Prison Phone Justice

Lee G. Petro
202-230-5857 Direct
202-842-8465 Fax
Lee.Petro@dbr.com

September 26, 2012

Law Offices
1500 K Street N. W.
Suite 1100
Washington, D.C.
20005-1209
(202) 842-8800
(202) 842-8465 fax

By ECFS
Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, S.W.
Washington, DC 20554

www.drinkerbiddle.com

RE:
CALIFORNIA
DELAWARE
ILLINOIS
NEW JERSEY
NEW YORK
PENNSYLVANIA
WASHINGTON D.C.
WISCONSIN

Implementation of the Pay Telephone Reclassification and
Compensation Provisions of the Telecommunications Act of 1996
Petitioners’ Alternative Rulemaking Proposal
CC Docket No. 96-128

Dear Ms. Dortch:
Martha Wright, et al. (“Petitioners”), by and through her attorneys, respectfully
submit into the record the attached recent calls for immediate action by the New York
Times Editorial Board, Commissioner Mignon Clyburn, the New Mexico Public
Regulatory Commission, and the FCC Consumer Advisory Committee in the instant
proceeding.
For example, attached is an editorial from the New York Times Editorial Board,
published on September 24, 2012, highlighting many of the points the Petitioners have
raised on numerous occasions in this proceeding, noting the recent letter from
Representatives Henry Waxman and Bobby Rush directed to Chairman Genachowski,
and concluding that the FCC “has danced around this issue for far too long.”
Also attached is the Statement from Commissioner Mignon Clyburn, released on
September 24, 2012, calling for Chairman Genachowski to “propose a rulemaking for a
vote by the full Commission that will lead to lower interstate long distance rates for
incarcerated individuals and their families.”
A similar stance was taken by the New Mexico Public Regulatory Commission,
which adopted the attached resolution on September 25, 2012. In the resolution, the NM
PRC restated many of the positions previously highlighted by the Petitioners, and urged
the FCC “to act on the ‘Wright Petition’ (CC Docket No. 96-128) and set standards to
ensure that families of those who are either incarcerated or detained in immigration
proceedings are provided affordable options to remain connected.”
Finally, the FCC’s Consumer Advisory Committee adopted the attached
Resolution on September 21, 2012, again highlighting the issues previously discussed by
the Petitioners, and urging the FCC to take the following steps:

Established 1849

1. Ensure that the price of calls from inmates are reasonable;
2. Restrict “commissions” paid by telephone companies to correctional
institutions to a reasonable amount above the actual cost of providing the
service;

DC01/ 3006633.1

Marlene H. Dortch, Secretary
September 26, 2012
Page 2
3. Encourage the use of prepaid debit accounts for inmates whereby inmates or
their called parties may buy low-cost minutes, and
4. Continue to allow collect calls from inmates with charges that are a
reasonable amount above the actual cost of providing the call.
In light of these urgent calls for action, and in consideration of the fact that the
FCC was directed by the D.C. Circuit Court to act “with dispatch” in 2001, the Petitioners
respectfully request that the Commission move forward to grant the Petitioners’ 2007
Alternative Proposal.

Respectfully submitted,

Lee G. Petro
Drinker Biddle & Reath LLP
1500 K Street N.W.
Suite 1100
Washington, DC 20005-1209
202-230-5857 – Telephone
202-842-8465 - Telecopier
Counsel for Martha Wright, et al.
Attachments

Marlene H. Dortch, Secretary
September 26, 2012
Page 3
cc (via electronic mail) :
Chairman Julius Genachowski
Michael Steffen, Legal Advisor to Chairman Genachowski
Commissioner Robert McDowell
Christine Kurth, Legal Advisor to Commissioner McDowell
Commissioner Mignon Clyburn
Angela Kronenberg, Legal Advisor to Commissioner Clyburn
Commissioner Jessica Rosenworcel
Priscilla Delgado Argeris, Legal Advisor to Commissioner Rosenworcel
Commissioner Ajit Pai
Nicholas Degani, Legal Adviser to Commission Pai
Sean Lev, General Counsel
Julie Veach, Chief, Wireline Competition Bureau
Victoria Goldberg – Acting Chief, Pricing Policy Division, Wireline Competition Bureau
Deena Shetler – Associate Bureau Chief, Wireline Competition Bureau
Nicholas Alexander – Acting Deputy Division Chief, Pricing Policy Division, Wireline
Competition Bureau
Pamela Arluk – Assistant Division Chief, Pricing Policy Division, Wireline Competition Bureau

HOME PAGE

TODAY'S PAPER

VIDEO

MOST POPULAR

Subscribe: Digital / Home Delivery

U.S. Edition

Log In Register Now Help

Search Opinion

WORLD

U.S.

N.Y. / REGION

BUSINESS

TECHNOLOGY

SCIENCE

HEALTH

SPORTS

OPINION

EDITORIAL

Costly Phone Calls for Inmates
Published: September 23, 2012

Members of Congress and civil rights groups are pushing the Federal
Communications Commission to rein in telephone companies that, in
many states, charge inmates spectacularly high rates that can force
their families to choose between keeping in touch with a relative
behind bars and, in some cases, putting food on the table.

FACEBOOK
TWITTER
GOOGLE+
E-MAIL
SHARE

Connect With
Us on Twitter
For Op-Ed, follow
@nytopinion and to
hear from the
editorial page
editor, Andrew Rosenthal, follow
@andyrNYT.

The time is long past for the F.C.C. —
which has been weighing this issue for
nearly a decade — to break up what
amount to monopolies and ensure
that prisoners across the country have
access to reasonably priced interstate
telephone service.

