by Alan Prendergast
In a news cycle dominated by reports of war, plague and insurrection, a single press announcement from Global Tel*Link (GTL) managed to convey some of the oddest news of all. Flash: The creators of the nation’s most beloved children’s television show are joining forces with GTL, the nation’s largest provider of phone services to carceral facilities.
Big Bird is headed for the Big House. Bert and Ernie are facing hard time. The prison-industrial complex has made its way to “Sesame Street.”
The press release ballyhooed a $750,000 grant made by GTL to Sesame Workshop, the nonprofit production company behind “Sesame Street,” to develop educational and coping materials for children dealing with parental incarceration. It’s estimated that more than five million children in the U.S. have had a parent behind bars at some point in their lives, and the new materials would “strengthen connections for the whole family”—comforting kids, supplying tips to caregivers on how to talk to children about incarceration, and offering resources to imprisoned parents that “will highlight the importance of communication.”
The irony of GTL’s new alliance was hard to miss. Incarcerated people already have a deep appreciation of the “importance of communication,” thanks to the many ways that companies like GTL have found to monetize their conversations with the outside world. The prison and jail telecom industry, dominated by GTL and Securus Technologies, rakes in an estimated $1.2 billion a year. It’s an industry built on exorbitant phone rates charged to the families of the incarcerated, who now pay anywhere from $2 to $25 for a 15-minute phone call with their loved ones, as well as stiff fees for messaging, voicemail and email services, money transfers, music subscriptions and other content for electronic tablets, and more. In response to the announcement, the snarky website Jezebel invoked a Harry Potter reference; partnering with GTL to help the children of incarcerated parents “is like teaming up with the Dursleys to provide support to orphans.”
Possibly as a result of negative media reactions and pressure from advocacy groups, the proposed collaboration was soon canceled. A spokesman for GTL says the company and Sesame Workshop “determined that it was best to individually pursue our objectives.” But the ill-fated partnership was only one piece of a far-flung public relations blitz launched by the prison telecom companies in recent months, one that seems designed to put a kinder, gentler face on an historically predatory industry. Securus has enlisted the aid of podcasters, rappers, and civil rights figures in what company leadership has described as “an aggressive, multi-year transformational agenda,” which includes a pledge to lower rates and “do a better job of listening and responding to our customers.” GTL has engaged in other outreach efforts and boasted of offering free calls and free educational programming while pushing campaigns focused on suicide prevention and job training. On January 4, 2022, GTL changed its name to ViaPath Technologies, a rebranding move that emphasizes the company’s expanding interest in “impactful engagement” and re-entry services as well as tablets and phones.
Beneath all that lofty rhetoric, though, critics of the prison telecoms see a beleaguered industry struggling to respond to setbacks on several fronts. In 2021 the Federal Communications Commission slashed the interstate calling rates for prisons and jails, capping the rates at $.12 per minute for prisons and $.14 per minute for jails with a daily population of 1,000 or more; smaller jails can still charge up to $.21 per minute. [See: PLN, Sept. 2021, p.12.] Media investigations, scathing attacks on the industry by prison reformers, reports of illegally monitored phone calls between prisoners and their attorneys, and class-action lawsuits have also nibbled away at the telecoms’ image, their business model and their profits. [The Human Rights Defense Center, which publishes PLN and Criminal Legal News, is counsel in a national class action lawsuit against ViaPath, Securus, and 3Cinteractive Corp., alleging price-fixing in violation of the Sherman Antitrust Act; see PLN, Feb. 2022, p. 21.] But the greatest threat of all may be the emerging movement to stop charging prisoners and their families inflated rates for phone calls—in fact, to stop charging them at all, shifting the cost to state and county budgets while driving down the rates overall.
