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HRDC comment to FCC re PLN cover story April 2011

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Dedicated to Protecting Human Rights

Please Reply to Tennessee Office:

Direct Dial: 615-495-6568
5331 Mt. View Rd. #130
Antioch, TN 37013

April 25, 2011

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
Office of the Secretary
445 12th Street S.W.
Washington, DC 20554

RE: Comment Regarding CC Docket No. 96-128 (“Wright Petition”)
Dear Ms. Dortch:
I am the associate editor of Prison Legal News (PLN), a nationally-distributed monthly
publication that reports on criminal justice and corrections-related issues, and a project of the
Human Rights Defense Center (HRDC). This letter and the attached document are submitted as
a formal comment relative to CC Docket No. 96-128.
CC Docket No. 96-128, referred to as the “Wright Petition,” requests that the FCC enact
rules to require competition among prison phone service providers by prohibiting such providers
from entering into exclusive service agreements with contracting government agencies, and that
the FCC impose caps on interstate prison phone rates. The FCC has the authority to implement
such rules pursuant to 47 U.S.C. § 201(b).
PLN has previously submitted formal comments regarding the Wright Petition, on April
18, 2007, May 14, 2007 and September 21, 2008.
Following a multi-year research project, in April 2011 PLN published a comprehensive
cover story on prison phone services nationwide, including a state-by-state comparison of prison
phone rates, commission (kickback) percentages, and commission payments from prison phone
contracts. This is the most detailed look at the prison phone industry to date.
Our research revealed that based on 2008 data, 42 states received commission revenue
from companies that provide prison phone services, amounting to $152.44 million nationwide;
that commission rates ranged from 18% to 66.1%, with an average rate of 42%; and that long
PLN is a project of the Human Rights Defense Center

Secretary Marlene H. Dortch
April 25, 2011
Page 2

distance (interstate) prison phone rates ranged from $.048/minute in New York (which banned
commission payments in 2008) to $4.95 + $.89/minute in Washington State ($18.30 for a 15minute long-distance collect call).
Our research further found that prison phone rates are non-uniform and largely arbitrary,
with high rates in some states and lower rates in others; that there is little or no competition in
the prison phone market from the perspective of the consumer, since contracts are awarded not
on the lowest phone rate but on the largest kickback commission; that the prison phone industry
is consolidated among a shrinking number of firms, which reduces what little competition exists
(one company, Global Tel*Link, provides prison phone services in over half the states); and that,
notably, when states reduce or forgo kickback commissions, the cost of prison phone rates drops
significantly (based on before-and-after comparisons in states that have reduced or banned commissions). That is, but for the commissions, prison phone rates would be much lower.
A copy of our April 2011 cover story with an accompanying chart that reflects state-bystate prison phone data is attached, and we are submitting this document for consideration by the
FCC relative to CC Docket No. 96-128.
We are in the process of putting all of the underlying research data that contributed to our
April 2011 cover story online, and would be glad to share such data with the FCC. Thank you for
your time and attention in this regard;


Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor

P R I S O N

Legal News
VOL. 22 No. 4
ISSN 1075-7678

Dedicated to Protecting Human Rights

April 2011

Nationwide PLN Survey Examines Prison Phone Contracts, Kickbacks
by John E. Dannenberg


n exhaustive analysis of prison phone
contracts nationwide has revealed
that with only limited exceptions, telephone service providers offer lucrative
kickbacks (politely termed “commissions”) to state contracting agencies
– amounting on average to 42% of gross
revenues from prisoners’ phone calls – in
order to obtain exclusive, monopolistic
contracts for prison phone services.
These contracts are priced not only
to unjustly enrich the telephone companies by charging much higher rates than
those paid by the general public, but are
further inflated to cover the commission
payments, which suck over $152 million
per year out of the pockets of prisoners’

I n s i de
Phone Rate Chart	




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Prison Legal News

families – who are the overwhelming recipients of prison phone calls. Averaging
a 42% kickback nationwide, this indicates
that the phone market in state prison systems is worth more than an estimated $362
million annually in gross revenue.
In a research task never before accomplished, Prison Legal News, using
public records laws, secured prison phone
contract information from all 50 states
(compiled in 2008-2009 and representing
data from 2007-2008). The initial survey
was conducted by PLN contributing writer Mike Rigby, with follow-up research by
PLN associate editor Alex Friedmann.
The phone contracts were reviewed
to determine the service provider; the
kickback percentage; the annual dollar
amount of the kickbacks; and the rates
charged for local calls, intrastate calls
(within a state based on calls from one Local Access and Transport Area to another,
known as interLATA), and interstate calls
(long distance between states). To simplify
this survey, only collect call and daytime
rates were analyzed.
Around 30 states allow discounted
debit and/or prepaid collect calls, which
provide lower prison phone rates (much
lower in some cases). However, since other
states don’t offer such options and not all
prisoners or their families have access to
debit or prepaid accounts, only collect
calls – which are available in all prison
systems except Iowa’s – were compared.
Also, while telephone companies sometimes provide reduced rates for evening
and nighttime calls, many prisoners don’t
have the luxury of scheduling phone calls
during those time periods.
Lastly, it should be noted that more


recent phone rates may now be in effect due
to new contract awards or renewals, and
while data was obtained from all 50 states,
it was not complete for each category. See
the chart accompanying this article for a
breakdown of the data obtained.
PLN has previously reported on the
egregious nature of exorbitant prison
phone rates, notably in our January 2007
cover story, “Ex-Communication: Competition and Collusion in the U.S. Prison
Telephone Industry,” by University of
Michigan professor Steven Jackson.

How Are Phone Rates Regulated?
Domestic phone calls are generally
divided into three categories: local, intrastate and interstate. The rates charged for
these calls depend on several factors and
are regulated by different authorities. Local calls are usually flat-rate within a small
area around the call’s originating location;
e.g., within the same city.
Local and intrastate calls are often
regulated by state public utility or service commissions, which set rate caps.
These caps are negotiated to allow phone
companies to recover capital costs in a
reasonable time frame while also satisfying
requirements levied by the state. The latter
include subsidizing low-income phone users, providing emergency communications
for state agencies, and providing required
phone coverage (such as emergencyreporting phone booths along major
highways). Obviously, some of these statemandated requirements are not in and of
themselves profitable, so negotiation of
rate structures includes recouping these
otherwise nonrecoverable costs.
At the interstate level, phone com-

April 2011

Rollin Wright
Paul Wright
Alex Friedmann
Michael Cohen, Kent Russell,
Mumia Abu Jamal
Mike Brodheim, Matthew Clarke,
John Dannenberg, Derek Gilna,
Gary Hunter, David Reutter,
Mike Rigby, Brandon Sample,
Jimmy Franks, Mark Wilson
research associate
Sam Rutherford
advertising director
Susan Schwartzkopf
Lansing Scott/
Catalytic Communications
HRDC General Counsel
Lance Weber

PLN is a Monthly Publication
A one year subscription is $24 for prisoners, $30 for individuals, and $80 for
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deductible. Send contributions to:

Prison Legal News
P.O. Box 2420
West Brattleboro, VT 05303
Please do not mail PLN paperwork for an
ongoing case or request legal advice. PLN
is not a legal service provider and cannot
give legal advice. PLN reports on legal
cases and news stories related to prisoner
rights and prison conditions of confinement. PLN welcomes all news clippings,
legal summaries and leads on people to
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Article submissions should be sent
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PLN is indexed by the Alternative Press
Index, Criminal Justice Periodicals Index
and the Department of Justice Index.

Prison Legal News

Prison Phone Contracts (cont.)
panies are also regulated by the Federal
Communications Commission (FCC).
The FCC oversees rate structures across
state lines, provides for an orderly integration of smaller telephone companies
into the national phone network, and is
responsible for implementing the Telecommunications Act of 1996.
These regulatory agencies are necessary to prevent one large company from
forming a monopoly and price gouging
the public with unreasonably high phone
rates. However, such monopolies are only
prohibited in the non-prison market.
Prison phone service providers are free
to bid on contracts at the maximum rates
allowed by regulatory agencies, and upon
winning such bids are effectively granted
a monopoly on phone services within a
given prison or jail system.

