Prison Phone Justice

COMMONWEALTH OF MASSACHUSETTS
DEPARTMENT OF TELECOMMUNICATIONS AND CABLE

PETITION OF RECIPIENTS OF COLLECT CALLS FROM
PRISONERS AT CORRECTIONAL INSTITUTIONS IN MASSACHUSETTS
SEEKING RELIEF FROM
THE UNJUST AND UNREASONABLE COST OF SUCH CALLS

JameS Pingeon, Esq.
Leslie Walker, Esq.
Massachusetts Correctional
Legal Services
8 Winter Street, 11 th Floor
Boston, MA 02108
Patricia Garin, Esq.
Stern, Shapiro, Weisberg & Garin
90 Canal Street, 5 th Floor
Boston, MA 02114

Dated: August 31, 2009

TABLE OF CONTENTS
Page
I.

n.

INTRODUCTION AND SUMMARY

1

A. Petitioners do not pay jnst and reasonable rates for prisoner
telephone service

1

B. The cost of calls that Petitioners pay to maintain contact with
their incarcerated family, friends and clients is exorbitant and
harmful.

4

DISCUSSION
A. Telephone company customers who receive prisoner telephone
calls are entitled to pay just and reasonable rates for those calls

6

6

1. Just and reasonable rates in the anti-competitive prisoner
telephone market must be based on actual, necessarily incurred
costs of providing service plus a reasonable return on
investment
7
2. Commissions are not recoverable costs but shared profits
according to the FCC and other regulatory bodies

9

B. The profits of prisoner telephone serviee providers and the rates
that fund them have risen to levels that are presumptively unjust and
unreasonable notwithstanding that the actual, necessarily incurred
costs of providing service have fallen dramatically since 1998
11
1. Telephone rates that generate profit margins of 30% to more
than 52% are presumptively unjust and unreasonable
11
2. The cost of providing prisoner telephone service has fallen
dramatically since 1998, and none of the special cost elements
cited by DTE in the 1998 Order to justify per call surcharges on
prisoner-initiated telephone calls is any longer significant. ..... 15
3. Service providers impose highly lucrative service and other
fees to set up and replenish prepaid accounts. These
unregulated charges further inflate already unjust and
unreasonable prisoner phone rates
22
C. The recent history of commissions and surcharges in Massachusetts
as well as developments in the prisoner payphone market nationally

provide further incontrovertible evidence that prisoner telephone rates
23
in the state are unjust and unreasonable
1. Iucreased charges for prisoner telephone calls in the state are
directly tied to increased commission payments to correctional
facilities that are used for budget balancing and general revenue
purposes, not telephone related expenses
24

2. The rise in prisoner telephone rates for county facilities runs
counter to the recent national trend of decreasing fees and
eliminating snrcharges, with the resnlt that many Massachusetts
counties in 2009 are counted among the jurisdictions that
charge the highest per call surcharges in the country for instate
calls
27
III.

CONCLUSION

29

A. DTC must continue to regulate the anti-competitive prisoner
payphone market and determine just and reasonable rates
IV.

APPENDICES
APPENDIX I
APPENDIX II
APPENDIX III
APPENDIX IV

APPENDIX V
APPENDIX VI

V.

Names and Addresses of Petitioners
Annual Commissions (Including Per Prisoner
Commission Profit)
Public and Penological Policy
A Comparison of Charges for a I5-minute Intra-LATA
Prisoner-initiated Collect Call in 2008 vs. 2004, for
Correctional Facilities in Massachusetts Counties and 47
States
A Comparison of Surcharges Levied and Commissions
Paid to DOC for FY2005 (Partial Year)
Comparison of County and DOC Telephone Rates
including Cost of Call Data Net of Commissions

EXHIBITS
EXHIBIT 1

EXHIBIT 2

EXHIBIT 3

Massachusetts State Budget Summary FY 2009 (7/1/086/30/09): Account 8910-0000 - County Correctional
Programs
State of Missouri Notice of Award for Offender
Telephone Services to Public Communications Services,
Inc., May 19,2006 (pp. 1,9-10)
MA DOC Notice to Inmate Population, Families &
Friends of Inmates Re: GTL Advance Pay Program
Calling Rates, June 4, 2007

11

29

EXHIBIT 4
EXHIBIT 5

Kevin Rothstein, "Phone fee hike may quiet inmates,"
The Patriot Ledger, Dec. 1, 2001
Montgomery County, Maryland Contract with Global
Tel*Link Co. for Inmate Telephone Services, May 15,
2008 (pp. 1, 11)

111

COMMONWEALTH OF MASSACHUSETTS
DEPARTMENT OF TELECOMMUNICATIONS AND CABLE

)

Petition of Recipients of Collect Calls
)
from Prisoners at Correctional
)
Institutions in Massachusetts Seeking
)
Relief from the Unjust and Unreasonable)
Cost of such Calls
)

D.T.C.09-

)

"Inmates shall have access to reasonably priced telephone services... Fees should be
commensurate with those charged to the public. "
103 CMR 482.01, Massachusetts Department of Correction Regulation on
Telephone Access and Use, Effective August 7, 2009 1

I.

INTRODUCTION AND SUMMARY
A. Petitioners do not pay jnst and reasonable rates for prisoner telephone
service.
Petitioners are family members, loved ones, legal counsel, and others residing in

Massachusetts who receive and pay for telephone calls from prisoners who live in the
Commonwealth's prisons, jails, and houses of correction. 2 Petitioners are representative of
the thousands of telephone company customers who are hanned by the excessive, inflated
telephone rates for instate and local calls that result from the exclusive service contracts
that prison administrators enter into with telecommunications carriers for prisoner calling
services. 3 Petitioners are also harmed by the poor quality of service they do receive.

1 Available

on DOC's website at http://www.ma1s.gov/Eeops/docs/doc/policies/482.pd£
See Appendix I for a list of the names and addresses of all Petitioners.
3 Currently Petitioners fall into four categories: five institutions, eight family and friends of prisoners, twelve
prisoners, and six individual attorneys who represent prisoners. With more than 24,000 prisoners in the state
on any given day, tens ofthonsands of telephone calls are made each week from the Commonwealth's
prisons and county facilities to thousands of telephone company customers in the state who pay for those
calls. Over 11,000 prisoners are in the state prison system, generally serving tenns of 2Y2 years or more. In
April this year debit calling was introduced at Department of Correction (DOC) facilities. The DOC
estimates that 3-4,000 prisoners in fact use debit calling for at least some of their calls. Each of these
prisoners is a telephone company customer. (cont' d)
2

Petitioners, like all telephone company customers, are entitled to pay just and
reasonable rates for prisoner phone calls. Because an effective monopoly market that
offers no competitive alternative to the pre-selected payphone companies exists, the
Department of Ielecommunications and Cable ("DIC") must determine what is just and
reasonable based on actual, necessarily incurred costs of providing prisoner telephone
service plus a reasonable return on investment. Currently, the .exorbitant rates paid by
Petitioners and others - including per call surcharges of up to $3.00 per call for each local
and intrastate call- fund the millions of dollars of commissions that telephone service
providers pay annually to correctional institutions to secure their exclusive service
contracts. Such commissions are not a cost of providing telephone service according to the
Federal Communications Commission ("FCC") and other regulatory bodies, but instead
represent shared profits. Ihis has particular resonance in the Commonwealth where the
millions of dollars of commissions paid to correctional facilities each year are virtually all
paid into either the state's General Fund (in the case of DOC) or canteen funds that support
prisoner programs and other prisoner amenities (in the case of county correctional
facilities). Commissions are not used for telephone-related purposes and in fact the state
and most counties are required by law to use these funds for non-telephone objectives.

Just under 13,000 prisoners are housed in county facilities on any given day. The annual turn-over in county
facilities is high, at over 400% of bed capacity, with pre-trial prisoners being held an average of 12-14 weeks,
and sentenced prisoners serving sentences of up to 2YS years. The high turnover rate translates into over
50,000 women and men who are admitted and released annually from couuty penal institutions in the
COlmnonwealth, all of whom have family, friends and legal counsel they must contact by collect and prepaid
calls. Debit calling is not an option at county facilities.
Petitioner Committee for Public Counsel Services, which oversees the provision of legal representation to
indigent persons in criminal and civil court cases, has an active roster of over 2,800 lawyers in the state, each
of whom is a current telephone company customer. Five of the attorney Petitioners fall into this category.
For information about current prison and county facility population statistics, see the Quarterly Report on the
Status of Prison Overcrowding, First Quarter 2009, Mass. Dept. of Correction, May 2009, available at
http://www.mass.2:ov/Eeops/docs/doc/research reports/1st 09 overcrowding.pdf.

2

Telephone eharges that fund millions of dollars of telephone company profits that
are ultimately used for general expenses of the Commonwealth and other non-telephone
related budget items are by definition not actual, necessarily incurred costs of providing
telephone service and therefore not just and reasonable. Moreover, notwithstanding that
the overwhelming majority of prisoner phone calls are paid from prepaid accounts,
telephone service providers continue to bill them as more expensive collect, operatorassisted calls when in fact they are neither.
Petitioners also complain of (i) bad connections and poorly maintained equipment
that make it difficult to hear parties, including excessive static; (ii) calls that are frequently
dropped or terminated for no valid reason, requiring that additional surcharges be incurred
when calls are reinstituted; (iii) requests to customer service that are routinely ignored; (iv)
excessive replaying of recorded announcements and warnings that greatly reduce the actual
time parties can speak; and (v) other service issues.
Accordingly, Petitioners petition DTC pursuant to G.L.c. 159 §§ 14, 17 and 24 to
open a proceeding and, after hearing, to enter an order providing relief from the unjust and
unreasonable cost ofinstate and local telephone calls they receive from Massachusetts'
prisoners, and the poor quality of service they receive. Petitioners call on the Commission
to find that: (1 )(i) in accordance with FCC and other regulatory rulings, commissions paid
by telephone service providers to correctional institutions are shared service provider
profits, not an actual, necessarily incurred cost of service; (ii) per call surcharges are
unnecessary for service providers to recover the actual costs of their calls plus a reasonable
profit; and (iii) per call surcharges on all intrastate and local telephone calls originated by
prisoners incarcerated in the Commonwealth's correctional institutions are unjust and

3

unreasonable and should be eliminated; (2) per minute rates must be lowered to reflect just
and reasonable rates that permit providers to recover necessarily incurred costs of
providing service plus a reasonable rate of return; (3) all service, maintenance, recharge
and other fees incurred by Petitioners and other telephone company customers in
connection with the use of prepaid accounts must be inclnded in the calculation ofjust and
reasonable rates for prisoner phone calls; and (4) prisoner telephone service providers must
improve the quality of service they offer their customers.

B. The Cost of Calls that Petitioners Pay to Maintain Contact with their
Incarcerated Family, Friends and Clients is Exorbitant and Harmfnl.
The enormous cost that Petitioners and other telephone company customers must
pay to stay in touch with their family, friends, and clients who are incarcerated in
Massachusetts is clear: gross annual telephone proceeds per prisoner bed average over
$1000 for many of the county facilities for which we have data. 4 Profits per prisoner are
also staggering, with a prisoner's family, friends, and counsel each funding hundreds of
dollars in telephone company profits annually that the companies then share with
correctional facilities in the form of commissions. 5 These profits-cum-commissions are
almost all used for general revenue purposes and to pay for prisoner programs and
benefits. 6
Petitioners and telephone company customers like them are harmed in several ways
by the unjust and unreasonable charges they are forced to pay for prisoner initiated phone
calls. The financial burden is obvious: the charges bear no rational relationship to the
actual, necessarily incurred cost of the calls to the service providers, who make enormous

See the last column ofAppendix II, "Avg. Gross Proceeds Per Prisoner."
column 6 of Appendix II, "Annual Commission Payment (Profit) Per Prisoner."
6 See discussion in section ILB.1 below, at pp. 11-14.
4

5 See

4

profits that are shared with correctional institutions as commissions. The exorbitant
monopoly charges bear no relationship to the quality of telephone service that Petitioners
receive, which they universally rate as poor. Petitioners complain of frequently dropped
calls tllat require them to pay an additional cOID1ection surcharge of up to $3.00 when the
call is recoID1ected; static-filled or otherwise difficult to hear connections; poorly
maintained and malfunctioning equipment; excessive playing of recorded announcements
that are often too loud; and non-responses to service complaints. In addition, Petitioners
who must establish prepaid accounts to receive collect calls also complain of the
outrageous cost of service fees (13.9% in the case of calls received from Evercom-serviced
facilities) that they must pay on top of already high surcharges. 7
Prisoners tend to come from the poorest communities in the state, meaning that the
financial burden of these calls falls disproportionately on those individuals and
communities that are least able to afford it. Petitioners who are family and friends of
prisoners describe being forced to restrict their acceptance of calls from prisoners,
effectively depriving their incarcerated loved ones of the most accessible and reasonable
means of communication. This further weakens the family and community ties needed for
released prisoners' successful reentry and reintegration into society. Prisoners, including
twelve Petitioners, and society suffer as a result: half a century of studies show a consistent
relationship between strong family and community contact during incarceration and
reduced recidivism rates. 8
Lawyers complain of the high cost of calls to stay in touch with their clients. This
has forced some public interest law firms, including Health Law Advocates, not to accept

7
8

See discussion of high service fees in section II.B.3. below, at pp. 22-23.
See Appendix III, a sununary of public policy arguments supporting lower prisoner telephone rates.

