Feigley v At&t Pa Taxing Collect Calls Fr Inmates 1999
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32
M
1
PUBLIC UTILITY COMMISSION
2
"1
4
5
6
7
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l4',:dJ,1
"T&T
c:'!1~""::l
T.
~v"
Communications of Pennsylvania.
Inc,
Complainant wants PUC to bar the
companies from collecting a tax
on speech in which tax doubles
cost of collect phone calls from
prisoners and which is paid to
the Commonwealth without
legislative authorization.
8
)
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Pages 32 through 251
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Hearing Room 3
North Office Building
Harrisburg, Pennsylvania
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12
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Docket # C-00981434
)
Further Hearing.
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wednesday, June 16, 1999
Commencing at 10:21 a.m.
BBFORB
LOUIS G. COCHERES, Administrative Law Judge
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APPEARANCES:
16
17
18
ANGUS R. LOVE, ESQUIRE
924 Cherry Street
Suite 523
Philadelphia, pennsylvania ~9~07
Appearing on behalf of Sandra Feigley
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20
21
22
ALAN C. KOHLER, ESQUIRE
WOLF, BLOCK, SCHORR and SOLIS-COHEN, LLP
212 Locust Street
Suite 300
Harrisburg, pennsylvania 17101
Appearing on behalf of AT&T Communications of
pennsylvania, Inc.
23
ALSO PRESENT:
24
Mark B. Guzzi, Bsquire
25
KEENAN REPORTING SERVICE (717) 665-4060
of
/'
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1
2
COMPLAINANTs
3
Sandra Feigley
51
65
4
Dianna Hollis
67
78
5
Robert Frantz
83
105
6
John Malcom
109
148
7
John Shaffer
157
DIRICT
CROSS
RID;IRBCT
RICROSS
81
8
9
10
RBSPONDBNT:
patricia Cal ega
189
218
229
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'. .."."",..
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,
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16
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19
20
21
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25
KEENAN REPORTING SERVICE (717)
of
665-4060
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.....
1.
2
COMPLAl:NAIIT;
3
No. P-1.
54
1.88
4
No. P-2
86
1.88
5
No. P-3
1.08
1.88
6
No. P-4
1.30
1.88
7
No. P-5
1.43
1.88
8
No. P-6
1.65
188
9
No. P-7
1.70
1.88
1.0
No. P-8
1.76
1.1.
No. P-9
1.82
1.88
l:DBHTl:P:tBD
ADMITTBD
-
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1.2
1.3
ATiT;
1.4
No. 1.
1.96
231.
1.5
No. 2
1.97
231.
1.6
No. 3
200
231.
1.7
NO. 4
201.
231.
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NO. 5
209
231
C.propn el-arj )
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KEENAN REPORTING SBRVICE
(717)
665-4060
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1.
2
Good morn3.ng.
rlO:liiM!~:
and gentlemen.
Good morning, .1aa1eS
As you all know by now, my name is Louis
3 ·Cocheres and I'm the Administrative Law Judge assigned to
4
hear the matter of Sandra Feigley versus AT&T
5
Communications of pennsylvania, Incorporated at Commission
6
Docket· Number C-00981434.
7
First of all, it's nice to meet you, Mr. Love.
8
talked to you on the phone.
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face and the voice together.
10
MR. LOVE:
Who is this nice person you
This is a law student.
Could you
please--
13
1.4
It's always good to put a
brought with you at the table?
1.1.
12
I
MS GILCACKEL:
I'm Jasmine Gilcackel.
I'm a Temple
law student.
1.5
MR. LOVE:
She's an intern at my office.
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JUDGE COCHERES:
Okay.
Well, we'll try not to put
17
you to sleep immediately.
18
thing
19
parties to have a stipulation.
20
that I received Mr. Love's letter of June 11th including a
21
pleading denominated undisputed facts.
22
having looked at the very last page where Mr. Kohler's
23
signature appears on the last page.
24
signed them in sequence.
25
th~t
t
~p.~
on my
All right.
agend~
Okay.
The first
is that ! had required the
And I want you to know
Guilty of not
I didn't realize you
But in any event, I will certainly accept it into
KEENAN REPORTING SERVICE (717) 665-4060
.
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tne record..
I tooK tne 11l:)erty ot maK1ng an extra copy.
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I'm going to give it to the Court Reporter.
3
proprietary information in it, I will label the top of it
4
proprietary so that not only the Reporter but the file
5
room will know how to treat it.
Since it has
......
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(The stipulation was admitted into evidence.)
7
MR. KOHLBR:
Your Honor, can we address the
..
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8
treatment of proprietary information both in the
9
stipulation and how the hearings are going to be conducted
1.0
today?
1.1.
JUDGE COCHBRES:
12
MR. KOHLER:
Certainly.
Your Honor, first in the stipulation,
13
just to clarify the record and also for the Court
1.4
Reporter, Mr. Love prepared the stipulation.
15
clarify, proprietary information is marked a little
16
differently than it normally is in this forum.
17
no consequence to me as long as Your'Honor
~8
and the Court Reporter understands it and Mr. Love who did
1.9
make the designations, of course, understands it.
20
fact.
22
non-proprietary but the number of calls is.
23
that be marked.
25
That's of
understand~
it
The one thing I'd add is on the ninth stipulated
21
24
And just to
The number of calls -- the number of telephones is
JUDGB COCHBRBS:
All right.
And would ask
I'll put the -- use the
same format and just put an asterisk next to the
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1
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l.ntormatJ.on.
MR. KOHLER:
The other thing is, Your Honor, as you
3
know, this information is proprietary to AT&T.
It was
4
provided and disclosed to Mr. Love in discovery and then
5
became the basis for stipulated facts.
6
issued a proprietary order in this agreement.
7
that that information not be disclosed beyond Mr. Love
8
except by signed affirmation of other parties.
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Your Honor, has
It requires
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It was circulated to the Commonwealth through·
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service and stipulation.
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partially my fault or maybe wholly my fault because Mr.
12
Love did send me a copy of the certificate of service and
13
I should have seen that.
14
representing the Commonwealth this morning and he
15
understands that that is proprietary, and I don't need
16
anything further.
..:.(;
I talked to Mr. Guzzi who's here
That's fine.
17
JUDGE COCHERES:
."
MR. KOHLER:
.J..O
For the record, that was
You need no further reassurance.
That's right.
But I would like the
19
record to reflect that that information -- there's other
20
witnesses here.
They are third parties.
They are -- they
21 'have not signed the proprietary agreement.
They are not
22
parties to this proceeding.
They should have not received
23
the information and should not receive the information and
24
should' not be privied to it in this hearing.
25
also hold true for Ms. Feigley absent signing of an
KEENAN REPORTING SERVICE (717) 665-4060
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That would
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attlrmatlon whlcn
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accept 1.1: lt were so slgnea.
To take matters further, there will be testimony
2
3
today on I believe AT&T proprietary information and
4
potentially Commonwealth proprietary information.
5
Honor, we have parties that are in the room now that
6
cannot be subject to that information.
7
your
.g~idance
Yo~r
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And I would seek
as to how you want to run this hearing in
.........
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8
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some sort of orderly fashion.
JUDGE COCHERES:
well, I'm going to try and run it
10
the way you're accustomed to seeing me run it.
11
thank you for the lead in.
12
have proprietary information in the courtroom is, first of
But I
".
Normally what I do when we
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all, try to limit its use during the hearing.
14
must use it, I try to group it in as few instances as
15
possible.
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is on the stand and has as part of their testimony
17
references to proprietary information, we state the cross
18
examination or the examination of that material until they
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end their presentation.
20
proprietary information that they will be dealing with, we
21
will start with that information.
22
:
. ;....
And if we
So that if that means that witness number one
.... ,.
