SAY NO TO TELEPHONE GREED The prison and jail telephone industry wants to charge the children of incarcerated people $1 per minute for simple phone calls. We are fighting back.

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Phones archives

A merger between the two companies would have curtailed the ability of prisons and jails to choose a phone provider, to the detriment of incarcerated people and their families.

April 2, 2019

Easthampton, Mass. – Prison phone industry giant Securus has abandoned its attempt to purchase ICSolutions, the industry’s third largest company, after the Federal Communications Commission and the Department of Justice’s Antitrust Division signaled that they would likely block the deal. The merger would have effectively handed the market for prison and jail phone services over to Securus and its last major competitor, GTL.

“Based on a record of nearly 1 million documents comprised of 7.7 million pages of information submitted by the applicants, as well as arguments and evidence submitted by criminal justice advocates, consumer groups, and other commenters, FCC staff concluded that this deal posed significant competitive concerns and would not be in the public interest,” said FCC chairman Ajit Pai in a press release.

“Securus and ICS [Inmate Calling Solutions] have a history of competing aggressively to win state and local contracts by offering better financial terms, lower calling rates, and more innovative technology and services. This merger would have eliminated that competition, plain and simple,” said Makan Delrahim, Assistant Attorney General of the Department of Justice’s Antitrust Division in a press release. “The companies’ decision to abandon this deal is the right outcome – correctional facilities, inmates and their friends and families will continue to benefit from the robust competition between these firms.”

“All too often, calls home from jails cost an unconscionable $1/minute,” said Peter Wagner, Executive Director of the Prison Policy Initiative. “Had the companies merged, facilities would have had a harder time negotiating contracts with lower rates for families – which, thanks to our movement’s ongoing advocacy, they’re finally beginning to do.”

In our objection to the merger, filed in July 2018 with a coalition of groups working for prison phone justice represented by probono attorneys Davina Sashkin and Cheng-yi Liu, we argued that the FCC should stop the merger.

We argued that Securus’ history of repeatedly flouting commission rules – including deliberately misleading the FCC during a similar review last year, for which it was punished with an unprecedented $1.7 million fine – made it ineligible to purchase one of its competitors. We explained that the company has repeatedly tried to circumvent regulation in order to increase its profits from prison phone calls, and as recently as May 2018 was caught enabling illegal cell phone tracking.

Our filing included a detailed analysis of the concentration of the prison and jail telephone industry. We calculated market share in two different ways; by either measure, Securus and GTL were poised to control between 74% and 83% of the market. Except for ICSolutions – which Securus was seeking to acquire – no other company had above 3% market share.

Below is a historical timeline originally prepared for our report State of Phone Justice: Local jails, state prisons and private phone providers, showing how aggressively Securus and GTL have been gobbling up their competitors:

Graphical timeline showing how Securus and GTL have gobbled up most of their competitors in the prison and jail telephone market from the breakup of AT&T in the early 1980s through early 2019
For more information about this timeline, the companies, their respective sizes, the role of companies like CenturyLink that operate only in partnership with Securus and ICSolutions, or the historical role of AT&T and Verizon, see our report, the footnotes, and appendices to State of Phone Justice: Local jails, state prisons and private phone providers.

Updated April 3, 2019 10am with FCC press release and 1pm with the Department of Justice’s press release.


California's AB 964 would require in-person visits in all California jails

by Bernadette Rabuy, March 30, 2019

comment letter

For the past few years, California policymakers have been at hard work to protect in-person jail visitation from sheriffs and private companies who are eager to replace crucial human contact with impersonal video chats. While legislators were successful in preventing jails who provided in-person visits in January 2017 from later eliminating them, jails that had already banned in-person visits are permitted to continue their video-only policies.

That could change this legislative cycle thanks to Assembly Member Medina’s AB 964. AB 964 would require that all California jails provide in-person visits. Specifically, jails that are currently exempted would need to restore in-person visits by 2025.

The Assembly Public Safety Committee will be voting on AB 964 on April 2. We submitted a comment, encouraging committee members “to recognize and support the positive role families play in rehabilitation” and, more importantly, that “human beings need in person visits.”