5

collect calls from prisoners. Massachusetts Correctional Legal Services paid almost
$4,000 in charges for phone calls from county prisoners last year. Because of budget cuts,
MCLS had to reduce staff and curtail the hours that prisoners can call with their legal
problems. The Committee for Public Counsel Services, the organization charged with
providing criminal legal services to the indigent in the state, paid over $100,000 for collect
and prepaid phone calls from prisoners in 2008.
II. DISCUSSION

A. Telephone company customers who receive prisoner telephone calls are
entitled to pay just and reasonable rates for those calls.
Petitioners (like all telephone company customers) are obligated to pay (and,
conversely, telephone carriers in Massachusetts are entitled to receive) just and reasonable
charges for any telephone service the companies provide, including service to prisoners
and the recipients of their calls. G.L.c. 159 §17. DTC 9 is statutorily obligated "to ensure
that rates for common carrier telecommunications services in Massachusetts are just and
reasonable." Re VerizonNewEngland, Inc. dba Verizon Massachusetts, D.T.E. 01-31Phase II, 223 PUR4th 361,392 (April 11, 2003), citing G.L.c. 159 §§ 14, 17,20. In 1998
the Department of Telecommunications and Energy ("DTE"), DTC's immediate
predecessor, determined that due to the lack of competitive alternatives, it had to continue
to regulate the prisoner payphone market to ensure that customers like Petitioners paid just
and reasonable rates for prisoner phone calls. D.P.U.lD.T.E. 97-88/97-18 Phase II at 9
(April 17, 1998)(the "1998 Order"). DTE recognized that this market was an effective

As successor in interest to the Department of Public Utilities and the Department of Telecommunications
and Energy.

9

6

monopoly market serviced by a singlc, presubscribed carrieL 10 Id. The FCC has
recognized that in the absence of strict regulation the prisoner payphone market acts
"perversely," with competitive pressures pushing charges to consumers up, not down,
driven by the payment of exorbitant commissions to correctional institutions to secure the
lucrative exclusive service contracts. Order on Remand & Notice of Proposed Rulemaking,
Implementation ofthe Pay Telephone Reclassification and Compensation Provisions ofthe
Telecommunications Act of1996, FCC No. 02-39 at 7-8 (2002)("FCC Prisoner Payphone
Order"). 11 Indeed, commissions are now the single largest component of prisoner
payphone costs in Massachusetts, ranging from 30% to more than 52% of gross telephone
revenues. 12 The prisoner telephone market in the Commonwealth is in fact acting
perversely, and requires DTC's continued regulation to establish just and reasonable rates.
1. Just and reasonable rates in the anti-competitive prisoner telephone
market must be based ou actual, necessarily incurred costs of providing
service plus a reasonable return on investment.

In the absence of a competitive market, DTC must determine the appropriate

methodology and standard(s) to use in determining whether rates are just and reasonable.
See Re Verizon 223 PUR4th at 392 (where telecommunications "services are subject to
competition sufficient to keep prices at a reasonable level" the DTC can rely on market
forces to produce just and reasonable rates; otherwise the DTC must act). Prior to 1995 the
DTE determined just and reasonable rates for Verizon (and other telephone carriers) by
using a "cost plus" method where carrier revenue requirements were calculated based on
10 The 1998 Order regulates Operator Service Providers, long distance companies that carry so-called
operator handled calls snch as collect and credit card. 1998 Order at pA, tn. 4. Notwithstanding that live
operators have long been replaced by computers, prisoner telephone service providers continue to describe
collect calls fTom prisoners as operator-assisted, and to bill them as such. See discussion at section ILB.2,
below at pp. 15-22.
11 Available at http://fjallfoss.fcc.goviprodiecfslretrieve.cgi?native or pdJ'opdf&id document~6513l83346
12 See column 3 of Appendix II, "'Commission" for a list of commission fonnulas that I\1assachusetts
correctional institutions receive from prisoner payphone providers.

7

historic costs of providing service plus a fair rate ofretum on investment.ld. at 393. This
method of determining just and reasonable rates has been common in the field of
telecommunications as well as for public utilities regulated by DTE/DTC. 13 Indeed, as will
be seen, the FCC has used a cost plus rate of return model in the prisoner payphone market
context. Actual costs of service, then, must be a central focus ofDTC's inquiry here.
Appropriate, necessarily incurred costs of service played the central role in both the
FCC Prisoner Payphone Order and in the DTE's 1998 Order, and are indeed central to
Petitioners' claims today. The FCC Prisoner Payphone Order turned on the FCC's finding
that commissions paid to correctional institutions by telephone service providers were not
recoverable costs of service but constituted an element of service provider profit. FCC
Prisoner Payphone Order at 8, 12, 15. 14 In the 1998 Order the DTE justified the need for
per call surcharges for prisoner telephone calls by finding that carriers incurred unique
costs in providing service to correctional institutions that the companies were entitled to
recover and which existing rates were deemed unable to cover. 1998 Order at 9. Costs
necessarily incurred by payphone companies in providing prisoner telephone service were
therefore at the heart ofDTE's reasoning in approving per call surcharges. Nevertheless,
in the eleven years since the 1998 Order was issued, the special costs cited by DTE have
been almost entirely eliminated, thereby removing the justification for per call surcharges
underlying the 1998 Order. 15 Moreover, the overwhelming majority of prisoner phone

See. e.g., Mich. Bell Tel. Co. v. Engler, 257 F.3d 587,594 (6th Cir. 2001)(ajust aud reasonable rate for
basic local exchange service must be sufficient to cover costs and ensure a fair and reasonable return on
investment); Public Advocate v. Public Util. Comm ·n. 718 A.2d 201,203-04 (Me. I998)(telephone rates
must be just and reasonable to customers and public utilities -- including telephone companies -- such that
providers recover their operating expenses and an adequate return on investment); Hingham v. DTE, 433
Mass. 198, 203 (200 I )("It is a long-standing principle that a public utility is entitled to charge rates that allow
it to meet its costs of service, including a fair and reasonable return on [investmentr).
14 See discussion in sections 11.A.2. and II.B.I, helow at pp. 9-14.
15 See discussion of the 1998 Order in section 11.B.2, below at pp. 15-22.
13

8

calls are now paid from prepaid accounts, and are therefore not collect, operator-assisted
calls, even though providers continue to bill them as such.
2. Commissions are not recoverable costs but shared profits according to
the FCC and other regulatory bodies.
The FCC has determined that eommissions paid to correetional institutions are not
a reeoverable cost of providing payphone service, hut should be treated as an element of
the serviee provider's profit. FCC Prisoner Payphone Order at 8, fu.49, 12, 15. In the
FCC Prisoner Payphone Order, the FCC denied the prisoner payphone serviee providers'
request either to preempt state mandated calling caps or to impose a $0.90 per call
surcharge on all instate prisoner eal1s.Id. at 2, 11-12. The FCC rejeeted the eompanies'
petition after finding, inter alia, that their cost data was deficient because commissions
were treated as costs rather than profits.Id. at 15. While the FCC emphasized that "costs
must ultimately be reeovered" by prison telephone providers, it was equally adamant that
"loeation rents that providers have agreed to pay [correctional institutions] in the form of
commissions ... should not be treated as costs" and are therefore not recoverable in the
providers rate base.Id. at 11-12 (emphasis added). A few pages later it reiterated:
eommissions "represent an apportionment of profits between facility owners and the
providers of inmate payphone service." Id. at 15.
Both the Alaska and Georgia utility regulatory agencies ruled at about the same
time that eommissions paid to correctional ageneies were not costs incurred in providing
telephone service, and therefore not recoverable through rates. Re Evercom Sys.• Inc.,
Order Granting in Part. and Denying in Part, Pet. for Recons., 2001 WL 1246903
(Regulatory Comm'n of Alaska, 2001)("Alaska Prisoner Telephone Order"); Re
Investigate Long Distance Charges. Corrected Order, 2002 WL 31096770 (Ga. Pub. Servo

9

Comm'n 2002)("Georgia Prisoner Telephone Order"). In the Georgia Prisoner Telephone
Order, the Georgia Public Service Commission capped rates charged by AT&T for
Institutional Telecommunications Services (prisoner telephone service). In rejecting
AT&T's interLATA rates as unjust and unreasonable, the Commission noted that the
"most substantial increased cost to carriers" is the commissions paid to correctional
institutions "to prevail in the RFP process." Id. at 5. It concluded that the RFP process
"does not ensure a reasonable rate for the billed party. In fact, the record reflects just the
opposite. Ifbidders increase their chance of winning by including a high commission,
which they fully intend to pass on to the real consumer, then the RFP process may result in
higher costs to the billed parties." Id. (internal citation omitted). The Georgia
Commission forced AT&T to reduce its interLATA rate from $3.95 per call and $0.69 per
minute to $2.20 per call and $0.35 per minute. (IntraLATA surcharge and per minute call
rates were capped at $2.20 and $0.24 respectively.) The Commission found "that the rates

to be chargedfor [prisoner telephone service} should relate to the costs incurred in
providing the service, and that the commission paid to the [Georgia DOC} is not one of
those costs." Id at 6 (emphasis added). 16
In the Alaska Prisoner Telephone Order of 2001, the Regulatory Commission of
Alaska reaffirmed an earlier decision that excluded commissions payable to the state's
DOC from expenses that could be recovered through rates. Evercom, the "monopoly
provider of inmate telephone services in Alaska," had requested the reconsideration. In
denying Evercom's motion, the Commission quoted from its earlier ruling:
It is noted that the Georgia intraLATA surcharge and per minute rates remain among the highest in the
country. The Georgia Conunission noted that any attempt to raise the caps would have to be cost-justified
but it relied on the rates in eight neighboring states to reach its conclusion on appropriate rate caps, using
reasoning that echoes the DTE's in the 1998 Order. See Gerorgia Prisoner Telephone Order at 5. The
Commission failed to consider actual cost data in its analysis justifying rate caps.
16

10

'" A commission paid to a government agency pursuant to contractual agreement is
not the type of cost typically recovered through rates in a regulatory setting. The
inclusion of a commission requirement in a bid solicitation for regulated utility
service conflicts with the regulatory objective of ensuring utility costs are
necessarily incurred and rates are just and reasonable... Since the likelihood of
being awarded a sole source prison phone system contract is enhanced by
proposing higher DOC commissions, the incentive for service providers is to
increase the DOC commission in bid proposals. By allowing commissions to be
recovered through rates, the governing regulatory body ... promotes a system where
the service provider has an incentive to increase the price ofservice regardless of
the actual costs incurred...
We believe that such commission [sic] should not be treated as a utility operating
cost recoverable through rates. Disallowing negotiated commissions from the rate
base facilitates the regulatory goal ofencouraging utilities to only seek rate
recovery for the necessarily incurred costs ofproviding service and promotes just
and reasonable rates. Where prison phone service solicitations require
commissions, the exclusion of commissions from rates compels bidders to consider
the impact of a proposed commission on its profit margin. '" (internal citations
omitted)(emphasis added). Id. at 4-5.

Prison telephone service providers can in fact pay commissions, but they must come out
of, and be calculated as part of, their profits. As held by the FCC and the Georgia and
Alaska regulatory agencies, commissions paid to correctional institutions are not
necessarily incurred costs of providing prisoner telephone service and therefore not
recoverable in a provider's rate base, but represent shared profiL 17
B. The profits of prisoner telephone service providers and the rates that fund
them have risen to levels that are presumptively unjust and unreasonable
notwithstanding that the actual, necessarily incurred costs of providing
service have fallen dramatically since 1998.

1. Telephone rates that generate profit margins of 30% to more than
52% are presumptively unjust and unreasonable.
Commissions paid by plisoner telephone service providers to Massachusetts
correctional institutions are the single largest category of prisoner payphone expense

17 We note that commissions are not listed among the legitimate costs that the DTE agreed telephone service
providers could recover through per call surcharges on prisoner calls in its 1998 Order. 1998 Order at 9-10;
see discussion of the 1998 Order in section I1.B.2, below at pp. 15-22.