So that if witness number two has
And the reason I say that is that when proprietary
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information will be used in the courtroom, I need a clear
24
signal from counsel to alert me and the Court Reporter and
25 'then I must give the instructions to clear the courtroom.
KEENAN REPORTING SERVICE (717) 665-4060
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And as a stanaara torm ot pracc1.ce, tnose
wno
J:O.l.KS
2
have signed a particular agreement which was -- a copy of
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which was attached to my proprietary order signifying that
4
they will not disclose proprietary information except
5
under very limited circumstances, those people are allowed
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to stay in the courtroom.
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agreement
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Folks who have not
signe~
that
and in my estimation, most proprietary
8 . information is fairly boring but important to people who
9
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designate it as proprietary -- have to leave the
10
courtroom.
11
information has been disclosed on the record and
12
completed.
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And they are permitted to return when the
.-
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The result is that the transcript and the documents
14
that may be produced while we're on the proprietary record
16
transcript in two formats.
17
transcripts for today; the proprietary transcript and the
18 . non-proprietary transcript.
There will be obviously two
The pages are sequential'in
. ..
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the sense that if we do page 1 through 125 on the
20
non-proprietary transcript, page 126 will start the
21
proprietary transcript and only go to page 140 before
22
we're back on non-proprietary.
23
page 141.
24
25
,
..
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And that would start on
So the result is only slightly bizarre to the
outsider.
But it's intended to protect information which
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KEENAN REPORTING SERVICE (717) 665-4060
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l.mportance co tne partles ot tne case.
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MR. KOHLER:
2
Your Honor, could I make a suggestion?
3
I'm going to make a presumption that Ms. Feigley would
4
like ·to be here for her entire case.
5
an acknowledgement.
6
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I have no objection to her signing it
I have -- signing an acknowledgement now.
And I'm relying on Mr. Love to make it clear to his
7
8
I have not received
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client on what the obligations are with the proprietary
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agreement and to do everything in his power to make sure
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it's complied with.
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third parties.
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would add that that's not true for
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AT&T would object to disclosure to any third parties
~2
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even with a signed acknowledgement because they are not
14
part~es
to this proceeding, third party witnesses.
If
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they qualify as an expert under the proprietary agreement,
16
Mr. Love maybe could make a request.
17
no such acknowledgements to date.
JUDGE
18
~9
COCH~RES:
Yes.
But
All right.
I
have received
well, that is
certainly up to Mr. Love and Ms. Feigley to accept your
20
offer.
And at least at this point, unless there are no
21
other procedural aspects that I have to deal with, we can
22
get to witnesses.
..
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MR. LOVE:
24
JUDGE COCHERES:
during the break.
.
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Ms. Feigley will sign the agreement.
That's fine.
And we can do that
·
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It doesn't have to be done immediately.
KEENAN REPORTING SERVICE (717) 665-4060
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That
2
issues?
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not a
proJ:)~em.
Are tnere any otner procedural
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(No response.)
4
JUDGE COCHERES:
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Hearing none, then, Mr. Love, you
are the attorney representing the claimant.
You have.the
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burden of proof, and I expect that you have one or two
7
witnesses that you want me to hear from.
8
, MR. LOVE:
Your Honor, I'd like to make a brief
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opening statement if I could.
10
JUDGE COCHERES:
11
MR. LOVE:
Fine.
MS. Feigley started this proceeding pro
12
se April of 1998 when she filed a challenge with the
13
Public Utilities Commission to the contract between the
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Commonwealth of pennsylvania and Bell and AT&T alleging
15
three things:
16
constituted a tax on her free speech because of their
17
excessiveness and that there was a racially
18
impact upon people of color paying a higher rate than
19
other folks were paying in the Commonwealth.
That the rates were excessive, that they
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disp~rit
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20
Your Honor issued an order in this case I believe it
21
was in November of 1998 dismissing Bell from the case.
22
Bell had filed a motion for a judgment on the pleadings.
23
You converted that to a summary jUdgment motion and
24
granted that.
25
judgment and allowed the case to proceed.
YOU dismissed AT&T'S motion for a summary
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You also
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KEENAN REPORTING SERVICE (717) 665-4060
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1
QiSCUSSea wnetner or not tne commonweaJ..tn snouJ..C1 oe
2
brought in as a necessary party.
3
Feigley opposed that bringing in of the Commonwealth.
4
That decision was basically affirmed by the Public
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And at that time Ms.
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utilities Commission, I believe, in February of the
6
following year.
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We're here today to present six witnesses.
7
8
We're
...
,
going to present three family members of inmates to
9 'testify as to their experiences with the phone system.
10
We're then going to call John Malcom from the Commonwealth
11
of pennsylvania who is familiar with the contract
12
negotiations on behalf of the Commonwealth.
13
going to call Deputy Commissioner Shaffer from the
14
pennsylvania Department of Corrections to explain the
15
Department of Corrections role in this operation and then
16
I'll either call Patty Calega from AT&T to talk about
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We're then
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their rate structure in this case.
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Based on this evidence, I'm going to ask the Court
18
19 ,to reconsider its ruling in the Bell summary judgment"
20
motion based on new evidence that we're going to present
21
today.
22
Code "Rules, there is a section that allows the Court to
23
reconsider motions before a final decision is made.
24
we're going to ask the Court to review that in light of
25
the fact that the new contract entered in to this year is
And I understand in the rules, in the Pennsylvania
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And
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KEENAN REPORTING SERVICE (717) 665-4060
•
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1
substantlallY altferent :trom toe Ola contract.
2
believe that's a material change, a fact that warrants a
3
reconsideration.
4
add the Commonwealth of Pennsylvania as a party
5
believe that a contract takes two people to have a
6
contract, and they're both equally important in this
7
matter.
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Ana we
And we're also going to ask the court to
beca~se
we
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of the Commonwealth into this case and is asking that the
10
Commonwealth be added to the case.
11
case today.
12
Feigley to the stand.
And that will be our
I'd like to start out by calling Sandra
13
MR. KOHLER:
14
JUDGE COCHERES:
15
MR. KOHLER:
Your Honor, can I respond?
::..~~:
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.First of all, I don't have a problem
with joining the other parties.
17
Bell should have never been dismissed.
18
Mr.
19
amended complaint or a petition or even a motion for
20
reconsideration or whatever you may call your pleading may
•
It's AT&T'S position that
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And I agree with
Love that. the circumstances have changed and that an
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Yes.
16
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And Ms. Feigley is now not opposing the introduction
8
9
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be appropriate at this time.
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Your Honor, we have to have all the parties here
23 . before a hearing.
And they have to be parties of record.
24
If there was a, you know, if this isn't an appropriate
25
preliminary matter which it may be, we could have done it
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KEENAN REPORTING SERVICE (717) 665-4060
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Dy teJ.epnone.
2
evidence.
we ougnt co ao l.t now DetOre we get 1nto
JUDGE COCHERES:
3
Yes.
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MR. KOHLER:
4
Your Honor, it may be relevant.
I
5
think Mr. Love and I can stipulate at least as to Ms.
8
now.
9
advisement, whatever you prefer.
And Your Honor can issue a a rUling or take it under
I don't think there' any
10
point in putting witnesses on for purposes of the
11
preliminary motion.
12
before we proceed.
13
MR. LOVE:
~~.
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I'd like to know who the parties are
Your Honor, my position is that the new
14
contract, the point of having Mr. Malcom here was to have
15
him talk about the differences between the old contract
16
and the new contract.
17
contract, AT&T was the prime contractor.
18
prime contractor.
19
-
As I understand it, in the old.
NOw, Bell is the
So I think there's been a significant change in the
20
roles of the parties in this regard.
21
in the regulations you have to show a change in a material
22
fact in order for the Court to entertain a motion to
23
reconsider a prior ruling.
24
bring this evidence to the Court so there would be a
25
foundation for this motion.