In 2021 Connecticut became the first state in the nation to make prison calls free for incarcerated people and their families, saving them an estimated $12 million a year. Jails in New York City, San Francisco, and San Diego have stopped charging prisoners’ families for phone calls, and the U.S. Bureau of Prisons (BOP) adopted a similar policy system-wide in response to COVID-19 restrictions. Prison activists and grass-roots groups in several other states, including Maine, New York, Michigan, Wisconsin, Virginia, and California, are also pushing for an end to the high phone bills for prisoners’ families—all of which makes the telecoms’ interest in reinventing themselves more understandable.
When the Human Rights Defense Center launched the Prison Phone Justice Campaign in 2012 with the goal of reducing or eliminating the cost of prison calls it seemed like an impossible task. Since then, prison phone rates have decreased significantly from what they were and jail phone rates have also trended downward though not as dramatically. Regulators at the Federal Communications Commission and some state utility commissions and legislatures have also turned their attention to prison phone rates and begun to limit their costs. As a result, the prison telecoms, which are generally owned by hedge and equity funds, have sought to both diversify their revenue streams beyond phone calls and also expand their web of financial exploitation by seeking to monetize every single form of human communication prisoners can have with the outside world: video calls, text messages, email, digitizing letter mail, etc.
Cashing In on a Literally Captive Market
It wasn’t so long ago that the prison telecom business consisted of banks of well-worn pay phones, maintained by the Bell system or a smaller independent company, which prisoners used to place collect calls to loved ones, at rates fixed by a highly regulated industry. The picture began to change in the 1980s, with the breakup of the Bells and other de-regulation efforts, leading to the Telecommunications Act of 1996. The landmark legislation, the first major retooling of telecom law in more than half a century, was supposed to foster more competition and lower calling rates; but it also led to the emergence of a flurry of companies specializing in prison calling services, eager to cash in on a literally captive market.
The new providers faced few restrictions on the rates they could charge or the sort of fees, surcharges, and add-ons they could devise to further boost revenues. In many instances, they were encouraged in their price-gouging by state prison systems, which would award monopoly contracts in exchange for generous “site commissions” that would fatten their own operational budgets. For state prisons and larger jail operations, these kickbacks often amounted to millions of dollars a year in bonus funding; instead of seeking out the lowest rates available, sheriffs and Department of Corrections chiefs became increasingly focused on signing up the companies that promised the biggest commissions. Prisoners and their families, who were bearing the burden of the high rates, had many complaints about the ways the system ripped them off, especially after the telecoms began to eliminate the option of collect calls, forcing families to prepay for calls that might not go through. Users of the new phone systems reported being charged for “ring time” on calls that were never completed, being assessed “operator-assisted rates” on calls that offered no operator, and incurring additional surcharges for callbacks after encountering poor reception and cut-off calls.
As in any gold rush, the big bucks to be made in the emerging prison phone business initially attracted fierce competition, but the industry has since undergone waves of consolidation. The companies now known as Securus and ViaPath (GTL) have swallowed dozens of their rivals over the years. In 2013 GTL, Securus, and the upstart Telmate controlled an estimated 85 percent of the prison telecom market, based on revenue; GTL has since acquired Telmate. Formerly owned by Goldman Sachs and Veritas Capital, GTL was purchased by the New York private equity firm American Securities in 2011 for $1 billion. In 2017 another private equity firm, Platinum Equity, purchased Dallas-based Securus for $1.6 billion. Securus has long dominated the jail market and now claims to provide service to more than 1.2 million incarcerated individuals and 3,400 law enforcement and carceral agencies. GTL/Viapath rules the prison business, having contracts with 30 state prison systems (including eight of the ten largest), the BOP, the District of Columbia, and Puerto Rico—encompassing, all told, nearly 2,000 facilities across 640 counties.
Despite the relentless consolidation, the FCC was slow to respond to the major players’ pricing schemes. In 2013, nearly two decades after the Telecommunications Act, the agency set interstate rate caps at $.21 per minute for prepaid calls and $.25 for collect calls, but the ruling provided many loopholes for smaller operations. In addition, the FCC caps didn’t apply to in-state calls, which are regulated by the states; in many cases, those rates remained much higher than the new caps. Two years later, the FCC decided that a cap of $.11 per minute represented a fair price and reasonable compensation in most cases—a rate that was a tenth of what some prisoners were paying per minute at the time. (The 2015 interim rate caps were later nullified by a circuit court, leaving previous caps in place.)
