By Paul Barbagallo
The Federal Communications Commission proposed rules Dec. 28 [NPRM, FCC
12-167] that could result in lower phone rates for prisoners and their friends
and family members and expanded regulation of a roughly $1.2 billion market
dominated by just two companies.
Since 2003, civil rights groups, consumer advocates, and some members of
Congress, including House Energy and Commerce Committee ranking member Henry
Waxman (D-Calif.), have urged the FCC to act on two petitions by Washington,
D.C., resident Martha Wright--one seeking an FCC ban on all “exclusive” inmate
calling service agreements and collect call-only restrictions at privately
administered prisons, and the other proposing rate caps and a prohibition on
In deciding to issue a notice of proposed rulemaking now, the FCC said the
“wide disparity” in the rates charged across the country required further
Typical collect calls from prison require a $3.95 connection fee and can cost
nearly 90 cents per minute, though there are wide disparities. The FCC found
that the costs for a 15-minute interstate call were $6.65 in California, $6.45
in Texas, $2.04 in Montana, and $16.55 in Idaho.
“With seven hundred thousand individuals released every year from these
institutions, it is crucial that we do whatever we can to strengthen family ties
before these individuals return home,” FCC Commissioner Mignon Clyburn a member
of the agency's Democratic majority, said in a statement posted on the FCC's
website. “One sure way to realize this is through the provisioning of affordable
phone service. The overall costs of not doing so are too great, for those who
re-offend place a substantially higher economic burden on taxpayers than any
lost proceeds that would result from lower prison phone rates.”
Perhaps most important for advocates of the Wright petition, the FCC's
rulemaking notice seeks comment on whether the agency should now impose rate
caps as a way to encourage more regular contact between inmates and their
friends and family members.
The FCC, in the notice, suggested that the exclusive deals that prisons offer
to phone service providers in exchange for commissions create monopolistic
“Although barriers to entry are low for payphone providers in most locations,
a correctional facility typically grants an exclusive contract to a single ICS
[inmate calling services] provider for a particular facility, essentially
creating a monopoly at that facility,” the agency wrote. “As such, competition
exists for ICS contracts but once an ICS provider wins a contract it becomes the
sole ICS provider in that facility. Unlike non-incarcerated customers who have
access to alternative calling platforms on public payphones, inmates only have
access to payphones operated by a single provider for all available services at
that payphone. These contracts additionally often include a site commission or
location fee paid to the correctional facility.”
According to Standard & Poor's, Global Tel-Link Corp. and Securus
Technologies Inc. maintain 70 percent of the correctional phone services market
in the United States.
Ultimately, the commission's final rules will hinge on a determination of
whether the current rates are “just and reasonable” under Section 201(b) of the
The decision by the FCC to open the rulemaking won unanimous support.
Republican Commissioner Ajit Pai said he would be open to exploring possible
solutions to the problem.
“As a general matter, I believe that prices should be set by the free market
rather than by government fiat,” Pai said in a statement. “At the same time,
however, we must recognize that choice and competition are not hallmarks of life
behind bars. Inmates cannot choose among multiple carriers for lower rates.
Instead, prison administrators select the service provider, and their incentives
do not necessarily align with those who are incarcerated.”
Depending on the prison, inmates can make collect calls or set up prepaid
accounts funded by relatives or by their earnings from prison jobs that pay
cents per hour.
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