The FCC Aims To Lower Cost Of Prison Phone Calls In Historic Vote

Above Photo: A prisoner on a telephone at the Louisiana State Penitentiary in Angola, Lousiana, September 9, 2013. The Federal Communications Commission reportedly will decide sometime in October 2015 whether to limit rates and service fees for phone calls made by prisoners, which are typically far more expensive than normal commercial charges. Angel Franco / The New York Times.

For Annette Taylor of Illinois, weekly phone calls are a lifeline, connecting her to the two sons she has in prison. “Getting those phone calls keeps us going,” she said, “not just them inside, but us too.” Although she has been convicted of no crime, she feels she is also being punished by the high cost of these calls. Thousands of mothers like Taylor are soon to see their phone bills reduced.

The Federal Communications Commission (FCC) is poised to make a decision this month that will overhaul the industry that for decades has been making millions from phone calls made by incarcerated people throughout the United States.

Once run by jails and prisons themselves, phone services in the age of mass incarceration are outsourced to private companies. Today, this is a $1.2 billion business. The two main industry giants, Securus Technologies and Global Tel-Link (GTL), have become so profitable that they have been bought out by large investment firms. Within the prison industrial complex, phone companies are perhaps the best example of capitalism run amuck. They are reaping huge profits from what is, literally, a captive audience.

A recent report from the Ella Baker Center illustrates how families, and particularly women of color, shoulder the burden of mass incarceration. In addition to the personal toll, families pay a financial cost, with one in three going into debt to stay in contact with loved ones through phone calls and visits. This is largely due to the inflated rates charged by phone companies. Some families can spend $100 a month on these calls.

Attempts to reform this injustice have been fought tooth and nail by phone companies and police organizations. However, those incarcerated and their families have succeeded in making their voices heard. The step the FCC is about to take is a rare victory for those advocating for what they call “prison phone justice.”

Cutting Rates by Half

On September 20, 2015, the FCC released a fact sheet with details of its proposal to regulate this long unchecked industry. Most significantly, the plan calls for a maximum fee of 11 cents per minute for a 15-minute phone call from state and federal prisons. The rates would take effect early next year. The coming decision will slash by half the cost of phone calls in most states, bringing immediate relief for the vast majority of the 2.3 million people incarcerated.

But the cost of calls can vary widely across the country. In Illinois, Annette Taylor pays about $4 per call (plus additional charges), whether it lasts for the allotted 30 minutes or is suddenly cut off after two minutes, as often happens. The FCC’s per-minute rate will replace these flat rates. In some states like Maryland calls can cost as much as 30 cents per minute. Yet in others like New York, the rate is only 5 cents per minute. So the FCC’s 11-cent maximum is an improvement, but the commission could do better.

The FCC took its first step in 2013, under the leadership of then-Chair Mignon Clyburn, to cap the rates of interstate calls. The recent proposal is being spearheaded by current Chair Tom Wheeler, as well as Commissioner Clyburn, who continues to advocate on this issue. In an op-ed for The Huffington Post with Sen. Cory Booker (D-New Jersey), Clyburn wrote, “the unnecessarily high cost of inmate calling charges is an injustice that must be addressed so that inmates can stay in touch with their families and plan for successful reintegration into society.”

A letter signed by 15 senators, including presidential candidate Bernie Sanders, was sent supporting the FCC’s action, which they say is of “utmost importance.”

While the 11-cent cap is a big win for families, it comes with concessions. The FCC has accepted the argument for tiered rates made by the National Sheriffs’ Association (NSA), which represents the elected officials who operate county jails (different from state prisons). The NSA claims that smaller jails find it more costly to provide phone services. The FCC’s plan sets rates at 22 cents for jails with a population of less than 349 people, 16 cents for jails with a population of 350 to 999 people, and 14 cents for jails with a population of 1,000 or more.