Phone providers are so creative in their influence-peddling that the most viable reform strategies do not focus only on "commissions."

by Peter Wagner and Alexi Jones, February 11, 2019

The prison and jail phone industry is rife with problems – from sky-high phone rates to inexplicable consumer fees to expensive and unnecessary “premium services” – and all of these problems can be traced to a single moment in the industry’s history: When the companies decided to start offering facilities a percentage of their revenue in order to win contracts.

Before long, jails and prisons were prioritizing commissions over low rates when choosing a phone provider. This didn’t just saddle incarcerated people and their families with higher phone rates – it created two major problems for the companies, both of which have caused the market to spiral into dysfunction.

 

Problem 1: The arms race for higher commissions

Prison phone companies started offering commissions to jails and prisons in order to win contracts from companies that didn’t offer them. What they didn’t expect was that sheriffs would become dependent on this new income. The companies were forced into an “arms race,” competing to give away more and more of their revenue from phone calls; the proffered commissions inched ever closer to 100%.

The companies had painted themselves into a corner: How do you make a profit when you’ve given virtually all of your revenue away? Their solution: Find another source of revenue and hide it from the facility’s management.

That’s why, today, prison and jail phone companies have learned to sustain themselves with revenue entirely separate from phone rates. The first of these hidden sources of revenue is consumer fees – fees to deposit money, open accounts, or get a refund.

The second source of revenue is a suite of unrelated, profitable services that the companies bundle into phone contracts, such as money transfer, commissary sales, video calls, emails, etc. Most recently, the New York Department of Corrections and Community Supervision signed a contract for over 50,000 “free” tablet computers, alongside its phone contract with Securus. (The tablets are, of course, not “free” for incarcerated people and their families, who pay to use the tablets and are generating millions in profit for Securus.)

Advertisement from a phone provider offering 100 percent commissions on phone revenue.Smart Communications promises the impossible. (What could go wrong?) Source: Screenshot from http://www.smartcommunications.us

Advertisement from a phone provider offering 100 percent commissions on phone revenue.Smart Communications promises the impossible. (What could go wrong?) Source: Screenshot from http://www.smartcommunications.us

The most extreme – and telling – example so far of the prison phone market’s reliance on extra services comes from a provider named Smart Communications. This year, the Florida-based company began marketing to facilities on a promise of “100% phone commissions.” The catch should be obvious: The provider makes money by bundling other profitable services into the contract, and sharing none of this additional revenue with the facilities.

Such extravagant promises reveal what providers have been doing all along: promising higher and higher commissions by relying more and more heavily on ancillary services and fees to boost profits.

 

Problem 2: Circumventing new regulations

Gradually, the public has come to understand that there is an inherent conflict of interest when facilities award monopoly contracts and then reap a percentage of the revenue. As a result, the commission system started to fall out of favor. Some – though far from all – state legislatures started to prohibit percentage-based commissions.

But legislatures left open a critical loophole: They didn’t prohibit companies from offering all improper perks to facilities – only commissions.

Instead of paying a fixed percentage of their revenue to the facilities, the companies now use the extra revenue to issue kickbacks in other forms. From the perspective of the poor families paying for the calls, nothing has changed – phone rates remain high – but for the companies, disguising payments in this way makes it harder for journalists and advocates to track the kickbacks. These payments include:

As such, some of the prison and jail systems that have been widely hailed for refusing phone commissions do not, in our opinion, deserve the praise:

  • In 2007, the County Commissioners of Dane County, Wisconsin voted to ban the commissions that brought in nearly $1 million per year. The County Supervisor explained, “We’ve lost our moral compass and direction for a million bucks a year.” But in 2009 the county negotiated a new contract where instead of taking a commission, it would just take an “administrative fee” of $476,000 in monthly increments.
  • By statute, the California prison system does not take a percentage commission, but it’s quite happy to take cash and cell phone blocking equipment, which was expected to cost GTL between $16.5 million and $33 million to install. (It should also come as no surprise that states with lower phone rates have fewer problems with contraband cell phones and therefore have no need for jamming equipment.)
  • Since 2008, the Michigan Department of Corrections has refused percentage commissions. However, in 2011, they raised their rates1 and started requiring that their provider pay money into a “Special Equipment Fund.” As of 2018, this fund takes in $11 million per year, which would amount to a 57% commission. As a result — despite lowering their phone rates in 2018 — Michigan’s phone calls are more expensive calls than 23 states that take traditional commissions.2