PRINT
REPRINTS

The calls are expensive because they are placed through independent telephone companies
that pay the state a “commission” — essentially a legalized kickback — that ranges from 15
percent to 60 percent either as a portion of revenue, a fixed upfront fee or a combination
of both. According to a new report by the Prison Policy Initiative, a research group based
in Massachusetts, depending on the size of the kickback, a 15-minute call can cost the
family as little as $2.36 or as much as $17.
Prison officials and phone companies that defend the system of commissions say that
extra charges are necessary to pay for the security screening required when inmates make
calls. But this presents no problem in New York State, which banned the kickbacks several
years ago and required its prison telephone vendor to provide service at the lowest
possible cost to the inmates and their families.
Service is similarly inexpensive and easily managed in federal prisons, which use a
computer-controlled system that allows inmates to place monitored calls to a limited
group of preregistered telephone numbers. The federal system, though affordable, also
makes a profit.
Overcharging inmates is not just unfair but also counterproductive, because it discourages
inmates from keeping in touch with a world where they will be expected to fit in. As
Representative Henry Waxman, Democrat of California, and Representative Bobby Rush,
Democrat of Illinois, noted in a recent letter to the F.C.C., the agency has danced around
this issue for far too long.
A version of this editorial appeared in print on September 24, 2012, on page A22 of the New York edition with the headline:
Costly Phone Calls for Inmates.

ARTS

STYLE

TRAVEL

JOBS

REAL ESTATE

AUTOS

FRED UPTON , MI CHIGAN

HENR Y A. WAXMAN, CA LIFORN IA

CHAI RM AN

RANK ING M EMBER

ONE HUNDRED 1WELFTH CONGRESS

~tates
j!)otls'e of l\epres'entntibes'

(!Congress of tbe Wniteb

COMMITTEE ON EN ERGY AND COMMERCE
2125 R AYBURN H OUSE O FFICE B U ILDING
W AS HINGTON, DC 20515-6115
Majority (202) 225-2927
M inority (202) 225-364 1

September 12,20 12
The Honorab le Julius Genachowski
Chairman
Federa l Co mmunications Com mi ssion
445 12'h Street, S.W .
Washington, D,C, 20554
Dear Chairman Genachowski:
We write in regard to a matter that has been pending at the Federal Communicati ons
Commi ssion (f'CC) for close to a decade: the exorbitant rates that the families of pri soners pay
to communicate with an incarcerated fa mil y memher. Although thi s issue has been the subject of
several round s of notice and comment, as we ll as legislation introduced by Rep, Rush during the
110,h Congress, the FCC has yet to take fina l action. We urge yo u to do so as soon as possible,
Research shows that regular contact between prisoners and fami ly members during
incarceration red uces recidi vism, I Phone call s are the primary means for fam ilies to maintain
contact wi th incarcerated relatives. Ex perts across the politica l spectrum have reconmlended
minimiz ing the cost of prison phone calls as a way to support strong fa mily relati onships wi th
ilUllates 2 Yet under current poli cies and practices, prisoners and their families pay unusually
high rates for phone service that di scourage regular contact. In fact, a one hour call from pri son
often costs as much as a month of unlimited home phone service.

I House Oversight and Government Reform Subcomm iltee on Federal Workforce, Posta l
Service, and the Di stri ct of Co lu mbia, Testimony of Nancy G. La Vigne, Director, Justice Poli cy
Center, the Urban Institute, Hearing on Hot/sin?, D. C. Code Felons Far AlVay From Home:
EjJecls on Crime, Recidivism, and Reenll y, 1 I I' Congo(May 5, 20 I 0),
2 The Commission on Safety and Abuse in America 's Prisons, Conji'onling Conjinemenl (June
2006),

The Honorable Julius Genachowsk i
September 12,2 01 2
Page 2
When inmates and families lose contact, soc iety ultimate ly pays the price. Over 67% of
released pri soners are rea rrested within three years. At a time when the Uni ted States has the
highest per capilCl incarcerati on rate in the world and spends nearl y $58 bi lli on per year to
manage its pri son populati on, we should be doing more to reduce rec idi vism]
The ex tremely hi gh cost of phone call s for priso ners and their families led a group of
affected indi viduals to seek re lief from the FCC. That request, known as the Wright Pet iti on, has
been before the Commi ssion since 2003. Over ft ve years ago, the Wri ght pet iti oners proposed
rates that wo uld ensure reasonable and affordable phone service for inmates and their fami lies
without short -c hangi ng states, prisons, and telephone service providers.
Rece ntl y, a coa liti on of civil ri ghts gro ups and co nservati ve leaders wro te the FCC asking
the agency to cap the rates charged for interstate prison phone calls: Thi s di verse coa lit ion of
advocates came together to urge FCC action because of their common view that exorb itant
prison phone rates do nothing to fu rther the safety of our society or help rehabi litate pr isoncrs.;
In fact, they conclude that all owing current practices to continue is not so und publi c poli cy6 The
coa liti on also notes that its proposed policy change will not undermine prison securi ty7
Earli er thi s week, the Pri so n Policy Initiati ve released a new repo rt on the pri son phone
system tit led Th e Price 10 Call HOllie: Slale-Sanclionec/ Monopolizalion inlhe Prison Phone
Inc/uslJy.s Thi s stud y also concludes that hi gh prison phone rates harm soc iety both
economi ca ll y and soc iall y and recommends that the FCC approve the Wright Pet iti on and cap

Department of Justi ce, Federal Prison Syslelll FY 2012 Budgel Requesl (online at
hnp:llwww.j ustice.gov/jmd/20 I2summary/pdf/fy 12-bop-bud-summary. pd f) and Nati onal
Assoc iati on of State Budget Officers. SlCtle E\pendilure Rep0rl: Examining Fiscal 2009-2011
Slale Spending (online at
hnp:llw\v\v. nasbo.org/sites/defau ltift les/20 I 0%20S tate%20 Ex pend it ure%20 Report. pd f).
4 Letter li'o m the Lead ership Co nference on Civil and Ilu man Ri ght s et al. to Federal
Co mmuni cati ons Commi ssion Chai rman .I ulius Genac howski Uvial' 18, 20 12).
; As David Keene, fO rlner chair of the American Conservati ve Uni on stated: "Thi s makes no
sense. This does nothing to fllrther the safety of civil soc iety. It does nothing to help rehabi litate
those people who have been removed from that soc iety as a result of cri minal convictions. And
in fact. it makes it less li kel y that these people will even be able to reintegrate them selves as
use ful citi zens." See The Leadership Conference on Civil and I-Ium an Rights, /n Joint Leller,
Lejl, Rig/II , and CeJ1l er Urge FCC 10 End Praclice o/PredalOlY Prison Phone ROles (May 18.
2012)
J

6 /el
1

/d.