Typically, when asked about reports of predatory charges for 15-minute phone calls, the telecoms have responded that the charge in question is from an outlier contract, is in the process of being renegotiated, and doesn’t reflect their prevailing rates. The industry average for a 15-minute call is currently around six dollars, but the actual prices can vary widely from one hoosegow to the next—even in the same state. For example, a 2019 report on “The State of Phone Justice” by the Prison Policy Initiative (PPI) found that the Illinois Department of Corrections had negotiated a phone call rate for its prisoners of less than a penny a minute, one of the cheapest phone rates available in any carceral setting. But in Illinois county jails, a 15-minute phone call cost an average of seven bucks, more than 50 times more.
The enormous disparity between prison and jail calling rates is particularly troubling, the PPI report notes, because the majority of people in county lockups are awaiting trial, not serving a sentence: “Charging pretrial defendants high prices for phone calls punishes people who are legally innocent, drives up costs for their appointed counsel, and makes it harder for them to contact family members and others who might help them post bail or build their defense.”
Outside of prisons and jails, no one in America is paying these rates to use the telephone. Flat rate calling has long been the norm in the phone industry that does not rely on exploiting prisoners yet prison telecoms tell the public, regulators and legislators that charging a dollar a minute, or more, for a phone call is somehow reasonable or just.
The FCC’s 2021 rate caps, while significantly lower than the 2013 rates, have been criticized for not going far enough to crack down on fees and kickbacks and for allowing smaller jails to continue to charge much steeper rates. But state regulators have made reductions in the cost of many in-state call rates, too, and the rate-setting process has provided a clear signal that the golden era of unfettered price-gouging for prisoner phone calls is coming to an end. The telecoms have responded by developing new revenue streams: electronic monitoring, video visitation, tablets, email and messaging services—and, of course, money-transfer services. In 2015 GTL snapped up the payment services company TouchPay, while Securus acquired JPay. Regarding the latter purchase, Securus’ CEO at the time, Rick Smith, noted that the deal “thrusts Securus into the fastest-growing segments in corrections: payments, email, and most recently, inmate tablets.”
The telecoms have promoted their new services as game-changers, a bold foray into innovative technology that can make it easier for prisoners to stay “connected” to the outside world than ever before. Instead, it is simply a new way to exploit poor people. The new technology comes at a hefty price. The fees for money transfers at most prisons and jails are much higher than those in the free world—on average, 19 percent for a $20 online transfer—significantly reducing the amount a prisoner might actually receive. [See: PLN, Mar. 2022, p.22.] In some cases, the video visitation vendors required that the facility do away with or sharply restrict in-person visits, a trend that was then exacerbated by pandemic restrictions. Fees associated with messaging and emails artificially hiked the costs of services that the rest of us take for granted as essentials of twenty-first century communication. Some prisons and jails demanded a high upfront price for the tablets or an ongoing rental fee; even when the tablets were handed out at no charge, the inflated costs for music, movies, magazines, books and games (as well as the lack of promised “educational content” that would aid re-entry programs) arguably made the new gear less of a game-changer than an expensive time-waster.
“The telecoms’ ideal tablet is a device that hooks into a non-prisoner’s bank account and drains it,” says PLN editor Paul Wright. “It’s a perpetual money machine.”
The new technology made it easier than ever to monitor prisoner communications with the outside world—and more tightly control their choices in e-books, music, and other materials by steering captive consumers to the limited selections found in a vendor’s catalogue. And then sharing the results of that monitoring with law enforcement agencies around the country, for a fee. Even more alarming, to some analysts, was the effect of the new systems on the fragile prisoner support network that is regarded as a key to lowering recidivism; studies suggested that, far from strengthening connections, the privatization of basic services such as phone calls discouraged prisoners and their families from staying in touch. A 2015 study by the Ella Baker Center for Human Rights found that the high cost of phone calls, visits, and other efforts to maintain contact with an incarcerated loved one drove one-third of the families of prisoners into debt. The most severe economic impacts were reported by women of color. Women in general, the report found, accounted for 87% of the people bearing the financial burden for phone and visitation costs.