Not all hope is lost, of course. Sheriffs and legislatures still have the power to clean up this mess and make the prison and jail phone industry fair for consumers. But to do so, they’ll have to start evaluating phone contracts differently, focusing on more than just percentage commissions. Sheriffs and legislators should also ask whether:

  1. Consumers are getting a good price for phone calls and ancillary fees.
  2. The phone contract prohibits the provider from steering calls to more expensive methods.
  3. The contract does not include other correctional services. (Bundling phone contracts with other things the facility needs makes it impossible for the facility and the families to determine whether the cost for each service is reasonable.)
  4. The contract does not include “free” products like tablets which are paid for through the sale of “premium” content.
  5. The contract specifically lists all rates, fees and charges. (It is unfortunately common for facilities to sign contracts without knowing what the provider is going to charge for ancillary fees, or for products that the providers label as “premium” or “convenience”.

Similarly, it can be really tempting to want to ban percentage commissions. We instead suggest two different ways to change the incentives behind these contracts:

  1. Require contracts to be negotiated on the basis of the lowest price to the consumer. (New York law does this for the state’s prison phone contract.)
  2. Cap commissions not as a percentage but as a fixed number of cents per minute, say 1 cent a minute. This approach maintains the problematic system of families subsidizing the correctional system, but is in improvement in that it gives the facilities an economic incentive to increase call volume and to monitor their provider for unnecessary fees and services that cut in to call revenue.

 

 

Suggested reading for more on the topics here:

  • See Prison phone provider accuses Florida Dept. of Corrections of using inmates’ families as a slush fund by Ben Conarck of the Florida Times-Union about how Florida “explicitly prohibited” contract bids that offered a percent commission, and then during negotiations demanded (and received from the winning bidder) a “wish list of goodies” instead of lower rates.
  • Our August 1, 2013 letter arguing that the Federal Communications Commission should take an expensive view of “commissions.”” This letter was written when we still thought it practical to prohibit all commissions, but the detail in our letter reviews many of the most egregious examples of commissions packaged under other names.
  • Our August 12, 2015 letter to the Federal Communications Commission with our investigation of the industry’s campaign contributions. We make the case that the FCC should focus on lowering the total cost of calls instead of chasing the infinite forms that commissions are taking.
  • Our article about the prison phone industry’s new business model: “fee harvesting.” In this 2015 article, we explain why the providers focus on fees and why the facilities have a a real but short-sighted incentive to look the other way.

Footnotes

  1. Rates changed from 10-12 cents a minute to 18-20 cents with the increase going to the “Special Equipment Fund.”  ↩
  2. These states are: Florida, Hawaii, Colorado, Wisconsin, Idaho, Nevada, Washington, Wyoming, Massachusetts, North Carolina, Maine, South Dakota, North Dakota, Texas, Pennsylvania, Minnesota, Virginia, Delaware, Mississippi, Vermont, West Virginia, New Hampshire, and Illinois. The one bright spot in the Michigan contact is that it prohibits deposit fees, which the state estimates will save families $3 million per year. We don’t have a position on whether fee cuts or rate cuts are superior, but to make the best apples-to-apples comparisons, we compared other states to what we GTL would likely have set Michigan’s phone rates at with $3 deposit fees ($0.14/min).  ↩

The cost of jail phone calls punishes people in the most desperate circumstances, most of whom have not been convicted of a crime.

by Wendy Sawyer, February 5, 2019

It’s easy to see how people in state prison, who spend years or decades behind bars, are hurt by the cost of phone calls. But less obvious is how people in jail, who are usually behind bars for much shorter periods, can be hit even harder by the same cost.

