address abusive practices by prison phone companies, and to make communication services more affordable and accessible. All the reforms go into effect in 2025. See: Incarcerated People’s Communications Services; Implementation of the Martha Wright- Reed Act; Rates for Interstate Inmate Calling Services, Fed. Reg. Vol. 89 No. 165.

To properly appreciate this most recent FCC action, it must be considered in the context of longstanding exploitation of prisoners and their families by telecom providers, operating in collusion with corrections officials.

Carceral Communication

We live in a world with an overabundance of communication options. Free email services are universally available outside of prisons and jails. Cell phones have effectively become a necessity, offering unlimited calling with flat-rate monthly plans. Texts and other forms of no-cost instant messaging are even more widely used than calls, as are video conference services such as Zoom and Skype—both of which are also free. Additional communication options range from online “e-faxes” to Voice-over-Internet Protocol (VoIP) calling.

Yet in prisons, jails and other detention facilities the primary means of contacting family members and friends remains the landline telephone—technology that dates back to Alexander Graham Bell’s invention of the first telephone in 1876. Until fairly recently, such phone services, as well as letters and in-person visits, were the only way prisoners had to reach those in the outside world.

Written correspondence is not a viable option for the majority of offenders and detainees behind bars who are illiterate or functionally illiterate. According to the 2014 National Adult Literacy Survey, 70% of incarcerated adults read below the fourth-grade level.

Further, many correctional facilities are located in rural areas far from the cities where most prisoners resided prior to their incarceration. These rural settings are typically chosen for political reasons—as a boon to lawmakers who represent that district, for example, or for job creation in impoverished non-urban communities. But the distance that families have to drive to reach such far-off prisons often makes in-person visits both expensive and infrequent.

That leaves phone calls as the main method of communication for the incarcerated. Telecom firms that specialize in prison and jail phone services are well aware of this fact and have exploited it ruthlessly. Over the years, companies such as ViaPath Technologies (formerly Global Tel*Link/GTL), Securus Technologies, ICSolutions, Telmate, CenturyLink, NCIC Inmate Communications and Pay Tel Communications, among others, have used a “commission”-based business model to obtain monopoly contracts to provide “inmate calling services” in jails and prison systems—what the FCC now calls “incarcerated persons calling services” (IPCS). Instead of basing such contracts on the lowest cost to consumers—prisoners and the family members they call—corrections officials instead award the business to the company that offers the highest “site commission,” which is a euphemism for a kickback of some portion of IPCS revenue.

These kickbacks average over 40% of gross revenue but can be as high as 90%; they have also been extremely lucrative for prison and jail systems, generating an estimated $460 million annually, according to the FCC. Moreover, this business model appears to be unique to the IPCS industry; in any other context, providing monetary payments in exchange for securing government contracts would be considered bribery.

To cover the substantial costs of this commission-based business model, prison and jail telecoms have historically charged excessively high phone rates, including first-minute charges up to $3.95 and long-distance rates up to $1.00 per minute. Ancillary fees add to these costs additional charges for “services” like adding money to prepaid phone accounts or providing a paper billing statement.

No one can call a prisoner, and most prisoners are unable to pay to make calls themselves. According to a 2017 report by the nonprofit Prison Policy Initiative (PPI), the average wage for most prison jobs is between $.14 and $.63 per hour. People held in local jails usually do not earn anything for work they do there. In seven states, including Texas and Florida, prisoners receive no pay for their labor. Thus, the expense of prison and jail telecom services is primarily borne by prisoners’ families.

As PLN reported from a 2013 panel discussion at an FCC workshop, most phone calls placed behind bars are paid for by call recipients, either with a direct payment for a collect call or by placing money on prepaid accounts so that an incarcerated loved one can stay in touch. [See: PLN, Aug. 2013, p.26.] The inflated rates and fees that prisoners and their families must pay to maintain contact has created a $1 billion-plus market for telecom firms. And lacking other options for making calls from prisons and jails due to the monopolistic nature of IPCS contracts, it’s a literally captive market.

As explained by the FCC in its most recent rulemaking order, “Unlike virtually everyone else in the United States, incarcerated people have no choice in their telephone service provider. Instead, their only option typically is to use a service provider chosen by the correctional facility, and once chosen, that service provider typically operates on a monopoly basis.”