The Prison Phone Bidding Process
Prisons and jails present unique
cost factors to telephone service providers. Such factors include physically
secure phones (i.e., no readily removable
parts); extensive monitoring and recording capabilities, including the ability to
archive phone calls for later review by
investigators; and difficult access to the
prison-based equipment for servicing.
Some of these requirements, especially the monitoring, recording and archiving
aspects, are not unique to prisons and are
routinely provided to corporate America’s
call and customer service centers. Naturally, telephone companies should be allowed
to build into their charged rate structure
the recovery of capital and operating costs
for such expenses.
But that simple logic does not control
the cost of prison phone rates. What does
control the rates? Pure, unabated greed
by both the phone companies and the
contracting agencies (e.g., state prison
systems, county jails and private prison
The bidding process for prison phone
contracts typically begins with a request
for proposal (RFP) – a document that outlines the number of phones, locations and
technical performance standards required
by the contracting agency. The latter
include minimum “down time” specifications, frequency of servicing, estimated
usage, and (in most but not all cases) audit
provisions. From the RFP, telephone companies can determine their cost exposure


when making bids. But that is not what
guides their bid price or determines the
winning bidder in most cases.
With very few exceptions, prison
phone contracts contain kickback provisions whereby the service provider agrees
to pay “commissions” to the contracting
agency based on a percentage of the gross
revenue generated by prisoners’ phone
calls. These kickbacks are not insignificant. At more than $152 million per year
nationwide for state prison systems alone,
the commissions dwarf all other considerations and are a controlling factor when
awarding prison phone contracts.
For example, when Louisiana issued
an RFP for prison phone services in 2001,
it specified that “[t]he maximum points,
sixty (60) ... shall be awarded to the bidder who bids the highest percentage of
compensation ...,” and that “[t]he State
desires that the bidder’s compensation
percentages ... be as high as possible.”
When the Alaska Dept. of Corrections (DOC) issued an RFP in 2007,
bidders were rated on a point system with
60% of the evaluation points assigned
to cost. The RFP explicitly stated that
“[t]he cost proposal providing the largest
percentage of generated revenues ... to the
state will receive the maximum number
of points allocated to cost.” That is, the
most important evaluation criterion was
the commission rate.
Prison phone service kickbacks average
42% nationwide among states that accept
commissions, and in some cases reach 60%
or more. Put into simple terms, up to 60% of
what prisoners’ families pay to receive phone
calls from their incarcerated loved ones has
absolutely nothing to do with the cost of the
phone service provided. The kickbacks are
not controlled by state or federal regulatory
agencies, and the only limit on the maximum
rate for prison phone calls is the top rate
permitted by such agencies or by the phone
service contract itself.
It should come as no surprise, then,
that many prison phone contracts result
in very high rates, with enough profit left
over after recouping all of the phone company’s costs to permit up to 60% of the
gross revenue to be paid to the contracting agency. The kickback rates are listed
in the chart accompanying this article, as
are the dollar amounts of the commissions
received in 2007-2008.
Some prison officials have denied that
kickbacks influence their decision when
contracting for prison phone services.
“There are complaints due to the rates,”

April 2011

Prison Phone Contracts (cont.)
said Nevada DOC spokesman Greg Smith
in 2008, after the DOC entered into a new
phone contract with Embarq. “A lot of
families do complain that it’s expensive,
but it’s an intricate system, it’s not cheap....
We didn’t negotiate this [contract] to create more revenue for us.”
However, when responding to the
RFP for Nevada’s prison phone contract,
Embarq had presented three options:
base rates, lower rates and higher rates.
The lower rate option included a smaller
kickback (41.5%) and lower guaranteed
minimum commission ($1.36 million
per year). Instead, the Nevada DOC
selected the company’s higher rate option, which provided a 54.2% kickback
and guaranteed minimum annual commission payment of $2.4 million, even
though this resulted in higher local and
interstate phone rates for prisoners and
their families.
So despite protestations by prison
officials, sometimes they do in fact negotiate contracts specifically to create more
revenue. This was explicitly acknowledged
in an RFP for prison phone services in
Alabama. According to a March 13, 2007
memo from the state’s Department of Finance, the RFP “proposed to award what
amounts to an ‘exclusive franchise’ to the
successful bidder based on the highest
commission rate paid to the State on revenues received from users of the [prison]
pay phones.” It is likely no coincidence
that Alabama has one of the highest commission rates – 61.5%.

The History Behind Kickback
The prison phone service market remained an exclusive monopoly of AT&T
until 1984, when it was thrown wide open

with AT&T’s breakup under a settlement
in an antitrust action brought by the U.S.
Department of Justice. In 1989, MCI introduced its “Maximum Security” service,
part of a larger concerted push into the
government and institutional markets. By
1995 MCI held monopoly or near-monopoly contracts for prison phone services in
California, Ohio, Connecticut, Virginia,
Wisconsin, Missouri and Kentucky (MCI
merged with WorldCom in 1998).
Other companies had their own
“locked-in” contracts. The reorganized
AT&T Prisoner Services Division managed to hold on to prison phone contracts
in New Jersey, Pennsylvania, Michigan,
New Mexico, Mississippi and Washington, followed by phone companies GTE
(in Washington DC, Hawaii, Indiana
and parts of Michigan); Sprint (sharing
Michigan and also in Nevada); and US
West (in New Mexico, Idaho, Oregon,
South Dakota and Nebraska).
By the mid-1990s, this new competition had driven prison phone rates
– spurred by higher kickback commissions to win contracts – to new heights.
According to an American Correctional
Association (ACA) survey published
in 1995, nearly 90% of prison and jail
systems nationwide received a portion of
the profits derived from calls placed by
prisoners, ranging from 10-55% of gross
For states struggling to keep up with the
costs of exploding prison populations, these
kickback payments represented a welcome
and multi-million dollar source of income.
According to the 1995 ACA survey, based
on self-reports, Ohio was making $21 million a year in prison phone commissions
(more recently it took in only $14.5 million
based on PLN’s research), while New York
brought in $15 million, California $9 million
(more recently $19.5 million in 2007-2008),
Florida $8.2 million (more recently $3 mil-



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lion), and Michigan $7.5 million (more
recently $10.2 million before phasing out
kickbacks in August 2008).
According to the ACA, 32 state
prison systems plus 24 city and county
jails – a fraction of the national total –
reported phone commission payments in
1994 totaling over $100 million. The more
recent total was $152.44 million from 43
of the 44 states that received prison phone
revenue at the time of PLN’s survey (Arizona claimed it did not track commission
Since the survey, one additional state
no longer accepts prison phone kickbacks:
California. Thus, the nationwide total for
commission revenue has since decreased
by $19.5 million per year based on California’s 2007-2008 commission income
(the state’s kickback was phased out from
a flat $26 million prior to August 2007 to
$19.5 million in 2007-2008, $13 million in
2008-2009, $6.5 million in 2009-2010 and
zero in FY 2010-2011).
Notably, however, the kickback commission data reported by state prison
systems still vastly undervalues the
prison phone service market, as it does
not include jails, the federal prison system,
private prisons or immigration detention
By 2000, the commission rates for
prison phone contracts had soared to new
heights, with California at 44%, Georgia
46%, South Carolina 48%, Illinois, Ohio
and Pennsylvania at 50%, Indiana 53%,
Florida 57%, and a national high in New
York at 60% (reduced in 2001 to 57.5%).
Ten states were raking in $10 million or
more per year from prisoner calls, with
California, New York and the federal
Bureau of Prisons leading the way with
over $20 million each in annual kickbacks.
Such patterns were broadly if unevenly
replicated at the local level, with city and
county jails entering into similar commission-based phone contracts.
According to PLN’s research, as of
2008 more than half of the states that
reported their kickback percentage were
receiving commissions of at least 40%,
including thirteen that reaped 50% or
more. The Idaho DOC uses a commission
structure that includes a per-call kickback
ranging from $1.75 per collect call to $2.25
per debit call, which is “not affected by
... the length of call or whether the call
is local or long distance.” This flat percall commission translates to an effective
kickback rate of 10.5% to 66.1% based
on a 15-minute call. Several states have

Prison Legal News

increased their commission rates in recent
years, including Vermont and Wyoming.
The emphasis on kickback commissions correlates to a lack of competition in
the prison phone industry. If competition
truly existed, prison phone rates would
gravitate towards a relatively consistent
level as phone companies vie with competitors to obtain contracts. Businesses
in the non-prison market must be price
competitive, which benefits consumers.
But that hasn’t happened in the prison
phone market; the phone rates in the chart
accompanying this article are enormously
varied across the national map, with high
rates in some states and lower rates in
This is because 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
competition is thus largely absent in the
prison phone industry, at least from the
perspective of the consumer – mainly
prisoners’ families.
As stated in an efficiency analysis of
prison phone contracts published in the
Federal Communications Law Journal
in 2002, “In the prison context, the state
contracts with a private entity, and the
private entity provides services to the
prisoners and also to the state. ... Due to
the perverse financial incentives and the
political climate surrounding prisons and

Prison Legal News
Has Moved!
Effective immediately
please direct all
to PLN at:
Prison Legal News
P.O. Box 2420
West Brattleboro,
VT 05303
802 257-1342
Prison Legal News

prisoners, however, neither the state nor
the private entity acts in the best interests
of the consumers in particular or of society in general.”