II

incurred by providers. Amounts paid to the state's prisons and jails range from 30% to
more than 52% of gross telephone proceeds, sums that are collected by providers from
telephone company customers like Petitioners. See Appendix II, Annual Commissions
(Including Per Prisoner Commission Profit). As column 4 titled "Commission Paid" of
Appendix II shows, Petitioners and other telephone customers fund millions of dollars of
such commissions each year, funds that the FCC and other regulatory agencies have
determined are in fact profits shared by telephone companies with correctional institutions.
Commissions are decidedly not necessarily incurred, recoverable costs of providing
service. Rel,'Ulatory characterization of commissions as shared profits takes on particular
resonance in the Commonwealth since commissions paid here are ultimately used like
profits, that is, for purposes completely unrelated to the provision of telephone service in
the state's correctional facilities. Indeed, at the state level and in most counties
commissions have been unavailable for prisoner telephone-related use.
For the five year period from July I, 2003 through June 30, 2008, prisoner
telephone service providers Verizon and its successor Global Tel*Link (GTL) shared more
than $11.5 million in profits - paid in the form of commissions - with the state Department
of Correction. 100% of that sum - funded by Petitioners and other telephone company
customers - was paid by law directly into the state's General F\U1d, the repository for taxes
and other general revenues collected by the state. G.L.c. 29 § 2. The more than $3 million
of shared profits paid each year by providers to county correctional facilities in the form of
commissions (also funded 100% by telephone customers including Petitioners) is virtually
all deposited in prisoner canteen funds. I8 Moneys in these funds are earmarked for

J8 See column 4 of Appendix II, "Commission Paid," for a Jist of the amount of commissions paid to county
facilities for which we have data. The $3 million is a very conservative figure: we have no figures for several

12

prisoner programs and other prisoner amenities. 103 CMR 911.08(2) 19 Half the counties in
the state are required by statute to pay telephone commissions into these funds 20
Commissions paid to at least four (and possibly all) of the other seven counties in the state
are also paid into canteen funds pursuant to local rules written under authority of 103 CMR
911.08. 21
The profits that prisoner telephone providers share with state plisons and jails in the
fonn of commissions are clearly unrelated to the cost of providing phone service or
security. Instead this single largest chunk of prisoner telephone revenue is used like taxes
or other public levies for general state operations or programs and services that benefit
prisoners. Funding state and county general revenue streams is clearly not a cost of
providing telephone service to prisoners.
Commissions paid to correctional institutions are profits shared by prisoner
telephone service providers according to the FCC and other regulatory bodies. Provider
profit margins therefore are at least equal to the amount of the commissions paid since
commissions are calculated on a gross revenue basis. Profits-cum-commissions paid in the
state range from 30% to more than 52% of gross billable charges.
counties including Suffolk, the state's largest county facility, which receives 50% of gross telephone
proceeds as an annual commission, with a $2.85 instate per call surcharge. In addition, the commission
amount for Worcester is from a period immediately before a new contract with a 350% surcharge increase
took effect. See discussion of the history of commissions in the state at section II.C.I, below at pp.24-27.
19"[R]evenues generated by the sale or purchase of goods or services to persons in correctional facilities may
be expended for the general welfare of all the inmates at the discretion of the sheriff. .. "
20 Seven of the fourteen counties in the state have been abolished. The sheriffs' departments in the fonner
counties are now technically stale departments though still independent. The other seven sheriffs'
departments continue to exist as independent county units though they are funded in large part by the state.
As part of the annual appropriation to fund sheriffs' offices in these non-abolished counties, the legislature
passed a law requiring that all telephone commissions paid to such county sheriffs be retained by them "for
use in a canteen fund." See, e.g., the text accompanying state budget line item appropriation for County
Correctional Programs, State Budget Account 8910-0000, from the Budget Summary for FY2009 (7/1/086130/09), attached as Exhibit 1. The legislature apparently felt this income stream for sheriffs needed
statutory protection. It is unclear why there is no parallel law or restriction for abolished counties.
21 Commissions paid to Hampden, Middlesex, Berkshire and Franklin counties are paid to canteen funds. We
do not know what entity receives commission payments in Suffolk, Worcester, or Hampshire counties.

13

The Supreme Judicial Court held that a return on investment '" should be
commensurate with returns on investments in other enterprises having corresponding
risks.'" Att Y Gen. v. Dep't ofPub. Utils, , 392 Mass. 262,266 (I 984)(quoting Fed. Power
Comm 'n v. Hope Natural Gas Co., 320 U.S. 591, 603 (1 944»(upholding a return on equity
of 16.3% by a gas and electric utility). The FCC found that an 11.25% return on
investment is "accepted elsewhere in telecommunications." FCC Prisoner Payphone Order
at 16. Since risks are relatively low in a monopolistic market with a captive client base,
steady and predictable usage, and no competitive alternative, it can be argued that the
11.25% return on investment in this telecommunications submarket is actually highn The
FCC held elsewhere that a return of investment of 24% in the telecommunications field
was, in fact, unreasonable. In a 200 I case, the FCC found that defendant Business
Telecom Inc. failed to explain how revenues from a "truly reasonable" charge "could
profitably permit" commissions of up to 24% of gross revenues. ATT Corp. v Business
Telecom Inc., 16 FCC Rcd 12312, 12332 (2001),recon. denied, l6 FCC Red 21750
(2001). Since telephone rates paid by Petitioners fund profits that are at least 30% to more
than 50% of the total cost ofa prisoner telephone call, truly just and reasonable rates that
reflect a fair return on investment for service providers must be vastly lower than the
monopoly rates providers currently charge in the state. Although it can be argued that
these excessive profit-cum-commissions are used for laudable purposes, including helping
to balance the state's budget and funding needed prisoner programs, there is no exception
to the requirement of Massachusetts law that telephone service charges be "just and
reasonable."
Because prisoner telephone service providers are for-profit companies \vith responsibilities to shareholders,
it may be assumed that in addition to profits-cum-commissions, other profits are built into the rates charged

22

which are also funded by the substantial revenues retained by providers on each prisoner initiated call.

14

2. The cost of providing prisoner telephone service has fallen dramatically
since 1998, and none of the special cost elements cited by DTE in the 1998
Order to justify per call surcharges on prisoner-initiated telephone calls is
any longer significant.
The DTE in 1998 recognized the monopoly nature of the prisoner payphone market
and the absolute need for its continued regulation including, most importantly, the capping
of phone rates. 1998 Order at 9. In the 1998 Order the DTE found it necessary to authorize
surcharges for prisoner phone calls but capped them at $3.00 per call. Id. The DTE
grounded its 1998 ruling on the right of payphone service providers to recover "legitimate
additional costs incurred in providing inmate calling services." Id. DTE authorized the
surcharges to fund three specific categOlies of costs that providers claimed were not
recoverable in the per minute rate: special systems and security costs; uncollectibles; and
higher personnel costs. Id. at 9-10. Commissions are notably absent from DTE's list of
costs that service providers are entitled to recover through increased rates. In fact
commissions figure not at all in the 1998 Order even though service providers had been
paying commissions to correctional institutions for years prior to the 1998 ruling.
What is apparent more than a decade later is that the need for an extraordinary per
call charge to fund the special cost categories enumerated by DTE no longer exists.
Indeed, service providers primarily need and use surcharges to fund the millions of dollars
of profits they share with the state's correctional institutions in the form of commissions
that secure their exclusive service contracts. 23 Profit sharing with correctional institutions
represents the single largest component of prisoner phone call proceeds. But as has been
shown, these commissions are neither used for nor are they legally available at the state
See Appendix V for an analysis that correlates surcharges levied and commissions paid for a ten-month
period in FY05 to the DOC. We only have sufficient data to attempt the correlation for that partial year, and
only for DOC. The correlation shows almost a one-ta-one ratio between surcharges collected and
commissions paid. Commissions by law are, of course, deposited into the state's General Fund.
23

15

level and in most counties for the cost categories DTE approved in the 1998 Order. Indeed
virtually none of the commissions are used to pay for telephone service costs. Instead they
are paid to the Commonwealth's general fund to underwrite the state's operations or to
prisoner canteen funds that pay for prisoner programming and other amenities.
The communications landscape has changed dramatically since 1998, and even
more so since 1994 and 1995, the date of the underlying documents from AT&T, MCI and
Sprint cited by DTE to justifY the 1998 Order 24 Only two states impose per call
surcharges of $3 today versus the 33 that DTE said did so in 1994/95; ten have eliminated
surcharges altogether. 1998 Order at 9; see column 8 of Appendix N, "2008 IntraLATA
rates" for rate data for intraLATA calls in MA counties and nationally, discussed in section
ILC.2 at pp. 27-29, below. GTL, Evercom and other telephone companies can profitably
charge lower rates in diverse correctional settings across the nation (from large, state-wide
systems to smaller, local jails) because costs in all expense categories are lower and
continue to decline as improved technologies make telephone operations more efficient.
Each of the three categories of extraordinary costs allegedly incurred by prison
telephone service providers that DTE cited in the 1998 Order to justify per call surcharges
has benefitted from considerable cost savings over the past decade as communications
technologies have continued to advance, tighter payment safeguards have been imposed,
and the industry itself has undergone widespread consolidation resulting in significant
economies of scale. System and security costs have come down dramatically since the
1998 Order was issued. 25 Fully automated collect call functions that use voice recognition

See Exhibit I to InVision Initial Comments cited in the 1998 Order at p. 9.
See, e.g., Declaration of Douglas A. Dawson in Support of Petitioners' Alternative Proposal ("Dawson
Declaration 2007-1") at 5-6, Appendix B to Petitioners' Alternative Proposal, Implementation ofthe Pay
Telephone Reclassification and Compensation Provisions qfthe Telecommunications Act of 1996, CC

24
25

16

software came on-line in the late 1990s. 26 These continue to be improved and made more
cost effective, and assure that live operators and the high wages and infrastructure needed
to support them are a thing of the past. 27 As GTL noted in a 2007 filing with the FCC, the
provider "continues to explore ways to reduce costs by increasing automation, thus
limiting the need for on-site personnel, which will further reduce costs and create savings
for customers. ,,28 Other industry-wide factors that contributed to the decrease in the cost
of telephone service include: the "reduction in transport costs as transport technologies
have improved; drastic reductions in switching costs as the cost of switching hardware and
software has plummeted in recent years; reduction of access charges over the years; and a
reduction in the regulation and thus the regulatory costs of providing long distance.,,29
More recent technological advances have specifically benefited the prison
telephone industry. Between 2003 and 2007, the use of soft switches reduced switching
costs by "allOWing signaling and penological control functions to be provided to many
facilities from a central location" resulting in huge economies of scale.

30

As a result,

prisoner calling service providers "can serve hundreds or thousands of prison facilities

Docket No. 96-128 (March I, 2007). Dawson Declaration 2007-1 is available at
http://fiallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native or pdf=pdf&id document=6518909012
Mr. Dawson is the Petitioners' expert witness in connection with the on-going FCC inquiry into long distance
call rates for prisoner telephone calls (the "FCC Interstate Rate Case"). The FCC Prisoner Payphone Order
was issued earlier in this case.
26 See, .e.g., Affidavit of Douglas A. Dawson ("Dawson Affidavit 2003") at 6, Appendix A to Martha
Wright, et 01.; Petition for Rulemaking or. in the Alternative. Petition to Address Referral Issues in Pending
Rulemaking, CC Docket 96-128 (Nov. 3, 2003). Dawson Affidavit 2003 is available at
http://fjallfass.fcc.£ov/prodiecfs/retrieve.cgi?native ar pdf=pdf&id document=6515782l68
27Dawson Declaration 2007-1 at 4-6. Live operators have not been used for well over a decade for collect and
prepaid calls, yet Evercom still categorizes these calls as "operator-assisted" on its billing website, noting
that there "is a surcharge applied to this type of service." Surcharges may have been justified when
operators were live to cover the associated special costs, but this false characterization serves nOw only as a
smokescreen to rationalize an unnecessary and othenvise unjustifiable fee.
28Comments of Global Tel*Link (filed in ti,e FCC Interstate Rate Case), May 2,2007 at 10, available at
http:;;(jallfoss.fcc.gov!prod!ecfs!retrieve.cgi?native or pdf=pdf&id document~6519408408
29 Dawson Declaration 2007-1 at 6.
30 Id. at 21.

17

from a single switching platfonn with a central featnre server and signaling gateway,"
greatly reducing overall operating costs. 3! (Evercom, service provider for eight ofthe ten
counties in the state for which we have at least some data, is now part of Securus
Technologies, the largest prison telephone service provider in the country. Securus
services 2,600 prisons and jails from one central facility.)32
Advanced recording technologies developed since the 1998 Order make it possible
to record and monitor calls, a key penological requirement, more efficiently and cheaply.
For most of the history of phone service, calls could only be monitored by having a person
tap into and listen to the calls.]] Modem recording systems record and store calls digitally,
making it easy to later retrieve recorded calls.

34

The size and cost of storage devices that

can be used for such a purpose have decreased dramatically over time. 35 The cost
continues to decline as digital storage technologies improve year to year, "with a seeming
doubling in storage capacity per dollar every 18 months or SO.,,36
One of the biggest areas of savings for service providers has been the substantial
elimination ofuncollectibles, DTE's second category of unique costs supporting per call
surcharges. Indeed the overwhelming majority of prisoner telephone calls are now made
from mandatory prepaid accounts. Uncollectibles essentially vanish with these accounts.
Unless they are exempted, telephone customers must deposit money with the provider
before they can accept collect calls from correctional facilities. The hefty service fees that
are imposed to set up and replenish prepaid accounts, including GTL's unconscionable

311d.
See website ofSecurus Technologies, Inc., Evercom's parent, at http;//vilww.t-netix.corrl/'public!abouLasp .
Dawson Affidavit 2003 at 6.
341d. at 6-7.
35 ld. at 7.
32

33

36ld.

18

19% service charge, are a source of unregulated income (and profit) for GTL, Evercom,
. proVI'd ers. 37
and other servIce

A more accurate way of describing the current prisoner payphone system is that
service providers have shifted from essentially a collect call system to a prepaid system,
with truly collect calls generally available only to the most financially responsible and
credit-worthy third parties. The only individuals and entities that are generally exempted
from the prepaid requirement are lawyers and legal and govemment agencies. There are
also some exceptions for individuals with certain local providers, like Verizon, that have a
tight contractual relationship with the prisoner payphone provider, greatly reducing the risk
ofuncollectibles from the small universe of true collect call recipients under the new,
mostly prepaid system.
Even though the vast majority of prisoner calls are now prepaid, service providers
insist on labeling and billing them as if they were much more expensive collect, operatorassisted calls when in fact they are neither. That prepaid calls represent a substantial
billing and cost savings to providers is clear. In a filing in the FCC Interstate Rate Case,
Illinois-based prisoner payphone service provider Consolidated Communications Public
Services, Inc. conceded that use of prepaid accounts "would enable it to recover its costs
without the need for a per-call [sur]charge.,,38 The current contract between Missouri on
behalf of state cOITectional institutions and Public Communications Services, Inc., a Los
Angeles prisoner payphone provider, explicitly recognizes these significant savings:
charges are $0.10 per minute for all prepaid and debit account prisoner calls made

See section II.B.3 below for a more detailed discussion of unregulated service fees, at pp. 22-23.
Comments of Consolidated Communications Public Services Regarding the Alternative Rulemaking
Proposal of Martha Wright, et aL, filed in the FCC Interstate Rate Case, May 2, 2007 at 17, available at
http://fiallfoss.fcc.gov/prod/ecfs/retrieve.c2:i?native or pdf:=udf&id document=6519408595

37
38

19

anywhere in the country, but a per call surcharge of$I.OO is imposed only for collect
calls

39

Similarly in New Mexico, the April 22, 2009 prisoner telephone service contract

with Securus, Evercom's parent, provides that prepaid and debit account calls instate are
$0.89 flat (i.e., without a surcharge or per minute charge) while collect calls are more, at
$1.00 flat.