The answer has to do with why people are in local jails in the first place. In many cases, it’s solely because they are poor. On a given day, 3 out of 4 people held in jails under local authority have not even been convicted, much less sentenced. Very often, they simply cannot afford the bail amount set by the court as a condition of release. (Men in jails reported earning a median of $17,676 per year before incarceration (in 2018 dollars). For women, the median pre-incarceration income was just $11,184 per year, well below the poverty line.)

When people can’t get together the funds to get out of jail, exorbitant phone rates only make a difficult time even harder. Pretrial detention is an extremely stressful experience; detainees are often at risk of losing their jobs, housing, and even custody of their children. Being locked up, even for a short time, can interrupt medical care and can exacerbate mental health problems. It’s no coincidence that suicide risk is highest in the first week of jail incarceration. Calls with loved ones are essential for people under these conditions, who may need to coordinate childcare or elder care, make arrangements for missing work, have prescriptions brought to the facility, or simply have someone to talk to while incarcerated. Expensive phone calls further punish people in jails – most of whom, again, have not been convicted of a crime.

Even beyond the potential damage to one’s health and personal affairs, pretrial detention also negatively affects case outcomes, and it’s in this way that high phone rates from jails do the most harm to the justice process itself. People who can’t afford money bail are forced to organize their defense from jail, where it is much harder to contact people who can help – and the cost of calling them from jail is even more limiting. In a 2016 opinion in a case about the proper use of phone calls in pretrial processes, Judge Jenny Rivera acknowledged the difficulty of preparing a defense while detained:

“Pretrial detention hampers a defendant’s preparation of his defense by limiting ‘his ability to gather evidence [and] contact witnesses’ during the most critical period of the proceedings…The detained suspect…lacks a similar ability [to a defendant free on bail or their own recognizance] to contact witnesses and gather evidence.”

People detained pretrial are more likely to plead guilty just to get out of jail, more likely to be convicted, and more likely to get longer sentences. Costly phone calls play a central role in this injustice by limiting how often and how long pretrial detainees can talk to their families and friends in the service of their defense. This makes it harder for defense attorneys to coordinate with family to build mitigation cases or track down witnesses. As a result, pretrial detainees often present a weaker defense than they would have if they had been able to make calls freely (or better, had not been detained in the first place).

Furthermore, on a systemic level, high phone rates from jails hurt indigent defendants by draining already-scarce resources from public defenders’ offices. As the Missouri State Public Defenders explained in a letter to the FCC, these offices pick up the tab for phone calls from clients in jail, which can add up to tens of thousands of dollars every year. In the long term, they say the cost “reduces our ability to communicate with our clients about their cases, diminishes the quality of representation we are able to provide, and thus risks denying clients their Sixth Amendment right to effective counsel.”

So jail phone companies (and jails themselves, which get kickbacks on these calls) are essentially subsidized by public defenders – and by extension, taxpayers – while public defenders are left with even fewer resources to help indigent clients. Ultimately, this, too, makes conviction more likely.

But, wait, you might ask, if you’ve been paying attention to this issue: Didn’t the government solve this problem years ago? Didn’t the FCC limit how expensive phone calls from correctional facilities could be?

Partly, yes: In 2014, the FCC set limits on rates for out-of-state calls from prisons and jails. But here too, unfortunately, people in jails get shortchanged. People in jails almost always make in-state calls, meaning that the FCC’s rate caps don’t apply to 92% of calls from jail. Instead of paying 21 cents or less per minute, as they would for out-of-state calls, people in jail calling loved ones in-state often still pay $1 per minute or more.

The cost of these calls continues to get less attention from regulators, journalists and the public than it deserves. There’s an irony in that: When poor people in jail can’t afford to make phone calls, the fairness of the justice system is distorted – and everyone pays an outsized price.