The Arbitrary Nature of
Prison Phone Rates
Referring to the accompanying chart,
even a casual examination of prison
phone rates nationwide reveals a patchwork of charges that simply cannot be
correlated to providing the same basic
telephone service. In other words, the rates
are arbitrary.
Some local calls are flat rate (typically for 15 to 20 minutes); others have a
connection charge plus a per-minute fee.
Local collect calls range from as low as a
flat rate of $.50 in Florida, North Dakota
and South Carolina to $2.75 + $.23/minute in Colorado ($6.20 for a 15-minute
local collect call). Alaska is unique in that
prisoners can make local calls for free.
Intrastate rates vary from $.048/minute in New York to $3.95 + $.69/minute
in Oregon ($.72 versus $14.30 for a 15minute collect call, respectively).
Interstate rates are as reasonable as
New York’s $.048/minute with no connection fee, or Nebraska’s $.70 + $.05/minute,
but most crowd the high end of the scale
with a connection charge of $3.00 or more
plus per-minute rates up to $.89 – resulting
in $10 to $17 for a 15-minute collect call
(Washington has the highest interstate
rate). This is a far cry from the much
lower long distance rates paid by the non-

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April 2011

Prison Phone Contracts (cont.)
incarcerated public, which typically run
$.05 to $.10 per minute or simple flat rate
monthly fees for unlimited long distance
calling in the $50-80 a month range.
Only eleven states have local collect
call rates of under $1.00 per call, while
Nebraska’s interstate rate is one-twelfth
and New York’s interstate rate is one
twenty-fifth the cost of the highest-priced
phone charges for a 15-minute long distance collect call.
The irrationality of the rate structures
is further exemplified by Rhode Island’s
no-kickback commission low rates, which
are provided by Mobile, Alabama-based
Global Tel*Link (GTL) – the same firm that
has some of the highest rates in other states
where the company pays commissions.
Local collect calls made by prisoners in Arkansas cost $4.80 per 15-minute
call compared with $.70 in Rhode Island.
Further, the rate for interstate collect calls
from Arkansas prisons is $10.70 for 15
minutes, compared with $5.80 in Rhode
Island – even though the same company,
GTL, supplies phone services in both
It is readily apparent that the service
provided, i.e., prison-based phone calls, is
profitable for GTL even at the company’s
lowest rates; thus, the higher rates charged
in states where GTL pays commissions
amount to nothing more than price gouging and gross profiteering. Sadly, GTL’s
kickback-based business model is prevalent across the country, as more than half
the state prison systems now employ GTL

to provide phone services – either directly
or through other GTL-owned firms.
In addition to connect and per-minute
charges, some prison phone companies
price gouge in other ways. For example,
Value-Added Communications (VAC),
which provides phone services for New
York state prisoners, charges a $7.95
service fee when a prisoner’s family
adds funds to their phone account by
credit card (there is no fee for payments by
money order). Further, a $4.95 “monthly
inactivity fee” is charged for an account
with no call activity for over 180 days.
And if a prisoner’s family wants to close
the account? Unless the account has not
been used and is closed within 90 days
after it was created, a $4.95 fee is imposed
to cover “administrative” expenses.
GTL charges family members a $4.75
service fee for each $25.00 payment made
to a prepaid phone account via credit
card (i.e., a $9.50 surcharge for a $50.00
payment to a prepaid account – almost a
20% fee). There is a $5.00 charge to close
an account and withdraw the remaining
balance; also, if an account is not used
for 90 days, the balance is forfeited to
GTL. Another prison phone company,
Securus Technologies, charges a monthly
bill statement fee of up to $2.99 plus a
“processing fee” of up to $6.95 for credit
or debit card payments made online or
(ironically) by phone.
Such extra fees cost Securus at least
one contract. After Securus won a bid
to provide phone services for the New
Mexico DOC in April 2009, competitor
Public Communications Services (PCS)
challenged Securus’ bid because it did not

factor in the additional billing statement
and credit card fees, which inflated the actual cost of phone calls. The New Mexico
Dept. of Information Technology agreed.
“It’s in the best interest of the state to
cancel the contract and start over again,”
said spokeswoman Deborah Martinez,
noting that the bid information “was not
as clear as it should have been.”
Once companies win prison phone
contracts and are granted a monopoly on
phone services within a certain prison or
jail system, however, prisoners’ families
have no choice but to pay the phone rates
and fees if they want to accept calls from
their incarcerated loved ones – an extortionate form of price gouging. Do you
want to speak with your mother, father,
wife, husband or child who’s behind bars?
Then pay up – at rates up to two dozen
times higher than for non-prison calls.

Are All Prison Phone
Companies the Same?
Prison phone companies have included some well-known firms and some
that offer phone services solely in prisons
and jails. Widely known are AT&T and
Unisys, but the largest prison phone service provider is GTL. Other companies
include Securus (owned by H.I.G. Private
Equity), VAC, PCS, McLeod/Consolidated Communications, Embarq (a spin-off
from Sprint/Nextel that is now owned
by CenturyTel, Inc. d/b/a CenturyLink),
ICSolutions, FSH Communications, and
Pay-Tel (which mostly services jails in the
In recent years, many of the firms
providing prison and jail phone services

Crescent City, CA.)

April 2011


Prison Legal News

have been merged into larger companies.
FSH entered the prison phone market
after buying the payphone assets of Qwest
Communications Int’l, and recently sold
its prison phone business to VAC. Securus
Technologies, Inc. was formed in 2004
by the merger of T-Netix and Evercom
Systems – two of the major players in the
prison phone industry. On June 1, 2009,
Securus entered into a 5-year contract
renewal to provide phone services at 25
facilities operated by Corrections Corp.
of America. According to a Securus press
release, the contract was worth “over $19
million annually.”
GTL has been prominent in consolidating the market. For example, the
company took over AT&T’s National
Public Markets prison phone business
on June 2, 2005, and acquired MCI
WorldCom’s correctional phone services
division from Verizon in 2007. GTL also
purchased competitor DSI-ITI, LLC
in June 2010. GTL was itself acquired
by Veritas Capital and GS Direct, LLC
(owned by Goldman Sachs) in February
2009, but still does business as Global
A rational mind would conclude that
larger companies with more amortization

of overhead costs would provide lower
rates to be more competitive. But that
is not what happens. The largest firms
instead are able to offer larger kickbacks,
thus creating the very monopoly that competitive bidding was designed to prevent.
This is not to say that GTL, among other
prison phone service providers, does not
“compete.” When GTL is up against a
competitor for a contract where the contracting agency has imposed rate caps or
does not accept commissions, it will apparently bid lower rates to compensate.
Although all prison phone companies
provide the same basic service – secure
phone systems for prisons or jails with
monitoring, recording and other security
features – there are some differences.
One firm, PCS, stood out in terms of
providing low phone rates. In three states
that ban kickback commissions the winning contractor was PCS on the basis of
bidding lower rates for phone services.
Those states are Nebraska, Missouri and
New Mexico (while Missouri does not
accept commissions, it requires payments
to cover certain staffing costs).
In another state where kickbacks
are banned, Rhode Island, the winning
bidder was GTL. What, you ask, the

company known for high rates had the
lowest bid? Indeed, GTL charges Rhode
Island prisoners $.70 (flat rate) for local
and intrastate calls plus a thrifty $1.30 +
$.30/minute for interstate calls. Evidently,
absent the need to provide kickback payments, GTL was able to offer lower rates
and underbid its competitors.
GTL has since acquired PCS effective
November 10, 2010, thereby reducing its
competition for no-commission, lowerrate prison phone contracts.

Are All States the Same?
The short answer is “no.” Eight states
have banned prison phone kickbacks entirely: Nebraska, New Mexico, New York,
Rhode Island, Michigan, South Carolina,
California (as of 2011) and Missouri (Missouri requires its phone service provider
to cover the cost of 21 staff positions to
monitor prisoners’ calls). New Hampshire,
Kansas and Arkansas have reduced their
kickback commissions, and Montana recently entered into a limited-commission
contract. As a result, prison phone rates
in those states have plummeted.
Although not included in PLN’s stateby-state survey, the District of Columbia
prohibits any “surcharge, commission, or

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April 2011

Prison Phone Contracts (cont.)
other financial imposition” on prisoners’
phone calls beyond legally-established
phone rates, which are limited to “the
maximum rate determined by the Public
Service Commission of the District of Columbia.” D.C. Code Ann. § 24-263.01.
While phone companies’ costs associated with installing and maintaining
secure prison phone systems exceed those
of installing public telephones, this is
not reflected by the widely variant rates
charged in different jurisdictions.
For example, GTL charges only $.70
for a local collect call in commission-free
Rhode Island. But the company stiffs
prisoners’ families in Alabama with $2.75
for a local call and charges $4.80 for local
calls in Arkansas – no doubt due to GTL’s
61.5% and 45% kickbacks in those states,
respectively. This indicates that GTL can
provide lower rates absent the need to
pay hefty commissions to the contracting agency.
Securus provides up to a 32.1%
kickback in Alaska, but offers kickbacks
of up to 60% in Maryland. Yet Securus’
interstate rate in Maryland (with almost
double its Alaska kickback percentage) is
less than half the interstate rate in Alaska.
Securus partnered with Embarq to handle
phone services in Texas’ prison system at
$.26/minute for local and intrastate calls,
and $.43/minute for interstate calls – using a “bundled” rate that includes a 40%
kickback. [See: PLN, Feb. 2009, p.27; Nov.
2007, p.11]. Thus, for a 15-minute collect
interstate call, Securus charges $6.45 in
Texas prisons versus $7.50 in Maryland
and $17.30 in Alaska. Such disparities further demonstrate the arbitrary nature of
prison phone rates among the states, even
when provided by the same company.

