Facing Rates Of $17 For 15 Minutes, FCC Takes Up Regulation Of Prison Phone Industry

Facing Rates Of $17 For 15 Minutes, FCC Takes Up Regulation Of Prison Phone Industry

Phone calls between prisoners and their families can cost as much as $17 for a 15-minute call, reaping generous profits in many states for both the phone companies that provide the service and the states, which receive what amount to legalized kickbacks. Recognizing the drastic obstacle these costs impose on children staying in touch with their parents, a bipartisan coalition launched a campaign this past Mother’s Day calling for regulation of this industry. On Thursday, the Federal Communications Commission entertained these calls, announcing at a rally that it would seek public comment on prison phone rules and rates. In a scathing September report, the Prison Policy Initiative’s Drew Kukorowski explains why the industry needs regulating:

Exorbitant calling rates make the prison telephone industry one of the most lucrative businesses in the United States today. This industry is so profitable because prison phone companies have state-sanctioned monopolistic control over the state prison markets, and the government agency with authority to rein in these rates across the nation has been reluctant to offer meaningful relief.

Prison phone companies are awarded these monopolies through bidding processes in which they submit contract proposals to the state prison systems; in all but eight states, these contracts include promises to pay “commissions” — in effect, kickbacks — to states, in either the form of a percentage of revenue, a fixed up-front payment, or a combination of the two. Thus, state prison systems have no incentive to select the telephone company that offers the lowest rates; rather, correctional departments have an incentive to reap the most profit by selecting the telephone company that provides the highest commission.

The prison telephone market is structured to be exploitative because it grants monopolies to producers, and because the consumers — the incarcerated persons and their families who are actually footing the bills — have no comparable alternative ways of communicating.

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Full article here: http://thinkprogress.org/justice/2012/11/19/1214071/facing-rates-of-17-for-15-minutes-fcc-takes-up-regulation-of-prison-phone-industry/