The fight to make prison and jail phone calls affordable began in 2000. For those wondering "why is this taking so long?", here are the key dates.

by Peter Wagner and Alexi Jones, December 17, 2018

Journalists and others often ask about how the movement for phone justice began and why this is taking so long. Here are the key dates:

2000:
Martha Wright, a grandmother who was struggling to afford calls to her incarcerated grandson, sues a private prison company over the contracts it has with various phone companies.
2001:
Federal Court grants motions by private prison company and telephone companies to refer the case to the Federal Communications Commission (FCC).
2002-2011:
For nearly 10 years, the Federal Communications Commission takes no visible action.
2012:
The Federal Communications Commission files a Notice of Proposed Rulemaking (NPRM) regarding the Wright Petition.
2013:
The Federal Communications Commission votes 2-1 to approve new regulations that set interstate rate caps of 21 cents a minute for debit and pre-paid calls and 25 cents a minute for collect calls. The one dissenting vote is from FCC Commissioner Ajit Pai, who previously represented prison phone giant Securus in private practice.
2014:
Despite legal challenges from prison phone companies, the FCC’s new rate caps go into effect in February.
2015:
In October, the FCC issues additional regulations, lowering the cost for all calls from prisons (out-of-state and in-state) to 11 cents a minute, and lowering the cost of calls from jails at 14 to 22 cents a minute depending on the size of the institution. The FCC also approves comprehensive reform and caps on the cost of “ancillary fees” that can double the cost of a call. Again, Commissioner Pai voted against these regulations. Many of the phone companies, several state prison systems, county jail systems, and sheriff associations file suit challenging the FCC’s order.
2016:
The federal court issues a partial stay of the Federal Communications Commission’s October 2015 regulations, preventing the new rate caps from taking effect. The new regulations on fees, however, go into effect. The lawsuit moves very slowly.
2017:
In January, Donald Trump appoints FCC Commissioner Ajit Pai the Chairman of the FCC. In February, Pai, who had twice voted against regulating the industry, announces that the FCC will stop defending its in-state rate caps in court. However, the FCC does consent to 6 advocacy organizations, including the Prison Policy Initiative, defending that part of the lawsuit as intervenor-defendants. In June, despite this effort, the federal court strikes down the FCC’s 2015 rate caps. The 2013 rate caps, and the 2015 fee caps, remain in place.

For more on the struggle for phone justice, see our campaign page.


In our rebuttal to Securus, we disprove the company's claims of healthy competition in the prison phone market.

by Aleks Kajstura, July 31, 2018

Two weeks ago, the Prison Policy Initiative, along with the Wright Petitioners and other advocates, called on the Federal Communications Commission to stop the merger of prison phone companies Securus and ICSolutions. Following Securus’ reply, we filed a rebuttal today demonstrating why the company should not be allowed to acquire its last effective competitor for prison and jail phone contracts.

Securus tried to argue that there’s still plenty of competition left in the market. The company quibbles over the methods we used to calculate its future market share (should it acquire ICSolutions). But the math here is not really that complicated: When a giant industry player acquires a competitor, there is immediately one less player, which reduces competition.

And competition in the prison phone market is more important than ever. Prisons and jails are finally starting to pay serious attention to the rates shouldered by incarcerated people and their families, taking these concerns into account when they choose a phone provider.

Securus, meanwhile, “continues to engage in charging unlawful and egregious rates,” as well as enabling illegal cell phone tracking. Securus is asking the FCC to look the other way as it acquires one more of its competitors. It must be prevented from expanding its frontier for misconduct.

 

For our detailed analysis of why Securus/ICSolutions are wrong about diversity of competition, and barriers to entry and expansion in the prison and jail phone market, see Exhibit D of our filing.


New York City becomes the first jurisdiction to make calls home from jails free. Who else is going to follow this smart step?

by Peter Wagner, July 19, 2018

Yesterday, the New York City Council made New York the first jurisdiction in the country to make telephone calls from its prisons and jails free. The city will not only give up the commission it currently makes on phone calls – it is going a step further and making the phone calls themselves free. This change will save the poorest families in the City of New York more than $8 million a year.

In many prisons and jails, calls home from jail are very expensive, costing up to $1/minute. Typically, the facilities grant one phone company a monopoly contract in exchange for the company sharing the revenue with the facility. Some jurisdictions, however, including the New York State prison system, have refused to accept kickbacks on contracts and have instead negotiated for lower rates. They argue (correctly) that giving up that income is a cost-effective investment in lowering recidivism.

Going further and just paying for the calls makes particular sense in jails, where people are either serving short sentences or are detained only because they are too poor to make bail.