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Maine is unique in that its Department of Corrections supplies phone
services for prisoners through the state’s
Office of Information Technology. That
does not mean Maine has forgone making
a profit off prisoners’ phone calls, though,
as the DOC receives an effective 22% commission from collect calls and the charged
rates are comparable with those in states
that accept commission payments.
In 2007 the Public Utilities Commission held the Maine DOC was a public
utility under state law since it was providing phone services, and ordered the DOC
to file its rate schedule with the Commission. However, the DOC appealed and
the Maine Supreme Court ruled on April
21, 2009 that the DOC was not a public
utility and thus not subject to regulation
by the Commission. See: DOC v. Public
Utilities Commission, 968 A.2d 1047
(Maine 2009).
Iowa has a system in which prison
phone services are provided through the
Iowa Communications Network (ICN),
a state agency, which in turn contracts
with PCS. The Iowa DOC only permits
debit calls, and instead of receiving a
percentage-based commission the DOC
keeps all of the revenue generated after
paying ICN and PCS for phone usage
charges. Prison phone rates in Iowa are
comparable to those in states that receive
In Oklahoma, a prison actually closed
in 2003 due to excessively high phone
rates. The North Fork Correctional Facility, located in Sayre and operated by
Corrections Corp. of America (CCA),
housed almost 1,000 Wisconsin prisoners.
Long distance calls from the facility were
$3.95 + $.89/minute, and Sayre received
a 25-42% commission that amounted to
$656,000 annually – nearly equal to the
city’s entire budget before the private
prison opened. When Wisconsin officials
pressured CCA and Sayre officials for
lower rates, AT&T, the prison’s phone
service provider, refused. Unable to renegotiate the rates under the city’s contract
with AT&T, Wisconsin transferred all its
prisoners to a different CCA facility. [See:
PLN, March 2004, p.14].
“We find it hard to believe that they
would shut down the prison over telephone
rates. We had no interest in shutting the
prison down,” said AT&T spokesman
Kerry Hibbs. But that is exactly what
happened, despite AT&T’s last-minute
cancellation of its contract with Sayre in an
effort to forestall the prison’s closure and


the loss of 225 jobs. “Everyone tried to get
those rates lowered,” said CCA vice president Louise Grant. “It was not done.”
Such is the power of profitable prison
phone revenues. CCA’s North Fork facility
has since reopened, presumably with lower
phone rates.

Florida – A State in Flux
Florida prisoners have enjoyed affordable phone rates since April 2006,
when then-DOC Commissioner James
McDonough reduced the cost of prison
phone calls by about 30%. [See: PLN,
Oct. 2006, p.24]. Soon, however, they may
receive a rude wake-up call. In 2009 the
Florida legislature passed a bill (S.B. 2626)
that removed rate caps for all providers of
“operator services” in the state.
On September 24, 2009, the Florida
Public Service Commission (in Docket
No. 060476-TL) ruled that prison phone
calls should be included in the class of services that would no longer have a rate cap.
Eight companies, including GTL, PCS,
Embarq Florida, Evercom Systems and
T-Netix, had argued in favor of removing
the rate caps.
Under Florida’s prison phone service
contract with Securus, the state’s recent
annual kickback was $3 million and phone
charges were substantially lower following
McDonough’s rate reduction. It remains
to be seen whether Securus’ current rate
of $.50 for local collect calls, and $1.20 +
$.04/minute for intrastate and interstate
calls, will continue once the rate caps are
If Florida county jails are any indication, the phone rates charged to prisoners’
families are far from rational. In Monroe
County, local calls are billed at $2.25 and
long distance calls cost $1.75 + $.30/minute. The funds obtained by the Monroe
County Sheriff ’s Office from its phone
system are deposited into the inmate
welfare account to pay for board games,
television and other items used for the
benefit of prisoners. The jail contracts
with ICSolutions, Inc.
Other Florida county jail phone rates
include: Escambia County, local $2.25,
intrastate $1.75 + $0.30/minute, interstate
$4.99 + $0.89/minute; Lake County, local
$2.25, interstate $3.95 + $0.45/minute;
Gadsden County, local $2.25, intrastate
$1.85 + $.50/minute, interstate $2.85 +
$.50/minute; and Broward County, local
$2.35, intrastate $1.75 + $0.30/minute,
interstate $3.66 + $0.59/minute. Broward
County, which contracts with Securus,

Prison Legal News

receives a 58.5% commission on prisoners’
phone calls.
Thus, Florida jail prisoners are subject to long distance rates ranging from
$6.25 to $18.34 for a 15-minute collect
call at the above facilities, representing an
almost 300% difference between the lowest
and highest rates, even when such calls are
made from jails within the same state.

PLN Sues to Obtain
Phone Contract Data
While most of the states contacted by
PLN provided their prison phone contract
data pursuant to public records requests,
albeit sometimes grudgingly, one did not.
Mississippi refused to produce a copy of
its phone contract with GTL or any data
concerning GTL’s commissions paid to
the state.
A court ruling in a previous case filed
by one of GTL’s competitors had resulted
in a protective order sealing the contract
and related kickback commission data,
despite the fact that the contract involved
a public, taxpayer-funded agency – the
Department of Corrections.
PLN filed suit against the Mississippi DOC and GTL on March 10, 2009
seeking disclosure of the prison phone

contract and commission data, noting that
the state’s public records act specifies that
“all public records are ... public property,
and any person shall have the right to
inspect, copy or obtain a reproduction of
any public records of any public body.”
“Contracts entered into by the state
which involve public funds are public
documents,” stated PLN editor Paul
Wright. “As such, the prison phone contract and commission information must
be produced pursuant to Mississippi’s
public records act, and Global Tel*Link,
a private for-profit company, cannot
hide such documents from members of
the public. Such secrecy is unacceptable and contrary to public policy.”
GTL agreed to settle the case in June 2009
by producing a copy of its contract with
the State of Mississippi and associated
commission data. Those records revealed
that GTL paid the state a 55.6% commission – one of the highest in the nation
– amounting to $2.8 million in 2008.
PLN was represented by Jackson,
Mississippi attorneys Robert B. McDuff
and Sibyl C. Byrd. See: PLN v. Mississippi
Dept. of Corrections, Chancery Court of
Hinds County (MS), Case No. G 2009 391
I. [PLN, May 2010, p.8].

What Happens Without Kickbacks?
The prison phone contract data
obtained by PLN provides a before-andafter look at phone rates in several states
that have banned, limited or reduced their
kickback commissions. The comparisons
are telling.
The New Mexico DOC stopped accepting commissions in 2001 following
the enactment of House Bill 13, which
specified that contracts “to provide inmates with access to telecommunications
services in a correctional facility or jail
shall not include a commission or other
payment to the operator of the correctional facility or jail based upon amounts
billed by the telecommunications provider
for telephone calls made by inmates in the
correctional facility or jail.” N.M. Stat.
Ann. § 33-14-1.
New Mexico previously had a 48.25%
commission rate, and before House Bill
13 went into effect the DOC’s intrastate
phone rate was $1.80 + $.22/minute for
collect calls. Following House Bill 13 the
intrastate rate dropped to $1.75 + $.125$.175/minute – a modest but significant
decrease of 14.2% to 28.9% for a 15minute call. Local and interstate call rates

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April 2011

Prison Phone Contracts (cont.)
could not be compared due to a lack of
pre-2001 data. New Mexico still has high
phone rates in comparison with other
states that no longer accept commission
payments, though.
The State of New York faced (ultimately unsuccessful) legal challenges to
its exorbitant prison phone rates, plus a
concerted advocacy campaign involving
the New York Campaign for Telephone
Justice, Prison Families of New York, Inc.
and other organizations. On July 19, 2007,
then-Governor Eliot Spitzer signed the
Family Connections Bill, which prohibited kickback commissions and required
the DOC to contract with telephone service providers based on the lowest cost.
[See: PLN, April 2007, p.20].
Previously, New York had received a
commission of 57.5% to 60%, the highest
in the nation at the time, which generated
$200 million in kickback payments from
1996 through 2007. The no-commission
statute went into effect in 2008, and under
a new contract with Unisys and VAC, New
York prisons now have some of the lowest
phone rates in the country – a flat $.048/
minute for any type of call (i.e., $.72 per
15-minute call whether local, intrastate
or interstate).
Before banning kickback commissions, New York’s prison phone rates were
$1.28 + $.068/minute for all categories of
collect calls (i.e., $2.30 per 15-minute call
whether local, intrastate or interstate).
Thus, after the commissions ended, the
rates dropped 68.7% based on a 15-minute
collect call.
In August 2008, Michigan ended its
practice of accepting kickback payments
from prison phone service providers as
a result of legislative action. Under the
state’s no-commission contract with
Embarq, rates decreased significantly to
$.12/minute for local and intrastate calls
and $.15/minute for interstate calls, with
no connection charge. The new rates represent a 10% price drop for local calls, a
77% drop for intrastate calls and an amazing 87% drop for interstate calls from the
previous commission-based rates of $2.00
local, $2.95 + $.325/minute intrastate and
$3.99 + $.89/minute interstate.
Michigan’s prison phone contract
has since been bid to PCS, now owned by
GTL, but the current low rates remain in
effect until a new rate structure is developed. Prior to ending its phone kickbacks,