.... ~~
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And my understanding
And that was my point today to
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KEENAN REPORTING SBRVICE (717) 66S-4060
MR.
1
vrl1'lT,Rg:
Thac's true, Your Honor.
But tne
2
founqation is in the stipulation.
3
not as Your Honor would like, we can stipulate further.
4
mean, there's no dispute as to how the contract worked
5
before and how the contract worked after February of 1999.
6
I agree it may have relevance to whether Bell should
7
be a party and whether the Commonwealth should be a party.
8
But again, it's a preliminary matter.
9
witness.
10
And to the extent it's
I
There' no need for
It's just going to take time.
When we get to
..._. . ..
the merits, we need witnesses.
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11
Your Honor, if the Court's willing, I can take a
12
shot at explaining that to Your Honor and Mr. Love can
13
jump in if I say anything that he doesn't agree with.
JUDGE COCHERES:
14
-'.
'.
.. '.-,
I think I better get a chance to
15
talk here.
You have a basic problem.
You have a couple
16
basic problems.
17
side and you're arguing against an empty chair.
First of all, you two are on the same
Bell
.
... ·~4
Second, I issued my order.
19
It,..:
And as Mr. Love just
20 'told me, the Commission affirmed it.
Now, I don't have
. . . . . . It·.
21
the authority any more to order that Bell, you know, that
22
I reconsider my decision.
..
.......
There is a final Commission Order that was not
23
24
appealed to the effect that Bell should no longer be a
25
party.
So there is nothing for me to reconsider because I
KEENAN REPORTING SERVICE (717) 665-4060
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no longer nave tne autnorJ.ty to reCOnSl.C1er.
2
wanted reconsideration, you should have gone to the
3
Commission.
4
Statute, Section 703 of the pennsylvania Public Util;ty
5
Code, 66 P.A.C.S 703 (g) allows the Commission to
6
reconsider its orders.
II:
you nad
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And that is appropriate and permitted by
10
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You're talking to the wrong fellow
..
7
here.
8
Commission has completed.
9
There is nothing
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o.
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can do to change what the
Next, I did read the stipulation.
I did note that
10
there was a change in the contract format that is part of
11
the facts stipulated.
That's interesting.
This
12
stipulation, according to my order, was due a week ago.
13
got it two days ago.
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,
14
This hearing was deliberately postponed to allow the
15
parties to complete their discovery so that if this kind
16
of problem was going to come up, it was going to come up
17
and could be taken care of before today.
18
of witnesses.
19
since 1998 and should have done their homework before they
20
walked into the courtroom.
21
for the Department of Corrections or the Commonwealth?
I have
22
MR. GUZZI:
23
JUDGE COCHBRES:
24
MR. GUZZI:
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litiga~ts
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I haveoa roomful
who have been litigating
Now, is there counsel present
Yes, Your Honor.
....;..
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You're Mr. Guzzi?
That's correct.
.... ...
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25
JUDGE COCHERES:
All right.
You were really
... - ·-0
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1
enchantea to get my
2
know, for you to bring it up now is a definite violation
3
of the due process rights of Bell Atlantic.
4
no way during this hearing that I will even consider.what,
5
at best, could not be characterized as a motion to
6
reconsider but, at best, a new motion to join an
~ast
7 . indispensable party.
oraer I'm sure.
...
now.
By the luck of the draw, Mr. Guzzi is here.
And I
12
will at least entertain any comments that he has at this
13
point before I make a decision as to whether the
14
Commonwealth should be joined as an indispensable party.
MR. GUZZI:
Well, Your Honor, I'm not afraid to tell
16
you that my knowledge of the specifics of this case is
17
very limited.
18
been filed with the Commission is limited.
.": ..........
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0-• • • • •
The documents that I've had access to and
. "'_ ...
And I would just request time for me to assess Mr.
20
Love~s.
21
indispensable parties before the Commission.
22
familiar with those rules at this time.
23
the Court indulge me in giving me some time to respond to
24
the motion of Mr. Love.
25
.'..
And without having given prior
Bell Atlantic is simply not well taken and will be denied
19
",'
~'J~~,'
9
15
11.
And there's
notice to Bell, I find that your motion with respect to
11
-
I nave, you
8
10
~
.'.
request to do some legal research about joinder of
JUDGB COCHBRBS:
....
I am not
I would just ask
When you say time, you don't mean
.....
.. . ...
,
KBBNAN REPORTING SBRVICB (717) 665-4060
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,
Tonger than an nour, ao yOU?
2
MR. GUZZI:
3
JUDGE COCHERES:
, '
..........
Yes, I do, Your Honor.
Okay.
Well, I'm not going to be
.~
I don't have that luxury.
And
wha~
4
able to do that.
5
going to conciude is this case, Mr. Love, as you properly
6
characterized it and as I indicated in my prior order and
7
decision is about whether AT&T's rates are too high or
8
not.
That's what we're here today to talk about.
..." .. ' .. ,
• 0.':
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_ ~•.•
And while the basis for that decision may rest on
9
.
I'm
10
your client's conclusion that there's something unfair,
11
too high, improper or a violation of some statute or her
12
constitutional rights in respect ,to what the Commonwealth
13
has done in its contract, I do not find it is necessary
14
that the Commonwealth actually be a party to these
15
proceedings.
16
adjudicate in this forum is utility problems.
,The only thing I have the right to
,
.
And to the extent that your client has pleaded that
17
18
the AT&T rates are too high,. that is the problem I must
19
deal with.
20
time to get it right -- but you have properly brought the
21 . Commonwealth officials into the courtroom.
Their testimony will be relevant.
23
the issuance of the subpoenas had I not believed that.
24
I see no reason at this point to make the Commonwealth a
25
party.
y~ur
~
.
I wouldn't have allowed
motion to join the Commonwealth as an
KEENAN REPORTING SERVICE (717) 66S-4060
of
'
That's fine.
22
And
- ..
You have properly -- and I know it took some
So
.
....
"
"
49
1
~na1spensaDJ.e
2
to witnesses?
3
MR.
party 1S aJ.so
LOVE:
aen~ea.
NOW,
can we move on
.........
0°
• '.~, ....
.. ~..'.; .:.,.
Can I just put on the record that I
4 ,object to those two rUlings and just give you my position
......
"".
..........
.'
"
5
in this matter.
6
stipulated facts a week in advance.
7
problems in 'getting a couple issues straightened out and
8
signatures,
9
e~c.
I apologize for not getting you the
There was some
......
.
,
. ..":: •..:
And I take that responsibility.
But with regard to the two motions that I'm
10
presenting to the Court today, my understanding of the
11
grounds with which the Court could rule on those motions
12
was that there was need for evidence to support those
13
motions.
14
the Court the necessary evidence to support those motions.
15
with regard to the Bell motion to bring -- to
......
............
And my point of coming here today was to give
..
...........
16
reconsider the Bell ruling, it's my understanding from the
17
regula~ions
of the Commission that if there is a material
"
18
change, a change of a material fact that the Court can
19
reconsider~
20
and not Your Honor.
21
I do know the Commission has the power to reconsider based
22
on new evidence presented.
23
present the new evidence, i.e., a new contract, a new
24
contractual arrangement, different roles between the
25
parties and utilize that evidence as a basis for my motion
.....
you may be correct that it's the Commission
That I don't know the answer to.
That was my point today to
. . KBBNAN REPORTING SERVICB
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(717) 665.-4060
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to reconSJ.der tne role
o~
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Now, with regard to the Commonwealth of
3
Pennsylvania, Your Honor, on page 7 of your opinion
4
queried why the Commonwealth was not a party to this,
5
action and noted that there was a strong possibility that
....
.
·
6
they would be called in some capacity as a party.
~
. ... ;--.:.:
However, at that time, Ms. peigley who was
7
8 . representing herself opposed the motion.