Pri so n Poli cy Initiati ve, The Price 10 Call HOlli e: SIClle-Sanclioned Monopolizalion in Ihe
Prison Phone InduslJy (Sept. 11 .20 12).

8

The Honorabl e Julius Genachowsk i
September 12, 201 2
Page 3
pri son phone rates. 9 Notabl y, the study asserts that lower prison telephone rates would lessen the
ongo ing security problem of contraband cell phones in pri sons. Accordingly, lowering prison
telephone rates "would improve safety by providing less incentive for incarcerated peopl e to
acquire contraband cell phones." 10
We encourage the FCC to move expeditiously to resolve thi s issue. Thank yo u for yo ur
at1enti on to thi s matter.
Sincerely,

Iio~~·
....
Henry A. Wax man
cc:

The Honorabl e Fred Upton
Chairman
The Honorable Robert M. McDowe ll
Commissioner
Federal Communications Co mmi ssion
The Honorable Mi gnon Clyburn
Comm issioner
Federal Communicati ons Commi ss ion
The Honorable Jessica Rosenworcel
Commi ss ioner
Federa l Conul1lll1ications Commission
T he Honorable Ajit Pai
Commi ss ioner
Federal Communications Commission

9 1d.
10 1d.

]G--

The price to call home: state-sanctioned monopolization in the prison ph...

1 of 10

http://www.prisonpolicy.org/phones/report.html

Home Page > Reports > The Price to Call Home > Report

Sections:
1. Introduction
2. The Prison Telephone Market is Broken
3. Exorbitant Prison Phone Rates Result from the Monopolistic Market
4. Exorbitant Prison Phone Prices Harm Society
5. Government Regulation in the Prison Phone Industry
6. Why Federal Regulation Would Ameliorate the Problem
7. Summary & Recommendations
Acknowledgments
About the author
About the Prison Policy Initiative
Endnotes
A Prison Policy Initiative Report
by Drew Kukorowski
September 11, 2012

1. Introduction
Exorbitant calling rates make the prison telephone industry one of the most lucrative businesses in
the United States today. This industry is so profitable because prison phone companies have statesanctioned monopolistic control over the state prison markets,[1] and the government agency with
authority to rein in these rates across the nation has been reluctant to offer meaningful relief.
Prison phone companies are awarded these monopolies through bidding processes in which they
submit contract proposals to the state prison systems; in all but eight states, these contracts include
promises to pay “commissions” — in effect, kickbacks — to states, in either the form of a
percentage of revenue, a fixed up-front payment, or a combination of the two.[2] Thus, state prison
systems have no incentive to select the telephone company that offers the lowest rates; rather,
correctional departments have an incentive to reap the most profit by selecting the telephone
company that provides the highest commission.[3]
This market oddity — that the government entity has an incentive to select the highest bidder and
that the actual consumers have no input in the bidding process — makes the prison telephone market
susceptible to prices that are well-above ordinary rates for non-incarcerated persons. This fact,
coupled with what economists would label as the “relative inelastic demand”[4] that incarcerated
persons and their families have to speak with one another, leads to exorbitant prices. The prison
telephone market is structured to be exploitative because it grants monopolies to producers, and
because the consumers — the incarcerated persons and their families who are actually footing the
bills — have no comparable alternative ways of communicating.[5]
Exorbitant telephone rates are not only bad for
incarcerated persons and their families, but are

The prison telephone market is
structured to be exploitative

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

2 of 10

http://www.prisonpolicy.org/phones/report.html

bad for society at large. High phone rates reduce
because it grants monopolies to
incarcerated persons’ ability to communicate
producers, and because the
with family, and family contact has been
consumers have no comparable
consistently shown to lower recidivism.[6]
alternative ways of
Currently, there is public debate about reducing
the costs of mass incarceration by focusing on
communicating
ways to lower the likelihood that incarcerated
persons will re-offend after their release.[7] For example, the Republican Party Platform for 2012
endorses “the institution of family-friendly policies … [to] reduce the rate of recidivism, thus
reducing the enormous fiscal and social costs of incarceration.”[8] And the Democratic Party
Platform for 2012 notes that the party “support[s]… initiatives to reduce recidivism.” [9] Lowering
prison telephone rates would serve the uncontroversial goal of reducing the likelihood that
incarcerated persons will commit another crime after their release.
Fortunately, government regulation can help
Regulation would both reduce the
achieve this goal. The Federal Communications
price-gouging that incarcerated
Commission is considering a modest regulation
persons’ families suffer and
to impose price caps on long-distance prison
simultaneously contribute to the
telephone rates. This report finds that such
regulation, when considered against the
social good by reducing
backdrop of the corporate monopolization of the
recidivism.
prison telephone market, would both reduce the
price-gouging that incarcerated persons’
families suffer and simultaneously contribute to the social good by reducing recidivism.

2. The Prison Telephone Market is Broken
Markets for goods and services work best when consumers have the freedom to select the best seller.
In the prison phone market, though, the consumers have no choice as to which telephone company to
use. That choice is made for them by the state prison system. But state prison systems cannot be
expected to advocate for lower phone rates because they don’t have consumer interests in mind. And
prison telephone companies have little incentive to provide reasonable rates to their customers
because they do not answer to those customers.
These state-sanctioned monopolies prey upon people who are least able to select alternative methods
of communication and who are least able to sustain additional expenses. Incarcerated persons have
below average literacy rates that make it less practical for them to communicate in writing.[10] It is
difficult for families of incarcerated persons to pay for phone calls because people in prison tend to
come from low-income households.[11] A study of recently released people from Illinois prisons
found that the price of phone calls from prison was one of the two most significant barriers to family
contact during incarceration.[12] Therefore, prison phone companies not only have monopolies, but
their customers have no comparable alternatives to telephone communication.
In addition to these structural problems with the
prison telephone industry, corporate agglomeration
has exacerbated the already exorbitant rates. Over the
past few years, three corporations have emerged to
dominate the market. 90% of incarcerated persons live

American Securities:
A primer[39]
Who is American Securities?