Longstanding Advocacy Efforts

For decades, prisoner rights organizations and advocates have fought for lower IPCS rates. In February 2000, District of Columbia resident Martha Wright filed a class-action suit seeking to reduce the cost of phone calls at the prison where her grandson was held. A federal district court stayed the case pending action by the FCC, which had primary jurisdiction over telecom issues. See: Wright v. Corr. Corp. of Am., USDC (D.C. Dist.), Case no. 1 :00-cv-00293.

The Wright plaintiffs filed a petition for rulemaking with the FCC in 2003, and a number of criminal justice organizations began pushing for IPCS reforms, including, notably, the Michigan chapter of justice reform nonprofit Citizens United for the Rehabilitation of Errants (CURE).

The Human Rights Defense Center (HRDC), publisher of PLN and Criminal Legal News, which have both long reported on prison phone-related issues, began submitting formal comments to the FCC in 2007. Four years later, HRDC co-founded the Campaign for Prison Phone Justice and launched a comprehensive data collection project. Contacting all 50 state prison systems and the federal Bureau of Prisons, the project compiled information about phone service providers, rates and commission payments nationwide.

PLN published an extensive story based on that data, including a chart detailing state-by-state IPCS phone rates and commissions. [See: PLN, April 2011, p. l]. At that time, state prison systems received IPCS commission payments estimated at 42% of gross revenues from prisoner calls, and the cost of a 15-minute phone conversation was as a high as $17 for a collect call at a lockup in Washington. [See: PLN, Apr. 2011, p.1.]

HRDC executive director Paul Wright subsequently testified at an FCC event, and other organizations joined the IPCS reform efforts, including PPI, the Center for Media Justice, Helping Educate to Advance the Rights of the Deaf (HEARD), the United Church of Christ and Color of Change. In 2013, a decade after the Wright plaintiffs petitioned the FCC, the agency issued an order setting interim rate caps on interstate (long distance) IPCS calls ranging from $.21 to $.25/minute; reporting that move, PLN noted how state prison systems that year took in approximately $123.3 million in commission kickbacks, representing, on average, 47.79% of what prisoners and their families were charged. At the highest IPCS phone rates, they were paying $275 a month to make a one-hour phone call just once a week. [See: PLN, Dec. 2013, p.1.] That was equal to almost 30% of the $943 U.S. median rent that year.

Nearly two years later, in November 2015, the FCC issued a second rulemaking order that imposed permanent rate caps on both interstate and intrastate (in-state) IPCS calls, as well as limits for ancillary fees. There were separate rate caps for prisons and jails, initially ranging from $.14 to $.49 per minute. The FCC also indicated it would take action to regulate video calling services. See: In the Matter of Rates for Interstate Inmate Calling Services, Second Report & Order and Further Notice of Rulemaking, 2015 WL 6779887.

Those reforms, championed by then-FCC Commissioner Mignon Clyburn, were necessary due to “market failure” in the IPCS industry. The second order explained that prisons and jails “each have a single provider of inmate calling services. And very often, correctional authorities award that monopoly franchise based principally on what portion of inmate calling revenues a provider will share with the facility—i.e., on the payment of ‘site commissions.’ Accordingly, inmate calling providers compete to offer the highest site commission payments, which they recover through correspondingly higher end-user rates. If inmates and their families wish to speak by telephone, they have no choice but to pay the resulting rates.”

“Excessive rates for inmate calling deter communication between inmates and their families,” the FCC added, “with substantial and damaging social consequences. Inmates’ families may be forced to choose between putting food on the table or paying hundreds of dollars each month to keep in touch.”

Five telecom companies, including ViaPath/GTL and Securus, appealed the order, arguing that the FCC’s “belief that lower [IPCS] calling rates reflect desirable social policy cannot justify regulations that exceed its statutory mandate.”

Appellate Setback and Remand

The D.C. Circuit Court of Appeals initially stayed the rate caps and other IPCS reforms, before it ultimately vacated the rulemaking order in part on June 13, 2017.

Although the FCC initially defended its order, after President Donald J. Trump (R) took office in January 2017, the composition of the FCC changed. The chairperson was replaced by Commissioner Ajit Pai, who had dissented from the agency’s 2015 order, and a majority of the commissioners no longer agreed that they had authority to regulate intrastate phone rates. The agency therefore declined to defend that issue before the appellate court, so a number of third-party advocates intervened to argue in support of the rulemaking order.