It's our
0"
9
~
.. '.' .
position today that in order to
~ursue
.
,"
..:
. . . . . '•
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her theory that
~o
this is a tax, we need the Commonwealth to be a party to
~~
the case in order to consider whether the Commonwealth's
~2
role in this could be considered to be a tax.
~3
need the Commonwealth for the very simple reason that a
14
contract takes two people to have a contract.
~5
contract is the issue.
.....
:
We also
....
And the
The rates are the issue.
And through the testimony today, I'm going to try to
16
17
show that the Commonwealth shares the burden of why the
~8
rates are so high.
...... " '"'
....
It's not.just AT&T that dictates the
,
rates.
20
have the Commonwealth in to understand why the rates are
2~
as hign as they are.
22
role in setting those rates by signing the contract.
23
A contract is between two parties.
And we need to
Because the Commonwealth played a
And that's why we believe we need the Commonwealth
24
to be in this case.
25
for the record.
So I want my objections duly noted
I will be happy to continue the matter,
KEENAN REPORTING SERVICB (717) 66$-4060
.
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e necessary paperwor
1ze my
.
requests or I'll do whatever Your Honor wishes.
JUDGE COCHERES:
3
.
.. A_.,:
Well, Mr. Love, we continue to
4
disagree.
5
for the hearing in this case.
6
to have.
And'r see no reason to have the Commonwealth as
7
a party.
They are not a utility.
8
appropriate and that's going to be my ruling.
9
peigley is going to be the first witness, she should come
10
And the answer is we have set today as the day
And that's what we're going
Their witnesses are
So if MS.
.. ,:"
..........
up on the stand.
SAMDRA PBXGLBY, called as a witness, having been
11.
12 'duly sworn, was examined and testified as follows:
........
........
\
JUDGE COCHERES:
13
14
down.
Please sit
You've waited a long time, Ms. peigley.
DIRBCT BXAKINATXOH
15
16
Good morning to you.
,.
BY MR. LOVE:
Ms. Feigley, can you give your full name for the
17
Q
18
record?
19
A
My name is Sandra Lee peigley, P-E-I-G-L-E-Y.
20
Q
And your address?
21
A
Box 15541 Harrisburg, pennsylvania 17105.
22
Q
And are you employed?
23
A
I'm self-employed.
24
Q
And what do you do?
25
A
I do property management.
........
......
KEENAN REPORTING SERVICE (717) 665-4060
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1
Q
And are you marrl.ed?
2
A
Yes, I am.
3
Q
And who are you married to?
4
A
I'm married to George Feigley who is a prieoner
. . . . . . . .w
5 .at SCI Smithfield.
6
7
JUDGE COCHERES:
THE WITNESS:
He's
.
He's incarcerated at SCI Smithfield
JUDGE COCHERES:
Okay.
Thank you.
BY MR. LOVE:
12
Q
Now, am I correct you began these proceedings?
13
A
Yes.
14
Q
And can you tell us a little bit about what
15
'
which is in Huntingdon.
10
11
I'm sorry, I didn't hear you.
:.
a prisoner where?
8
9
.
. .•..::.;
caused you to bring this action?
16
The reason that I brought this action before the
A
17
PUC was because I, for many years, I've paid considerable
18
charges for the calls that I
19
husband.
20
to calls coming from a prison that they constituted a
21
special charge being placed on me because I accepted the
22
calls from a prisoner.
23
somebody in California or from somebody, even a collect
.mus~
receive collect from my
And I felt that since these charges were limited
..
If I had accepted a call from
,
•
24
call from down the street, the charge would have been much
25
different.
.
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Now, now long nave you Deen gett1ng pnone calolos
Q
from your husband in prison?
3
A
The past 22 years.
4
Q
He's been in jail 22 years?
5
A
Yes.
6
Q
And do you get calls from any other people in
7
...
. ....
......
prison other than your husband?
8
A
Yes, I do.
9
Q
And how do these telephone calls come to you?
10
A
They are placed
11
Q
And can you just briefly explain what happens
12
13
collec~
when the phone rings?
Okay.
A
'=..
When the prisoner places the telephone
call and I answer it, I get a recording telling me the
15
conditions surrounding the call, that they are being
16
recorded and that the call is being placed from an
17
institution, etc.
18
And then I push a button on
20
21
22
It must last about 30 seconds or so.
~y
.. ..
.........:'
..
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phone to accept the call.
If you know, is that time of the announcement
Q
.. ".. ':.. .
charged?
A
It is my understanding, although I never
actually timed it, that it is not.
23
Q
Are there any voice overs during the call?
24
A
There are interruptions which I'm pretty sure
25
... ~:
calls to me.
14
19
'.' "-
'
would be included in the time that it tells you you have
KEENAN RBPORTING SERVICB (717) 665-4060
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54
1
two ml.nutes
~ett
ana tnen you nave one m1nute
~ett.
Ana
2 ,sometimes you're also interrupted by clicking noises .. I
3
don't know if that's caused by the recorder switching or
4
what causes that.
5
disrupted.
6
7
Q
- .,
Now, do you have a choice in the matter of who
would be carrying these telephone calls?
What company?
A
No, there is no choice.
9
Q
And do you get bills for these calls?
10
A
Yes, I do.
I have brought one as evidence.
The
"
•
-
11
calls are approximately three times higher than calls
12
placed outside of the system.
14
15
.
But the conversation is oftentimes
8
13
, .
.
MR. LOVE:
Your Honor, I'd like to mark these.
.0
'.
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_.
"--. .
.
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Would it be appropriate P-1?
JUDGE COCHERES:
Yes, that's fine.
.....
,
16
(Compl~inant's Bxhibit Ho. P-1
marked for identification.)
~~a
produced
'
~nd
17
18
19
20
MR. LOVE:
And I show you what I've marked as P-1.
And can you identify this document please?
THE WITNESS:
Yes, this is a copy of one of my
. . . . . . ' 0 ••
21
telephone bills from March of this year.
22
JUDGE COCHERES:
24
MR. LOVE:
25
Excuse me, do you have a copy for
I'm sorry.
BY MR. LOVE:
KEENAN REPORTING SERVICE (717)
of
66~-4060
55
1
2
Q
Ana can you cake us tnrougn
C01S
aocument ana
explain which of those calls are from your husband?
A
3
The ones that are designated on the first page,
4
that would be the bottom section, they're designated,as
5
from pay phone PA.
.
.'
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And then the same would be true of the
6 . second page, the top two sections.
And you can see that
. . ""'.
.......
'
7
long distance calls from California, from Illinois or my
8
calls to them are much cheaper than the calls placed from
9
two hours away.
10
11
Q
Can you just specifically look at a couple of
these, perhaps the one from Anaheim?
12
A
Okay.
For instance, I have two calls to
13
Anaheim, California which total approximately 15 minutes.
14
And there the charge would be $4.
15
from my husband which is the reduced weekend rate for 14
16
minutes is 6.78.
17
from Smithfield costs 4.35.
18
call to Downers Grove, Illinois for five minutes was only
19
1.55.
20
21
Q
And I have one call
, ,
I·"'~·~'
And then you can see a five-minute qall
While on the second page, my
.. :.........
"
Are you familiar at all what -- how these
charges are accumulated?
22
A
Somewhat.
There is an initial placement call,
23
then there is a per minute charge.
And in addition to
24
these two charges, there is also a $.30 charge placed on
25
each call because supposedly it's placed from a pay' phone
KEENAN REPORTING SERVICE (717) 665-4060
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when 1n
2
require the maintenance that a pay phone would require.
3
Nobody goes and picks up money.
4
These are just regular household type phones that y04
5
would have on your desk or on your nightstand.
6
7
Q
A
9
system.
11
cney are not pay pnones.