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

3 of 10

in states with prison phone service that is exclusively
controlled by Global Tel*Link, Securus Technologies,
or CenturyLink.[13] The largest of these corporations,
Global Tel*Link, currently has contracts for 27 state
correctional departments after its acquisition of four
smaller prison phone companies between 2009 and
2011.[14] Global Tel*Link-controlled states contain
approximately 57% of the total state population of
incarcerated people in the United States.[15]
Government regulation was designed to control this
kind of corporate domination over a captive market.

3. Exorbitant Prison Phone Rates Result
from the Monopolistic Market
The combination of corporate consolidation in the
prison phone industry, state-granted monopolies, and
inelastic demand for prison telephone service has led
to exorbitant rates. In many states, someone behind
bars must pay about $15 for a fifteen minute phone
call.[16] For families trying to stay in touch on a
regular basis, such prices are often backbreaking.
Because rates vary widely between states — even
between states that use the same prison phone
company — nationwide regulation appropriate. For
example, a fifteen minute long-distance phone call
from Global Tel*Link costs $2.36 in Massachusetts,
but that same call costs more than $17 in Georgia.[17]
This large difference in rates originates in large part
from the wide range — anywhere from 15% to 60%
— in the size of kickbacks that prison phone
companies pay to state governments.[18]

http://www.prisonpolicy.org/phones/report.html

A New York private equity firm that
purchased prison telephone
behemoth Global Tel*Link last year.
How did American Securities
acquire Global Tel*Link?
By purchasing the prison phone
company from two other New York
private equity firms, Veritas and
Goldman Sachs Direct, for $1
billion in 2011. Veritas and Goldman
Sachs purchased Global Tel*Link in
2009 for $345 million. That’s a $655
million return on their investment in
two years.
What kinds of companies does
American Securities invest in?
According to its website, American
Securities specializes in “stable
demand industries.” And it doesn’t
get much more stable than a
monopoly over the prison telephone
industry with a captive consumer
market.
Never heard of American
Securities before?
Aside from Global Tel*Link, their
investments include Oreck Vacuums
and Potbelly Sandwich Works.

The phone companies and state prison systems
The combination of corporate
use different arguments to defend the high rates.
consolidation in the prison phone
Prison phone companies argue that rates must be
industry, state-granted
high in order to cover costs associated with
monopolies, and inelastic demand
providing secure telephone service, such as call
monitoring.[19] But this argument is refuted by
for prison telephone service has
phone rates charged in New York. New York
led to exorbitant rates.
law bans kickbacks and requires that “the lowest
possible cost to the user shall be
emphasized.”[20] Currently, Global Tel*Link charges incarcerated persons and their families about
$0.05 per minute, local and long-distance, in the New York prison system. Thus, low rates in the
prison phone market are entirely consistent with call monitoring and other security measures.
Correctional departments argue that revenue

Both prison phone companies

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

4 of 10

http://www.prisonpolicy.org/phones/report.html

from kickbacks provides for prison amenities
and state prison systems would
that would otherwise go unfunded by state
be able to cover costs and
legislatures.[21] This argument fails to stand up
generate revenue even with price
to scrutiny when considering that the federal
caps.
prison system charges comparatively low rates:
$0.06/minute local and $0.23/minute
long-distance, and still generates enormous revenue. As a recent Government Accountability Office
report points out, the federal prison phone rates were sufficient to cover costs and generate $34
million in profit in 2010.[22] Thus, profits can still be generated when prices are capped at relatively
low levels. Both prison phone companies and state prison systems would be able to cover costs and
generate revenue even with price caps.

4. Exorbitant Prison Phone Prices Harm Society
The link between family contact during incarceration and reduced recidivism is
well-documented.[23] Indeed, the federal Bureau of Prisons states that “telephone privileges are a
supplemental means of maintaining community and family ties that will contribute to an inmate’s
personal development.”[24] Congress itself has found, in the context of re-enacting the Second
Chance Act of 2007, that “there is evidence to suggest that inmates who are connected to their
children and families are more likely to avoid negative incidents and have reduced sentences.”[25]
And the American Correctional Association, the world’s largest professional corrections association
and an accreditation agency for correctional facilities, has repeatedly resolved that “sound
correctional management” requires that “adult/juvenile offenders should have access to a range of
reasonably priced telecommunications services” and that rates for such services should be
“commensurate with those charged to the general public for like services.”[26] Thus, a variety of
stakeholders and policy-making bodies agree that high phone prices are harmful, and yet high prison
phone prices persist.
In addition to reducing recidivism,
lower telephone prices that lead to
increased contact between
incarcerated people and their
children increase incarcerated
persons’ involvement with their
children after release.[27] As of
2007, 52% of people incarcerated in
state prisons and 63% of people
incarcerated in the federal system
were parents of minor children.[28]
Lowering the cost of
communications for these
incarcerated persons and their
The telephone is one of the few ways that people in prison can
children would improve parent-child
remain in touch with their children. (Photo: Lucy
relationships by permitting more
Nicholson/Reuters, 2012)
frequent communication.
The economic consequences of high prison
phone rates are harmful, as well. The apparent

The apparent revenues generated
by high prison phone rates are

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

5 of 10

http://www.prisonpolicy.org/phones/report.html

revenues generated by high prison phone rates
offset by the costs of larger prison
are offset by the costs of larger prison
populations caused by increased
populations caused by increased rates of
rates of re-offending.
re-offending. Foregoing revenue from exorbitant
phone rates now will decrease correctional
departments’ costs in the future because fewer people will find themselves back in prison. If state
governments are serious about lowering costs by reducing prison populations, lowering prison phone
rates provides a simple, straightforward, and evidence-based way to achieve that goal.
High prison phone rates also function as a
It is unfair that taxpayers whose
regressive tax on communities that experience
family members are incarcerated
higher incarceration rates.[29] This is the
should be subject to an additional
opposite of our generally progressive tax
tax.
structure where tax burdens increase as income
rises. In this context, low-income families pay
exorbitant phone rates that fund state revenues. But taxpayers are already paying for prisons. It is
unfair that taxpayers whose family members are incarcerated should be subject to an additional tax,
especially one that also enriches prison phone corporations and makes incarcerated people more
likely to return to prison.
Finally, lower prison telephone rates would also lessen the recent problem of contraband cell
phones.[30] The connection between high prison phone rates and contraband cell phone spurred
Congress to order a government study into the effect of high prison phone rates on the demand for
contraband cell phones.[31] And even TIME Magazine notes that the “notoriously expensive” cost of
using prison telephones contributes to the demand for cell phones in prison.[32] Lowering prison
telephone rates would improve safety by providing less incentive for incarcerated people to acquire
contraband cell phones.