4o

Charging any surcharge for prisoner phone calls paid from prepaid accounts

is unjustifiable. Charging $3 per call for local and instate calls is unconscionable.
The final category of unique cost cited by DTE in the 1998 Order to justify per call
surcharges - high labor charges - has also seen dramatic reductions as personnel costs fall
by eliminating live operators and shifting virtually all of their functions to computers, as
discussed above, and (more recently) through mergers and acquisitions that have resulted
in an unprecedented consolidation of former competitors in the prison payphone service
industry and accompanying centralization of operations. 4 ! The two dominant players in
the field nationally - Evercom (now part of Securus Technologies) and GTL - are also the
predominant service providers in Massachusetts. Major economies of scale have resulted
from consolidation in the industry and the centralization of function allowed by new
switching technologies. 42

Relevant pages of the Missonri contract are included as Exhibit 2.
According to John Reynolds, Economist, Telecommunications Bureau, New Mexico Public Regulations
Commission, in an email dated Jnne 9, 2009.
41 See, e.g., website of Securus Technologies, Evercom's parent (supra at fn. 32), the largest prisoner
telephone service provider in the world. The History section describes Securus' creation through the merger
of"tWD correctional business leaders," Evercom and T-Netix, who were themselves the results of numerous
prior mergers. See also website of GTL describing its acquisition of (i) AT&T's prison service division in
Jnne 2005, and (ii) MCl's prison division in July 2007. http://,,'WW.gt1.netiindex.aspx?Pid=51
42 Pay Tel, a Securus competitor, noted that "Evercom and T-Netix merged in 2004 to form Secnrus
Teclmologies, Inc. to provide better economies of scale and to attempt to improve profitability by positioning
that company as the largest lCS provider in the conntry." Comments of Pay Tel Communications, Inc. (filed
in the FCC Interstate Rate Case), May 2,2007 at 8, available at
h!J:p://fiallfoss.fcc.Qov/prod/ecfs/retrj",ve.cgi?native ..QLPS!fopdf&id document=65 J9408488
Pay Tel goes on to discuss its own centralized systems for providing support to correctional institutions,
systems that save money because of economies of scale.
39

40

20

Large carriers that serve hundreds or thousands of facilities, including both
Evercom/Securus and GTL, by definition enjoy enormous economies of scale. Most of the
functions performed by prisoner payphone service providers, including management,
billing and collection, marketing, and customer support, are centralized. 43 Thousands of
correctional customers can now be serviced from one central location, translating into huge
savings from reduced labor costs on a per call basis (i.e., fewer personnel are needed to
service thousands of facilities from one location). It is clear that personnel costs do not
need to be subsidized through an additional surcharge.
None of the reasons cited by DTE in support of per call surcharges of up to $3 in
the 1998 Order is any longer relevant. The argument by proxy DTE cited - that becausc
prison payphone providers imposed a $3 surcharge in 33 states (in 1994/95) to cover the
extra expenses associated with prison payphone service, a $3 per call surcharge cap was
appropriate here - has completely collapsed with the dramatic reduction in collect call
rates for prisoner initiated calls in all parts of the country, with only two states continuing
to permit $3 per call surcharges in 2008. 44 Indeed the majority of states - 28 - impose no
surcharge or surcharges of $1.50 or less. Appendix IV, column 8 "2008 IntraLATA rates."
In 1998, no Massachusetts correctional institution levied an intrastate surcharge
approaching $3; now, in 2008, most of the counties do, raising rates dramatically even as
correctional institutions across the country are lowering theirs, making the counties outliers
nationally. The special costs that DTE cited to rationalize surcharges have declined
dramatically over the past decade as technology has advanced, cost-saving measures have

GTL states on its website (sipra at fn. 41) that it provides technical service and customer support for all its
customers at its headquarters in Mobile, AL, with a validation and secondary system and data backup site in

43

Houston, TX.
See more detailed discussion of national trends in section II.C.2 below at pp. 27-29.

44

21

been adopted and uncollectibles have beeu virtually eliminated, and the industry has
become increasingly consolidated. Surcharges -- and unjust and unreasonable rates
generally -- are levied by service providers not for necessarily incurred costs of providing
telephone service, but to increase profits which they share with correctional institutions in
the form of commissions to secure the monopoly markets they serve.
3. Service providers impose highly lucrative service and other fees to set
up and replenish prepaid accounts. These unregulated charges further
inflate already unjust and unreasonable prisoner phone rates.
Prepaid accounts have become another source of income for Evercom and GTL
because of the outrageous service fees they (or billing affiliates) impose to set up and
replenish prepaid accounts. GTL charges a 19% service fee, or $9.50 for a $50 deposit, on
set-up and anytime money is deposited in a prepaid account. When GTL took over the
DOC account from Verizon in 2006, DOC administrators objected to the confiscatory fee,
adamant that recipients of telephone calls from DOC prisoners not see a rate increase
because of the vendor switch. 45 DOC was well aware that an almost 20% fee on prepaid
accounts translated directly into a significant rate increase. GTL agreed.

46

Had the DOC

not insisted on reducing the service fee to zero for GTL's customers in Massachusetts, the
cost to consumers would have been enormous: in FY 2008 total gross telephone revenues
at DOC prisons was over $5.66 million. If only 75% of those calls had been paid with
prepaid accounts, GTL's customers would have been required to pay over $823,000 in
service fees in one year on those accounts, virtually all of which would have added to

45 Exhibit 3 is a notice from DOC to prisoners and ilieir families about the switch of service to GIL. It
describes the complex mechanism needed to effectively eliminate the 19% service fee for MA customers.
46 Because GIL had centralized all of its operations, including hilling, at one facility, it decided ilie cost of
setting up a separate billing system for DOC was too expensive. So a GIL bill for a customer in
Massachusetts is quite complicated: GTL's billing continues to assess the 19% service fee for pre-paid
Massachusetts accounts, but those calls are discounted 23% so iliat the actual cost ofilie call including the
service fees equals the posted rates. See Exhibit 3.

22

GTL's bottom line since the accounts are set up by computer. These are profits GTL does
not share with DOC, nor need to file with DTC.
County correctional institutions are not as concerned as DOC with phone company
customers who receive collect calls from their facilities: Evercom is allowed to collect
service fees on prepaid accounts. The company's customers who receive county phone
calls and set up prepaid accounts with a credit card must pay a 13.9% service charge, or
$6.95 for a $50 deposit. This charge essentially increases telephone call costs by almost
14%, so that a $6 call actually ends up costing $6.83; a $10 call ends up costing $11.39. In
one smart business move, uncollectible charges for calls were reduced to a fraction of their
former magnitude due to the switch to a prepaid system, while simultaneously establishing
incredibly successful profit generators. While economies of scale provide enormous
savings for the industry, set-up and service fees for prepaid accounts provide a separate,
quite lucrative, and completely unregulated source of profit for the companies, even while
these same customers are charged up to $3.00 for each local and instate call. The rate of
return represented by this piling of fees on surcharges as actual costs of service have
plummeted is egregious, beyond unjust and unreasonable.
This unregulated area of service fees imposed on a captive customer base must be
examined by DTC since the service charges effectively operate as additional surcharges on
prisoner calls. Evercom charges a 14% service fee. If GTL were to become the provider
of choice to one or more counties, set-up fees would translate into an almost 20%
surcharge on the amount of many prisoner calls. In the absence of competition, strict
regulation of this charge is required. Nothing else will contain or cap these charges.

C. The recent history of commissions and surcharges in Massachusetts as well
as developments in the prisoner payphone market nationally provide

23

further incontrovertible evidence that prisoner telephone rates in the state
are unjust and unreasonable.
The recent history of prisoner telephone rates in Massachusetts, including
surcharges and the exorbitant service provider profits and commissions they finance,
starkly illustrates how the prisoner telephone market functions as a reliable and convenient
revenue enhancement extraction device for correctional administrators, where charges are
increased to boost profits and commissions, untied to actual, necessarily incurred costs of
providing prisoner telephone service. An examination of the downward trend in prisoner
telephone charges nationally similarly underscores both the outlier position of many
Massachusetts correctional facilities and the need for the DTC to step in and establish just
and reasonable rates for prisoner phone calls in the Commonwealth.

1. Increased charges for prisoner telephone calls in the state are directly
tied to increased commission payments to correctional facilities that are
used for budget balancing and general revenue purposes, not telephone
related expenses.
County sheriffs in Massachusetts have been using their monopoly pricing power to
inflate prisoner telephone call rates and increase correctional facility revenues for nontelephone related purposes at least since 2001. That year Norfolk County Sheriff Michael
Bellotti more than tripled the per call surcharge on all instate prisoner phone calls from
$0.86 to $2.85 at the correctional facilities under his control. The Sheriff acknowledged
that the increased revenues would not be used for telephone related purposes when he
declared at the time that the increase benefitted prisoners because, "by law," commission
proceeds had to be paid to a prisoner canteen fund, "helping to pay for things such as drug

24

rehabilitation.,,47 The Sheriff noted that the added cost for telephone company customers
"helps defer the cost to taxpayers here in Norfolk County.,,48 Considering that at least twothirds of individuals incarcerated at Norfolk County facilities are actually from the county,
his comment underscores the unjust and unreasonable nature of the surcharge: functioning
as a special tax or penalty, the surcharge shifts the cost of programs like drug rehabilitation
from the entire county population onto the backs of only those county residents (and
others, including Petitioners) who happen to have family, friends, or clients incarcerated in
a Norfolk County facility and pay for phone calls from them. Drug rehabilitation and other
prisoner programs are obviously worthwhile penological and sociological tools. 49 But
Petitioners and other telephone company customers should not be unfairly singled out to
fund these programs through unjust and unreasonable telephone rates.
The use of increased surcharges to fund prisoner programs gained momentum
through the decade. For example, a IS-minute intra-LATA collect call in Hampden
County increased from $2.10 in January 2005 to $2.60 in February of that year, an increase
of24%. The price rise resulted from a $0.50 jump in the per call surcharge for all local
and intra-LATA calls from $1.50 to $2.00, a 33% increase. The surcharge helped fund
$1,017,808 in commission payments to the Inmates Commissary Fund for the period from
December 2005 to November 2006.
In Worcester County the increase was even more dramatic: the price of IS-minute
local and intraLATA calls rose an astronomical 90.7% (from $2.36 to $4.50) in July 2006
when an amended Evercom contract took effect. Prior to July the per call surcharge for
47 Kevin Rothstein, "Phone fee hike may quiet inmates," The Patriot Ledger, Dec. 1.2001, attached as
Exhibit 4. The law the Sheriff referred to was undoubtedly an earlier version of the budget law included as
Exhibit 1. Norfolk Connty is still an independent county, and therefore covered by such a law.
48Id.
49 See Appendix III describing the public policy benefits ofjnst and reasonable telephone charges.

25

local and intraLATA calls was $0.86, the surcharge that DOC imposes and that Norfolk
County similarly charged prior to the 2001 increase to $2.85. In July 2006 the Worcester
surcharge rose to $3.00, an increase of almost 350%. At the same time Evercom agreed to
increase its commission to the county (40% of gross telephone proceeds) by $60,000
annually. 50 From July 2006 forward, the Worcester County sheriff would earn a minimum
of$1.80 per 15 minute intraLATA call (40% of the cost of such a call) versus $0.944 for
the same call prior to the increase in the surcharge.
While we do not have comparable rate data for other counties and cannot show
when rates increased and by how much, we do know that four of the seven counties for
which we have per call rate data impose a per call surcharge of $3.00 for each local and
instate call, two others charge a $2.85 instate per call surcharge, and the seventh (Hampden
County) levies a surcharge of $2.00 per call. 51 A comparison of commissions paid to
Barnstable County House of Correction by Evercom in the same general time frame that
other counties were entering into new telephone contracts supports the conclusion that the
rate increases described were negotiated as pure revenue generators, not to pay for any
telephone related cost or expense. The following table shows that commissions paid to the
Barnstable HOC Canteen Fund (the recipient of telephone service provider commissions)
more than doubled after January 1, 2005, the date that a renegotiated contract with
Evercom became effective.

50 Prior to the increase in the surcharge in July 2006, commissions paid to the Worcester County sheriff's
department totaled $424,930 for the period of April200S to April 2006, an average of$32,686.92 per month.
Commissions paid to Worcester went up beginning in July but we do not have data indicating by how much.
With a 350% increase in the amount of the surcharge, the commission on a 15 minute call would increase
from $0.944 to $1.80 for a IS-minute call, an increase of more than 90%. It is likely that gross revenues
would almost double following the increase, leading to a similar increase in commission payments.
51 See Appendix IV, column 8, "2008 IntraLATA rates" for a list of surcharges for counties in the state for
which we have data.

26

Year
i 2003
2004
2005
2006

Commission Paid
$100,585.40
$113,380.41 (projected)'L
$254,304.09
$247,674.55 (projected)"

,

% increase/decrease from prior year

-+12.7%
+124%
-2.6%

The astronomical increase in profits represented by tbe more than doubling of
commissions from 2004 to 2005 parallels the increase in rates experienced by recipients of
prisoner telephone calls in Hampden and Worcester (and undoubtedly otber) counties.