The COVID-19 pandemic proved to be a windfall for the prison telecoms. With in-person visits suspended, call volume and the use of video visitation services surged, even as prison populations declined. Securus reported revenues of $767 million in 2020, a ten percent bump over 2019. An analysis of Securus financial data by Worth Rises concluded that the company’s valuation, which had been plummeting, “bounced back to as much as $1.5 billion, still not what Platinum Equity paid for it [in 2017], but much better than where it was pre-pandemic.”
The uptick was welcome news to the telecoms, but it has been accompanied by a panoply of controversies. Among the more notable developments:
In the spring of 2019, a contemplated acquisition by Platinum Equity of another prison telecom, ICSolutions, fell through after indications that the Department of Justice’s Antitrust Division would oppose it.
In 2020, Securus reached a $900,000 settlement in a class-action lawsuit that alleged the company had illegally recorded calls between prisoners and their attorneys at California prisons and jails. The settlement came shortly after Securus and GTL agreed to pay $3.7 million over the recording of prisoners and their attorneys at the U.S. Bureau of Prisons Leavenworth Detention Center. [See: PLN, Feb. 2022, p.36.]
Late in 2021, GTL agreed to revise company policies and pay up to $67 million to reimburse customers who’d had funds seized from prepaid accounts that remained inactive for 90 days—a practice that allegedly enriched the company by close to $100 million over a ten-year period. [See: PLN, Apr. 2022, p.32.]
Private equity firms aren’t known for being overly sensitive to shifts in popular opinion. But in recent years, as lawmakers, regulators, journalists and activist groups have become more inquisitive about the role of the private sector in mass incarceration, the telecoms have come under increasing scrutiny. The spotlight has been particularly warm for Tom Gores, the billionaire owner of the Detroit Pistons basketball team. Since Gores’ Platinum Equity firm bought Securus five years ago, he’s been pressured by various groups within the NBA and outside the league to overhaul the company or sell it. In 2020, after artists’ protests over his involvement in Securus, Gores resigned from the board of trustees of the Los Angeles County Museum of Art while pledging to do more to cut call rates and help the formerly incarcerated.
In recent months Securus has boasted of its lower rates and its “commitment to positive change.” Tylek of Worth Rises says the lower rates are “still remarkably predatory” and expresses disappointment in Gores, who has yet to deliver on a vow to reinvest profits in improving Securus; instead, Platinum Equity has extracted millions in management fees from the company while promising to make Securus operations more transparent and accountable.
Securus now appears to be pursuing community outreach initiatives of varying scope and gravity. “They seem desperate to shed their well-earned image and reputation as a sleazy, exploitive, money grubbing, blood sucking leach of a company,” said Paul Wright, PLN editor.
Last year the company launched an “Original Hip-Hop Track Contest,” open to incarcerated individuals in “select” state prisons. Contestants were invited to write lyrics to one of three beats provided by record producer Zaytoven; the winning entry would be selected by Grammy-winning rapper Lecrae, then be produced on-site and distributed “free to all incarcerated individuals who have access to music services” offered by Securus. Any revenue generated on Spotify or other streaming services by the winning track would be donated to a rehabilitation-oriented charity, making the campaign one more example of the company’s “investment in the incarcerated community.” Taking prisoner content that isn’t theirs and monetizing it to burnish their soiled image seems to be a continuation of a decades old business model they have perfected.