',L'ney 00 not
Nobody does anything.
To the best of your knowledge, do these calls
Q
....
No, they do not.
It comes through an automated
'
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live operator if need be; is that correct?
A
Yes, that is correct.
13
Q
Are you familiar with if there's any basic
14
surcharge for these calls other than the $.30 charge that
15
you mentioned?
A
Just the initial charge that I'm aware of placed
17
on each call that is placed.
18
vicinity of $3.
19
down in to. how many sets.
20
•
And the pay phone has the ability to access'a
12
16
':';
involve a live operator?
8
10
rea~J.ty
•..:
"
...
Q
And that's somewhere in the
I personally did not actually break them
And the $3 charge and the $.30 charge are
21
automatic whenever you get a call regardless of the length
22
of the call?
23
.A
That's correct.
If I would speak one minute,
24
they would be there or a half a minute.
25
accepted the call, I would be charged those prices.
KiiN~
As long as I
RBPORTING SBRVICB (717) 665-4060
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57
1
2
DO
Q
you nave any 1C1ea wnat tne m1nute rate 1S tor
A
No, I'm sorry, I do not.
4
Q
Do you know what company is charging you for
6
,
your calls?
3
5
..
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...
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.
these calls?
well, Bell Telephone is the collector of the
A
......
7
money for the calls who in turn pays money to AT&T who in
8
turn pays money to the Commonwealth.
9
contracts, I did have the percentages of what the money
Under the old
10
was that was paid, but now I understand that has been
11
changed.
12
pays to the Commonwealth 25 percent or the other may be
13
paid them 35 percent of the money collected.
14
again, I don't have my documents in front of me.
15
submitted them as evidence at one time.
I believe one company receives 25 percent or
.........
16
But there
I had
If I just correct the witness, Your Honor.
Q
submitted initial pleadings that alleged 35 percent for
18
Bell and 50 percent for AT&T; is that correct?
A
I believe so, yes.
20
Q
And that was under the contract that was in
21
..:
She
17
19
.-":~~ ~
.....
force when you began this action?
........
22
A
That is correct.
23
Q
Do you have any idea how much money that
..
P
........
24 'generates for the Commonwealth each year?
. . . . ._.'h.
25
A
I have heard various figures.
One of them I
KEENAN REPORTING SERVICE (717) 665-4060
•
58
1
neara was S1X
2
the amount of money that is paid to the Commonwealth.
m1.1..1.~on.
But I
.ce.1.~eve
tnat 1S not near.1.Y
3
Q
And where did you hear that $6 million figure?
4
A
From various people who had seen copies of.a
5
report.
6
_..
.. . .. ....
.~.
MR. KOHLBR:
'
Your Honor, I'm going to object on
7 . hearsay and relevance.
I'm a little confused on Mr.
.... ."' ..
:~~.
8
Guzzi's role since he's not a party.
9
permitted to object?
10
. JUDGE COCHBRBS:
Is Mr. Guzzi
Mr. Guzzi has not entered his
11
appearance in the sense of a participant in this case.
12
would certainly entertain his participation by virtue of a
13
special appearance on behalf of the witness.
14
chosen to take a more quiet role.
15
MR. KOHLER:
I
But he has
Your Honor, I'm going to try to be
. -.......
16
patient and allow a broad record but try not at the same
17
time to go too far afield.
18
question was asked for a hearsay response.
19
how much m9ney the Commonwealth receives or doesn't
20
rece~ve
21
AT&T's charges are.
22
overall revenue collection isn't.
23
I don't see, number one,
~he
Number two,
is not relevant to what AT&T charges -- to what
MR. LOVE:
commissio~
The
rate might be, but the
Your Honor, I would respond by stating
24
with regard to hearsay, I believe it's a matter of public
25
record how much the Commonwealth makes on a contract.
.
KEENAN REPORTING SERVICE (717) 665-4060
..
And
......
...
.........
"
59
1
as sucn, snoU.La be allowea.
2
JUDGE COCHERES:
3
MR. KOHLER:
Your Honor, he can ask the Commonwealth
witness.
6
MR. LOVE:
7
Commonwealth witness.
8
sorry?
We're going to go through the
JUDGE COCHERES:
9
MR. LOVE:
10
11
Do you have the public records with
you?
4
5
.. .:~ ~
·point.
What was the second objection, I'm
It was hearsay and
relevance~
If the question is what are the rates being
charged and are they reasonable?
13
amount of money made on this contract by the Commonwealth
14
is relevant to these proceedings.
15
believe the Commonwealth should be a party.
JUDGE COCHERES:
YOU're half correct,
18
BY MR. LOVB:
20
21
. -....''''-.
And that's why I
objection on the basis of hearsay is sustained.
Q
~
I believe that the
17
19
~
Relevance, again, back to my initial
12
16
....... ....
...
The
Do you have any idea, Ms. Feigley, how much more
you pay for these rates than other calls?
A
I believe that I pay approximately three times
...... :..
22
23
24
25
more for these calls than I do for other calls.
Q
Now, does the cost of these calls have any
impact· upon your ability to communicate with your husband?
A
It certainly does.
I would talk to him much
:..
KEENAN REPORTING SBRVICE (717) 665-4060
of
61.
1.
current~y
speaK to n1m every aay.
So if the rates were lower, you would speak
2
Q
3
longer?
4
A
That is correct.
5
Q
Is there a limit on the amount of time you can
6
speak to him?
7
A
.' -
.,,!.'::.~.
It depends on the institution that one is in.
8 . Some of them allow freedom to speak every day.
Some give
..
9
permission to speak three times a week.
give a time block.
1.1.
three
12
minutes during the week in any way they wish.
1.3
1.4
Q
For instance, they may have either
minute calls a week or they may use those 45
Now, am I correct that you began this case
without an attorney?
A
That's correct.
16
Q
And did you submit a contract that existed at
the time that you began this case into evidence?'
1.8
A
Yes,
1.9
Q
And who was that contract with?
20
MR. KOHLBR:
21.
22
.........
It varies.
1.5
1.7
....
Some institutions
10
~5
,0
into .evidence.
I did.
Your Honor, objection.
He may attach it.
JUDGE COCHERES:
23
signed.
24
that later.
25
BY MR. LOVE:
It wouldn't be
I'm familiar with the document she
I appreciate the objection.
We'll worry about
Mr. Love?
KBENAN RBPORTING SERVICE (71.7) 66$-4060
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.. -. -"
60
1
more otten, out I can't attora :l.t.
Toe cnarges -- I
2
believe that these charges are so excessive that they
3
constitute a tax on my free speech.
4 .to speak to prisoners, to my husband.
And I'm only
the poorest class of people in the state.
6
families are among the poorest people there are in
7
pennsylvania.
8
Q
10
-.
0 •• : :
...
They limit my ability
5
9
..
~ne
of
The prisoners'
.
"
~'
.
And you had indicated also that you believe
there's a racial dimension to this.
Can you explain why
you believe that?
11
This is basically because most of the men who
A
12
are and women who are incarcerated in pennsylvania are of
13
minority background.
14
calls that their families must accept in order to speqk to
15
the prisoners.
16
had their phone service terminated.
17
spea~
18
as a unit.
19
black and
20
minority of the people affected, I guess, would be white,
21
but we are poor.
22
should be
This tax is based on these telephone
Many of these people I have spoken to have
to them any more.
They are unable to
This interferes with the family
And it's just that most of these people are
~hen
--
I guess next would be Hispanic.
We cannot afford these calls.
And the
And they
we feel that our free speech is taxed.
... ...
-
23
Q
How often does your husband call?
24
A
At the present time, I speak to him seven days a
25
week.
We try to limit them to a few minutes.
. " KBENAN RBPORTING SBRVICB (717) 665-4060
..
But I
.
,"
.":..'=:.,•.