While the Court of Appeals observed that high IPCS charges “raise serious concerns,” it held the FCC lacked authority to regulate intrastate payphone services under the governing law at the time—the Communications Act of 1934, 47 U.S.C. § 276(d). Additionally, the appellate court found that the FCC’s methodology of setting the rate caps using “industry-averaged cost data” was improper and must be reconsidered; the exclusion of all commission payments from rate cap calculations also was improper; and the FCC lacked jurisdiction to regulate video calling services. The D.C. Circuit upheld the FCC’s prior cap on interstate IPCS rates, however, as well as caps on ancillary fees related to interstate calls. The appellate court also upheld the agency’s requirement that IPCS providers report data regarding their commission payments.

With respect to commissions, the Court of Appeals wrote that “site commissions obviously are costs of doing business incurred by IPCS providers,” noting that “[i]n some instances, commissions are mandated by state statute” while in others they “are required by state correctional institutions as a condition of doing business with IPCS providers.” Thus the FCC’s 2015 rulemaking order was vacated in part and remanded for reconsideration. See: Global Tel*Link v. FCC, 866 F.3d 397 (D.C. Cir. 2017).

The court’s decision to rescind the intrastate rate caps was particularly disappointing, since around 80% of IPCS calls are made in-state, not interstate. The FCC’s interim caps on interstate calls in its 2013 order, ranging from $.21 to $.25/minute, remained in effect.

It Took an Act of Congress

Following remand, the FCC issued several additional rulemaking notices and orders, including one in May 2021 that reduced the rate caps for interstate IPCS calls at prisons and large jails; the order also limited the recovery of commission costs incurred by telecom providers; removed separate rate caps for debit and collect calls; and imposed caps on international IPCS calls.

The FCC explained that “egregiously high rates and charges,” together with “associated unreasonable practices for the most basic and essential communications capability”—telephone service—”impedes incarcerated peoples’ ability to stay connected with family and loved ones, clergy, and counsel, and financially burdens incarcerated people and their loved ones.” See: In the Matter of Rates for Interstate Inmate Calling Services, Third Report & Order, 2021 WL 2144296.

The FCC entered another order in September 2022 that improved access to communications services for prisoners with hearing-related disabilities; it also implemented reforms to curb “certain abusive [IPCS] practices to lessen the financial burden” on offenders and their families. As a direct result of the D.C. Circuit’s ruling, Senate Bill 1541 was introduced in Congress to grant the FCC authority to regulate intrastate phone calls as well as video services in prisons and jails, and to otherwise ensure fair costs for IPCS services. The bipartisan Martha Wright-Reed Just and Reasonable Communications Act, championed by U.S. Sen. Tammy Duckworth (D-Ill.), was signed into law by Pres. Joseph R. Biden, Jr. (D) on January 5, 2023. [See: PLN, July 2023, p.50].

The Wright-Reed Act amended 47 U.S.C. § 276 to ensure that costs for interstate, intrastate and international IPCS calls are “just and reasonable,” and that telecom providers are “fairly compensated.” The definition of payphone services in correctional facilities was expanded to include “any audio or video communications services used by inmates … regardless of technology used.” The Act further specified that the FCC may “use industry-wide average costs” when setting IPCS rate caps—a practice rejected by the D.C. Circuit Court of Appeals in its 2017 ruling because it exceeded the authority Congress had then given the agency.

The FCC voted to begin additional rulemaking to implement the Act’s provisions in March 2023, which resulted in numerous comments being submitted by advocacy groups, IPCS providers and corrections agencies. Then on July 18, 2024, under the leadership of Chairperson Jessica Rosenworcel, the FCC issued a comprehensive, 437-page rulemaking order that included the most significant IPCS reforms to date.

Rulemaking Reforms: Highlights

According to the FCC, the Wright-Reed Act gave it a “clear mandate” to fix a “broken system” by expanding its jurisdiction to include intrastate and international IPCS rates; to select the methodology for establishing those rates; and to regulate video calling and other “advanced communications services” such as tablets and videophones. See: In the Matter of Incarcerated People’s Communications Services, Report & Order, 2024 WL 3617335.

