Unlikely coalition targets prison phone call rates

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Decrying the "exorbitant rates" for telephone calls placed from most state prisons and correctional institutions, a broad coalition of civil-rights groups and conservative leaders called Friday on the Federal Communications Commission to examine the harm caused by interstate prison phone call rates.

Pressing the FCC to protect prisoners and their families from "predatory" fees is an unlikely coalition that includes progressive groups--the ACLU, NAACP, The Leadership Conference on Civil and Human Rights--and national conservative leaders, including American Values president Gary Bauer, the Rev. Lou Sheldon of the Traditional Values Coalition, and Galen Carey of the National Association of Evangelicals.

The coalition, among other consumer protections, seeks an FCC-imposed cap on interstate prison phone call rates. Today, a 15-minute collect call placed from a state correctional institution typically costs $10 to $17, the group wrote in its letter to FCC Chairman Julius Genachowski, a Democrat.

"We write to you as organizations and individuals that represent a wide variety of views on many issues, but that stand united on the need to reduce the exorbitant rates for telephone calls from prisons," they wrote. "Unreasonably high prison phone rates unjustly punish the families of people who are incarcerated, and contribute to rising recidivism rates by deterring regular telephone contact with family members and loved ones."

In their letter to Genachowski, the signatories urged the five-member FCC to act on the so-called Wright Petition that they said has languished before regulators since November 2003.  The petition seeks a 25-cent per minute cap for collect calls, and no connection fees, as well as a benchmark rate of 20 cents per minute for calls placed using a calling card.

The petition asks the FCC also to bar exclusive inmate calling service agreements and collect call-only restrictions at privately administered prisons, and to require facilities to permit multiple long distance carriers to interconnect with prison telephone systems.

Promulgating consumer protections from predatory phone rates for inmates and their families "is a critical opportunity for the Commission to exert its leadership," the letter argues.

The coalition and other critics argue that the unreasonable prison phone rates harming inmates' families result from most states' requirements that bids for prison telephone service also include an annual commission to the prison operator. Commissions, typically based on a share of phone revenues, are negotiated during the contracting process.

"The costs of the calls are passed on to prisoners' families in the form of higher telephone rates, while the prison reaps the benefit of the extra fees and commissions," the coalition's letter reads. "Thus, prisons have every incentive to choose bids that maximize fees and maximize telephone rates-a clear ‘moral hazard.'"

Six states--Michigan, Missouri, Nebraska, New York, Oklahoma and Rhode Island--forego commissions and pass the savings on in lower inmate phone rates. The other 44 states, in 2011, collectively raised $152 million in revenue for prisons from "predatory rates," said Wade Henderson, president of The Leadership Conference on Civil and Human Rights.

The issue of inmate phone tolls came before the FCC in 2001, after Judge Gladys Kessler of the U.S. District Court for the District of Columbia referred to commissioners a civil-rights lawsuit filed by Martha Wright and 19 other plaintiffs with relatives in state prison.

Filed in February 2000, the class action against Nashville, Tenn.-based private prison operator Corrections Corporation of America (NYSE: CXW) asked the U.S. district court to recoup damages to inmates and families and to nullify phone-service contracts entered into by CCA and several carriers, among other prayers.

After the FCC received the case, the commission issued a Notice of Proposed Rulemaking. That proceeding has been pending before the commission since December 2003, the coalition said.

"[W]e urge you to act quickly to address this problem by capping the charges that can be imposed for interstate prison phone calls," reads their letter to Genachowski.

The lawyer for Wright, who filed the petition and brought forth the underlying litigation, said he's hopeful the FCC--now with its full complement of five commissioners and technology available to carriers--will act on the petition.  

"The plight of the families of inmates paying exorbitant telephone rates to remain in contact with their loved ones has languished at the FCC for more than 10 years," said Lee Petro, of counsel to the Telecommunications & Mass Media Team at Drinker Biddle & Reath LLP.

"With the resolution of other long-pending matters, the recent additions of two new Commissioners, and new technologies developed by the service providers that has decreased their costs of service, prompt action now will give relief to struggling families in these tough economic times," Petro added.

The Federal Bureau of Prisons, which charges significantly lower calling rates that states' facilities, uses its revenue commissions to help bankroll inmate programs and recreation.

In fiscal year 2010, federal prison system charged 6 cents per minute for local calls and 23 cents per minute for long-distance calls. That year, the inmate telephone system generated approximately $74 million in revenue, cost roughly $39 million to operate, and showed a profit of some $34 million, according to a September 2011 Government Accountability Office report (GAO-11-893).

Securus Technologies Inc., which offers communications solutions for the corrections industry, met with FCC officials May 7 and May 17 to discuss, among other regulatory matters, prison calling rates.

A bevy of factors cause inmate-generated collect calls to be more costly than traditional operator-assisted calls, the Dallas-based company told Michael Steffen, legal advisor to Genachowski; Deena Shetler, associate bureau chief of the Wireline Competition Bureau; and Nicholas Alexander, deputy division chief of the WCB Pricing Policy Division.

Particular to prison calls, they said, are costs of bad debt, research and development and site commissions, Securus counsel Stephanie Joyce recounted in an FCC filing.

"Securus explained that site commissions are the product of a public policy decision made by correctional authorities, and in some cases state legislatures, to fund prison operations and inmate welfare funds through the inmate telecommunications system," Joyce, a partner in the telecommunications practice group at Arent Fox, wrote.

In October 1999, the FCC began requiring carriers to disclose the rates consumers will actually pay for phone calls received from prisoners. The rule--Operator Services for Prison Inmate Phones-is codified at 47 C.F.R. § 67.710.

The FCC petition matter is Docket No. 96-128, Petitioner Martha Wright et al., Alternative Rulemaking Proposal.

For more:
- see the coalition letter
- the Securus filings are here and here