Despite this compromise, the NSA is still not pleased. NSA executive director John Thompson continues to make repeated threats that with regulation, small jails may be forced to “simply stop” allowing all phone calls. The NSA has shown its callousness on this issue in the past, arguing that those in jail have no right to phone calls, which they call “discretionary.”

Commissions Strongly Discouraged

Not only did the FCC agree to tiered rates, but also it will still permit companies to hand out “site commissions,” or kickbacks, to prison and jail authorities in order to gain the right to exclusive contracts. In 2013, there was a total of $460 million awarded in commissions. The FCC proposal “strongly discourages,” but does not prohibit this practice, which is a kind of legal bribery accepted as commonplace in the industry.

The American Jail Association, an organization of those responsible for operating jails, was delighted the FCC would still allow them to accept these kickbacks. In an “alert” sent out to its 4,000 members, the association said the FCC had done a “180 degree reversal” from its original stance on commissions. “We believe the FCC now better understands the need for facilities to recoup some costs.”

While jail operators are happy, phone companies are not excited they will still be expected to pay out millions in commissions. Securus’ CEO Richard Smith, along with attorneys, met with the FCC just days after the proposal was released and told them it could be a “business-ending event.” Securus bemoaned the “extremely low” figures. The tiered rates for jails were “arbitrary and capricious.”

Yet the most “unwelcome surprise” was the FCC’s refusal to end commissions. Securus will be limited in what they can charge, but will still need to pay out the promised commissions, what they say amount to $140 million a year. The company’s recommendation is to set calls at 20 to 24 cents per minute.

Securus would prefer that commissions be eliminated so that it can keep all the profits to itself, rather than share them with sheriffs and wardens. As it currently stands, Securus offers the highest percentage of commissions in order to win contracts. What Securus does not say is that most phone contracts allow the provider to change or stop commission payments. Indeed, after the FCC’s 2013 decision, Securus, GTL and others sent out letters notifying clients they would no longer be paying site commissions on interstate calls.

Securus also issued a foreboding warning that, under the FCC’s rates, jails will be “worse off” because providers will be unable to offer their services. Securus has vowed to, along with industry partners, “litigate and appeal aggressively” the FCC’s decision. GTL and Pay-Tel, another leading company, have also filed letters expressing their displeasure with the FCC’s proposal.

Kickbacks for Contracts

The practice of granting kickbacks can easily breed corruption, as evidenced by a recent bribery scandal in Mississippi. In August 2015, Sam Waggoner, who had been a consultant for GTL for 20 years, plead guilty to federal charges for bribing the former commissioner of the Mississippi Department of Corrections (MDOC) for the contract to provide phone services to the more than 25,000 people in the state prison system.

The revelations came after a federal indictment was brought against Christopher B. Epps, who has since plead guilty to charges that as MDOC commissioner he had pressured contractors for bribes. In his plea agreement, Waggoner admitted to visiting Epps monthly at his home to deliver a check. “When I was at his house,” he testified, “I’d just put it on the counter by him. And then if we’re having lunch, I would hand it to him.”

As part of a plea agreement, Waggoner will forfeit $200,000, his cut of the commission money he accepted over a two-year period. Currently awaiting sentencing, he faces 10 to 20 years in prison on bribery and conspiracy charges. In an ironic twist of fate, he may soon be paying for the expensive phone calls that once made him a living.

GTL characterizes Epps as a “bad apple,” and Waggoner as unable to resist his threats. “None of this, however,” claims the company, “has anything to do with” GTL employees, rates or contracts. Of course, GTL is attempting to minimize its role in this scandal. Companies often use consultants to avoid liability, leaving open the option of plausible deniability.

The FCC should do the right thing – it should lower rates and abolish commissions. It should do so not for the sake of companies clamoring for a larger profit share, or for police organizations that want a constant revenue stream from phone calls. The FCC should protect those who are often the last ones left who love and care for incarcerated people. Annette Taylor asks the FCC to act on behalf of families: “Put yourself in my shoes, just for one minute, and think about your child. Do you want to hear from your child?”