Additional reforms in the prison and jail telecom industry were necessary, the FCC wrote, because incarcerated “[c]onsumers have no means of switching to another [IPCS] provider and no means of redress even if the [IPCS] provider raises rates, imposes additional fees, adopts unreasonable terms and conditions for use of the service, or offers inferior service.”

The rulemaking order cited numerous cases of imprisoned parents who were unable to regularly speak with their children, as well as women who had to choose between accepting calls from one of two incarcerated family members and families that went into debt due to high IPCS costs. As just one example: “Jada Cochran, who gave birth in prison and whose mother raised her four young children while she was incarcerated, cried as she lamented that her mother could not afford many calls, despite the fact they were her ‘lifeline to my family, to my children.’” FCC Chairperson Rosenworcel noted, “The price of an individual call [from a prison or jail] can be as much as many of us pay for an unlimited monthly plan” with a cellular provider.

The effects of egregiously high IPCS costs are particularly detrimental considering what they risk—the positive impact that communication between prisoners and their loved ones has on reducing recidivism. “For decades,” the FCC stated, “studies have linked regular contact with family with lowering rates of recidivism and increasing likelihood of successful reentry into society after release.” Absent such communication, “incarcerated people tend to lose contact with the outside world and can lose hope of reengaging with society and their loved ones.” [See, e.g.: PLN, April 2014, p.24.]

With these concerns in mind the FCC’s rulemaking order required IPCS providers to implement numerous reform measures, including the following highlights.

Phone & Video Calling Rate Caps: The latest rate caps for IPCS services established by the FCC are structured by facility type and size, with the latter based on average daily population (ADP). For prisons of any size and large jails (those with an ADP of 1,000 or more), phone rates are capped at $.06 per minute. For medium jails (350-999 ADP), the cap is $.07 per minute, while the cap for small jails (100-349 ADP) is $.09 per minute. There is a $.12 per minute cap at very small jails (0-99 ADP).

For video calling services, rates are capped at $.16 per minute at prisons, $.11 per minute at large jails, $.12 per minute at medium jails, $.14 per minute at small jails and $.25 per minute at very small jails. The video calling caps are higher because, according to the FCC, “the data show that video communications typically require more expensive equipment.”

These rate caps apply to both interstate and intrastate calls, and whether they are made collect, by debit or from prepaid accounts. The caps for phone calls are permanent, while those for video calling services are interim pending future regulations. IPCS providers must publicly disclose their rates for both phone and video services on their websites and/or mobile apps.

The rate caps were determined using industry-wide average costs reported by telecom providers, which the FCC found would provide “fair compensation” as required by the Wright-Reed Act. The caps encompass “all relevant costs incurred in the provision” of IPCS services—including costs related to ancillary fees (see below) as well as safety and security-related expenses incurred by correctional facilities. There are no “add-ons” to the caps, and telecom companies cannot charge more than the capped rates, except any applicable taxes. The rate caps for international phone calls remain the same as those set in the FCC’s 2021 order.

The phone and video calling caps represent a ceiling and not a floor; IPCS providers can charge less, and the FCC noted that “several states and smaller jurisdictions have adopted rate caps equal to or lower than those we adopt today.”

Importantly, the FCC’s rulemaking order preempts and overrides and state and local laws and regulations requiring IPCS charges that exceed the caps. Under the rate caps, a 15-minute phone call from a prison or large jail will cost no more than $.90, while a 15-minute video session will run no more than $2.40 from prisons and $1.65 from large jails. To those costs, of course, IPCS providers will then also add applicable taxes, which lie outside the caps.

The phone and video rate caps will go into effect on January 1, 2025, for prisons and large jails, except those where IPCS providers are “currently obligated to pay legally mandated site commissions.” For all other jails the effective date is April 1, 2025—again, except where telecom companies are now legally required to pay commissions. To allow time to amend laws and regulations that conflict with the FCC’s order—including “legally mandated” kickbacks that lawmakers must now rescind—the rate caps will go into effect at all remaining correctional facilities on July 1, 2025.

Ancillary Fees Eliminated: In its 2015 order, the FCC restricted the separate ancillary fees that IPCS providers could charge to five categories: fees for automatic payment services (i.e., to add funds to phone accounts); paper billing statements; live agent interactions; third-party financial transactions; and single-calland related services. All of those fees were eliminated in the July 2024 rulemaking order, and telecom companies may no longer charge ancillary fees. Instead, they have been incorporated into the rate caps established for phone and video calling services.