Securus also announced that Yusef Jackson, son of civil-rights icon Rev. Jesse Jackson, had joined the company as a senior advisor and would “play a vital role” in reform efforts. It has not been disclosed how much Yusuf is being paid for his services. [Editor’s Note: Yusuf joins Thurgood Marshall Jr. who has long sat on the board of CoreCivic, as children of civil rights leaders who now feed at the trough of privatized mass incarceration profiteering.] That acquisition was followed by a deal with Andre Norman, former prisoner turned motivational speaker and self-help author, to produce a podcast available for free to prisoners on Securus tablets. With Jackson’s assistance, the company recently unveiled an independent advisory board that includes Norman, former Colorado and Wisconsin prison chief Rick Raemisch, former FCC official Jeff Carlisle, former IBM vice president Johnny Barnes, and former General Electric vice chairman Lloyd Trotter. The group also features several “formerly justice-involved individuals,” including its chairperson, Teresa Hodge, who once served 70 months for mail fraud and now operates a nonprofit that helps ex-prisoners get access to capital for business startups. The group is expected to report to Dave Abel, CEO of Aventiv, Securus’ parent company, and to “work cross-functionally with other members of the company’s management team on its sweeping transformation into a modern technology business providing education, re-entry and rehabilitations [sic] services in addition to communications.” Securus has not disclosed how much it is paying its newfound independent advisory board.
GTL, too, has been working to diversify its base of support. The company has entered into a partnership with Prison Fellowship to produce prisoner educational materials, to be distributed on GTL tablets; the collaboration also involves working with a “network of community partners” to offer job opportunities for the formerly incarcerated. In recent months the company has announced similar alliances with mental health, substance abuse treatment, and job training providers, as well as “Inmates to Entrepreneurs” founder Brian Hamilton, with much of the new tablet content provided at no cost to the users.
Along with its new name, ViaPath, GTL has a relatively new face at the helm: CEO Deb Alderson, who joined GTL in 2018 after working in the defense industry and is described in company literature as having a “deep-seated passion” for re-entry programs because of her “personal experience with an incarcerated family member.”
In an interview with PLN, Alderson explained that she has a nephew who was formerly incarcerated on drug charges. She put money on his books and learned of the challenges prisoners at his prison faced in getting a crack at the wall phones, access to which was frequently controlled by gangs. She decided to interview for the top job at GTL and became convinced that better technology could make it easier and safer for prisoners to communicate with their loved ones. “I saw an opportunity to change the mission to be more socially responsible and impactful,” she said. When she arrived at GTL, the company “was much more focused on operational metrics, not really the importance of serving the underserved. No one was reaching out to the families and friends [of the incarcerated] to find out how they could do a better job.”
Alderson ticked off what she considers her top accomplishments at GTL. She “started driving rates down the day I walked in the door.” She launched a blog and responds to phone calls and emails from families, trying to engage in more constructive dialogue with her customers. She’s pushed to increase the availability and usefulness of the company’s tablets, including adding content that’s free to the incarcerated, focused on re-integration and job training; by the end of 2022, ViaPath expects to be providing tablet access to more than 600,000 people. As she sees it, the recent name change signals that the company is headed in a very different direction than it once was.
“We’re walking the talk, and we’re empowering formerly incarcerated individuals,” she said. “We’re really a different company than the GTL of the past.”
Scrambling to Replace Losses in Core Business
Both Securus and GTL have loudly proclaimed a commitment to lower calling rates, to be phased in over years. In 2020 GTL went even further, rolling out a program that offers its customers a free weekly five-minute call or free messaging option. Originally a response to COVID-19, the free calls have become a permanent offering, Alderson said. The company claims to have given away over 100 million free calls and messages to date, a gesture of corporate largesse that is often cited to counter claims of predatory conduct. (Securus, by contrast, claimed to have given away 40 million free calls during the COVID-19 shutdowns.) But for a company that brags of having 1.3 million customers around the globe, logging 4.1 billion minutes in calls in 2020 alone, 100 million free calls over a period of two years isn’t going to break the bank; it works out to less than 15 minutes of free call time per prisoner per month.