April 2011

the state received a 50.99% commission
that generated $10.2 million in FY 2007.
South Carolina’s legislature banned
prison phone kickbacks as part of a 20072008 appropriations bill, stating, “the State
shall forego any commissions or revenues
for the provision of pay telephones in
institutions of the Department of Corrections and the Department of Juvenile
Justice for use by inmates. The State Budget and Control Board shall ensure that
the telephone rates charged by vendors
for the use of those telephones must be
reduced to reflect this foregone state revenue.” S.C. Code of Laws § 10-1-210.
The bill was introduced by Republican Senator W. Greg Ryberg, a member
of the Senate Corrections and Penology Committee, upon the request of the
South Carolina DOC. Prior to the ban on
kickbacks, South Carolina’s prison phone
rates were $.76 for local calls, $1.73 + $.22/
minute intrastate and $1.89 + $.22/minute
The new no-commission rates, effective April 1, 2008, were $.50 for local calls
(a 34.2% reduction), $1.00 + $.15/minute
for intrastate calls (a 35.4% reduction) and
$1.25 + $.15/minute for interstate calls (a
32.5% reduction), with the rate decreases
based on a 15-minute call. Under its previous commission-based contract, South
Carolina received $1.2 million in FY 2008.
California is phasing out prison phone
kickbacks effective by the end of the 20102011 fiscal year. Phone rates for California
prisoners have been dropping since late
2007, and in early 2011 were down to the
final rate of $.58 + $.058/minute for local
calls, $.77 + $.084/minute for intrastate
calls and $1.52 + $.342/minute for interstate calls, according to the state’s Inmate/
Ward Telephone System Contract.
California’s commission-based rates
prior to August 2007, when the kickbacks
began to be phased out, were $1.50 +
$.15/minute for local calls, $2.00 + $.22/
minute intrastate and $3.95 + $.89/minute
interstate (the rates in the accompanying
chart reflect the initial rate reduction for
2007-2008). The new phone charges as of
2010-2011 thus represent a price drop of
61% for 15-minute local, intrastate and
interstate collect calls compared with the
rates before the state began to phase out
commission payments.
This is yet another example of how
banning kickbacks translates to lower
phone rates. California prohibited prison
phone commissions as a result of state
legislation, S.B. 81, enacted during the


2007-2008 session.
Notably, states do not have to
eliminate payments from prison phone
companies entirely to achieve lower phone
rates, as evidenced by Missouri, which has
low rates of $1.00 + $.10/minute. While no
longer accepting commissions, the state
requires its phone service provider to cover
the cost of 21 staff positions for monitoring prisoners’ calls (about $800,000 to
$900,000 annually). Previously, Missouri
had received a 55% commission before
eliminating prison phone kickbacks in
April 1999.
New Hampshire limited its maximum
commission rate to 20% and imposed rate
caps in a 2006 RFP issued by the state’s
Division of Plant and Property Management, which resulted in fairly low rates
of $1.20 + $.10/minute for prison phone
calls. Montana, Kansas and Arkansas
have also reduced but not eliminated their
kickback commissions, with lower phone
rates as a result.
Following a July 2010 RFP, the
Montana Department of Corrections
contracted with Oregon-based Telmate,
LLC to provide prison phone services.
By state statute, all commissions from
the phone system must go to the inmate
welfare fund. The DOC determined
that $23,000 per month was sufficient to
maintain the fund, and “[t]he RFP was
written with the requirement that the
commissions only generate enough to
maintain the inmate welfare fund. This
allowed the vendors responding to the
RFP to focus on the rate of the call and
not how much money could be generated
by commissions.”
The Montana DOC’s phone rates
under its prior contract with PCS, as
reflected in the chart accompanying this
article, were $2.75 + $.20/minute for local,
intrastate and interstate calls. Telmate’s
rates, pursuant to its limited-commission
contract (which has a maximum kickback
of 25%), are $.24 + $.12/minute for local,
intrastate and interstate calls. This represents a 64.5% reduction from the previous
rates for a 15-minute call.
When the Kansas DOC entered into
a new telephone contract with Embarq
in January 2008, Kansas Secretary of
Corrections Roger Werholtz stated, “It is
important for inmates to be able to maintain
contact with their families and friends. We
have recognized for many years that the
cost of the phone calls inmates make from
our correctional facilities has created a
financial hardship for their families, and I

Prison Legal News

am pleased that the new contract will help
reduce those costs.”
The state’s new contract with Embarq included a kickback of 41.3% and a
minimum guaranteed annual commission
of $1,057,000, compared with the 48.25%
kickback and minimum $2,750,000 annual commission in the DOC’s prior
contract with Securus/T-Netix. Embarq’s
new collect call rates are $2.61 for local
calls, $1.96 + $.41/minute intrastate and
$1.70 + $.40/minute interstate. Under the
previous higher-commission contract the
collect call rates were $4.35 local, $3.26 +
$.69/minute intrastate and $2.84 + $.66/
minute interstate. Thus, under its reducedcommission contract with Embarq, the
Kansas DOC’s phone rates dropped by
40% across the board.
And when the Arkansas DOC contracted with GTL in February 2007, the
company initially offered a 55% commission with phone rates of $3.00 + $.24/
minute for local and intrastate calls, and
$3.95 + $.89/minute for interstate calls.
Arkansas officials instead considered
two alternative rate proposals, one with
a 50.75% commission that had a 25% decrease in the per-minute call rates, and the
other with a 45% commission that included
a 50% decrease in per-minute rates.
The Arkansas DOC selected the 45%
commission with lowest per-minute rates
($3.00 + $.12/minute for local and intrastate, and $3.95 + $.45/minute interstate),
noting that “while our annual revenues
may decrease, we believe this would be a
good faith effort to reduce the financial
burden on inmate [sic] families.” Although
the phone rates for Arkansas prisoners
still remain high, they are not as high as
they could have been had the DOC decided to maximize its commission rate.
The above examples send a clear
message that prisoners and their families
and advocates should seek both administrative and legislative changes to ban,
limit or reduce kickbacks, and encourage prison systems to contract with the
lowest bidder for phone services. While it
seems a Herculean task to convince state
officials to forgo millions of dollars in
phone revenues, and indeed legislation to
reduce prison phone rates has failed in a
number of states, it is not impossible and
there have been several success stories beyond the states that have already banned
According to the Equitable Telephone Charges (eTc) Campaign, a project
of National CURE that advocates for

Prison Legal News

prison phone rate reform, Arkansas
selected a lower commission and phone
rates in 2007, as described above, due to
efforts by prisoners’ advocacy groups and
threatened legislation to eliminate the
commissions entirely.
Also, an effort to impose a $2.00 fee
on local calls from Alaskan prisons was
scuttled as a result of public opposition.
The Alaska DOC had announced that the
fee would go into effect on September 1,
2008 under a new prison phone contract
with Securus. Previously, prisoners could
make local calls at no cost.
The Regulatory Commission of
Alaska received a number of complaints
concerning the $2.00 per-call charge and
opened an investigation, stating “that
doubt exists as to the reasonableness” of
the fee. The proposed local call charge was
withdrawn in January 2009, even though
Securus had estimated that based on historical call volume the $2.00 fee “could
add [gross] revenues of $4,661,808 annually.” Local calls remain free for Alaskan
In short, the magnitude of harm
caused by typical prison phone contracts
that include kickbacks, and thus higher
phone rates, is most apparent when comparing rates in the states that accept
commissions with those that do not.


Prison Phone Rates
on the Federal Level

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The federal Bureau of Prisons (BOP)
has moved to a debit-based phone system
called the Inmate Telephone System (ITS),
in which prisoners pay for calls from
their institutional accounts, though they
can also make collect calls to approved
numbers. The system has all of the usual
security features but in most cases has
resulted in savings to prisoners and their
Rates are as low as $.06/minute for
local debit calls and $.23/minute for long
distance debit calls. However, collect long
distance rates are still pricey at $2.45 +
$.40/minute ($8.45 for a 15-minute interstate collect call). Intrastate rates are
capped at 90% of the applicable stateregulated phone rates, which vary.
BOP prisoners are limited to 300
minutes of calling time per month (400
in November and December), and phone
calls are limited to 15 minutes. The ITS
was implemented following a settlement in
a federal class-action lawsuit, Washington
v. Reno, in November 1995. [See: PLN,
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Prison Phone Contracts (cont.)
1994, p.10; March 1994, p.1].
The BOP entered into a 3-year
contract with Unisys in 2005 to install
and operate a new generation of the
ITS (ITS-3, also known as TRUFONE)
at more than 100 federal correctional
facilities; the contract had an estimated
value of $37 million, not including three
one-year optional extensions. The BOP
declined to provide its phone commission
data during PLN’s recent survey.
In Congress, legislation to require the
FCC to prescribe rules regulating prison
phone services, titled the Family Telephone
Connection Protection Act, was introduced
by U.S. Rep. Bobby Rush in 2005, 2007 and
2009, but was never enacted.
Another piece of federal legislation,
the Cell Phone Contraband Act (S.1749),
signed into law by President Obama on
August 10, 2010, makes it a crime for federal prisoners to possess a cell phone. The
law also includes a little-known provision
that requires the Government Accountability Office (GAO) to study the BOP’s
phone rates and investigate less expensive
In regard to federal oversight of
prison phone services, PLN has asked the
FCC to address excessive overcharging
relative to interstate prison phone calls as
part of the Wright petition – a rulemaking
proposal pending before the FCC (CC
Docket No. 96-128). The petition stems
from a long-standing federal lawsuit challenging exorbitant phone rates, Wright v.
Corrections Corp. of America. [See: PLN,
April 2004, p.39].
An alternative rulemaking proposal,
submitted in the Wright petition in March
2007, suggests a rate cap of $.25/minute
for all interstate collect calls and $.20/
minute for all interstate debit calls made
by prisoners. Thus far the FCC has taken
no action on the Wright petition since it
was originally filed in 2003, despite having acknowledged in a prior proceeding
that “the recipients of collect calls from
inmates … require additional safeguards
to avoid being charged excessive rates
from a monopoly provider.”