The FCC wrote that such additional charges imposed on IPCS customers “have been a continuous source of confusion and gamesmanship,” and substantially increased the costs paid by prisoners’ families. The elimination of the fees will prevent telecom providers from being “motivated to exploit every available opportunity” to continue price-gouging prisoners and their loved ones. The rulemaking order also preempted any and all state and local laws and rules that require ancillary fees for IPCS services.

In a related matter, the FCC addressed the practice of telecom providers seizing funds from inactive IPCS accounts. That had proven a highly profitable practice; from 2012 to 2018, ViaPath/GTL reportedly confiscated $14-15 million per year from unused accounts. Under the FCC’s new regulations, accounts will be deemed dormant only after six months of inactivity, and IPCS companies must make reasonable efforts to provide refunds to the account holders.

In 2021, ViaPath/GTL settled a class-action lawsuit over its seizure of funds from inactive accounts, agreeing to pay up to $67 million in damages plus $18.675 million in attorney fees, as PLN reported. [See: PLN, April 2022, p.32; and Mar 2023, p.63.]

The End of Commission Kickbacks: In an unprecedented move, the FCC’s rulemaking order also ended the practice of IPCS providers paying commission kickbacks to corrections agencies. As noted, such payments have been a major driver of excessively high prison and jail phone rates. In taking this action the FCC determined that the commission-based IPCS business model was “fundamentally incompatible” with its statutory mandate to ensure just and reasonable rates for prisoners and their families.

The rulemaking order cited abuses associated with commissions—which, in addition to monetary payments, have included gifts, political contributions (e.g., to sheriffs’ election campaigns), in-kind payments and technology services. In one case, a telecom company offered jail officials Caribbean cruises valued at over $84,000 as part of an IPCS contract bid. In Los Angeles, the county’s jail system required a minimum of $15 million in commissions annually, which came directly from payments by prisoners, detainees and their loved ones.

Although commission kickbacks were banned, the FCC allowed IPCS providers to reimburse correctional facilities for “costs associated with the provision” of telecom services. While such reimbursements will not alter the rate caps, this exception threatens to swallow the whole amount saved on kickbacks, with prison and jail officials overstating (or fabricating) costs they incur in order to obtain the largest reimbursements possible. And telecom companies will gladly pay them as an incentive to win or retain IPCS contracts.

As with its phone and video calling rate caps, this part of the FCC order preempted state and local laws and regulations that require commission-based IPCS contracts at prisons and jails, and prohibited telecom providers from entering into such contracts. The provision will result in amendments to or renegotiation of IPCS contracts nationwide. The no-commissions requirement will be phased in according to the same effective date schedule for phone and video rate caps.

Alternative Pricing Plans: Historically, all prison and jail telecom services have based their rates on per-minute charges. Acknowledging that other methods may provide “meaningful benefits” to IPCS customers, the FCC’ s order permitted alternative pricing plans, such as subscriptions for “flat-rate pricing for a specific quantity of or an unlimited number of minutes.” For example, by purchasing blocks of phone or video time, the effective per-minute costs may be lower than fixed rates. Securus offered a short-lived subscription plan of this sort in 2020.

Prisoners and their loved ones should have these options, the FCC found, as they could result in lower costs and increased use of IPCS services. Alternative pricing plans must comply with certain conditions, however. They must be optional; subscription plans must be one month or less in duration; automatic renewals must require an opt-in and not be automatic with an opt-out, and they must have advance renewal notices; and per-minute rate plans must also be offered. IPCS customers must be able to cancel alternative plans at any time, and provisions for prompt refunds for dropped calls and unused subscription time are required. Details of alternative pricing plans, including costs and methods of opening and closing accounts, must be disclosed on IPCS providers’ websites and mobile apps, and upon request.

Although having the option of alternative plans will be useful, it doesn’t alter the monopoly nature of IPCS services. Such plans will be offered by the sole telecom provider that has the contract at a given correctional facility; prisoners and their families will not be able to select from among plans provided by different companies.

IPCS and People with Disabilities: Expanding on its 2022 order, the FCC increased options and strengthened protections for people with hearing and vision-related disabilities who utilize IPCS services. The agency allowed a formof registration so prisoners with disabilities can more easily use Internet Protocol Captioned Telephone Services (IPCTS). Additionally, telecom providers are required to offer billing and other documentation related to IPCS services in accessible formats for those with hearing and vision disabilities.