The free calls may have bought GTL and Securus some good press, but freebies and lower rates have done little to pacify the industry’s critics, who continue to characterize the telecoms as predatory and toxic. Largely missing from the debate, though, has been the role that local jail administrators have played in driving up the costs. Weaning them from their dependency on kickbacks is a formidable challenge. Paul Wright notes that when the Prison Phone Justice Campaign was urging the FCC to reduce the cost of jail calls, the National Sheriffs Association was threatening to shut down all prisoner phones in their jails if their kickbacks were threatened or reduced. “Jailers are as addicted to their free kickback money as the worst heroin or crack addict is to their drug of choice,” says Wright.
Extricating incarcerated “customers” from inflated telecom contracts is no easy matter. Prison and jail officials not only have to find ways to replace or do without the revenue from site commissions, they also have to figure out, like a couch potato trying to cut corners on his cable bill, how to renegotiate a complicated package of costly bundled services—voice, video, money transfer services, and so on—that they’ve come to rely on as essential to the operation. Yet they may be prodded in that direction by their own state lawmakers, several of whom have expressed interest in following Connecticut’s lead and making calls entirely free to prisoners. The arguments for abandoning the price-gouging model tend to be couched not simply in high-minded moral terms (the current system of forcing the families of the incarcerated to pay for calls is unjust) but as practical and fiscal appeals, too (encouraging family contact will presumably lower recidivism rates and save money in the long run, especially since the facilities will now have an incentive to negotiate the lowest rates possible).
One problem is entrenched corruption. In addition to the legal kickbacks, it is known that telecom companies also give prison and jail officials criminal bribes in exchange for these monopoly contracts. In 2014 Chris Epps, then the commissioner of the Mississippi Department of Corrections was convicted of taking bribes from numerous vendors in exchange for lucrative contracts with the state prison system. Among the bribers was GTL which, in addition to paying kickbacks to the state, was also giving Epps $10,000 a month in cash bribes in exchange for the prison phone contract. In 2017 Epps was convicted and sentenced to 235 months in federal prison for taking the bribes. GTL for their part kept the phone contract and faced no criminal liability for providing the bribes.
The kickback model fundamentally undermines democracy because it gives prison and jail officials sources of free money with no legislative or other oversight and all too frequently that free money is simply stolen or otherwise abused.
Alderson thinks the industry’s critics tend to underestimate the costs involved in developing and maintaining a secure prison phone system. But she supports the movement to shift the cost of prison calls from families to government. “We’re totally in favor of free calling, but it still has to be funded by someone,” she said. “I just have to cover my costs.”
“Letting consumers choose who will provide their phone services in prison and jail and ending the current monopoly contract system would be the best way to lower prices and interject real competition to the prison phone market,” said Paul Wright. Prison phone calls are the biggest and most abject market failure of deregulation in the United States due to its monopoly nature and lack of competition and critically, one where the people deciding who provides the services not only are not the ones paying for the services, they are getting a kickback from the service provider.
Even as the free-call movement gnaws away at their core business, the telecoms are investing millions of dollars and developing new opportunities in re-entry services, educational curriculum, and related ventures—extending their reach, so to speak, in order to continue to achieve “impactful” (and profitable) engagement with their customer base well beyond prison walls. It’s a particularly creepy form of mission creep, without much reflection on the private sector’s expanding role in virtually all aspects of the carceral system, or whether re-entry should be considered a “business” at all.
In a rare interview with the Detroit Free Press last year, Tom Gores was asked if private equity companies like his should have so much control over communications between the incarcerated and their families. “Ultimately, I think this industry should be led probably not by private folks,” he said. “I think it probably should be—I’ll get killed for saying this—but the nonprofit business, honestly.”
But ViaPath’s Alderson believes the private sector will continue to play a vital role. “We run this like a business,” she said. “Because of that, I can manage the capital that’s needed to deploy these tablets. A nonprofit can do the same thing. But the fact that I have the tools we need to invest in technology is something that’s benefitting the incarcerated right now. I’m very proud of what we’re doing and the service to the mission.”
Sources: ARTNews, Crain’s Chicago Business, Detroit Free Press, Nation Inside, Prison Policy Initiative, Worth Rises
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