PRISON Legal News VOL. 22 No. 4 April 2011 ISSN 1075-7678 Dedicated to Protecting Human Rights Nationwide PLN Survey Examines Prison Phone Contracts, Kickbacks by John E. Dannenberg n exhaustive analysis of prison phone families – who are the overwhelming re- recent phone rates may now be in effect due Acontracts nationwide has revealed cipients of prison phone calls. Averaging to new contract awards or renewals, and that with only limited exceptions, tele- a 42% kickback nationwide, this indicates while data was obtained from all 50 states, phone service providers offer lucrative that the phone market in state prison sys- it was not complete for each category. See kickbacks (politely termed “commis- tems is worth more than an estimated $362 the chart accompanying this article for a sions”) to state contracting agencies million annually in gross revenue. breakdown of the data obtained. – amounting on average to 42% of gross In a research task never before ac- PLN has previously reported on the revenues from prisoners’ phone calls – in complished, Prison Legal News, using egregious nature of exorbitant prison order to obtain exclusive, monopolistic public records laws, secured prison phone phone rates, notably in our January 2007 contracts for prison phone services. contract information from all 50 states cover story, “Ex-Communication: Com- These contracts are priced not only (compiled in 2008-2009 and representing petition and Collusion in the U.S. Prison to unjustly enrich the telephone compa- data from 2007-2008). The initial survey Telephone Industry,” by University of nies by charging much higher rates than was conducted by PLN contributing writ- Michigan professor Steven Jackson. those paid by the general public, but are er Mike Rigby, with follow-up research by further inflated to cover the commission PLN associate editor Alex Friedmann. How Are Phone Rates Regulated? payments, which suck over $152 million The phone contracts were reviewed Domestic phone calls are generally per year out of the pockets of prisoners’ to determine the service provider; the divided into three categories: local, intra- kickback percentage; the annual dollar state and interstate. The rates charged for amount of the kickbacks; and the rates these calls depend on several factors and Inside charged for local calls, intrastate calls are regulated by different authorities. Lo- (within a state based on calls from one Lo- cal calls are usually flat-rate within a small Phone Rate Chart 16 cal Access and Transport Area to another, area around the call’s originating location; Editorial 18 known as interLATA), and interstate calls e.g., within the same city. (long distance between states). To simplify Local and intrastate calls are often Prisoners’ Human Rights 22 this survey, only collect call and daytime regulated by state public utility or ser- Crime Reporting 26 rates were analyzed. vice commissions, which set rate caps. Around 30 states allow discounted These caps are negotiated to allow phone Guantanamo Drugging 28 debit and/or prepaid collect calls, which companies to recover capital costs in a Washington Public Records Suit 32 provide lower prison phone rates (much reasonable time frame while also satisfying lower in some cases). However, since other requirements levied by the state. The latter Texas Parole Audit 34 states don’t offer such options and not all include subsidizing low-income phone us- prisoners or their families have access to ers, providing emergency communications Maine Private Prison Lobbying 37 debit or prepaid accounts, only collect for state agencies, and providing required Los Angeles Jail Heat Ray 38 calls – which are available in all prison phone coverage (such as emergency- systems except Iowa’s – were compared. reporting phone booths along major Prison Facebook Problems 43 Also, while telephone companies some- highways). Obviously, some of these state- Texas Legislator Sentenced 46 times provide reduced rates for evening mandated requirements are not in and of and nighttime calls, many prisoners don’t themselves profitable, so negotiation of New Jersey Bankrolls CEC 48 have the luxury of scheduling phone calls rate structures includes recouping these News in Brief 50 during those time periods. otherwise nonrecoverable costs. 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Subtotal: $_________________________________________________ SHIP TO: NAME _____________________________________________________________ ADDRESS __________________________________________________________ Total Amount: $ ____________________________________________ _____________________________________________________________ CITY, STATE, ZIP ____________________________________________________ April 2011 2 Prison Legal News when making bids. But that is not what PUBLISHER Prison Phone Contracts (cont.) guides their bid price or determines the Rollin Wright winning bidder in most cases. EDITOR panies are also regulated by the Federal With very few exceptions, prison Paul Wright Communications Commission (FCC). phone contracts contain kickback provi- ASSOCIATE EDITOR The FCC oversees rate structures across sions whereby the service provider agrees Alex Friedmann state lines, provides for an orderly inte- to pay “commissions” to the contracting COLUMNISTS gration of smaller telephone companies agency based on a percentage of the gross Michael Cohen, Kent Russell, into the national phone network, and is revenue generated by prisoners’ phone Mumia Abu Jamal responsible for implementing the Tele- calls. These kickbacks are not insignifi- CONTRIBUTING WRITERS communications Act of 1996. cant. At more than $152 million per year Mike Brodheim, Matthew Clarke, John Dannenberg, Derek Gilna, These regulatory agencies are neces- nationwide for state prison systems alone, Gary Hunter, David Reutter, sary to prevent one large company from the commissions dwarf all other consider- Mike Rigby, Brandon Sample, forming a monopoly and price gouging ations and are a controlling factor when Jimmy Franks, Mark Wilson the public with unreasonably high phone awarding prison phone contracts. research associate rates. However, such monopolies are only For example, when Louisiana issued Sam Rutherford prohibited in the non-prison market. an RFP for prison phone services in 2001, advertising DIRECTOR Prison phone service providers are free it specified that “[t]he maximum points, Susan Schwartzkopf to bid on contracts at the maximum rates sixty (60) ... shall be awarded to the bid- LAYOUT allowed by regulatory agencies, and upon der who bids the highest percentage of Lansing Scott/ winning such bids are effectively granted compensation ...,” and that “[t]he State Catalytic Communications a monopoly on phone services within a desires that the bidder’s compensation HRDC GENERAL COUNSEL given prison or jail system. percentages ... be as high as possible.” Lance Weber When the Alaska Dept. of Correc- PLN is a Monthly Publication The Prison Phone Bidding Process