2. The rise in prisoner telephone rates for county facilities runs counter to
the recent national trend of decreasing fees and eliminating surcharges,
with the result that many Massachusetts counties in 2009 are connted
among the jurisdictions that charge the highest per call surcharges in the
country for instate calls.
The dramatic increase in tbe Commonwealth in rates for local and instate prisoner
initiated telephone calls runs counter to the national trend and virtually every major prison
system in the country. From 2004 to 2008, at least 23 state systems reduced tbeir phone
charges for intraLATA prison calls, including substantial reductions at five oftbe nine
largest prison systems in the country with almost one-third (31 %) of the country's prison
population. 54 Indeed, well over half (54.85%) of prisoners nationwide experienced
reductions in their phone bills from 2004 to 2008. Prison phone calls in FIOlida were
reduced by 66%, by 57% in New York State, by more than 70% in New Mexico and
Washington State, 37% in New Hampshire and 84% in Rhode Island. Only one state
system, in Colorado, experienced an increase in intraLATA rates, and that was part of a
larger renegotiation ofthe telephone contract that saw an overall reduction in intrastate

We were provided data for 10 months of2004, which showed commissions paid of$94,483.68.
Similarly, ten months of data for 2006 yielded a sum of $206,395.46 for the period.
54 See Appendix IV for a detailed comparison of charges for a IS-minute Intra-LATA prisoner-initiated
collect call in 2008 vs. 2004, for correctional facilities in Massachusetts counties and 47 states. The chart
indicates percentage increases and decreases in rates between 2004 and 2008 for the listed jurisdictions.
52

53

27

rates. 55 Today, at least ten states no longer impose any surcharge or connection fee for
intraLATA calls,56 another eighteen had surcharges of$1.50 or less, including
Massachusetts DOC, and (at the high end) only two states had surcharges of $3.00
(Arkansas and Minnesota). In contrast, at least five Massachusetts counties increased their
surcharges in the same general time frame, and a sixth imposed a surcharge that qualifies
as the second highest in the country. Along with Arkansas and Minnesota, Massachusetts
counties now charge the highest per call surcharges in the country for instate calls.
To the inevitable cry from providers that rates were substantially reduced in
correctional systems with large prison populations or other unique characteristics, we note
that all local and intrastate phone calls in Rhode Island are $0.70 flat for a call of any
authorized length (without a surcharge) while in New Mexico all such calls are $0.89 flat
(prepaid) or $1.00 flat (collect), also with no surcharges. (The New Mexico provider is
Securus, Evercom' s parent, pursuant to a contract dated April 22, 2009.) These two
systems could not be more different: New Mexico is a huge, sprawling, sparsely populated
Western state, while Rhode Island is the smallest, most densely populated state in the
country. Finally, GTL entered into a contract with the Montgomery County (Maryland)
Department of Correction on May 15, 2008 that calls for a flat rate of $0. 65 for calls made

anywhere in the countly, both intra- and interstate, with no per call surcharge. 57 The
Montgomery County DOC has a capacity of 1,228 prisoners, smaller than at least four
county correctional institutions in the state. 58

Pursuant to correspondence in September, 2008 with Board members of Colorado CURE.
Seven of these states charge flat rates for intra-LATA calls. Texas only started pelTIlitting prisoner phone
calls this year, \vith no per call surcharge,
57Exhibit 5 is a copy of relevant pages from the Montgomery County, MD DOC contract with GTL.
58 See the website of the Montgomery County Department of Correction and Rehabilitation,
http://w\V\v.molltgOmcrycountymd.gov/doctmpLasp?url=/content/docr/index.asp and links to different county
55

56

28

The per minute cost of prisoner initiated collect calls is obviously also falling as
various rate components decline. 59 In Massachusetts, a truer per minute cost of prisoner
payphone rates emerges when commissions .- the shared profit element of the rates
according to the FCC - are backed out of the per minute rate. 60 A collect call from a DOC
facility costs IO.2¢ per minute after backing out the 35% commission payments.
Similarly, the cost of a collect call from a Hampden County jail facility costs less than 8,3¢
per minute after backing out the 52% commission.

61

These all indicate that in

Massachusetts, charges to collect call customers of 1O.2¢ per minute or less cover the
actual costs of providing collect telephone service for prisoners, including adequate profit
margins for the providers with no per call surcharges or other additional costs.

III.

CONCLUSION
A. DTC must continue to regulate the anti-competitive prisoner payphone
market and determine jnst and reasonable rates.
The cost of telephone calls made by Massachusetts' prisoners to their in-state

families, friends, and counselors is exorbitant. The high rates for collect calls are due
almost entirely to per call surcharges that prison telephone service providers use to fund
millions of dollars of commissions paid to the correctional facilities annually. Virtually
none of the commissions are used for telephone or telephone security related purposes, and

facilities for numbers of beds at each. See column 5 of Appendix II, "Institution Population," for similar data
for MA county facilities. Suffolk, Hampden, Worcester and Plymouth county facilities are all larger.
1
59 See column 7 of Appendix IV, "'Per minute customer cost 2008. ' The figures in this column were derived
by dividing the cost of a fifteen-minute intraLATA call, including surcharges, by IS.
60 See the last column of Appendix VI, "Cost of 15 Minute Call Less Commission ~ Net Received by
Provider/Per Minute Cost." The first number in this column is the cost of a IS minute call, reflecting the net
amount received by telephone providers after paying commissions. The second figure after the slash (/) is
the per minute cost of a call after backing out the relevant commission amount.
61 Id. Hampden County receives an annual commission of 52% plus $42,000/year. The $42,000 cannot be
factored out when calculating per minute costs. It is clear from the relatively low telephone rates negotiated
by the Hampden County Sheriff, on the one hand, and the high conunissions paid (over $1 million/year,
certainly among the highest commissions paid to any county facility), on the other, that Sheriff Ashe and his
team negotiated the best county service contract in the state,

29

at the state level and in half the counties they have in any event been legally unavailable
for such uses. Instead commissions underwrite the state's operations and increase the
funds available to sheriffs for prisoner programming and other amenities, laudable
functions for sure, but ones that should be borne by the general public, not select telephone
company customers.
These unjust and unreasonable telephone rates are clearly unjustifiable and must be
dramatically reduced. The DTE's rationale underlying the 1998 Order in support of per
call surcharges has been shown to be no longer valid. Commissions - the single largest
component driving the cost of prisoner telephone calls - are not mentioned in me 1998
Order either as a category of cost contributing to the need for a surcharge or otherwise.
And nowhere in the 1998 Order does me DTE contemplate that funding the state's general
revenue fund or balancing county sheriffs' budgets is a legitimate, recoverable cost of
providing telephone service to prisoners.
The American Correctional Association, the national organization that accredits
prisons, in 2006 adopted a policy that stated that rates and surcharges for prisoner
telephone calls should be "commensurate with those charged to the general public for like
services" and that "[a]ny deviation from ordinary consumer rates should reflect actual costs
associated with the provision of [telecommunications] services in a correctional setting.,,62
Where, as in Massachusetts, the proposed enormous deviations in rates from those charged
to the public are determined by officials who also must seek to maximize their institutions'
revenue streams in tough economic times, the conflict of interest is obvious. What is also
obvious, and what has not changed in the eleven years since the 1998 Order, is the absolute

62 Public Correctioual Policy ou AdullJJuveuile Offeuder Access to Telephoues uuauimously ratified by ACA
Delegate Assembly ou Jau. 24, 2001; last ameuded Feb. 1,2006.

30

need for the DTC to continue to regulate the prisoner telephone service market. Indeed,
the FCC in the FCC Prisoner Payphone Order urged state regulatory commissions
to examine the issue of significant commissions paid to ICS providers to
confinement facilities and ... the upward pressure they impose on inmate calling
rates. FCC Prisoner Payphone Order at 13.
DTC must ask itself a fundamental question: is it just and reasonable to impose on
the families and friends of prisoners an annual multi-million dollar obligation to fund
public revenue coffers and local jail facilities? Or is that an obligation that should properly
be borne by the general public? It's clear how the surcharges imposed on prison call
recipients by the correctional institutions "take on the nature of a regressive tax that is
imposed exclusively upon the families of those who are incarcerated." J. Carver, An

Efficiency Analysis ofContracts for the Provision ofTelephone Services to Prisons, Fed'1
Communications Law Jnl 54:3, at 400 (May 2002). No matter how the funds are
ultimately used, the surcharges that fund them are experienced by telephone customers "as
an additional punishment imposed on the consumer for no reason other than that a family
member of the consumer has been incarcerated." Id. at 400-01.
DTC must find that the state's punishing surcharges are indeed unjust and
unreasonable and must be eliminated. In addition, the DTC must examine and adopt
additional remedies based on its findings including a reduction in the cap on per minute
rates, and the addition of safe b'1lards for prepaid accounts such as including service fees in
calculating the cost of calls when determining compliance with rate caps. DTC must act.
Respectfully submitted,
Massachusetts Correctional Legal Services
Stem, Shapiro, Weisberg & Garin
Committee for Public Counsel Services
Disability Law Center