5. Government Regulation in the Prison Phone Industry
Currently, prison phone companies are subject to minimal governmental regulation. Pressuring state
utility agencies, which regulate local and in-state long-distance phone rates, to lower prison phone
rates has been successful in a few places, but is unlikely to succeed everywhere. The commissions
that states receive from prison phone companies give states little incentive to enact affordable rates.
At the federal level, the Federal Communications Commission (FCC) currently limits its regulation
of the prison phone industry to disclosure requirements mandating that prison phone companies
inform collect call recipients of prices before family members accept calls from incarcerated
persons.[33]
In 2000, a group of plaintiffs brought a class action lawsuit against the Corrections Corporation of
America and several prison phone companies, alleging that the prison phone agreements between the
parties violated, among other things, federal anti-trust law. The federal district court referred the case
to the FCC, stating that the FCC was better suited to addressing the concerns raised by the lawsuit.
The plaintiffs then petitioned the FCC to enact regulations that would introduce competition to the
prison phone market in the hopes of lowering prison phone rates by breaking up the monopolistic
prison phone industry. After several years of little movement from the FCC, the plaintiffs shifted
their request by petitioning the FCC to impose price caps or benchmark rates of $0.20 - $0.25 per
minute for interstate long-distance rates.[34] This petition — known as the Wright Petition, after

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

6 of 10

http://www.prisonpolicy.org/phones/report.html

original plaintiff Martha Wright — is still pending before the FCC.
The rates requested by the Wright Petition
Despite widespread consensus
would be more affordable and would still permit
that prison phone rates should be
phone companies to earn profits. As
lower, the FCC has failed to
demonstrated by the example of the federal
impose price caps in this market
prison system discussed in section 3, rates as
low as $0.06 per minute can still generate
because of obstructionism by
significant revenue. Despite widespread
prison phone companies.
consensus that prison phone rates should be
lower, the FCC has failed to impose price caps
in this market because of obstructionism by prison phone companies. Prison phone companies
continue to resist a regulation that is eminently reasonable and that would permit them to make
handsome profits while simultaneously reducing crime. This is corporate greed and disregard for
public welfare at its worst.

6. Why Federal Regulation Would Ameliorate the Problem
The Federal Communication Commission’s statutory purpose, stated in the law that created the
commission in 1934, is to regulate telecommunications such that service is available nationwide at
“reasonable charges.”[35] Under no circumstances can the current prison phone rates be deemed
reasonable.
The FCC is ideally situated to regulate this broken market. The FCC already has consumer
protection capabilities such that it can field consumer complaints and resolve disputes with phone
companies without the time and costs associated with litigation.
Federal regulation of interstate long-distance prison phone rates would bring much-needed relief to
incarcerated persons and their families, and it would increase public safety by reducing recidivism
through increased family communications. While such regulation would not necessarily affect prison
phone long-distance rates within a single state,[36] the highest prison phone rates currently apply to
interstate phone calls.[37] Setting price caps for interstate prison long-distance rates would bring
rates more in line with rates in the non-prison market while still enabling prison phone companies to
earn profits.[38] In sum, federal regulation of this market is imperative.

7. Summary & Recommendations
State-sanctioned monopolies for prison telephone companies encourage exorbitant phone rates for
incarcerated persons and their families. High prison phone rates — effectively regressive taxes —
reduce communication between incarcerated persons and their families. Criminological research
undeniably demonstrates that increased communication with family during incarceration reduces the
risk that incarcerated persons will re-offend after their release. But neither prison phone corporations
nor state prison systems have a strong incentive to lower rates. As a result, incarcerated persons,
their families, and the public at large suffer while a few select corporations reap the profits.
Government regulation of this predatory
industry is the best solution. The Federal
Communications Commission should set price
caps on prison phone rates by approving the

Government regulation of this
predatory industry is the best
solution.

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

7 of 10

http://www.prisonpolicy.org/phones/report.html

Wright Petition. State governments should refuse to engage in the collusive and pernicious practice
of accepting kickbacks from prison phone revenue. And the public should exercise its political
power to ensure that justice is brought to the prison phone industry by participating in the relentless
advocacy campaigns for this issue, such as those organized by Citizens United for the Rehabilitation
of Errants (CURE), the Center for Media Justice, Thousand Kites, and the Prison Phone Justice
Campaign.

Acknowledgements
I thank Barbara Fair, Alex Friedman, Stephen Healy, Kelsey Kauffman, Taren StinebricknerKauffman, Nick Szuberla, and Paul Wright for sharing their expertise on fighting the monopolistic
prison telephone industry with me, and I thank Leah Sakala and Peter Wagner for their assistance
developing and distributing this report.

About the author
Drew Kukorowski has an M.A. in Philosophy from Tufts University and a J.D. degree from the
University of North Carolina School of Law. He is currently a research associate at the Prison Policy
Initiative.

About the Prison Policy Initiative
The non-profit, non-partisan Prison Policy Initiative was founded in 2001 to demonstrate how the
American system of incarceration negatively impacts everyone, not just the incarcerated. The
Easthampton, Massachusetts based organization is most famous for its work documenting how mass
incarceration skews our democracy. Other projects have included a groundbreaking report about
sentencing enhancement zones, and online resources giving activists, journalists and policymakers
the tools they need to participate in setting effective criminal justice policy.