62
1
Q
Ana. wno was tnat agreement wltn?
2
A
They were addendums to contracts.
Mr. Guzzi had
3
approved my receiving the telephone contracts, but I
4
beli~ve
5
at Camp Hill.
6
just added on each year which showed the percentages that
7
were paid to the Commonwealth and what each company
8
collected, the percentage paid to the Commonwealth.
Q
9
10
Mr. Malcom is the person I actually got them. from
And they constituted addendums that were
And you attached these contracts to various
A
Yes, I did.
12
Q
Okay.
Now, were these contracts open to
competitive bidding?
14
15
A
bid.
No, they were not.
They were not put out for
They were just renewed each time with an addendum.
16
Q
Without a bidding process?
17
A
That's correct.
18
Q
Do you know how long
19
A
For several years, I believe at least ten.
20
Q
And to the best of your knowledge, was
21
.....
pleadings that you filed in this case?
11
13
~hatwent
on?
AT~T
the
exclusive provider throughout those ten years?
22
A
To the best of my knowledge, that is true.
23
Q
And what percentage of the AT&T monies collected
24
25
...
."
from you goes to the Commonwealth, if you know?
I believe it was 50 percent.
KBENAN RBPORTING SBRVICB (717) 665-4060
..
63
1
2
e -- you sal.
in several different institutions; am I correct?
.
....-:...~.
3
A
Yes.
4
Q
An he's currently in Smithfield?
5
A
Yes.
,
Q
And you live?
7
A
In Harrisburg.
8
Q
Is there any policy under the Department of
10
It is my understanding that the policy of DOC is
when a person initially goes to prison, that he is moved
13
far away from home.
14
earn his way back closer to home.
15
Q
And they feel that the person should
And so that policy means that the rates will be
....... .
-
even higher?
A
Well, it would be even higher for most people,
19
Q
IS there anything else you want to add?
20
A
No, I
17
21
yes."
believe that that covered the points that
I was interested in bringing up.
22
MR. LOVE:
23
JUDGE COCHERES:
24
MR. KOHLER:
25
....
to their family?
12
18
"
corrections as to where to house individuals in relation
A
16
.
. . :..:::
6
9
.
.~
No further questions.
Mr. Kohler?
I just have a few questions.
On" one of
them, rather than trying to go through a series of
KEENAN REPORTING SERVICB (717j 665-4u60
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64
1
cros~-exam1nat10n
2
stipulate.
3
4
quest10ns,
JUDGE COCHERES:
want to see
I
1t
we can
Would it be better if we go off the
record for a few moments?
5
MR. KOHLER:
That's fine.
6
JUDGE COCHERES:
All right.
Let'S go off the
- .:~'
7
record.
8
(Discussion off the record.)
9
JUDGE COCHERES:
10
MR. KOHLER:
Let's go back on the record.
Your Honor, to clarify the record and
11
Ms. Feigley's testimony, counsel, let me see if I can
12
state the stipulation accurately.
13
some statements regarding AT&T providing service for ten
14
years without a competitive bid.
15
that AT&T responded and was successful in a bid to provide
16
interLATA services to Commonwealth correctional facilities
17
in 1983 which contract was then extended for a number of
18
years, approximately ten years.
19
JUDGE COCHERES:
Okay.
The -- Ms. Feigley made
The stipulation would be
So that I understand it, the
20
stipulation is that AT&T was the successful bidder in 1983
21
to provide interLATA telephone service to the
22
Commonwealth, Department of Corrections and that the
23
contract was extended for approximately a ten-year period;
24
is that correct?
25
MR. KOHLER:
'D t:I
....
:.
Yes, Your Honor.
n,,'O"" T
•
C! t:I "'n '"
~Tf'!
0
.,..
of
_
",,,
..... _
'.
65
~
MR. LOVE:
3
JUDGE COCHERES:
That's correct, Your Honor.
4
. ."::.
Thank you.
CROSS BXAMINATION
5
BY MR .. KOHLER:
6
Q
Ms. Feigley, I just wanted to try to understand
7
your telephone bill a little bit better here.
8
testified you live in Harrisburg; is that right?
You
9
A
That's correct, right.
~o
Q
And your husband is incarcerated in Huntingdon?
1.1.
A
That's correct.
12
Q
And what part of the state is Huntingdon in?
13
A
It's in the middle part of the state, in
Huntingdon County.
~5
Q
Do you know what area code that is?
16
A
814.
17
Q
And you're in the 717 area code; is that right?
1.8
A
That's right.
~9
Q
Looking at your bill
here~
the call on page
1
of
20
this Feigley Exhibit 1, P-1, these are calls -- at the top
21
of the bill -- these are calls that you made from your
22
home; is that right?
23
A
That's correct.
24
Q
And you called places like Philadelphia,
25
... ,
.....::. ..
correct
2
14
,
Norristown, Pikesville and Anaheim; is that correct?
KBBNAN RBPORTING SBRVICB (717) 665-4060
•
66
1 r - - - -.......AI\""-Un;;;m~-~
nuwml . - - - - - - - - - - - - - - - - - - - - - - .
2
3
o
You specifically referred to a call to Anaheim.
That's Anaheim, California, right?
4
A
That's correct.
5
o
That's not in Pennsylvania?
6
A
That's correct.
7
o
Okay.
Well, going to the bottom of the bill,
8
these are calls that your husband made to you at home; is
9
that right?
10
A
That's correct.
11
o
So they would have been from the 814 area code
12
to the 717 area code; is that right?
13
A
Yes.
14
Q
That holds true on the second page as well; is
15
. .....
that right?
16
A
That is correct.
17
Q
And the call you referred to, I think that's
18
circled on the Exhibit, that was a call that you made to
19
Illinois; is that right?
20
A
That is correct.
21
o
And that's not in pennsylvania either; is it?
22
A
No.
But if you would like to compare a
23
three-minute one in Philadelphia which is in Pennsylvania
24
for $.99 to my three-minute call from Huntingdon of $3.81,
25
that would be okay.
Both of those are in Pennsylvania and
KEENAN REPORTING SERVICE (717) 665-4060
. .....
'
.. :..
67
1
2
ust out one area co e.
. Q
But to clarify, the calls on the top of the bill
3
on both pages, they're not collect calls or anything.
4
They're just -- you know what a one-plus call?
5
A
Pardon?
6
Q
Are you familiar with the term a one-plus call?
7
A
When I must dial one first, yes, I'm familiar
0°
....
w
8
with that.
9
Q
Those are direct dial calls that you call?
10
A
That is correct.
11
MR. KOHLER:
12
JUDGB COCHERBS:
13
MR. LOVB:
14
JUDGE COCHERES:
15
coming, Mrs. Feigley.
I have nothing further.
No redirect, Your Honor.
16
THE WITNESS:
17
MR. LOVE:
18
Any redirect?
You're excused and thank you for
Thank you, sir.
I'd like to call Dianna Hollis to the
stand.
19
JUDGE COCHERES:
20
DIANNA ROLLIS, called as a witness, having been duly
21
22
23
24
25
Certainly.
sworn, was examined and testified as follows:
JUDGE COCHERES:
Please be seated and good morning
to you.
THE WITNESS:
Good morning.
PIlleT IXAMINATION
KEENAN REPORTING SERVICE (717) 665-4060
.
68
..
1
:;~
2
Q
Ms. Hollis, can you give us your address please?
3
A
616 Light Street in Millersburg, pennsylvania
.... ;:
4
17061.
5
Q
And your occupation?
6
A
I'm a registered nurse.
7
Q
And are you married?
8
A
Yes, sir.
9
Q
And to whom are you married?
10
A
Douglas Hollis.
1.1.
Q
And do you live with Mr. Hollis?
1.2
A
NO, sir.
1.3
Q
And where does hp. live?