Legal Challenges Mostly
Lawsuits challenging exorbitant
prison phone rates have met with little success. In Walton v. NY DOCS, 18 Misc.3d
775, 849 N.Y.S.2d 395 (N.Y.Sup. 2007), the

April 2011

court held that New York’s then-57.5%
kickback commission did not violate the
constitutional rights of prisoners’ families. [See: PLN, Oct. 2008, p.24; April
2007, p.20]. This finding was upheld by
New York’s highest court, the Court
of Appeals, in 2009. See: Walton v. NY
DOCS, 13 N.Y.3d 475, 921 N.E.2d 145
(N.Y. 2009) [PLN, Aug. 2010, p.18].
An Indiana appellate court denied
an appeal in a class-action suit by prisoners’ families raising similar issues.
See: Alexander v. Marion County Sheriff, 891 N.E.2d 87 (Ind.Ct.App. 2008)
[PLN, June 2009, p.28]. New Mexico’s
Supreme Court upheld the dismissal
of a lawsuit challenging prison phone
rates in 2002 [See: PLN, June 2003,
p.17], as did New Hampshire’s Supreme
Court that same year, in Guglielmo v.
WorldCom, Inc., 148 N.H. 309, 808 A.2d
65 (N.H. 2002). Further, the Eighth
Circuit Court of Appeals affirmed the
dismissal of an excessive prison phone
rate complaint in Gilmore v. County of
Douglas, 406 F.3d 935 (8th Cir. 2005).
Such legal actions typically run afoul
of the “filed rate doctrine,” which holds
that once a telecommunications company files its rate structure (tariffs) with
an appropriate regulatory agency, and
then adheres to those rates, it is insulated
from court challenges. [See, e.g.: PLN,
Jan. 2005, p.6].
A nationwide class-action suit was
filed against GTL in California in August
2010, claiming the company exploited its
customers “by charging them [] exorbitant, undisclosed per-minute rates (often
in excess of $1.00/minute) and excessive
service charges,” including undisclosed
fees for depositing money into prepaid
phone accounts. The suit settled under
confidential terms before a class was
certified. [See: PLN, March 2011, p.38].
An Ohio federal court ruled in 2003
that recipients of collect calls from Ohio
prisoners could pursue claims against
counties and prison phone service providers alleging that unreasonably high
rates violated their equal protection, freedom of speech and associational rights.
Claims against the State of Ohio, as well
as antitrust and telecommunications
statute claims, were dismissed. Soon after
that ruling the case was stayed pending
the resolution of bankruptcy proceedings involving WorldCom, Inc., and no
further action was taken by the court.
See: McGuire v. Ameritech Services, Inc.,
253 F.Supp.2d 988 (S.D. Ohio 2003).


In 2001, the Seventh Circuit Court
of Appeals held that Illinois officials did
not violate the rights of prisoners or their
families by granting phone companies a
monopoly on collect phone services at particular prisons in exchange for commission
payments. The appellate court found that
exorbitant telephone rates did not violate
the First Amendment, the kickback payments did not result in unconstitutional
takings or violate antitrust laws, and equal
protection and due process claims were
barred due to the doctrine of primary jurisdiction. See: Arsberry v. State of Illinois,
244 F.3d 558 (7th Cir. 2001), cert. denied.
[PLN, May 2002, p.12; Feb. 2001, p.19;
June 2000, p.19; Aug. 1999, p.10].
In Michigan, a U.S. District Court
dismissed a suit concerning prison phone
rates, holding that the filed-rate doctrine
barred challenges to the fairness of the
rates charged; that the FCC had primary
jurisdiction; that the plaintiffs failed to
state a claim for rate discrimination; that
the state was immune from liability; and
that state regulatory and consumer protection law claims were pre-empted by federal
statutes. See: Miranda v. Michigan, 141
F.Supp.2d 747 (E.D. MI 2001) and Miranda
v. Michigan, 168 F.Supp.2d 685 (E.D. MI
2001) [PLN, May 2002, p.12].
The Ninth Circuit Court of Appeals
rejected prisoners’ claims that higher phone
charges were the result of a “conspiracy”
between a warden and the telephone companies, finding that prisoners did not have
any constitutional right to particular phone
rates. See: Johnson v. State of California,
207 F.3d 650 (9th Cir. 2000) [PLN, Nov.
2001, p.22].
Even legal challenges by alternative
prison phone service providers that offer
lower-cost calling options have failed, such as
a lawsuit filed against Securus, T-Netix, Evercom and GTL by Millicorp, a Florida-based
company that has a Voice Over Internet
Protocol (VOIP) subsidiary called “Cons
Call Home.” Securus, et al. were accused of
blocking calls to VOIP numbers set up by
Millicorp for prisoners’ families. The suit was
dismissed in April 2010 under a procedural
rule of the federal Telecommunications Act.
[See: PLN, May 2010, p.48].

Regulation by State Agencies
Some actions before state regulatory
agencies have had greater success. The
Utilities Consumer Action Network filed a
complaint against MCI with the California
Public Utilities Commission over irregularities in the company’s billing practices

Prison Legal News

and quality of service for calls originating
from California prisons. In a 2001 settlement, MCI agreed to refund more than
$520,000 in illegal overcharges to families
of California prisoners. [See: PLN, Nov.
2001, p.19].
This followed a pattern of state
regulatory actions and settlements dating
from the early 1990s that saw a number
of telecommunications companies fined
and ordered to pay refunds due to illegal
prison phone call billings.
In Louisiana, the state Public Service
Commission ordered GTL to refund $1.2
million in overcharges from June 1993
to May 1994. In 1996, North American
Intelecom agreed to refund $400,000 overcharged to members of the public who
accepted prisoners’ phone calls, following
an investigation by the Florida Public
Service Commission. The following year
the Commission ordered MCI to refund
almost $2 million in overcharges on collect calls made from Florida state prisons.
[See: PLN, Aug. 1998, p.8; March 1997,
p.12; Sept. 1996, p.13].
More recently, in Washington state,
AT&T agreed in December 2007 to pay
over $300,000 in fines for overcharging
prisoners’ families for calls made from the
Airway Heights state prison and Washington State Penitentiary. Families were
eligible to receive refunds for an estimated
$67,295 in overcharges. [See: PLN, March
2008, p.34].
Florida’s Public Service Commission
ordered TCG Public Communications,
Inc., previously a subsidiary of AT&T before being acquired by GTL, to pay $1.25
million to settle overbilling complaints
at the Miami-Dade Pretrial Detention
Center from 2004 through 2007. The
settlement, approved in August 2009,
provided for the $1.25 million to be paid to
the state’s general revenue fund; prisoners’

families who were overcharged received
nothing. [See: PLN, Feb. 2010, p.49; April
2009, p.38].
A lawsuit filed in 2000 challenging the
lack of notice to consumers who accepted
high-priced collect calls from Washington
prisoners remains pending in Washington
state court. After more than a decade of
litigation before the state superior, appellate and supreme courts, and before the
state utilities commission, the case boiled
down to T-Netix and AT&T arguing
over which company was responsible for
providing notice to the call recipients. On
April 21, 2010, the utilities commission
held it was AT&T. Between 2000 and 2010
PLN has run five articles related to this
case, which is now set for trial. See: Judd v.
AT&T, 136 Wash App 1022 (2006) [PLN,
Dec. 2010, p.16; March 2007, p.38].
Most of the time, though, state regulatory agencies take little interest in prison
phone services so long as the rates charged
are within established rate caps – which
are typically set very high. Rather, state
public utility or service commissions tend
to get involved only when prison phone
companies overcharge, impose illegal
fees or otherwise violate state regulations.
This assumes that such regulatory agencies have jurisdiction over prison phone
service providers. In at least two states,
Colorado and Virginia, they do not. [See:
PLN, Aug. 2004, p.44; March 2003, p.12;
Nov. 1998, p.23].
There are exceptions, of course, where
state regulatory agencies have intervened
to set lower rate caps for calls made by
prisoners, such as in Kentucky, or to investigate proposed prison phone rate hikes, as
in Alaska. A larger
problem is that in
some cases the utility commissions are
largely co-opted by

The Purpose of Prison
Phone Services
Government officials who approve
prison phone contracts that include
kickbacks and excessively high rates apparently forget why prisoners are afforded
phone access in the first place. For one,
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. This, in turn,
benefits the community by reducing costs
associated with recidivism.
According to Prof. Steven Jackson,
“recidivism and community impact studies, some of which were used to justify
the introduction of prison calling in the
first place[,] ... have found that a powerful
predictor of re-offending is the failure to
maintain family and community contact
while incarcerated.”
For example, a research brief by the

