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Alternative Prisoner Phone Service Company Files Unsuccessful Suit

by David M. Reutter

A company that offers a lower-cost alternative to the monopolistic practices of the nation’s largest prison and jail telephone service providers filed a federal lawsuit alleging violation of the Federal Communications Act.

The suit was filed by Millicorp, a Florida-based company that offers alternative phone services to prisoners’ family members and loved ones through its subsidiary, Cons Call Home (CCH). Millicorp, a provider of interconnected voice over Internet protocol (VOIP), is registered with the Federal Communications Commission (FCC) to transmit voice communications over a broadband Internet connection rather than traditional land lines.

Millicorp sued Securus, T-Netix, Evercom and Global Tel*Link (GTL). The first three companies are under Securus’ corporate umbrella, and in combination with GTL the firms control 70 to 80% of the nation’s prison and jail phone services.

On average, Securus and GTL charge $3.95 per call for local set-up and service plus an average of $.90 per minute for long-distance calls. Through CCH, Millicorp provides a legitimate, secure and very popular technological alternative to the higher prices charged by Securus and GTL.

To offer lower-cost phone services, CCH provides its customers with a telephone number in the prison’s local calling area, which prevents Securus and GTL from charging long-distance fees. Under the guise of that arrangement being a security threat because it prevents prison officials from being able to verify the customer’s identity, Securus and GTL have been blocking, shutting off service or refusing to approve phone numbers issued by CCH on behalf of its customers – mainly prisoners’ family members.

CCH said that being shut-out by Securus and GTL not only resulted in lost customers and revenue, but the underlying alleged security concerns have no merit, according to Millicorp’s complaint.

Because CCH’s customers must still set up an account with Securus and GTL to pay for phone calls to the local numbers provided by CCH, they have the customers’ identification and address. Thus, while the call is shifted from the CCH-issued local phone number, security measures to verify the customer’s identity are still in place.

Moreover, prison officials have the ability to monitor all calls to CCH customers and regulate the recipients of those calls. Prison officials can also delay call approval until they verify that the number rings where the prisoner says it does. In sum, Millicorp argued that banning its lower-cost prison phone services was a pretextual excuse to justify charging exorbitant prices in a monopolistic market, which raised claims under §§ 201 and 202 of the Federal Communications Act (FCA) as well as Florida state law.

“This has everything to do with money,” said Brian Prins, president of an unrelated alternative prison phone service company. “It is simply about being a monopoly. Nor does [CCH or similar services] impinge on any legitimate security needs of corrections agencies.”

Unfortunately, however, the district court granted the defendants’ motion to dismiss on April 14, 2010. The court found that when Millicorp submitted a letter to the FCC complaining about the defendants’ practices and requesting intervention by that agency, it had opted to pursue administrative remedies that precluded litigation under § 207 of the FCA. The court also elected not to consider the company’s state law claims. See: Millicorp v. Global Tel*Link Corporation, U.S.D.C. (S.D. Fla.), Case No. 1:09-cv-23093-DLG. The complaint and ruling are posted on PLN’s website.

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