Getting Paid Off White Supremacy: The FCC Looks into the Prison Telephone Racket
/On November 21, the Federal Communications Commission published 28 pages of fine print that could overhaul the way prisons operate their calling plans. Until last year, prison phone systems — known within the industry as “inmate calling services,” or ICS — were “a dark little backwater of telecommunication that the FCC was not paying attention to,” says Peter Wagner of Prison Policy Initiative, an advocacy group.
With no regulation, telecom contractors in prisons and jails could charge whatever they wanted for a phone call and tack on fees without limit. In some states, a 15-minute phone call costs as much as $17. Inmates and their families spend $1.2 billion a year on phone calls.
That began to change in 2003, when Martha Wright, a grandmother from Washington, D.C. filed a class action lawsuit alleging that the phone company at the private prison where her grandson was incarcerated charged “exorbitant and unconscionable long-distance rates, which severely burden communication between inmates and their family members and counsel.”
“It’s been times when she did have to choose over paying for her medication in order to talk to me,” said her grandson Ulandis Forte, who ultimately served 18 years for assault before his release in 2012.
The courts ruled that the proper jurisdiction for Wright’s suit was the FCC and transferred it there as a petition, where it languished for a decade. Then in 2013, the FCC, in its own words, “took long overdue steps to provide relief to the millions of Americans paying unjust and unreasonable interstate inmate phone rates.” The most important of the preliminary rule changes that went into effect earlier this year was a rate cap on interstate calls. The FCC said companies could not charge more than 21 or 25 cents a minute, depending on the type of call.
But this ruling did not affect calls placed within a state, which account for many of calls the placed from inside prisons. Now the FCC is considering rate caps on intra-state calls, as well as other regulations and restrictions that would “ensure that ICS rates are just, reasonable, fair, and accessible to all Americans,” according to their proposed rule change.
Calling services from inside a facility are usually provided by a single contractor selected by the corrections department through a competitive bid. In bidding for these contracts, companies typically promise to pay a certain percentage of their profits back to the department. The average “site commission” is 48 percent, but it can be much higher: in a new Arizona contract, the telecom company CenturyLink agreed to pay a 94 percent commission rate, according to a Prison Legal News analysis.
These payments create “reverse competition,” the FCC says, in which the financial interests of corrections departments are aligned with the seller (the companies) rather than the consumer (the inmates). FCC calls these kickbacks “the main cause of the dysfunction of the ICS marketplace” because they drive up per-minute rates and cause companies to look for other ways to make money, like fees. These can include costs to deposit money in an inmate’s account; monthly account maintenance fees; fees to connect each call; and fees to have a balance refunded when the inmate leaves prison or transfers between facilities. [MORE]
