SELECT CORPORATIONS CHARGE PRISONERS INFLATED RATES TO CALL HOME
A new report details how several corporations are driving prices up and increasing their profits, while monopolizing the state prison telephone industry.
Global Tel*Link (GTL), Securus Technologies, and Century Link have exclusive control over prison phone service in states where 90 percent of incarcerated people live.
Of the three prison phone service providers, GTL is the largest, holding contracts in 27 state correctional departments, according to the report.
“Prison phone companies are awarded these monopolies through bidding processes,” said Drew Kukorowski of Prison Policy Initiative.
According to the report, consumers have no input in the bidding process, making the prison telephone market “susceptible to prices that are well-above ordinary rates for non-incarcerated persons.”
Every state, except eight, have contracts that are written to include a promise to pay “commissions” to states, which in effect are kickbacks. States either receive an up-front payment, a percentage of the revenue, or some combination from each.
“The prison telephone market is structured to be exploitative because it grants monopolies,” the report said, adding, “these state-sanctioned monopolies prey upon people who are least able to select alternative methods of communication.”
Prison phone companies, and prisons, justify over-pricing, contending that high phone rates are necessary due to the costs involved to provide security for the telephone service, like call monitoring, the report said.
“Correctional departments argue that revenue from kickbacks provides for prison amenities that would otherwise go unfunded by state legislatures,” the report said.
According to the report, “TIME Magazine (May 26, 2009) notes that the ‘notoriously expensive’ cost of using prison telephones contributes to the demand for [contraband] cell phones in prison.”
A Federal Bureau of Investigations (FBI) bulletin said correctional administrators are concerned over reduced revenue from prison-approved phones, due in large part to contraband cell phones, said the report.
According to the report, the Federal Communications Commission is looking into the possibility of regulation that would place a price cap on long-distance prison phone rates.
“Such regulation, when considered against the backdrop of the corporate monopolization of the prison telephone market, would both reduce the price-gouging that incarcerated persons’ families suffer and simultaneously contribute to the social good by reducing recidivism,” the report said.
The federal Bureau of Prisons has said that, “telephone privileges are a supplemental means of maintaining community and family ties that will contribute to an inmate’s personal development,” according to the report.
The report, however, said that with the corporate consolidation of prison phone service providers, “state-granted monopolies and inelastic demand for prison telephone service has led to exorbitant rates.”