31

Prisoners' Rights Clinic at Northeastern University
School of Law
Sonia Booker
Lula Bozman
Roger Carver
Jean Conti
Kim Eckmann
Patricia Gonet
Virginia Polk
Christine Rapoza
David Baxter
Derek Biggs
Samuel Conti
Raymond Gauthier
Shirley Jay McGee
Stephen Metcalf
Kenneth Moccio
William Nadwomy
Marcos Ramos
Isaias Rodriguez
Gerardo Rosario
Edward Sarmanian
Beverly Chorbajian, Esq.
Howard Friedman, Esq.
David Hallinan, Esq.
James Logar, Esq.
Peter T. Sargent, Esq.
Joshua Werner, Esq., Petitioners
By their Attorneys,

~~~

James Pingeon, Esq.
Leslie Walker, Esq.
Massachusetts Correctional Legal Services
8 Winter Street, 11 th Floor
Boston, MA 02108
(617) 482-2773

D

•

•

tf:j

.

r;b.·~~
Patricia Garin, Esq.
Stern, Shapiro, Weisberg & Garin
90 Canal St., 5th Floor
Boston, MA 02114
(617) 742-5800
Dated: August 31, 2009

32

Appendix I
Names and Addresses of Petitioners
Massachusetts Correctional Legal Services (Co-Counsel)
8 Winter Street, 11 til Floor
Boston, MA 02108
Attn.: James Pingeon, Esq.
Stern, Shapiro, Weisberg & Garin (Co-Counsel)
90 Canal Street, 5th Floor
Boston, MA 02114
Attn.: Patricia Garin, Esq.
Committee for Public Counsel Services
44 Bromfield Street
Boston, MA 02108
Attn.: Anthony J. Benedetti, Esq., General Counsel
Disability Law Center
11 Beacon Street, Suite 975
Boston, MA 02108
Attn.: Kathryn Joyce, Esq., Executive Director
Prisoners' Rights Clinic
Northeastern University School of Law
Dockser Hall
400 Huntington Avenue
Boston, MA 02115
Attn.: James Rowan, Esq.
Family and Friends of Prisoners
Sonia Booker
214 Harvard St. Apt. 3A
Dorchester, MA 02124

LulaBozman
49 Withington Street
Dorchester, MA 02124

Roger Carver
12 Briarwood Court
North Andover, MA 01845

Jean Conti
One Glenwood Ave.
Hyde Park, MA 02136

Kim Eckmann
11 Bunker Hill Rd.
Ipswich, MA 01938

Patricia Gonet
11 Emerald Drive
Dartmouth, MA 02747

Virginia Polk
7 Sesame Street
Dracut, MA 01826

Christine Rapoza
P.O. Box 9776
Fall River, MA 02720

Prisoners
David Baxter (W83642)
Derek Biggs (W66551)
Samuel Conti (W84707)
Raymond Ganthier(W45176)
Shirley Jay McGee (W88293)
Stephen Metcalf (C57664)
Kenneth Moccio (W86539)
William Nadworny (W40533)
Marcos Ramos (W69760)
Isaias Rodriguez (W80211)
Gerardo Rosario (W90224)
Edward Sarmanian (W45480)
All prisoner petitioners reside at:
North Central Correctional Institute at Gardner
500 Colony Road
P.O. Box 466
Gardner, MA 01440

Attorneys
Beverly Chorbajian, Esq.
390 Main St., Suite 659
Worcester, MA 01608

Howard Friedman, Esq.
Law Offices of Howard Friedman
90 Canal Street, 5th floor
Boston, MA 02114

David Hallinan, Esq.
221 Essex Street, Suite 31
Salem, MA 01970

James Logar, Esq.
1245 Hancock St.
Quincy, MA 02169

Peter T. Sargent, Esq.
P.O. Box 425
Gardner, MA 01440

Joshua Werner, Esq.
944 Washington St., Suite 2
South Easton, MA 02375

2

Appendix II: Annnal Commissions (Inclnding Per Prisoner Commission Profit)t
--

-

Commission

Commission
Paid

Institution Population
(as of date)'

Global
Tel*Link
Corp.

35%

9,780 (12/27/04);
10,385 (12/27/05);
10,769 (12/26/06);
1l,072 (12/31/07);
1l,348 (6/30/08)

Evercom

40%+
$60,000/yr5
52%+
$42,000/yr

$2,434,000 FY04;
$2,664,217 FY05;
$2,514,778 FY06;
$1,914,608 FY07;
$1,980,601 FY08 (pd to
State's General Fund/
$424,930 (4/05-4/06) (fd
to State General Fund)'
$1,017,808 (12/05-11/06)
(pd to Inmates
Commissary Fund)
$1,020,000 (FY04/05);
$871,776 (FY05/06);
$928,939 (3/07-2/08)
(pd to Canteen)

Annual
Commission
Payment (Profit)
Per Prisoner
$248.87;
$256.54;
$233.52;
$172.92;
$174.53

1,361 (12/27/05)

$312.22

2,147 (avg daily for
2006)

$474.06

$874.03

1,460 (12/27/04);
1,524 (12/27/05);
1,535 (12/31/07)

$698.63;
$572.03;
$605.17

$1343.52;
$1100.06;
$1163.79

County/
DOC

Provider

DOC

-

3

_.

Worcester
.-

Hampden

Evercom

-.

Plymouth

Evercom

52%

'-"

.. _.'-

Avg. Gross
Phone Proceeds
Per Prisoner/
Bed
$592.56;
$610.82;
$556.00;
$494.06;
$498.66
-$780.55

-

.•

I Unless otherwise noted, infonnation in this document was obtained from documents provided by the relevant correctional institution pursuant to state public
record requests.
2 From relevant Quarterly Report on the Status of Prison Overcrowding, index available at
http://www.mass. govl?pageID~eopstcnninal&L-4&LO-Home&L l-Law+Enforcemenl+%26+Criminal+Jnstice&L2-Prisons&L3-Research+Data&sid-Eeops&
b=tenninalcontent&Fdoc_research.~and._planning~.quarterly~overcrowdinRJepofts&csid=Eeops
3 DOC entered into a new telephone service contract in 2006 that lowered the commission paid to DOC from 42% to 35%, reflected in the decreased commission
paid for FY 2007. DOC does not retain the commissions it is paid. bnt pays them to the Commonwealth's General Fund.
4 Total commissions paid FY 04-FY08: $11,508,204.
5 For "On-site administrator."
6 This cOl1l1nission amount reflects the per call surcharge of$0.86. It rose almost 350% to $3.00 per call in Jnly of 2006.

_._._.

County/

Provider

Commission

Inmate
Calling
Solutions

44%(w/option $137,000 (minimum
to increase to
guaranteed)
58%)(min.

DOC
1-----

.

Hampshire

302 (I 2/31/07)

Annual
Commission
Payment (Profit)
Per Prisoner - $453.64

Avg. Gross
Phone Proceeds
Per Prisoner/
Bed
._$1031.00

$291,205 (FY2005/6)/
(pd to Canteen Funds at
Jail and HOC)

1,163 (12/27/05)

$250.39

$625.98

$254,304 (2005) (pd to
Canteen Fund)
$ I46,948 (2006) (pd to
Inmate Canteen Fund)
$72,578 (2006) (pd to
Commissary Fund)

410 (12/27/05)

$620.25

$1192.79

341 (12/26/06)

$430.93

$957.63

184 (I 2/26/06)

$394.45

~-

Institution Population
(as of date)'

$ I 37,000/yr.)

f--..

Middlesex

Commission
Paid

Evercom

40%+
$40,000/yr
(plus $200,000

-

'signing
bonus' in
2001)

Barnstable

Evercom

52%

Berkshire

Evercom

45%

Evercom

40%

\-----_ •.

Franklin
f--.

Suffolk

-

Evercom

50%

L.._ _.

...

-

$986.11

2,485 (3/30/09)
.-

Total county commissions paid FY 06 (with 05 for Barnstable): $3,083,067. $142,000 possibly paid for telephone staff person. Over
95% (95.4%) was for non-telephone, non-security related purposes.

7

From both Cambridge and Billerica facilities.

2

Appendix III
Public and Penological Policy
Sound correctional policy is designed to promote public safety by seeking to
curtail the continuous cycle of prisoner reoffending. See, e.g., the Report ofthe
Governor's Commission on Corrections Reform, June 30,2004 at (i).! Indeed, it is one
of the central statutory charges to the Commissioner of Correction who oversees all state
correctional facilities. G.L.c. 124 § 1(e). Supporting that legislative charge, the DOC's
Mission Statement specifically describes as core goals the promotion of public safety and
reduction of recidivism. 2 The Department's Vision Statement focuses on successful
community re-entry as a principal objective for the thousands of prisoners it releases
yearly.3
Research is unequivocal: recidivism rates are lower when prisoners remain in
closer contact with family members during their incarceration. For example, a DOC
study from 1990 documented significantly lower short- and long-term recidivism rates
among men who participated in programs that were "geared to maintain, or establish, or
to reestablish general societal links such as family, economic, political, and social roles.,,4
A 2003 review often studies from the 1980s and 1990s found that each study reviewed
found that stronger ties between inmates and families and close friends during
incarceration led to better postrelease outcomes. Prisoners who experienced more
family contact. .. experienced lower recidivism rates and greater postrelease
success. s
These ten studies corroborated the findings of five earlier studies from the 1950s to the
1970s that prisoners' family relationships and ties to family members during prison
improve postrelease outcomes. The uniformity of the findings support the conclusion
1

Available at http://www.mass.gov/Eeops/docs/eops/GovCommission Corrections RefolTI1.pdf

2

Available on the home page of the DOC (http://www.mass.gov/doc).

3 Id.

Daniel LeClair, "The Effect of Community Reintegration on Rates of Recidivism: A Statistical Overview
of Data for the Years \971 Through 1987" at 2, 10, 11 (MA DOC, July 1990). This study focused
primarily on prerelease prograrus and furlough as remarkably successful means of maintaining family and
community ties, nearly doubling the chance for post-release success. The curtailment of prerelease

4

programs with new sentencing structures and the effective elimination of furloughs following the Willie

Horton debacle in 1988 underscores the importance of other means of maintaining close family and
community ties, including regular telephone contact.
5 Christy A. Visher & Jeremy Travis, Transitions From Prison to Community: Understanding

Individual Pathways, Annual Review of Sociology 89, 100 (2003).

that the "family ties-lower recidivism relationship is consistent across study populations,
different periods of time, and different methodological procedures.,,6 A 2006 report
similarly noted "the remarkably consistent association" found in 50 years of studies
"between family contact during incarceration and lower recidivism rates.,,7 Maintaining
prisoners' contact with their families is a critical route to postrelease success.
Regular telephone contact by prisoners with their families and communities also
facilitates better prison management: prisoner morale is improved, and as a result
prisoners are more likely to have better interactions with others, including staff. Studies
show that "telephone usage and other contacts with family contribute to inmate morale,
better staff-inmate interactions, and more connection to the community, which in tum has
made them less likely to return to prison, ,,8 and that quality family visitation improves the
mental health of people in prison, as well as their ability to participate successfully in
prison programs and avoid disciplinary problems while incarcerated. 9
This unequivocal research prompted prominent national corrections agencies and
other organizations to adopt policies explicitly recognizing the importance of telephone
communication for prisoners. The Federal Bureau of Prisons recognizes the importance
of telephone access for prisoners in the preamble to its regulations,lo a policy that is
reflected in key statements of major players in the corrections field, including the
American Correctional Association (ACA), the national organization that accredits
prisons, and the National Sheriffs' Association. 11 In 2006 the ACA adopted a policy that
opined that rates and surcharges for prisoner telephone calls should be "commensurate
with those charged to the general public for like services;" and that "[a]ny deviation ii-om
C.F. Hairston, Family Ties During Imprisonment: Important to Whom andfor What?, J.Soc.& Soc.
Welfare, Mar. 1991, at 85, 97.
7 Rebecca L. Naser & Christy A. Visher, "Family Members' Experiences with Incarceration and Reentry,"
7 W.Criminology Rev. 20, 21 (2006).
'U.S. Department oOustice, Office of the Inspector General, Criminal Calls: A Review of the Bureau of
Prisons' Management ofinmate Telephone Privileges, Ch. II, n.6 (Aug. 1999), available at
http://www.usdoj.gov/oig/speciaV9908/(lastaccessedMay 26,2009).
9 Terry A. Kupers, M.D., Prison Madness: The Mental Health Crisis Behind Bars and What We Must Do
About It, 157-173; 239-40 (1999).
10 "The Bureau of Prisons extends telephone privileges to inmates as part of its overall correctional
management. Telephone privileges are a supplemental means of maintaining community and family ties
that will contribute to an imnate's personal development." 28 C.F.R. § 540.100. Calls from federal Bureau
of Prison facilities are 17 cents per minute with no surcharge and reflect the Bureau's desire to facilitate
telephone con\act between prisoners and their families, also reflected in BOP's policy allowing prisoners to
use debit card; to place direct calls,
II Resolution of!4 June 1995.
6

2

ordinary consumer rates should reflect actual costs associated with the provision of
services in a correctional setting.,,12 The American Bar Association in 2005 adopted a
resolution urging corrections administrators "to offer telephone services in the
correctional setting with an appropriate range of options at the lowest possible rates.,,13
In an accompanying report, the ABA's Criminal Justice Section noted that "[t]elephone
access can be a critical component of a prisoner's successful transition to a productive,
law-abiding life after leaving prison.,,14
Recognizing the importance of prisoner telephone contact in furthering its mission
and vision, DOC on August 7, 2009 officially adopted a new departmental policy for
prisoner telephone access and use. The new policy states in its opening section that
"Inmates shall have access to reasonably priced telephone services ... Fees [for prisoner
telephone calls] should be commensurate with those charged to the public.,,15 In keeping
with its policy to reduce the cost of prisoner telephone calls, the DOC in April of this
year initiated debit calling in all its facilities with charges that are 25% less than its
instate collect call rate, already among the lowest in the country. A DOC official noted
that he and other officials at DOC would prefer that surcharges on prisoner telephone
calls be eliminated altogether for penological and other reasons, a position we urge DTC
to adopt,16

12 Public Correctional Policy on Adult/Juvenile Offender Access to Telephones unanimously ratified by
ACA Delegate Assembly on Jan. 24, 2001; last ameuded Feb. 1,2006. The official comment to the policy

advised correctional officials who were seeking or renewing telephone service contracts to "inquire into the

reasons for proposed deviations from standard charges and seek the best possible rates for the broadest
possible range of calling options determined to be consistent with sound correctional management." ACA
Standard Governing Correctional Telephone Services adopted in Aug. 2002.

American Bar Ass'n, House of Delegates, Resolution adopted August 2005 ..
Report of the ABA Criminal Justice Section to the House of Delegates dated 5.14.05, p.l.
15 Available on DOC's website at http://,,,ww.mass."ov/Eeops/docs/doc/policies/482.pdf
16 Conversation with DOC Cbief Operating Officer Peter Macchi, December 12, 2007.
13

14

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StateiCOImry (Nat'! prison
population rank-top 10)

I Oregon

[ntraLATA
Z5 millute
collect call
cost 200s'

2008 % increase
Rallk Idecrease
2008 v
2004

[lltraLATA
15 minute
collect call
cost 2004

2004 , Per minute
Rank customer
cost 200tf

2008 [ntraLATA rates

Highest

C-----"-Per call ~r mill.
surcharge

I-~harge

Surchar

ges

I

(#1-#2)

-$4.14
28
_
-$4.14--~l-------l--$i.5(iTI
I
19
$2.37
12¢
Utah
$4.17
29
$4.17
1
~~suffolk County
$4.35