Endnotes
[1] Paul R. Zimmerman & Susan M.V. Flaherty, Location Monopolies and Prison Phone Rates, 47
QUARTERLY REVIEW OF ECONOMICS AND FINANCE 261, 262 (2007). Specifically,
Zimmerman & Flaherty identify prison telephone companies as having ‘location monopolies,’ i.e.,
the telephone service provider is the exclusive provider for all of the prisons in a state.
[2] See John E. Dannenberg, Nationwide PLN Survey Examines Prison Phone Contracts, Kickbacks,
22 PRISON LEGAL NEWS 1, 4-5 (2011); see also Steven J. Jackson, Ex-Communication:
Competition and Collusion in the U.S. Prison Telephone Industry, 22 CRITICAL STUDIES IN
MEDIA COMMUNICATION 263, 269 (2005). Dannenberg’s article is a tour de force that is
required reading for this issue.
[3] See Jackson, supra note 2, at 269.
[4] Roughly, demand for a specific product is inelastic when changes in the product’s price do not
have a corresponding effect on the demand for that good.
[5] See Zimmerman & Flaherty, supra note 1, at 262 (arguing that mail and email are not close
substitutes of telephone communication because of the high rate of illiteracy among incarcerated
persons).

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

8 of 10

http://www.prisonpolicy.org/phones/report.html

[6] See Nancy G. La Vigne, Rebecca L. Naser, Lisa E. Brooks, & Jennifer L. Castro, Examining the
Effect of Incarceration and In-Prison Family Contact on Prisoners’ Family Relationships, 21
JOURNAL OF CONTEMPORARY CRIMINAL JUSTICE 314, 316 (2005).
[7] There is also significant action by states to consider new ways to reduce recidivism. See
CHRISTIAN HENRICHSON & RUTH DELANEY, VERA INSTITUTE OF JUSTICE, THE
PRICE OF PRISONS: WHAT INCARCERATION COSTS TAXPAYERS 12 (2012) (noting that
several states have increased efforts to reduce recidivism through improved reentry programs),
available at http://www.vera.org/download?file=3542
/Price%2520of%2520Prisons_updated%2520version_072512.pdf (last visited Sept. 5, 2012).
[8] REPUBLICAN PARTY PLATFORM 38 (2012), available at http://www.gop.com/wp-content
/uploads/2012/08/2012GOPPlatform.pdf (last visited Sept. 4, 2012).
[9] DEMOCRATIC NATIONAL PLATFORM (2012), available at http://assets.dstatic.org
/dnc-platform/2012-National-Platform.pdf (last visited Sept. 7, 2012).
[10] See ELIZABETH GREENBERG, ERIC DUNLEAVY, MARK KUTNER, & SHEIDA WHITE,
U.S. DEPT. OF EDUCATION, NATIONAL CENTER FOR EDUCATION STATISTICS,
LITERACY BEHIND BARS: RESULTS FROM THE 2003 NATIONAL ASSESSMENT OF
ADULT LITERACY PRISON SURVEY 29 (2007), available at http://nces.ed.gov/pubs2007
/2007473.pdf (last visited Sept. 5, 2012).
[11] See generally BRUCE WESTERN, PUNISHMENT AND INEQUALITY IN AMERICA
85-107 (2006) (Ch.4).
[12] See La Vigne et al., supra note 6, at 323 (2005).
[13] Note that this data only reflects state prison contracts, not local jail contracts or contracts with
private prisons. Thus, it is likely that these companies control phone service for even more
incarcerated persons. Percentage was calculated by consulting Dannenberg (2011) and U.S. DEPT.
OF JUSTICE, BUREAU OF JUSTICE STATISTICS, PRISONERS IN 2010 14 (2012), available at
http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=2230 (last visited Sept. 5, 2012).
[14] See Dannenberg, supra note 2, at 16, and Global Tel*Link website, available at
http://www.gtl.net/ (noting that Global Tel*Link owns the contracts for Conversant Technologies,
Value-Added Communications, Public Communications Services, and Inmate Telephone Inc.) (last
visited Sept. 10, 2012).
[15] See note 13, supra.
[16] In Mississippi, for example, someone behind bars in the state Department of Corrections pays
$14.55 for a 15-minute phone call. See U.S. GOVERNMENT ACCOUNTABILITY OFFICE,
IMPROVED EVALUATIONS AND INCREASED COORDINATION COULD IMPROVE CELL
PHONE DETECTION 14 (2011), available at http://www.gao.gov/assets/330/322805.pdf (last
visited Sept. 5, 2012). In Georgia, that price rises to more than $17. See GEORGIA DEPARTMENT
OF CORRECTIONS, INMATE TELEPHONE SYSTEM: GLOBAL TEL LINK CUSTOMER
USER GUIDE 4, available at http://www.dcor.state.ga.us/pdf/GDC_GTL_user_manual.pdf (last
visited on Sept. 3, 2012).

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

9 of 10

http://www.prisonpolicy.org/phones/report.html

[17] See Dannenberg, supra note 2, at 16.
[18] See id. at 2.
[19] See Zimmerman & Flaherty, supra note 1, at 263.
[20] N.Y. CORR. LAW S 623.
[21] See Zimmerman & Flaherty, supra note 1, at 263; see also Justin Carver, An Efficiency Analysis
of Contracts for the Provision of Telephone Services to Prisons, 54 FED. COMM. L.J. 391, 400
(2002).
[22] See U.S. GAO, supra note 16, at 15.
[23] See La Vigne et al., supra note 6, at 316; see also Rebecca L. Naser & Christy A. Visher,
Family Members’ Experiences with Incarceration and Reentry, 7 WESTERN CRIMINOLOGY
REVIEW 20, 21 (2006) (noting that “a remarkably consistent association has been found between
family contact during incarceration and lower recidivism rates”).
[24] 28 C.F.R. S 540.100(a).
[25] 42 U.S.C. S 17501(b)(6).
[26] AMERICAN CORRECTIONAL ASSOCIATION, PUBLIC CORRECTIONAL POLICIES,
PUBLIC CORRECTIONAL POLICY ON ADULT/JUVENILE OFFENDER ACCESS TO
TELEPHONES 2001-1 (amended 2011), available at https://www.aca.org/government
/policyresolution/PDFs/Public_Correctional_Policies.pdf (last visited Sept. 8, 2012). This Policy
Statement was unanimously adopted in 2001, and was amended and endorsed in 2006 and 2011.
[27] See La Vigne et al., supra note 6, at 328.
[28] LAUREN E. GLAZE & LAURA M. MARUSCHAK, BUREAU OF JUSTICE STATISTICS,
PARENTS IN PRISON AND THEIR MINOR CHILDREN 1 (2008; revised 2010), available at
http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=823 (last visited Sept. 6, 2012).
[29] See Carver, supra note 21, at 400 (2002).
[30] See, e.g., TODD W. BURKE & STEPHEN S. OWEN, FBI LAW ENFORCEMENT
BULLETIN, CELL PHONES AS PRISON CONTRABAND (2010), available at
http://www.fbi.gov/stats-services/publications/law-enforcement-bulletin/july-2010/cell-phonesas-prison-contraband (last visited Sept. 6, 2012). This FBI bulletin also acknowledges that part of
correctional administrators’ objection to cell phones lies in the fact that cell phone use reduces
revenue from prison-approved phones. See also DAVID R. SHAW, CALIFORNIA OFFICE OF
THE INSPECTOR GENERAL, SPECIAL REPORT: INMATE CELL PHONE USE ENDANGERS
PRISON SECURITY AND PUBLIC SAFETY 6 (2009) (noting that a correctional officer in the
California prison system earned $150,000 in a single year smuggling cell phones).
[31] Cell Phone Contraband Act of 2010, Pub. L. No. 111-225, 124 Stat. 2387 (2010).
[32] Tom McNichol, TIME MAGAZINE, Prison Cell Phone Use a Growing Problem, available at
http://www.time.com/time/nation/article/0,8599,1900859,00.html (May 26, 2009) (last visited Sept.