1.4
A
Currently he's at Frackville, State Correctional
15
16
1.7
18
Institution at Frackville.
. Q
NOw, are you a member of any advocacy groups or
anything of that nature?
A
Yes, sir, I am.
I am a member of the
19
Pennsylvania Prison Society.
20
Pennsylvania CURS which means Citizens United for the
21
Rehabilitation of Errants.
22
23
24
25
Q
IS there a national organization -- you
indicated pennsylvania.
A
I am also the chairperson of
Is there a national chapter also?
Yes, there's a national organization of CURE.
It was found in 1.975 in San Antonio, Texas.
And there are
KEENAN .REPORTING SERVICE (717) 665-4060
of
.. :, .
69
~
51. states tnat nave cnapters now.
2
in washington D.C.
3
4
Q
Tne nat,10na.1. o:t:tlce 1S
what type of organization is CURE?
What is
their interest?
A
5
.
CURB is an advocate group for not only inmates
6
but their families.
We're interested in humane
7
incarceration.
8
to lesson the crime through criminal justice reform.
9
of these reforms have included banning guards who were
We are interested in all kinds of reform
Some
~o
being used as -- banning inmates who were being used as
~~
guards, increasing the use of halfway houses for parolees.
Q
J.2
And who founded CURB, if you know?
Yes;
~3
Ch~rles
~4
Tax~o.
~5
was a former nun.
~7
Charles was a former priest and his wife, Pauline,
Q
J.6
And can you give us a brief synopsis of the
philosophy of CURE?
1.8
Sullivan and· Pauline Sullivan in
A
Yeah.
I know you've done that somewhat.
Well, the basic philosophy of CURE is an
~9
advocate group who believe in the humane treatment of
20
inmates.
2~
for prisoner's rights.
22
23
24
25
We're a pro-family organization.
We also stand
Q
Are there a lot of family members involved in
A
Yes, the organization consists of family
CURE?
members, friends, ex-inmates, inmates themselves .
.
......
"
. 70
1
2
Q
Ana cu.a you 1na1.Cate you're t:ne executJ.ve
director of pennsylvania CURB?
Yes, I'm the chairperson.
3
4
Q
And who did you succeed in that position?
5
A
Ms. Lois Williamson unfortunately passed away
6
7
8
9
last year unexpectedly and she was executive director.
Q
Was Lois involved at all in the telephone issue
if you recall?
A
10
newly organized phone system.
11
advocate opponent to the present system of the phone calls
12
being monitored.
13
14
Also she was a very
n
time; is that correct?
15
A
Yes, sir.
16
Q
Now, can you briefly tell us a little bit about
17
18
the pennsylvania CURB Chapter?
A
pennsylvania CURE Chapter is made up of family
19
members, friends, people that are interested in
20
maintaining a humane criminal justice system or an
21
advocate system.
22
that are incarcerated in the Commonwealth's warehouse
23
prison system.
24
rehabilitation of these people.
25
... :."....
Q
There are 35,000 men, women and children
And CURE is a big advocate for
Now, why is CURB concerned about the telephone
KEENAN REPORTING SERVICE
•
(717) 66.5-4060
--"
71
1
Issue?
A
2
3
CURE is concerned about the telephone issue
I know myself.
We've been together ever since then.
6
inmate.
7
calls every month.
8
month.
He's a life sentence
It's one of my biggest bills every
Q
How often does he call you?
10
A
well, right now maybe twice a week.
There was a
11
time where he could have gotten two phone calls a day, of
12
course, he didn't with my job.
13
twice a week, not to our doinq.
Q
But right now it's about
Have the rates increased?
Have the rates
15
changed much over the 16 years that you've been
16
communicating with him by telephone?
19
20
21
.'-:,,~.
For 16 years I know the cost of the telephone
9
18
...
.,'
I had met my husband in 1982;
5
17
::~
because personally it puts a big financial burden on the
4 . family.
14
,
..
A
I think the rates have increased.
'. ;
It has caused
a more financial burden on us.
Q
What kind of problems does the high rates -- the
rates that are charged cause you, if any?
A
Well, for myself personally, I've had to
22
maintain two jobs.
Since 1983, I've worked two jobs.
I'm
23
the sole supporter of my family.
24
very little wages in the institution.
25
something, you know, it's a family member where the burden
.
My husband -- they get
When you need
KEENAN REPORTING SERVICE (717) 665-4060
of
',- ~;
.
72
1
lies.
Not only tor myselt, Due tor otner
2
that I have known, they're poor.
3
to have two jobs.
4
calls.
5
family members have had their phones disconnected because
6
they can't afford the price of the phone calls.
7
Communication, therefore is limited.
8
a lack of support.
tam1~y
members
TheY're not lucky maybe
They can't afford the cost of the phone
They have had to refuse phone calls.
Some of the
It's cut back.
It's
9
I think phone calls, visits and letters, I think are
10
very important in the rehabilitation process of an inmate.
11
They need that family support.
12
13
14
As the head of CURE, what are your impressions
Q
of the role of the family in rehabilitating an inmate?
A
Well, the family support is very important while
15
they're incarcerated just for the emotional support and
16
the financial support.
17
need someone out there that's going to be there for them,
But also when they get out, they
18 ·to support them so they don't go back to maybe the old
19
ways of stealing or drugs or whatever.
20
support system so that when they are released, they can
21
return- to society and be productive.
22
23
Q
They need that
So CURE believes in rehabilitation of offenders;
is that correct?
24
A
Yes, we believe everyone deserves to be.
25
Q
And you believe that the family is an important
KEENAN REPORTING SERVICE (717) 665-4060
•
.. '.: ..
73
1
.part ot tnat
2
3
4
A
renaDi~itat10n
process?
That's the most important part of an inmate is
the family support.
And do you believe that these phone rates
; Q
5
negatively impact the ability of a family member to
6
contribute to the rehabilitation process?
Yes, I do.
A
7
Also the District of Columbia, DOC'S
8
policy which was mentioned before about housing 'the
9
inmates as far away from home, that places an added burden
10
because the phone calls now cost more.
11
MR. KOHLER:
Your Honor, we're going a little far
13
~UDGE
14
MR. KOHLER:
15
JUDGE COCHERES:
16
MR. LOVE:
COCHERES:
What is your objection?
Objection, relevancy.
Okay.
Your Honor, the DOC has a policy that's
17
been alluded to by this witness and the previous witness
18
that they place inmates as far away'from their family as
19
possible when they initially are incarcerated.
20
relevance to this situation is that that causes the,phone
21
calls
22
to the burden of the family.
23
rates is exacerbated by this DOC policy.
24
that it's important that you look at both that policy
25
sending people as far as way as possible and the rates in
~o
be longer distance and more costly.
And it adds
The reasonableness of the
KEENAN REPORTING SERVICB (717)
•
The
So we believe
66~-4060
74
1
order to understand tne ourden cnat"tnese rates cause on
2
the family members.
3
MR. KOHLER:
Your Honor, jumping ahead a little bit.
4
When we get into what rates AT&T actually charges, AT&T
5
charges for inmate service calls.
6
sensitive.
7
street assuming it crosses the LATA boundary or across the
8
country.
9
10
......
.. '.,
It is not distant
It is the same whether you call down the
Your Honor, I don't have any problem with the
testimony on behalf of CURE.
I'm not going to object on
,
11
12
relevancy.
.
I just would like not to go too far afield.
JUDGE COCHERES:
All right.
Well, you're right, Mr.
13
Kohler, you are jumping ahead.
But currently, I'm going
14
to overrule your objection and allow the witness to
',4'.
15 . continue.
",
16
MR. LOVE:
17
BY MR. LOVE:
18
. Q
19
Thank you.
If your husband
wa~
at Camp Hill, would that
affect the rates that you would pay for these calls?
20
A
Yes, it would.