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Prison Legal News

the industries they purport to regulate,
with conflicts of interest and a revolving
door in which commission staff are later
hired by the companies they oversaw.
When former Florida Public Service
Commission chairwoman Nancy Argenziano resigned in September 2010, she
condemned “the corruption, the boughtand-sold nature of everything related to
the operation of the PSC.” She noted there
was a “universal expectation that if you
audition well, PSC employees and commissioners will be rewarded with lucrative
jobs with the utilities,” indicating a thin
line exists between the regulators and the

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April 2011

Prison Phone Contracts (cont.)
Jane Addams Center for Social Policy
and Research at the University of Illinois
at Chicago, published in 2004, observed
that “Family roles and relationships are
important in reentry planning, whether or
not they are explicitly articulated in formal
policies and program documents. Family
connections and other social networks
impact not only families’ and children’s
well-being but also the achievement of
social goals such as the reduction of
crime and the building of vibrant communities.”
Policy changes that can make a difference in maintaining prisoners’ family
relationships include making “telephone
access to families and friends a basic
prison program that is run with attention to the same cost efficiency and cost
containment rules that are used for other
prison operations.” The research brief
noted that exorbitant “government sanctioned telephone rates are abusive and
take advantage of families’ reliance on
telephones as a primary means of communication during incarceration.”
And according to a 2004 study by
the Washington, D.C.-based Urban Institute, “Our analysis found that [released
prisoners] with closer family relationships, stronger family support, and fewer
negative dynamics in relationships with
intimate partners were more likely to have
worked after release and were less likely
to have used drugs.” The study’s authors,
Christy Visher, Vera Kachnowski, Nancy
La Vigne and Jeremy Travis, concluded
that “[i]t is evident that family support,
when it exists, is a strong asset that can be
brought to the table in the reentry planning process.”
Such findings have been recognized
by corrections officials. The federal Bureau of Prisons states that “Telephone
privileges are a supplemental means of
maintaining community and family ties
that will contribute to an inmate’s personal development.” (Program Statement
5264.07 (2002), as codified at 28 CFR §
When GTL tried to raise phone rates
in Tennessee in 2002, then-Tennessee
Dept. of Corrections Commissioner
Donal Campbell stated, “As you know,
maintaining contact with family and
friends in the free world is an important
part of an inmate’s rehabilitation and
preparation to return to the community.

April 2011

Furthermore, telephone privileges are essential in managing inmate populations….
[Rate increases] would hinder both of the
aforementioned departmental objectives
in addition to creating an undue hardship
for inmates’ families.”
According to the Oregon DOC, “Ongoing contact with supportive family and
friends is an important part of inmates’
success in prison and upon release.” Also,
when South Dakota renewed its contract
with FSH in March 2008, Corrections
Secretary Tim Reish remarked, “The reduced rates we were able to negotiate will
have a positive impact on the inmates’ ability to maintain contact with their loved
ones while they are in prison.”
Wisconsin law provides that prison
officials “shall encourage communication
between an inmate and an inmate’s family, friends, government officials, courts,
and people concerned with the welfare
of the inmate. Communication fosters
reintegration into the community and
the maintenance of family ties. It helps
to motivate the inmate and thus contributes to morale and to the security of the
inmate and staff.” Wis.Admin.Code DOC
§ 309.39.
And in its final June 8, 2006 report,
the Commission on Safety and Abuse
in America’s Prisons noted that prison
phone rates were “extraordinarily high,”
and that lowering the rates would “support family and community bonds.”
For many prisoners, particularly
those who are functionally illiterate and
cannot rely on written correspondence,
phone calls are the primary means of
maintaining family ties and parental relationships during their incarceration. This
is also true for prisoners whose families
cannot travel to distant prisons for inperson visitation. While most prisoners
are from urban areas, virtually all prisons
built in the last 30 years have been built in
rural areas far from where most prisoners
originate and will return to upon completing their sentences.
Additionally, prisoners’ families suffer
from the increased isolation that attends
fewer phone calls from their incarcerated
loved ones due to exorbitant phone rates.
Often, prisoners come from low-income
families that can ill afford grossly high
phone bills that sometimes run into hundreds of dollars per month.
Hence, prison phone contracts awarded on the basis of the highest kickback
(and thus the highest cost to prisoners’
families) are vindictive and ill-conceived


at best, and negatively impact prisoners’
familial relationships and recidivism rates
at worst.
Excessive prison phone rates are
also detrimental from a security standpoint. Cell phones in prisons and jails
have become an epidemic problem for
corrections officials, who cite a number
of security concerns associated with contraband phones, starting with the corrupt
staff who smuggle the cell phones into
the prisons. [See: PLN, Feb. 2011, p.40].
Yet the market for cell phones behind
bars is driven in part by the exorbitant
rates charged by prison phone companies; prisoners use illegal – but much
more affordable – cell phones to stay in
touch with their families and friends. By
reducing institutional phone rates, prison
officials would reduce the demand for and
associated security risks of contraband
cell phones.
Sadly, the societal and security benefits of providing prisoners with more
affordable phone rates are trumped by
greed for the lucrative kickbacks. Worse,
phone commission money is often paid
to the contracting state’s prison system
or general revenue fund, where it becomes
a source of addictive income that makes
it difficult to end commission-based
contracts. And we’re not talking peanuts, as the kickbacks total more than
$152 million annually nationwide. California collected $26 million per year before
beginning to phase out its commission
payments in 2007; New York pocketed
up to $20 million annually before banning
kickbacks in 2008.
The truth is told by the numbers: Almost 85% of state prison systems receive
kickback payments from telephone service
providers 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.

Prison Phone Contracts as
Socially Regressive Policy
According to PLN’s research into
prison phone contracts, the bottom line is
that (1) the vast majority of states receive
kickbacks from phone companies, which
result in higher phone rates; (2) these
excessive rates further distance prisoners
from their families, who can ill afford
high phone bills; (3) the larger community is disadvantaged when prisoners are
unable to maintain family ties that will
help them succeed post-release; and (4)

Prison Legal News

most states profit handsomely, to the tune
of over $152 million a year nationwide,
from prison phone kickbacks; however,
phone rates drop significantly absent such
Thus, prison phone contracts, except
in those few states that have banned
or limited kickback commissions, are
nothing short of a socially regressive,
socioeconomic-based assault on prisoners’ families and the community as a
whole. This assault occurs due to the
basest of reasons – avarice – by telephone
companies and contracting agencies that
are willing to sacrifice the known rehabilitative benefits of maintaining prisoners’
relationships with their families in exchange for profitable phone revenue.
PLN has reported on prison phone
issues since the early 1990s, and most of
the news has been negative. The trend,
unfortunately, is for consolidation of the
prison phone market – which will further
erode competition – and deregulation, as
in Florida. PLN supports federal oversight of and rate caps on interstate prison
phone services, as well as closer regulation
and lower rate caps on the state level. Most
significantly, the contracts should be bid
on the basis of who can provide the lowest

price to the consumer, the direct opposite
of what occurs now.
The American Correctional Association, American Bar Association and
National Association of Women Judges
have voiced support for reforming prison
phone rates, and a number of advocacy
organizations are involved in this issue –
including National CURE, state CURE
chapters and the eTc Campaign, the
Center for Constitutional Rights, and the
Brennan Center for Justice.
The consensus reached by these
groups is that to ensure prisoners maintain
their family relationships so they have a
lesser chance of re-offending after they are
released, and to reduce the unfair financial burden placed on prisoners’ families,
exorbitant prison phone rates must cease.
If prison systems in states ranging from
California and New York to Nebraska and
South Carolina can reduce their phone
rates by forgoing commissions, then there
is no reason – except callous greed – why
other states cannot do likewise.
PLN extends our thanks and gratitude
to the Funding Exchange (,
which provided grant funding for PLN’s
research into prison phone contracts.

Sources: PLN research data,,, www.,, Global
Tel*Link,, www.vaci.
com,, Media Justice
Fund of the Funding Exchange, www.pulp.
tc/html/inmate_phones.html, www.justice.
gov,, www.gores.
com,, New York Times, www.,, Daily Hampshire Gazette,,, www.heraldtribune.
com, North Carolina Journal of Law &
Technology (Vol. 8, Issue 1: Fall 2006)

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Prison Legal News


April 2011

Prison Phone Contract Data / Kickbacks / Daytime Collect Call Rates

HI Telecom
Maine DOC



41.9 Avg

247 K
5.5 Mil.
2.06 Mil.
19.5 Mil.
3.1 Mil.
4.49 Mil.
1.35 Mil.
3 Mil.
7.8 Mil.
74 K
846 K
1.2 Mil.
10.7 Mil.
80 K
1.05 Mil.
3.2 Mil.
3.96 Mil.
1.9 Mil.
6.1 Mil.
370 K est.
1.44 Mil.
800-900 K*
2.8 Mil.
300 K est.
8.7 Mil.
132 K
240 K
4.42 Mil.
2.26 Mil.
14.5 Mil.
1.07 Mil.
3 Mil.
7.05 Mil.
225 K
3.2 Mil.
1.81 Mil.
900 K*
13.77 Mil.
372 K
5.1 Mil.
2.6 Mil.
900 K
323 K
152.44 Mil.

