Prison pay-phone giant Securus Technologies profits continue to rise in the face of an earlier order by the Federal Communications Commission (FCC), which capped the price of interstate telephone calls made from correctional facilities, Truth-out.org reports.
An impending ruling by the FCC that may limit how much the prison pay-phone industry is allowed to charge customers (incarcerated people, their family and friends) has not slowed Securus’ growth, according Truth-out.
“In leaked documents from a presentation to investors acquired by The Huffington Post, Securus portrays itself as a company clearly in the black,” Truth-out reported in July. “In 2014, they made $114.6 million, up from $87 million the previous year.”
According to Truth-out, the prison pay-phone industry generates an estimated $1.2 billion a year in revenue. More than $100 million of it is paid back to states in commissions, also known as “kickbacks,” for the right to contracts to provide phone service to inmates.
Prison Policy Initiative (PPI) reported that Securus no longer pays commissions on interstate calls. It said the FCC issued an order that now prohibits prison pay-phone service providers from passing off to consumers the cost of commissions paid to correctional facilities as if they were a valid expense in doing business.
“Securus exemplifies the industry’s obscene penchant for squeezing profits by fleecing their customers…” said Peter Wagner, executive director of Prison Policy Initiative. As explained in another recent article, “Securus’ business model is less about providing phone service than it is about harvesting fees.”
According to PPI, the difference between Securus’ cost to provide service and what it charges customers was 51 percent.
“That’s not only unprecedented, it’s significantly higher than companies typically known for having high profit margins like Apple,” Wagner said.
Securus provides phone services to 2,600 prisons and jails in 47 states, PPI reported.