IPCS companies can provide phone and video services for people with disabilities via traditional TTY devices, videophones, IPCTS, real-time text, or relay services; they may also use functionally equivalent internet-based options. Note that telecom providers and correctional facilities are also required to comply with the Americans with Disabilities Act (ADA), 42 U.S.C. ch. 126 § 12101 et seq.

FCC Proposes Further Rulemaking, Telecoms Seek New Revenue Streams

In addition to the IPCS reforms included in its July 2024 order, the FCC requested comments in a Further Notice of Proposed Rulemaking. First, it sought input on establishing permanent rate caps for video calls, such as information about existing and prospective video-based services, trends in the IPCS industry related to video calling, and video cost data from telecom companies. To facilitate this input, the FCC ordered mandatory data collection from IPCS providers regarding their video services.

Second, the Notice of Proposed Rulemaking solicited comments concerning the quality of phone and video calls, including “[d]ropped calls, lack of enough communication devices at facilities, frozen video screens, and other technological shortcomings.” There is a lengthy documented history of quality-related problems with IPCS services, including glitchy phone and video calls, with prisoners and their families unfairly charged for dropped calls and reconnection fees. The FCC is seeking to establish the scope of its authority to address quality of service issues, including the types of problems that should be regulated and its ability to promulgate rules and standards. The comment period for the Notice of Proposed Rulemaking is within 30 days after the FCC’s order is published in the Federal Register.

Meanwhile, as a result of the new regulations, prisons and jail telecoms are seeking other revenue streams. Securus and ViaPath/GTL, the market leaders, are also heavily leveraged and need to service massive debt. Activists have also gone after the companies directly.

In September 2023, for example, the Pennsylvania State Employees’ Retirement System declined to invest $150 million in Securus after learning of a controversy related to the firm’s exploitation of prisoners’ families. Securus, which is owned by Platinum Equity Partners subsidiary Aventiv Technologies, attempted a 2018 merger with competitor ICSolutions before pressure from prisoner advocates forced the firms to scuttle the deal. That also prevented Aventiv from offloading Securus to a special purpose acquisition company (SPAC).

In 2023, ratings agencies S&P Global and Moody’s downgraded Securus’s credit rating to junk bond status. NBA Detroit Pistons owner Tom Gores, CEO of Platinum Equity Partners, was forced to resign from the board of the Los Angeles County Museum of Art over his connection with Securus, and advocates have called on the NBA to force him to sell the Pistons.

ViaPath/GTL’s private equity owner, American Securities, has similarly tried to dump the telecom through a SPAC sale, without success. Investors have soured on ICS providers, seeing the proverbial writing on the wall: The days of relentlessly price-gouging prisoners and their loved ones with impunity are over.

Or are they? The industry has recently broadened to include other profitable and less regulated services, mainly through electronic tablets. While tablets are usually provided to prisoners at no cost, virtually everything available on them has been monetized: e-messaging, music downloads, games, video calls, movies, virtual greeting cards, e-books.

In many cases such services cost more and are lower-quality than their non-carceral counterparts. E-books not only cost money to download, their availability is increasingly cited by prison and jail administrators when banning physical books.

E-messaging is likewise a poor substitute for email. The messages don’t go directly to a recipient’s email account; rather, he or she must log in to a company site or app to receive messages and send replies. Unlike email, which is free in almost all cases, each of e-message typically costs $.25 to $.30, according to a March 2023 report by PPI.

As with phone services, Securus and ViaPath/GTL dominate the e-messaging market; of the 43 state prison systems that offer e-messaging, 36 contract with the two companies. The federal Bureau of Prisons uses the Corr Links system, which is owned by Advanced Technologies Group, LLC—part of the private equity-owned Keefe Group.

E-messaging is almost entirely unregulated. Since it isn’t an audio or video service, it doesn’t fall under the FCC’s jurisdiction. Only a few states have imposed their own limitations. In California each e-message costs $.05 and state prisoners get 20 free messages per week. In Connecticut prisons, e-messaging is totally free.

