The report, based on several years of research that included submitting public records requests in all 50 states, found that prison phone companies routinely provide kickbacks – euphemistically known as “commissions” – to contracting government agencies, based on a percentage of the revenue earned from prisoners’ phone calls.
These kickbacks, which average 42% of gross revenue, generated over $152 million nationwide in 2007-2008. Since the vast majority of prisoners’ phone calls are paid by their families, either by accepting collect calls or by funding pre-paid or debit accounts, most of the kickback money comes from prisoners’ family members.
“This has been a major concern for prisoners’ families, who are unfairly exploited by telephone companies and the government agencies that receive kickbacks from those companies,” said PLN associate editor Alex Friedmann. “This is an issue of fundamental fairness.”
PLN found that 42 states accept kickback commissions from prison phone companies, which include Unisys, Securus and Global Tel*Link (partly owned by investment banking firm Goldman Sachs). In some cases the commissions exceed 60% of prison phone revenue.
According to the report, “prison phone companies don’t ‘compete’ in the usual sense. They don’t have to offer lower phone rates to match those of their competitors, as prison phone contracts typically are based on the highest commission paid, not the lowest phone rates. Free market com-petition is thus largely absent in the prison phone industry, at least from the perspective of the consumer – mainly prisoners’ families.”
The report notes that prison phone rates are arbitrary, with high rates in some states and lower rates in others, which “simply cannot be correlated to providing the same basic telephone service.” Prison phone rates fluctuate widely within the same state and among different states, even when the phone services are provided by the same company.
Colorado has the highest prison phone rate for local calls, at $2.75 + $.23/minute ($6.20 for a 15-minute local collect call). The highest intrastate phone rate is charged in Oregon, at $3.95 + $.69/ minute ($14.30 for a 15-minute collect call). Washington has the highest interstate rate: $4.95 + $.89/minute, or $18.30 for a 15-minute long distance collect call.
Eight states do not accept kickback commissions – Nebraska, New Mexico, New York, Rhode Island, Michigan, South Carolina, Missouri and California (as of 2011). New Hampshire, Kansas and Arkansas have reduced their kickback commissions, while Montana entered into a limited-commission contract in 2010.
Notably, PLN’s research provides “a before-and-after look at phone rates in several states that have banned, limited or reduced their kickback commissions.” When states forgo commissions, their phone rates drop significantly. For example, prison phone rates in New York dropped almost 69% when the state banned commission payments in 2008. In California, which finished phasing out prison phone kickbacks earlier this year, the rates declined by 61%. Prison phone rates decreased by 64.5% in Montana and 40% in Kansas after those states adopted lower commissions.
Thus, prison phone companies are able to offer lower rates but for having to pay kickbacks to the contracting government agencies. “This is gross profiteering at its worst,” noted PLN editor Paul Wright. “State officials are lining their pockets, to the tune of tens of millions of dollars, by fleecing prisoners’ families with exorbitant phone rates. Why? Simply because they can.”
The report notes that “there is a widely-known and researched correlation between prisoners who maintain contact with their families and those who are successful in staying out of prison after they are released,” which reduces recidivism. However, most states continue to accept kickbacks “at the expense of facilitating more affordable phone calls for prisoners and their families, and in spite of the societal benefits that would inure from lower phone rates.”
A rulemaking petition to regulate prison phone rates on the interstate level is pending before the FCC, but the FCC has taken no action on the petition since it was filed in 2003.
In conjunction with Thousand Kites, Prison Legal News has opened a phone line for members of the public to share their stories about excessive prison phone costs. The toll-free number, available 24/7, is877-518-0606. Recorded stories can be heard at www.prisonphonejustice.org.
Prison Legal News (PLN) is a project of the Human Rights Defense Center. HRDC, founded in 1990 and based in Brattleboro, Vermont, is a non-profit organization dedicated to protecting human rights in U.S. detention facilities. HRDC publishes PLN, a monthly magazine that includes reports, reviews and analysis of court rulings and news related to prisoners’ rights and criminal justice issues. PLN has almost 7,000 subscribers nationwide and operates a website (www.prisonlegalnews.org) that includes a comprehensive database of prison and jail-related articles, news reports, court rulings, verdicts, settlements and related documents.
For further information, please contact:
Paul Wright Alex Friedmann
Prison Legal News, Editor Prison Legal News, Associate Editor