30
$4.35
2.3
29¢
__ J2.85
$1.71 4"" #2
.
Arizona.
.
$4.50
31
-18%
$5.46~~.:l2......._>---._j....
Kentucky..
$4.50
31
-9%
$4.95~>----_.~_.... $1.50
20¢
*Plymouth
Counry
$4.50
31
+18%
$3.81
13
30¢
$3.00
1O¢
#1
_.....
*Worcester Cnry (abolished)
$4.50
31
+90.7%
$2.36
4
30¢
$3.00
10¢
#1
....- - ---f-c---..Wisconsin
_
$4.55
35
.
$4.55
25
$1.25
..._
Vennont
$4.70 36 >$4.70
- 26
- - $1.40
- - New Jersey.
$4.75
37
:9%
$5.20
35
$1.75
Louisiana
$4.78
38
-14%
$5.58
40
f4rkansas
$4.80
3?
-27%
$6.60
43
$3.00
12¢
#1
Georgia (#5)
__.
$4.85
40
-16.4%
$5.80
41. 32.3¢
$2.00
19¢
I Illinois (#8)
~cJ4.89
41
$4.89
27
$2.71_
~ississippi_$4.90
_ 42
$4.90
28
$1.90
20¢
[South Carolina
.
$4..91
43
...
$4.91
~I--'
$1.50
Minnesota
$4.95
44
$4.95
30
$3.00
13¢
#1
Indiana
$5.00
45
-26%
$6.75
44
$1.50
Pennsylvania (#6)
$5.00
45
_
$5.00
32
$2.00 D
North Dakota
$5.13
47
1 $5.13
134
1
1 $I.7U
35¢/
.

~ . _ - -

1Connecticut

==U.s.20

==t§~

I$5.20

135

.L·

!J.D-s---I~~:

---+1-

Evercom is not the service provider for Hampshire County.
Intralata surcharges in OR are $1.56 in most institutions and $2.00 in one state institution.
14 2005 surcharge and COilllcction fee. Surcharge is less now.
15 Intralata surcharges are $1.45 at three institutions, $1.75 at six institutions, and $2.00 at 16 institutions.
12

13

3

~

State/County (Nat'l prison

population rank-top 10)
Maine
Montana
Colorado
f-=-.
South Dakota
Maryland

IntraLATA
15 minute
collect call

-- ~ost200lr

$5.30
$5.75
. - - f--._.
$6.20
$6.30
$7.05

2008 % increase
Rank /decrease
2008 v
2004

111fraLATA
15 minute
collect call
cost 2004

2004 Per minute
Rank customer
cost 200tf

49
50
51
52
53

$6.80

48

-22%
+42.2%

$4.36
$6.60
$7.05

33
45
49

2008111traLATA rates
Per call
per min.
surcharge
charge
---.._ . 1----.....

$1.55
$2.75
$2.75
$2.25
__ Jl2.55

Highest
Surchar
ges
(#1-#2)
-~

20¢
23¢
30¢

----

4

APPENDIX V
A Comparison of Surcharges levied and Commissions
Paid to DOC for FY2005 (Partial Year)
A closer look at commissions paid to DOC and the amount of surcharges levied
on recipients of phone calls from DOC prisoners for ten months of FY2005 highlights the
almost one-to-one funding relationship between surcharges collected and commissions
paid: surcharges, at least in this case, are almost equal to commissions paid. 1 This
example also underscores the fact that a phone charge to customers of less than $0.11 per
minute, without any surcharge, is sufficient to cover the service provider's costs as well
as to earn it (in all likelihood) a substantial profit.
From July 2004 to April 2005, 2,234,294 intrastate calls were made from DOC
facilities, along with 74,962 interstate calls. Altogether, the surcharges on these calls
generated $2,146,378.84. Commissions paid for this period totaled $2,234,573.17, a
difference of only a little over $88,000.00. Because of the shortfall, Verizon had to use a
tiny percentage of the funds generated by the $0.10 per minute charge to fully fund the
commissions due, equal to 42% of gross telephone revenues. Since the service contract
with Verizon was on a triple net basis, meaning that Verizon was responsible for all costs
and expenses incurred in connection with providing phone service to DOC facilities,
including all security measures and maintenance, Verizon covered its own costs plus
profit for less than the per minute cost of each call (since it had to use some of the
revenues generated to pay the balance of the commissions due). In fact Verizon had to
pay approximately $0.0028 per minute for each call during this period to cover the
commission, reducing it's per minute revenues to about $0.0972 2 Since all of the
commission funds paid to the DOC ended up in the state's general fund, it is clear that all
costs and expenses of DOC calls incurred by the telephone provider for this time period
were covered by a rate ofjust under $0.10 per minute. Everything else paid by telephone
I This was the only entity for which we had sufficient data to make the comparison. Additional information
was requested from a number of institutions but not supplied with sufficient detail to make corresponding
analyses.
2 The difference between commissions paid aud the amount of funds generated by the surcharges on all
calls was $88,194.33. This amount had to be paid out of the reveuues Verizon received from per minute
charges, which is $0.10 for all DOC calls. Since there was a total of30,922,474 minutes of prisoner calls
generated for this period, the per minute cost to Verizon of the shortfall was $0.0028. Deducting that figure
from the $0.10 per minute charge results in a net-to-Verizon figure of $0.0972 per minute.

customers went to the state's general fund, not to fund any prisoner telephone costs or
expenses, security related or otherwise,
The new service provider contract between GTL and DOC calls for a reduced
commission rate of 35%, If the lower rate had been in effect under the Verizon contract,
Verizon would still have paid more than 99% of the funds generated by the surcharges to
the DOC in the form of commissions. With the lower commission rate, the per minute
amount retained by the carrier to cover its costs and profits after payment of commissions
would have been 10.92¢, that is less than a penny more than the current per minute cost.
The $0.92 figure is far less than the $3.00 that carriers said they needed to cover the
additional expenses for prisoner telephone calls. The $0.1092 per minute amount is not
much greater than the per minute cost (after excluding commissions) of intraLATA calls
of 10.2¢ per minute in column 6 of Appendix VI, "Cost of 15 Minute Call Less
Commission=Net Received by Provider" that was calculated using DOC's published
rates. (Under the prior Verizon contract that paid a larger commission to DOC, Verizon
still received 9.72¢ per minute to cover its costs and profit.)

Appendix VI: Comparison of County and DOC Telephone Rates including Cost of Call Data Net of Commissions 1

--

,-._---

County/
DOC

Provider

-~--

Per call
Surcharge:
intraLATA

Worcester

--_._-~

Interstate

$0.10

$3.00

$0.10

$4.50

$4.50

$16.35

$2.16/
14.4¢ per min.

Evereom

$2.00

$0.04

$14.30

Evercom

$3.00

$2.58
$2.50
($2.6QL.....
$4.50
'$4:00

$1.25/
8.3¢ .per min.
$2.16/
14.4¢ per min.
$1.92/
12.8¢ per min.

_-

~;.t;~__ .$13.35

-----_._.

$1.53/
10.2¢ per min.

$1.53/
10.2¢ per min.
--------

$2.16/
14.4¢ per min.

..

_.

Plymouth

Intcrlatal

Cost of 15 Minute Call Less
Commission =Net Received by
Provider/Per Minute Cose
Illtralata/Instate
Interlatallnstate

$0.86

Global
Tel*Link
Corp.
Evercom

. - - ---

Hampden

Cost of 15 Minute Call

Local
(IntralataJ )
$2.36

.

l-iJoc

Per
miuute
charges

';;'-'--

$0.10

$17.30

- - - _ . - _.

I--c--.

Hampshire

Inmate
Calling
Solutions

$3.00

$0.07

$4.00
($4.05)

$4.50

Barnstable

Evercom

$3.00

$0.10/0.06

$3.94

Suffolk

Evercom

$2.85

$0.10

$4.50
($3.94)
$4.35

$4.50

$17.30

-

-----

$17.30
$16.35

.-

$1.89/
12.6¢ per min.
$2.175/
14.5¢ per min.

$1.24/
8.26¢ per min.
$1.92/
12.8¢ per min.
$2.16/
14.4¢ per min.

..

.-

'$1.89-/- - - - - - 12.6¢ per min.
$2.25/
15¢ per min.

.-

Information in this document was obtained from documents provided by the relevant correctional institution pursuant to state public record requests.
The first number in this column is the cost of a 15 minute call, reflecting the net amount received by telephone providers after paying commissions. The second
figure in the column is the per minute cost of a call after backing out the relevant commission amount.
3 At some facilities, local calls are the same as Intralata calls. Where they are not, the Intralata rate is given in (parentheses).
4 The intrastate/interlata connection surcharge is $2.50.
I

2

FY2009 Budget Summary

Exhibit 1

http://www.mass.gov/bb/gaa/fy2009/app_09/aet_09/h89100000.htm
8910-(1000 - County Correctional Programs
Account

89100000

Description

FY2009
GAA

FY2009
Total
Speuding

County Correctional Programs
For a reserve to fund county correctional programs;
provided, that funds appropriated in this item shall
be distributed among the sheriffs departments of
Barnstable, Bristol, Dukes, Nantucket, Norfolk,
Plymouth and Suffolk counties by the county
government finance review board upon prior
notification to the house and senate committees on
ways and means; provided further, that funds made
available to Plymouth county may be expended for
operating and debt service costs associated with
state inmates housed in the Plymouth county
facility, pUrSUa!lt to clauses 3 and 4 of the
Memorandum of Agreement signed May 14, 1992;
provided further, that funds distributed from this
item shall be paid to the treasurer of each county
who shall place the funds in a separate account
within the treasury of each such county; provided
further, that the treasurer shall authorize temporary
transfers into this account for operation and
195,179,966 195,179,966
maintenance ofjails and houses of correction in
advance of receipt of the amount distributed by the
commonwealtb under this item; provided further,
that upon receipt of the state distribution, the
treasurer may transfer out of such account an
amount equal to the funds so advanced; provided
further, that all funds deposited in such accounts and
any interest accruing thereto shall be used solely for
the functions of the sheriffs' departments of the
various counties including, but not limited to,
maintenance and operation ofjails and houses of
correction, without further appropriation; provided
further, that the sheriffs department of each county
shall reimburse the county treasurer of each county
for personnel-related expenses, with the exception
of salaries, attributable to the operations of the
sheriffs department of each county heretofore paid
by the county including, but not limited to, the cost
of employee benefits; provided further, that the

Account

Description
spending plans required by this item shall be
developed by the county govermnent finance review
board, in consultation with the Massachusetts
Sheriffs' Association; provided further, that in
accordance with section 247 of chapter 38 of the
acts of 1995, all spending plans shall be detailed by
object class and object code in accordance with the
expenditure classification requirements promulgated
by the comptroller; provided further, that such
spending plans shall be accompanied by a
delineation of all personnel employed by each
county correctional facility including, but not
limited to, position, title, classification, rank, grade,
salary and full-time or part-time status; provided
further, that such spending plans shall be
accompanied by a delineation of all vehicles leased,
owned or operated by each county sheriff; provided
further, that no sheriff shall purchase any new
vehicles or major equipment in fiscal year 2009
unless such purchase is made pursuant to a
multicounty or regionalized collaborative
procurement arrangement or unless such purchase is
directly related to significant population increase or
is otherwise necessary to address an immediate and
unanticipated public safety crisis and is approved by
the county govermnent finance review board and the
executive office of public safety and security;
provided further, that notwithstanding the other
provisions in this item, sheriffs may purchase
"marked" prisoner transportation vans, upon
notification to the county government finance
review board; provided further, that
notwithstanding any special law to the contrary,
no county treasurer shall retain revenues derived
by the sheriffs from commissions on telephone
service provided to inmates or detainees;
provided further, that snch revennes shall be
retained by the sheriffs not subject to further
appropriation for use in a canteen fund; provided
further, that the county government finance review
board and the executive office of public safety and
security shall identify and develop county correction
expenditures which shall be reduced through shared

FY2009
GAA

FY2009
Total
Spending

exhibit 2

NonCE OF AWARD
State Of Missouri
Office Of Administration
Division Of Purchasing And Materials Management
PO Box 809
Jefferson City, MO 65102
http;/lwww.oa.l11o. gov/pu reh

SOLICITATION NUMBER

CONTRACT TITLE

B2205070

Offender Telephone Service

CONTRACT NUMBER

CONTRACT PERIOD

C205070001

May 19, 2006 through May 18, 20 Jl

REQlifSnrON NUMBER

VENDOR NlJM BER

NR 300 2150000041

95461544000

CONTRACTOR NAME AND ADDRESS

STATE AGENCV'S NAfI,fE AND ADDRESS

Public Communications Services 1 Inc.
11859 Wilshire Blvd., Suite 600
Los Angeles, CA 90025

Various Correctional Institutions
Throughout The State of Missouri

ACCEPTED BY THE STATE OF MJSSOURJ AS FOLLOWS:

The proposal submitted by Public Communications Services, Inc. in response to RFP B2Z05070 is accepted in its
entirety, including Best and Final Offer #00 I and #002, and the letters ofelanfication dated October 21,2005 and
December 13, 2005. The eonlract period shall be May 19, 2006 through May 18,2011.

l
-"

BlJYER

BUYER CONTAcr INFORMATiON

John Stobbart

E-Mail: John.Stobbart@oa,mo,gov
Phone: (573) 751-3796
Fax: (573) 526-9818

SIGNATURE OF BUYER

DATE

i2ltr/X

j . .s~~

!j!RECTOR OF PURCHASINC AND MATER"CS MANACEMENT

i/~~

James Miluski

5-1"1-00

Slate of Missouri
Offender Telephone Services - RFP B2Z05070
Best and Final Offer #002

EXHIBIT A
COST (PRICING SECTION)
EXHIBIT REVISED BY BAFO #()02, REVISION #00 1
A.l REQUIRED PRICING: The offeror must state below the fmn, fixed price for performing OTS
services in accordance with the provisions and requirements stated here·m 1 'mcluding fUn1ishing, installing,
providing any necessary hard\,"'sre, monitoring, maintaining and incurring the expense for the of
installation of and the ongoing monthly expense) through the life of the conlract~ for data circuits: separate
from tbe bandwidth provided for the offender phone recording and monitoring system, at each of the
institutions referenced in paragraph ], l.8, All costs associated with providing the required services,
including all travel and expenses to be incurred by cO!1lraClOr staff1 musl be included. The offeror must
propose all items (00 I through 0 I0). Prices shall not include commissions to be paid to the State of
Missouri (see RFP paragraph 4.4.1).

o pes has read and understands.
The TeamPCS Full Disclosure Rate Plan
PARAGRAPH REVISED BY BAFO #002, REVISION #001
a.

Basic OTS: Collect Calls: shall be defined as where the outside party is requested to pa), for the
calls where the cost would be billed through a monthly invoice to the called part)'. Such prices
shall be exclusive of taxes. The offeror must propose all items (00 I through 008). The offeror
must state the firm, fixed rates per minute and shall include all set up fees for all offender calls for