Local Call
3.00 + .12/m

1.50 + .107/m

2.75 + .23/m
2.71 + .16/m
.86 + .10/m
1.55 + .25/m
1.00 + .05/m
1.00 + .10/m
2.75 + .20/m

1.20 + .10/m*

1.75 + .05/m

1.40 + .072/m


Intrastate 1

1.55 + .13-.38/m

2.25 + .30/m
3.00 + .12/m
2.00 + .159/m
2.75 + .23/m
1.75 + .23/m
2.50 + .20/m
1.20 + .04/m
2.00 + .19/m
1.45 + .14/m
2.50 + .26/m
2.25 + .30/m
1.96 + .41/m
1.50 + .20/m
2.15 + .19/m
.86 + .10/m
2.85 + .30/m
1.55 + .25/m
3.00 + .23/m
1.00 + .10/m
1.90 + .20/m
2.75 + .20/m
2.25 + .19/m
2.46 + .24/m
.70 + .05/m
1.20 + .10/m
1.75 + .40/m


.85 + .1175/m
1.04 + .322/m
3.95 + .69/m
2.35 + .26/m
1.00 + .15/m
3.00 + .44/m
1.852 + .098/m
2.80 + .12/m
2.25 + .25/m
1.40 + .23/m
1.25 + .28/m
.85 + .20/m
1.17 + .17/m

3.95 + .89/m
3.95 + .89/m
3.95 + .45/m
3.95 + .70/m
3.95 + .89/m
3.95 + .89/m
2.50 + .89/m
1.20 + .04/m
3.95 + .89/m
3.00 + .30/m
3.80 + .85/m
3.95 + .89/m
1.50 + .25/m
1.70 + .40/m
2.00 + .30/m
2.15 + .21/m
.86 + .10/m
3.00 + .30/m
3.00 + .69/m
3.95 + .89/m
1.00 + .10/m
3.00 + .69/m
2.75 + .20/m
3.95 + .89/m
2.46 + .24/m
.70 + .05/m
1.20 + .10/m
1.75 + .89/m
3.00 + .50/m
3.50 + .79/m
3.90 + .871/m
3.95 + .89/m
3.50 + .50/m
1.30 + .30/m
1.25 + .15/m
3.50 + .50/m
3.53 + .617/m
3.00 + .45/m
2.40 + .43/m
3.25 + .50/m
4.95 + .89/m
2.00 + .35/m
.85 + .50/m
3.55 + .62/m

Free local calls

Ending kick in 2011 2
Highest local rate
Rates reduced in 2006
Debit calls only 3
* Effective kick rates
Formerly AT&T

Kick reduced in 2008 4

Formerly MCI

Current kick is 15-30%

State-run phones
Ended kick in 2008 5
* Pays for 21 staff
PLN filed suit for data
Kick reduced in 2011 6

Formerly AT&T
Effective rates

* No per/m for 1st 5 min

Current rates = $.33/m.

Ended kick in 2001
* $2.4 Mil. min. kick
Ended kick in 2008 7
Rates as of 2009
* 50% of net profit
* $3 Mil. min. kick
* Flat fee for 20 min
Ended kick in 2008 8
Formerly Qwest

Bundled rate
* 2009 kickback data
37% kick in 2009
* Flat fee for 20 min
51.5% kick in 2010

Intrastate rates reflect intrastate interLATA rates, or intrastate intraLATA rates if interLATA is not applicable
CA is phasing out kickbacks in 2011; new rates = $.58+$.058/m. local, $.77+$.084/m. intra, $1.52+$.342/m. inter
Iowa uses a debit-only system and keeps all revenue after paying phone usage charges
Kansas reduced its commission from 48.25% in Jan. 2008; old rates = $4.35 local, $3.26+$.69/m. intra, $2.84+$.66/m. inter
MI banned kickbacks in August 2008; old rates = $2.00 local, $2.95+$.325/m. intra, $3.99+$.89/m. inter (current provider is PCS)
MT contracted with Telmate in 2011 for a limited 25% commission; new rates = $.24+$.12/m. for all categories of calls
Prior to 2008, NY had a 57.5% commission; old rates = $1.28+$.068/m. for all categories of calls
SC banned kickbacks as of April 1, 2008; old rates = $.76 local, $1.73+$.22/m. intra, $1.89+$.22/m. inter

Source: Prison Legal News research data (as of 2007-2008)

April 2011


Prison Legal News

Some Agencies Balk at Releasing Prison Phone Data
by Mike Rigby


t is common knowledge among PLN
readers that prison and jail phone
rates are priced far above those in the free
world. But just how overpriced are they?
What is the average kickback (commission) rate provided by phone companies,
and how much in kickbacks is paid each
year nationwide?
In an effort to obtain a comprehensive
overview of the prison phone market, I was
hired to help acquire phone contracts, rate
information and commission data from all
50 state prison systems as well as the federal Bureau of Prisons (BOP) and selected
county jails. I requested the same data from
all agencies yet the responses, and what was
initially produced, varied widely.
Responses to the requests for phone
data were varied, but the norm was a
mixture of bureaucracy and indifference.
I was often routed from department to
department, from one person to another,
before reaching someone who had the
authority or initiative to provide the requested information.
For example, the Alabama Department of Corrections (DOC) readily
produced its commission data, but obtaining the prison phone contracts from the
uncooperative state purchasing department
took multiple calls and emails to 5 different
agency officials. Actually obtaining copies
of the documents entailed having a local
supporter go to their office in Montgomery,
Alabama to photocopy the documents
since the agency refused to photocopy and
mail, or scan, fax or otherwise release the
documents to me. They would only provide them for “inspection” in their office.
In seeking the Kentucky documents I was
channeled through 4 separate state agencies and instructed to file a Freedom of
Information Act (FOIA) request through
the Finance Cabinet (which turned out to
be the wrong department) before finally
receiving some but not all of the data.
Agencies in Pennsylvania and Iowa sent my
requests to their legal departments.
A fairly common practice was to
charge a fee for the requested documents.
Some agencies waived the fees, but several
demanded payment even after being informed the information would not be used
for commercial purposes. These included
agencies in the states of Ohio ($17.05),
Illinois ($22.50), Delaware ($25.00), Idaho
($38.40), Oregon ($75.00) and Maryland

Prison Legal News

($78.00). Washington State and North
Carolina provided the records for nominal
fees of $1.25 and $5.00, respectively.

The Good
A minority of agencies quickly and
freely provided the requested data and
expressed a desire to know how their
phone rates compared to those in other
prison systems. Among the most cooperative were agencies in Alaska, Kansas,
Colorado, Massachusetts, Montana, New
Hampshire and Nevada. The Nebraska
Department of Administrative Services
was also helpful, noting that Nebraska’s
prison phone rates were among the lowest
in the nation because the state does not
receive commission payments.
In subsequent follow-up emails, state
officials in Louisiana, North Dakota, Indiana, New York, South Carolina, Idaho,
Maryland and Hawaii were helpful in
supplying additional information.

The Bad
A number of state agencies and DOCs
behaved like recalcitrant children, shouting
“no, no, no!” to repeated requests to waive
fees or produce the records in electronic
format at reduced rates. Among the most
uncooperative and bureaucratic were agencies in Arkansas, Hawaii (initial requests),
Iowa, Kentucky, Alabama, New Mexico,
New York (initial requests), Oregon, Tennessee, Virginia, West Virginia and the
BOP (which eventually produced rate
information but no data concerning commissions). Some of these agencies simply
ignored the requests. To acquire the Iowa
documents, for example, it took no less
than 10 phone calls and emails to the same
DOC contact person. In seeking the West
Virginia data, over a dozen calls, emails
and voicemails went unanswered.

The Ugly
Deserving special mention for their
unfriendly attitudes are the Arizona
and Mississippi DOCs. Arizona prison
officials were completely unwilling to
help and demanded an outrageous fee
of $651.00 for production of their phone
contract data. Thanks to the assistance
of the Arizona ACLU who assisted us
with the request by having one of their
employees go to the DOC headquarters
and copy the requested documents, wer


were able to obtain them. They refused to
waive the fees or copy only certain parts
of the contract at a reduced price and then
only with a personal representative physically going to their office. The Arizona
DOC further claimed they do not track
commission revenue; in other words, they
allegedly have no idea how much the state
makes off prisoners’ phone calls.
Even worse, the Mississippi DOC
refused to produce the requested information under any circumstances. After
ignoring multiple requests for phonerelated records, the DOC’s FOIA officer
produced a court order from an earlier
case “barring release of the information.”
PLN then had to file suit against the Mississippi DOC and its prison phone service
provider, Global Tel*Link, to eventually
obtain the documents.
For those states that are reluctant to
provide copies of their prison phone contracts and commission data, which are public
records, one must wonder what they have to
hide. See this issue’s cover story for the results
of PLN’s prison phone research project.

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Prism Optical, Inc.
10992 NW 7th Ave
Dept: LN0411
Miami, FL 33168

Inquiries from Friends
and Family Welcome

Since 1959

April 2011