9/26/2012 4:41 PM

The price to call home: state-sanctioned monopolization in the prison ph...

10 of 10

http://www.prisonpolicy.org/phones/report.html

3, 2012).
[33] 47 C.F.R. S 64.710.
[34] Federal Communications Commission, Implementation of Pay Telephone Reclassification and
Compensation Provisions of Telecommunications Act of 1996. Petitioners’ Alternative Rulemaking
Proposal, CC Docket No. 96-128 (Feb. 28, 2007). Given that this request was submitted in 2007, and
the low long-distance rates that prevail today, the requested rates would already seem too high.
[35] 47 U.S.C. S 151.
[36] FCC jurisdiction only extends to interstate telecommunications.
[37] See Dannenberg, supra note 2, at 16.
[38] See Zimmerman & Flaherty, supra note 1, at 277.
[39] David Carey, THE DEAL PIPELINE, American Securities Buys Global Tel*Link from Veritas,
(Oct. 31, 2011), http://www.thedeal.com/content/private-equity/american-securities-buys-globaltellink-from-veritas.php (last visited Sept. 10, 2012); American Securities, http://www.americansecurities.com (last visited Sept. 5, 2012).

9/26/2012 4:41 PM

News media Information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
TTY 202/418-2555
Internet: http://www.fcc.gov
ftp.fcc.gov

NEWS

Federal Communications Commission
445 12th Street, S.W.
Washington, D. C. 20554
This is an unofficial announcement of Commission action. Release of the full text of a Commission order
constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

FOR IMMEDIATE RELEASE
September 24, 2012

NEWS MEDIA CONTACT:
Angie Kronenberg (202) 418-2100

STATEMENT OF FCC COMMISSIONER MIGNON L. CLYBURN
ON MEETING PETITIONERS MARTHA WRIGHT AND ULANDIS FORTE AND
SCREENING THE AWARD-WINNING FILM MIDDLE OF NOWHERE
“This journey began in Washington, D.C. twenty years ago when Martha Wright’s
grandson, Ulandis Forte, was convicted, sent to prison in Lorton, Virginia and was subsequently
transferred to several out of state prisons, including Arizona, New Mexico, Ohio, and
Pennsylvania. Due to poor health and financial limitations, Mrs. Wright, who resides in D.C.,
could not easily visit her grandson. Written correspondence would also prove difficult because
she is blind. Like many of us, this family relied on the telephone to stay connected. But they
would soon be forced to terms with one of the stark realities of incarceration: prison payphone
rates. Their story is shared by many families every day as approximately two million Americans
are currently incarcerated.
The cost of calling from prisons is over and above the basic monthly phone service
families of prisoners already pay, and in many cases families will spend significantly more for
receiving calls from prison. Typically, a connection fee is charged for a prison payphone call,
along with per minute fees. While prices vary by state and prison, the connection fee is usually
$3 to $4 dollars, and the per-minute fee for interstate long distance service can be as high as $.89
per minute. For example, one fifteen-minute interstate phone call from prisons in two different
states—one in the East and one in the West—costs about $17. For those families, they will
spend an additional $34 over and above their basic monthly phone rate to speak twice a month
for a total of 30 minutes. Many cannot afford this. In fact, neither Mrs. Wright nor Mr. Forte
had the financial means to talk on the phone for very long and they kept their conversations as
short as possible—to five minutes or less. Over ten years ago, they joined with others to file a
lawsuit, which led to petitioning this Commission to request lower payphone rates in prisons.
An award-winning film, Middle of Nowhere, beautifully portrays the compelling story of
a young family separated by long distance due to incarceration. It captures the struggles families
face when their loved ones are serving their sentences hundreds of miles from home. Staying
connected is challenging. Traveling for in-person visits is time-consuming and often expensive,
and such hardships are most acute for low-income families who struggle just to make ends meet.
So access to low-cost phone service options should be part of the answer to this family divide.
Connecting husbands to wives, parents to children, and grandparents to grandchildren should be
a national priority because these tangible means of communicating not only will help these
families keep in contact, but the general society benefits overall, as studies show that prisoners
are less likely to reoffend if they are able to maintain these relationships with their loved ones.
I am uplifted that both political parties during their respective conventions this summer
reiterated their commitments to policies that will reduce the recidivism rate in our nation, and I