This change will be a big deal for the families, but the cost may be quite modest for the system. For example, prison systems like Nebraska have proven that it’s possible to get the rates down to just over a penny a minute when they refuse to take a commission. The New York City jail has economies of scale over Nebraska’s prisons, and the city will be saving the vendor the expensive hassle of individually billing tens of thousands of families.

With this legislation, New York City has not only joined the ethical jurisdictions that are standing up for their poorest families – they have catapulted into the lead. Who will follow?

The legislation takes effect in 270 days, giving the city jail system time to negotiate a new telephone contract.


In our letter to the Florida Department of Corrections, we explain why cutting visiting hours is bad policy and an inhumane practice.

by Lucius Couloute, May 31, 2018

comment letter

Florida’s Department of Corrections recently proposed new policies that would allow correctional facilities in the state to reduce their visitation hours by half, limiting opportunities for families to see their incarcerated loved ones in person. You’d be hard-pressed to find many people who actually believe reducing prison visits is a good idea, but the DOC has cited issues with contraband and staff costs as the impetus for the proposed changes.

Senior Policy Analyst Jorge Renaud and I wrote a comment letter opposing the proposed changes, citing established research that shows how reducing visitation is bad correctional policy. Moreover, we argued, it’s simply cruel:

Ensuring that incarcerated people maintain ample connection to the outside world is humane, cost-effective, and would result in less dangerous correctional facilities – to the benefit of everyone.

The plan to reduce these visits in favor of for-profit video chatting will undoubtedly force the families of incarcerated people to visit stale, flatscreen kiosks inside of correctional facilities, or to pay high fees when video chatting from home (a service that is usually free). Both options trivialize the importance of family relationships during periods of incarceration.

Reducing the opportunities incarcerated people have to see their families would be an unfortunate development in Florida’s justice system, which is already being criticized for cutting vital rehabilitative programs this year.

If Florida would like to reduce the need for visitation (because of costs or contraband), reducing the overall prison population would be a good start.

Update: check out journalist Ben Conarck’s twitter thread for coverage of a public hearing on visitation in Florida.


For nearly a year, the FCC knew about Securus’s cellphone tracking and turned a blind eye.

by Aleks Kajstura, May 11, 2018

Abuse of power in the nation’s prison and jails is nothing new, but now correctional staff can target any person in the U.S. – as long as that person has a cell phone. Last night, The New York Times reported that Securus allows facility staff to track any cell phone in the country.

Securus has contracts with hundreds of correctional and law enforcement agencies across the country, meaning that staffers at any of these agencies can track you on a whim. Shouldn’t they at least have a warrant or affidavit if they want to track your cell phone? Absolutely – but Securus isn’t checking. What if you never even talked to anyone in any correctional facility? Securus doesn’t check on that, either.

As the Times reports, Senator Ron Wyden (D-OR) sent a letter to the FCC asking them to investigate, as well as letters to phone companies like Verizon and AT&T, who provide the tracking data to Securus.

The thing is: the FCC already knew about this. When Securus was up for sale last year, Lee Petro, representing the Wright Petitioners, pointed to this very practice as a reason for the FCC to block the sale. But the FCC turned a blind eye.

Thanks to Senator Wyden’s letters, Verizon, AT&T, Sprint, and T-Mobile are starting to ask their own questions. But it’s a sad day when the FCC has to rely on telecom giants to carry out its mandate.


Senators introduced S 2520 in bipartisan effort to put FCC back on track in regulating the cost of calling home from prison or jail.

by Aleks Kajstura, March 12, 2018

In bipartisan effort, Senators Duckworth (D-IL), Portman (R-OH), Booker (D-NJ) and Schatz (D-HI) recently introduced a bill (S.2520) to smooth the road for prison phone and video call regulation.

The bill clarifies that the FCC is required to ensure fair cost to customers, rather than only protecting phone company profits. The bill also clarifies that the FCC’s authority to regulate prison and jail phone calls includes all types of calling technology; this is particularly timely as many of the companies are pushing video calling to circumvent phone call regulation (and monetize visitation).

While a lot of this may seem like common sense, recent phone company litigation makes these clarifications necessary.

For more info, check out the Senators’ fact sheet.




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