the following service. exclusive of any and all local. state. and federal fees/taxes (lE. LOCAL,
STATE AND FEDERAL TAXES/FEES MA Y BE PASSED ON TO THE CUSTOMER IN
ADDITION TO THE OFFEROR'S PER MINUTE PRICES AND SET·UP CHARGE).
ITEM

Unit of Measure

Description

NO.
001
002
003
004
005
006
007
008

Local Call
Set -up Charge
lntralata Call
Set-up Charge
Intedata Call
Set-up Charge
Interstate Call
Set-up Charge

for Local Call
for lntralala Call
for lnterlata Call
for Interstate Call

Finn Fixed
Price

I Minute

SO.IO

Call
Minute
Call
Minute
Call
Minute
Call

$1.00
$0.10
$1.00
$0.10
$1.00
$0.10
$1.00

PARAGRAPH REVISED BY BAFO #002, REVISION #001
b.

Basic OTS \\'ith option I features and functions for debit calls where the offender will
deposit money within the state run commissary. Price must be inclusive of taxes. The
offeror must propose item 009. The offeror must state a firm, fixed all inclusive postalized
price per minule, which must include any and all regulatory fees/surcharges, set up fees,

9

State of Missouri
Offender Telephone Services - RFP B22:05070
Best and Final Offer #002

and any and all laxes, etc (I.E, LOCAL, STATE, AND FEDERAL TAXES/FEES
SHALL NOT BE ADDED TO THE FIRM, FIXED POSTAL/ZED PRICE PER
MINUTEWD FOR BY THE OFFENDER).

ITEM
NO.

Description

Unit of Measure

009

Postallud Debit Call

PerM/nute

•

Firm Fixed
Postal/zed
Price
SO.IO

PARAGRAPH REVISED BY BAFO #002, REVISION #001

c.

d.

Basic OTS with option I features and functions for pre-paid calls, where the called party
deposits money within the offeror's operated account. Price must be exclusive of taxes,
The offeror must propose item 010. The offeror must state a firm, fixed all inclusive
postalized price per minute, which shall be exclusive of any and all regulatory
fees/surcharges, set up fees, and any and all taxes, etc: (I,E, LOCAL, STATE AND
FEDERAL TAXES/FEES MAY BE PASSED ON TO THE CUSTOMER EN
ADDITION TO THE OFFEROR'S FIRM, FlXED POSTAL/ZED PRICE PER
MINUTE).

ITEM
NO,

Description

Unit ofMeasure

0/0

Postalized Pre-paid Call

PerM/nute

Firm Fixed
Postalized
Price
SO.IO

International Calls: The offeror must propose rates for International calls. The offeror
shall attach their proposed international callings rates, Prices for International calls will be
subjectively evaluated within the area of Proposed Method of Performance.

•

PCS INTERNATIONAL CALLING RATES

10

ITEM

Description

Unit of Measure

NO.
201
202

International Call
Set-up Charge for International Call

Minute
Call

Firm Fixed
Price
$ 0.75
$ 0.50

•

:Cxrlibit 3

MASSACHUSETTS DEPARTMENT OF CORRECTION
PLEASE POST: Global Tel Link (GTL) Advance Pay Program Rates
To:
Innlate Population, Families & Friends of Imnates
Date: June 4, 2007
Re:
Advance Pay Program Calling Rates

The Advance Pay Program is offered as a means for families and friends of inmates to
receive calls from Massachusetts Correctional Institutions that otherwise would be blocked
for "collect" calling. These calls are generally blocked due to the lack of 'third party billing
agreements" between Competitive Local Exchange Carriers. There appears to be some
confusion as to the rates being charged for these calls and "service fees" chatged to deposits
to the Advance Pay Program. Our contract with GTL is specific as to rates charged for
inmate telephone calls and the rates presently being charged for Advance Pay calls are not
higher than rates charged for collect calls.
Present "collect" calling rates for inmate phone calls:
Calls within Massachuse«s: $0.10 per minute, plus a per call surcharge of $0.86
Out of State Calls:
$0.69 per minute, plus a per call surcharge of$3.00
(plus applicable state and federal taxes/fees)

GTL is presently charging all deposits made into an Advance Pay account a 19% "service
fee". This fee is $9.50 for a $50 deposit GTL offers the Advance Pay Program to over 25
state correctional agencies plus many more county and local correctional jurisdictions.
Massachusetts is the only customer of GTL who prohibits this charge in their contracted
rates. GTI:s present billing system does not allow for the removal of this 19% service
charge for just Massachusetts. The current billing mechanism only allows for this charge to
be assessed to all users of the Advance Pay Program. To compensate for this charge, GTL
discounts all Advance Pay calls originating from Massachusetts by 23%. This discount
more than offsets the 19% service fee and the end result is the Advance Pay calls are less
costly than the cost of collect calls.
The only added charge for the Advance Pay Program is the $2.00 service charge for
deposits under $50 made with a credit card. This charge can be avoided by either making
deposits of $50 or greater when using a credit card or paying by personal check, certified
check, money order or via Western Union.
The two charts detailed on the next page show the cost of a 20 minute collect phone call
(chart on left) compared to the cost of a 20 minute phone
made via the Advance Pay
Program (chart on right), with the 23% di,scount For $50, more calls (17) can be made via
the Advance Pay Program than calls (16) at the collect call rate. The Advance Pay
Program is not more expensive than collect calling.

can

$50.00 Deposit with Discount

$50.00 Deposit without Discount
(for 20 minute collect call)

Call#.

Cost
$ 50.00
$
1 $ 2.86
1 $ 0.13
2 $ 2.86
2 $ 0.13
3 $ 2.86
3$ 0.13
4 $ 2.86
4 $ 0.13
5 $ 2.86
5 $ 0.13
6 $ 2.86
6 $ 0.13
7 $ 2.86
7 $ 0.13
8 $ 2.86
8 $ 0.13
9 $ 2.86
9 $ 0.13
10 $ 2.86
10 $ . 0.13
11 $ 2.86
11 $ 0.13
12 $ 2.86
12 $ 0.13
13 $ 2.86
13 $ 0.13
14 $ 2.86
14 $ 0.13
15 $ 2.86
15 $ 0.13
16 $ 2.86
16 $ 0.13
$ 2.86
$

Balance
$ 50.00
$ 50.00
$ 47.14
$ 47.01
$ 44.15
$ 44.02
$ 41.16
$ 41.03
$ 38.17
$ 38.04
$ 35.18
$ 35.05
$ 32.19
$ 32.06
$ 29.20
$ 29.07
$ 26.21
$ 26.08
$ 23.22
$ 23.09
$ 20.23
$ 20.10
$ 17.24
$ 17.11
$ 14.25
$ 14.12
$ 11.26
$ 11.13
$ 827
$ 8.14
$ 5.28
$ 5.15
$ 2.29
$ 2.16
$ (0.70)

(for 20 minute call, Advance Pay)

Note
Deposit
Service Charge

Call
Tax
Call
Tax
Call
Tax
Caff
Tax
Call
Tax
Call,
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call

0.' 13 #%iik#:&.i\hffi Tax

Call#.

Cost
$ 50.00
$ 9.50
1 $ 2.20
1 $ 0.11
2 $ 2.20
2 $ 0.11
3 $ 2.20
3 $ 0.11
4 $ 2.20
4 $ 0.11
5 $ 2.20
5 $ 0.11
6 $ 2.20
6 $ 0.11
7 $ 2.20
7 $ 0.11
8 $ 2.20
8 $ 0.11
9 $ 2.20
9 $ 0.11
10 $ 2.20
10 $ 0.11
11 $ 2.20
11 $ 0.11
12 $ 2.20
12 $ 0.11
13 $ 2.20
13 $ 0.11
14 $ 2.20
14 $ 0.11
15 $ 2.20
15 $ . 0.11
16 $ 2.20
16 $ 0.11
17$ 2.20
17 $
0.11

Balance
$ 50.00
$ 40.50
$ 38.30
$ 38.19
$ 35.99
$ 35.88
$ 33.68
$ 33.57
$ 31.37
$ 31.26
$ 29.06
$ 28.95
$ 26.75
$ 26.64
$ 24.44
$ 24.33
$ 22.13
$ 22.02
$ 19.82
$ 19.71
$ 17.51
$ 17.40
$ 15.20
$ 15.09
$ 12.89
$ 12.78
$ 10.58
$ 10.47
$ 8.27
$ 8.16
$ 5.96
$ 5.85
$ 3.65
$ 3.54
$ 1.34

Note
Deposit
Service Charge
Call
Tax
Call
Tax
Cali
Tax
Call
Tax
Cali
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
'Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call
Tax
Call

~ih#~"TBX:

Savings , . " .

The Patriot Ledger at SouthofBoston.com

Exhibit 4

Saturday,
December 1,2001

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1 III

Phone fee hike may quiet inmates

U

By KEVIN ROTHSTEIN
The Patriot Ledger

~

Norfolk County Sheriff Michael Bellotti is installing a new phone
system that will triple the cost for inmates calling collect from
the jail.

~
~

I

The new system, which will be in use within a week, is
expected to net at least $200,000 for the sheriff's department
as well as profits for Evercom Systems, the Texas company
that supplies the phones.
Advocates for inmates across the country have blasted the
lucrative phone deals as kickbacks for correction
administrations that depend on captive customers.
"Any increase on the rates is an additional tax on the families of
prisoners who have already paid exorbitant phone rates in the
past," said Peter Kane, a paralegal with Massachusetts
Correctional Legal Services.
The new system will impose a $2.85 connection fee to make a
collect call, up from the current charge of 86 cents, said David
Falcone, a spokesman for Bellotti. The per-minute fees will
remain the same.
The only way for inmates to call the outside is through a collect
call. The jail allows free calls in emergencies, Falcone said.
He said the higher fees will result in benefits for inmates
because by state law the money go to an inmate canteen fund,
helping to pay for things such as drug rehabilitation.
"This money is helpful for two reasons. One, it goes into our

hup://ledger.southofboston. comldi spj avIinn new sinewsOS. tx t

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Page 2 of 2

The Patriot Ledger at SouthofBoston.com

canteen funds so we can have these programs and services for
our inmates, and two, it helps defer the cost to taxpayers here
in Norfolk County," he said.
The sheriff's department will keep 30 percent of the revenues, a
smaller percentage than the old arrangement but a more
lucrative one because of the higher fee.

~L
l

Q

J

The sheriff's department has already taken a $200,000
advance payment from Evercom based on projected revenue,
Falcone said.
Inmates in several states have filed lawsuits over phone
systems they say charge exorbitant rates. Calling plans vary by
state and by company, but critics say that the phone companies
and the prisons, some of them privately run, profit from inmates'
families.
Kevin Rothstein may be reached at krothstein@!edger.com.

Copyright 2001 The Patriot Ledger
Transmitted December 1, 2001

SUBSCRIBE I CONTACT US
The Patriot Ledger, 400 Crown Colony Drive
P.O. Box 699159, Quincy, MA 02269-9159
Telephone: (617) 786-7000

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Exhibit 5

•

CONTRACT NO. 8426000003·AA

lJORIGINAL

This Contract is entered into by and between Montgomery County, Maryland (the "County"), a political
subdivision of the State of Maryland, and Global Tel'Link Corporation, whose address is 2609 Cameron
Street, Mobile, Alabama 36607 (the "Contractor"),
WITNESSETH:

WHEREAS, the County has a need for inmate telephone services for inmates of the Department of Correction
and Rehabilitation ("DOCR"), and
WHEREAS, the intent of this Contract is to offer telephone services at the lowest possible cost to inmates and
their families, and that the Contractor must not, outside of the contracted calling Rates, include/attach any
hiddenlback·end fees (e.g, Bill Statement Fee, Bill Rendering Fee, Administrative Fee, etc.,) to the final bill
to inmates and their families, and

WHEREAS, the County reserves the right, at any time during the term of this Contract, to conduct audits of
the Contractor's billing statements to inmates and their families, and/or conduct investigative findings of the
Contractor's contract with the County; and, in the event of an audit (at no cost to the County), the Contractor
must make all records associated with this Contract available to the County within a reasonable time period
(agreed to between bcth parties to the contract), and
WHEREAS, the County requires a qualified establishment to provide inmate telephone services, and the
Contractor has represented to the County that Contractor and its Subcontractor are qualified to do business in
the State of Maryland, are fully capable ofperforming the services described in this Contract, and are duly
authorized and in compliance with applicable federal, State and local laws, regulations and ordinances
applicable to its activities and obligations under this Contract; and hold all valid licenses and permits
necessary to perform the services, and will promptly notifY the County in the event any such license or permit
expires, terminates, or is revoked, and
WHEREAS, the County has relied on such representation to select the Contractor and award this Contract to
provide telephone services, and
WHEREAS, this Contract is entered into as a result of a Formal Solicitation in accordance with Section 4.1.2
of the Montgomery County Procurement Regulations,

NOW THEREFORE, for and in consideration of the mutual agreements contained herein, the parties agree as
follows:

ARTICLE 1
SCOPE OF SERVICES

A.

General Requirements
The Contractor must comply with the following general requirements:

•

•

/

CONTRACT NO. 8426000003-AA

3.
The Contractor's Invoice or Bill to called-parties must include the Contractor's information
and a Toll-Free telephone number for called-parties to use when seeking resolution to problems or
answers to questions.
4.
The Contractor must begin charges for a call only when the calling party is connected to the
called party, The call tenninates when either party hangs up the telephone. The Contractor
must not bill the caliing party for incomplete calls such as network intercept recordings, busy
signals, no answers, refusal. of calls, and answering machine pickups.

ARTICLE II
Compensation and Pricing

A.

The Contractor shall pay no commission to the County for the tenn of this Contract and
the Contractor must not charge the County for any of the following costs and charges associated
with this Contract, which include, but are not limited to:
•
•
•
•
•
•

•
•
•
•
•
•
•
•

Costs of purchasing and installing telephone system, including site
repair, if necessary;
Charges from the local telephone company for installation of
subscriber lines, plus related taxes;
Monthly charges for subscriber lines;
Costs of maintenance and repair procedures;
Costs for on-site system administrator;
Costs associated with administrative functions for monthly billing,
collection of revenues from inmates' families and friends, and
monthly reporting;
Sales tax on. purchases of all goods and services;
Per call charge from local telephone company, if applicable;
Charges billed to telephones as a result of inmate fraud;
Charges for directory .assistance calls;
Charges from local telephone company for moving lines;
Cost associated with vandalism;
Cost for obtaining pennits, if necessary;
Training of County employees, as required.

B.
The following pay rates must apply to all inmates' telephone calls regardless of type, (Local,
IntraLata f IntraState, IntraLata f InterState, InterLata / IntraState, and InterLata f InterState calling
services), other than debit transactions identified in Article 1, Section C.6 of this Contract:
I.
The Contractor must charge a flat rate of$0.65 per call, with no additional surcharge andlor
usage charges, and regardless of time of day, and call duration.
2.
The County's current inmate telephone system does not allow for debit transactions.
However, the County reserves the right to include this option and to add it to the inmate telephone
system if it detennines that it is in the best interest of the inmate population. If and when the
County decides to implement the use of debit cards, the County shall utilize the Inmate
11