am further energized in that this agency also has a role to play in doing just that. It is the
Commission’s responsibility to ensure that interstate phone rates are just and reasonable, and we
have an obligation to ensure that basic, affordable phone service is available to all Americans,
including low-income consumers. Incarcerated individuals and their loved ones should not be
the exceptions here, and as watchdogs of the public interest, this Commission must and should
act expeditiously. I am pleased that the Chairman has been receptive to the Wright Petitioners,
and my discussions with him and his office have been very positive about the next steps needed
to move forward in this proceeding. It is my hope that soon the Chairman will propose a
rulemaking for a vote by the full Commission that will lead to lower interstate long distance rates
for incarcerated individuals and their families. I look forward to working with my colleagues to
ensure that we do the right thing by answering the Wright Petition.
The good news here is that the familial bond between Mrs. Wright and her grandson was
not broken by exorbitant prison payphone rates. Mr. Forte has paid his debt to society, was
recently released from prison, and they are now reunited. But what this family has not done is
stop fighting for all of the others who remain desperate to hear the voices of their incarcerated
loved ones on a regular basis. They know what it’s like when you can’t afford to make even a
short call, let alone the more important ones containing the missing news that all families want to
share—such as hearing your child’s first words or describing their first academic highlight or
great sports feat. And let us not minimize the power behind simply hearing and expressing those
three words, ‘I love you.’ That is what Mrs. Wright and Mr. Forte are fighting for, and I am
proud to stand with them.”
- FCC -

2

BEFORE THE NEW MEXICO PUBLIC REGULATION COMMISSION
Resolution No. 12-0925

REQUESTING THE FCC ACT ON THE "WRIGHT I)ETITION" TO PROTECT
CONSUMERS OF INMATE TELEPHONE SERVICES

WHEREAS security requirements present in jails, prisons, and other detention

and correctional facilities require these facilities to obtain specialized telephone facilities
to enable monitoring of inmate telephone calls;

WHEREAS inmate telephone system service contracts generally include

provisions for local exchange carrier and inter-exchange carrier services to enable the
completion of telephone calls originating with inmates in a facility;

WHEREAS the purchasing and contracting decisions for inmate telephone

systems are made by the operators of the detention and correctional facilities;

WHEREAS the financial interests of the consumers of the telephone services are

often left out of the equation when considering inmate telephone systems;

WHEREAS the terms of exclusive contracts between facilities and the

specialized telephone companies providing inmate phone services may result in high
rates per minute and excessive connection fees;

WHEREAS high connection fees can substantially raise costs to callers and

recipients beyond posted rates when calls are disconnected in progress, requiring multiple
connection fees to be paid to complete a single telephone call;

WHEREAS inmate telephone services have been characterized by the addition of

other fees and surcharges, such as fees to recharge pre-paid inmate calling cards or
accounts;
- - - ..•- . -......

Resolution No. 12·0925

Page 1

~

......-.

WHEREAS it has been shown that inmates with strong family and community

bonds are much less likely to re-oifend and end up back in the correctional system;

WHEREAS the inmates can be detained in a facility distant ii·om their home

communities, requiring long distance calls to maintain family and community ties;

WHEREAS unreasonable telephone fees and surcharge pose a real barrier to

fi·equent and adequate communications between inmates and their families, in many cases
forcing families to limit communication with an inmate due to high costs;

WHEREAS inmate telephone phone calls are a critical part of the reentry process

that allow incarcerated or detained individuals prepare for parole, coordinate legal
defense, find housing and secure employment;

WHEREAS eight states, including New Mexico, have banned pnson phone

commissions and as a result the cost of phone calls in those states have dropped;

WHEREAS, in 2001, the federal district judge hearing Wright v. Corrections

Corporation o/America, a case seeking judicial relief for consumers of inmate tclephone
services, acknowledged the civil rights issues plead, but dismissed the case citing the
primary jurisdiction of the Federal Communications Commission; and

WHEREAS the "Wright Petition" was filed with the FCC in 2003 seeking a

rulemaking on inmate telephone services, and in 2007 after no final action by the FCC,
petitioners submitted an alternate rulemaking petition seeking per-minute rate caps on
interstate long-distance services similar to what New Mexico and other states have
imposed on an intrastate basis,

Resolution No. 12·0925

Page 2

THEREFORE BE IT RESOLVED that the New Mexico Public Regulation
Commissioner urges the FCC to act on the "Wright Petition" (CC Docket No. 96-128)
and set standards to ensure that families of those who are either incarcerated or detained
in immigration proceedings are provided affordable options to remain connected.

ISSUE D under the seal of the Commission in Santa Fe, New Mexico, this 25 th
day of September, 2 12.

NEW MEXICO PUBLIC REGULATION COMMISSION

IfATRICK H. LYOS,CHAIRM,i

JASON A. MARKS, COMMISSI

Resolution No. 12-0925

Page 3

FCC CONSUMER ADVISORY COMMITTEE
Recommendation Regarding Affordable Phone Access for Incarcerated Individuals and
Families
Whereas telephones and phone calls are a vital part of our communications system;
Whereas, the prices for telephone calls from incarcerated individuals to their families,
friends, and professionals who serve them, may be unreasonably high and unaffordable; and
Whereas these excessive rates deter regular telephone contact, challenging a national goal of
the reduction of recidivism among inmates;
Whereas phone calls are a critical part of the reentry process as maintaining strong family
and community connections help inmates prepare for parole, coordinate their legal defense,
find housing and secure employment;
Whereas, most inmate calling arrangements require calls to be made as collect calls, which
are paid by the family and friends of the inmate, thus burdening those persons who are not
incarcerated; and
Whereas, the problem is national in scope and the FCC has failed to take action,
Therefore be it resolved that the FCC Consumer Advisory Committee urges the Federal
Communications Commission:
1. Ensure that the price of calls from inmates are reasonable
2. Restrict “commissions” paid by telephone companies to correctional institutions to a
reasonable amount above the actual cost of providing the service
3. Encourage the use of prepaid debit accounts for inmates whereby inmates or their
called parties may buy low-cost minutes, and
4. Continue to allow collect calls from inmates with charges that are a reasonable
amount above the actual cost of providing the call.
BE IT FURTHER RESOLVED, that as the only agency with jurisdiction over long distance
rates, the Federal Communications Commission is the correct venue to resolve this problem.
Adopted: September 21, 2012
Abstentions: Coleman Institute for cognitive Disabilities, CTIA the Wireless Association,
NCTA, Time Warner Cable, T-Mobile, Verizon
Respectfully Submitted:
Debra R. Berlyn, Chairperson
FCC Consumer Advisory Committee