In 2023 the Minnesota Department of Corrections stopped accepting commission kickbacks on phone, video and e-messaging services at state prisons. Yet as an indication of how IPCS companies continue to profit, the state raked in $274,365 that year from commissions on non-phone services such as photo sharing, money transfers and music downloads (with songs costing up to $2.36 each). The state will reportedly receive a 20% commission on such services under a new contract with ViaPath/GTL.

“The ideal world for the private equity owners of these companies is every prisoner has one of their tablets, and every one of those tablets is hooked up to the bank account of someone outside of prison that they can drain,” explained HRDC’s Wright.

The existing business model for prison and jail telecom services will radically change if Securus or ViaPath/GTL is forced into bankruptcy due to IPCS reforms. Video calling could be provided by non-profits, for example, or through in-house services at prisons and jails. At the very least, private equity firms seeing a threat to their bottom line would be incentivized to exit the IPCS market entirely.

The Fight For Prison Phone Justice Continues

Almost a quarter-century after Martha Wright first complained about the cost of calling her imprisoned grandson, the FCC’s new order marked the most significant step yet towards achieving fair and just IPCS services for prisoners and their loved ones. The elimination of the corrupting influence of commission kickbacks to corrections agencies alone is a precedent-setting, much needed reform. This is not the end of the battle for prison phone justice, though, but rather the beginning of the next chapter in that ongoing fight.

The IPCS industry is a duopoly, with Securus and ViaPath/GTL controlling approximately 80% of the market. Between them, the two companies have contracts with 43 state prison systems and more than 800 local jails. The FCC estimates that prisoners and their families will save around $386 million as a result of its most recent rate caps and other reforms. That’s a huge chunk of money that will no longer get kicked back to prisons and jails plus another bug chunk that simply won’t go into the coffers of telecom providers.

ViaPath/GTL and Securus are owned by private equity firms, American Securities and Platinum Equity respectively; Securus has acquired about $1.6 billion in debt, and in March 2024 “effectively defaulted” on over $1 billion of that amount, according to an article in The Appeal. The telecom’s creditors gave only an eight-month extension to make its debt payments, leaving it on the verge of bankruptcy. ViaPath/GTL also needs to refinance around $1.4 billion in debt which will start to come due in 2025.

Thus, the two largest IPCS providers have a substantial—even existential—interest in maintaining elevated phone and video calling rates that result in high profit margins. Securus filed several objections to the FCC’s rulemaking and order, but the agency declared most moot and denied the rest on the same day it published the new regulation.

Corrections agencies and their supporters, including the National Sheriffs’ Association, also have a vested interest in retaining lucrative commission payments, which total hundreds of millions of dollars per year. Consequently, litigation over the FCC’s most recent IPCS reforms is likely. Although the FCC now has authority granted by the Martha Wright-Reed Act, interpretation of that law and its application may well be subject to legal challenges.

While the FCC’s latest rate caps and reforms play out on the federal level—including proposed orders related to permanent rate caps for video calls and new quality-of-service regulations—the struggle continues on the state and local levels. At least nine states, including California, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, New York, Rhode Island and South Carolina, now prohibit commission-based IPCS contracts. Further, California, Connecticut, Massachusetts, Minnesota and Colorado have enacted laws that require free communication services in state prisons and/or jail, as PLN reported. [See: PLN, Aug. 2021, p.56; Apr. 2023, p.43; Oct. 2023, p.41; Nov. 2023, p.35; and May 2024, p.51]. Legislation was introduced in early 2024 in three other states for no-cost IPCS calls: New Jersey (SB 2390), Maryland (SB 948) and Illinois (HB 5257). New York City has also adopted free IPCS services at its jails, and so have a number of counties, including San Diego, San Francisco and Los Angeles, as PLN reported. [See: PLN, June 2024, p.19.] Grassroots advocacy efforts need to expand this trend to supplement the FCC’s reform measures.

Pressing the fight for prison phone justice on all fronts—federal, state and local—Martha Wright’s goal of fair and affordable IPCS services for all prisoners’ families may finally be realized. This includes abolishing the monopoly business model of telecom contracts that creates a captive market and prevents prisoners and their loved ones from selecting the provider of their choice based on cost and quality of service. Only then will there be lasting and meaningful reform in the IPCS industry.  

Additional sources: The Appeal, Filter Magazine, Mergers & Acquisitions, Reuters News

For information on HRDC’s Prison Phone Justice Campaign, visit www.prisonphonejustice.org