21
Q
How so?
22
A
The phone calls would not cost as much.
23
Q
Would it be a local call essentially?
24
A
No, it would be
25
Q
It would still be a collect call, but it
--
well
..
-....
KEENAN REPORTING SERVICE (717) 665-4060
.
-....
75
1
wouldn,' t J:)e a long al.stance caJ.J.?
2
3
It would be within the same area code, would
Q
that be fair to say?
Yes.
A
6
7
'.
•.. _to
8
policy on yourself and others.
9
you wanted to add?
Was there anything
..
.........
11
inma~e
12
harder for the family to physically travel to visit which
13
means the phone calls are even more important, you know
14
because they don't have that frequent visit.
15
depend on the phone call.
now being farther away in distance, it makes it
So they
Now, if -- the previous witness indicated that
Q
17
the costs are about three times, as high.
18
with that or have any comment on that statement?
19
20
22
Would you' agree
Yes, you have a copy of some of my phone bills.
A
There's a phone call
21
I
made.
Let me show you those.
Q
If you could look at
that and explain what it is.
This is my AT&T telephone calls that were made.
A
23
24
Most of these are from my husband, collect calls from a
25
pay phone.
That's when he was housed at Coal Township.
KEENAN REPORTING SERVICE (717) 665-4060
£
QQi.Q'"
mo~e
Just about the phone calls, but also with the
A
16
A4.5QQiWiJiiCl¥J,Q.QiQ::::::::m 1 ;:; .
'
So you were talking about the impact of the DOC
Q
10
"..* ,su....
But it
wouldn't be as long of a distance as to where he is.
4.
5
Where I live now it still would be, yes.
A
. ..2.A
:;:;:;30:0=:=
•
,
76
~
p~us
my otner pnone
ca~ls
tnat I made to otner
Q
Can you pick a couple of examples and read them?
3
A
Sure.
4
called my
5
call:
daught~r
~4th,
1999 at 8:52 p.m., I
in Steelton which is not a collect
:.
6
Q
Steelton, pennsylvania?
7
A
Steelton, Pennsylvania.
8
MR. KOHLER:
9
MR. LOVE:
It's a phone bill.
MR. KOHLER:
11
THE WITNESS:
I'm sorry.
.....
. ....
"
I made a call to my daughter in
12
Steelton in the evening for 15 minutes.
13
$1.65.
14
call for 15 minutes.
15
increase.
16
and Millersburg to Coal Township is about the same I would
17
say.
18
just one example.
20
.'.
Who is this letter from and to?
10
19
... ; ..:
p~aces.
2
January the
1
And it cost
My husband called me 8 p.m., it was an evening
And the price was $7.35, quite an
And the distance from Millersburg to Steelton
So there was quite a big difference there., That's
MR. LOVE:
Can you read a couple more examples
please?
'.'
.
• •• a. ...
21
MR. KOHLER:
Your Honor, I don' t kno'o'1 whether' the
22
bills are being introduced as an exhibit or but in any
23
case, I can walk up and stand behind the witness, but
24
counsel ought to have copies.
25
point, we can go forward.
If we can have them at some
KEENAN REPORTING SERVICE (717) 665-4060
.
105
w at 1S your mont
1
2
A
y 1ncome
My monthly income is limited to my Social
3
Security disability and my disability from the Army which
4
totals right now about 1800 hundred a month.
5
Q
Does your wife have any income?
6
A
Her income has stopped except for the company is
7
giving her some -- I forget what they call it -- it's like
8
a disability pay.
9
10
Q
In the last month, we've spent well over $4000
A
just on several medications that she has to have.
So is it fair to say these phone calls impose a
Q
13
14
And do you have medical bills associated with
her illness?
11
12
But that is to cease some time in July.
significant burden on you?
15
A
Serious right now.
16
Q
Is there anything else you want to add?
17
A
No, sir.
18
MR. LOVE:
19
JUDGE COCHERES:
22
No further
qu~stinn~.
Cross.
CROSS BXAMINATION
20
21
Thank you.
BY MR.
KOHLER~
Q
I think you indicated at one point that you
23
called an AT&T operator from, correct me, from a prison
24
phone and asked what the rates were?
25
A
Yes, sir, I did.
KEENAN REPORTING SERVICE (717) 665-4060
. 106
1
Q
And tney l.nal.cat:ed
2
A
NO, sir, I'm sorry.
~t
was a
~3.30
surcnarge?
You're mixing the two up.
3
I called on the bills on my home phone.
I called AT&T and
4
that lady that I spoke to there at AT&T, she's the one
5
that broke down the $3.30 and $.25 a minute.
It was from your home, but it was related to
6
Q
7
phones calls?
8
A
It was related, yes.
9
Q
And she indicated there was a $3.30 surcharge,
10
and then I believe you said that there was then a rate of
11
$.25 a minute?
..
....
12
A
Yes, sir.
13
Q
Could that have been $.27 a minute?
14
A
It didn't work out on the phone bill if it did.
15
If you work it out at $.25 and $3.30, it works out to
16
$7.05.
17
18
And that's the rate she gave me.
Could your recollection be a little bit vague
Q
about what rates she gave you back then?
19
No, sir, because she gave me the $.25 and" $3.30.
A
20
And whenever we added them up on the phone, it came out to
21
$7.05.
22
23
That's the figure she gave me.
MR. KOHLER:
One moment, Your Honor.
Nothing
further.
24
JUDGE COCHERES:
25
MR. LOVE:
Any redirect, counselor?
None, Your Honor.
KEENAN REPORTING SBRVICE (717) 665-4060
•
107
JUDGE: __
1
RBS:
Tne wltness
J.S
excused.
TnanK you
...
2
for coming, sir.
3
your math.
THE WITNESS:
4
5
And I might add that you're correct in
I was an engineer, sir.
I know my
math.
MR. LOVE:
6
Your Honor, I'd like to ask that we take
7
our lunchtime recess at this time so I can make some
8
additional copies of these exhibits and make the afternoon
9
go a little smoother.
10
JUDGE COCHERES:
I don't have· a problem with that.
11
I was going to raise the issue myself.
As Mr. Kohler
12
knows from appearing in front of me, I eat regularly.
13
we'll be back on the record at quarter after one.
So
Please
14 'be back in your seats.
15
MR. LOVE:
Thank you, Your .Honor.
16
(Whereupon, at 12:15 p.m., the hearing recessed for
lunch and reconvened at 1:25 p.m., the same day.)
17
MR. LOVE:
18
A couple
19
Honor.
20
would have a complete set.
22
Give three to my Court Reporter and
she can give one to me.
MR. LOVE:
23
24 .also.
25
of housekeeping, Your
I made additional copies of P-2 so that each party
JUDGE COCHERES:
21
bi~s
And I made copies of Ms. Hollis's records
I don't know if you have any objection if we mark
those.
KEENAN REPORTING SERVICE (717)
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---
1
Tney
~~
oe marKea EX"'I"\'t
P-,j.
(Complainant's Bxhibit No. P-3 was produced and
marked for identification.)
2
3
4
5
6
MR. LOVE:
I'd like to call John Malcom to the
stand.
'..-" ....
JUDGE COCHERES:
I'm not going to swear Mr. Malcom
7
in right of way, so just relax a little bit.
8
small piece of housekeeping information that I wanted to
9
pass on here .
10
There's·one
. Mr. Love, I have given the Court Reporter the
11
original and two copies of what is labeled undisputed
12
facts which is a stipulation.
13
record.
14
document that it is proprietary.
15
for the record that the caption is somewhat incorrect.
16
And the reason is that it carries the second caption and
17
docket number for Bell Atlantic.
18
dismissed.
19
20
21
And it is admitted into the
I have designated in red across the top of the
And I would also note
That case has been
It's over.
MR. LOVE:
we're overly optimistic, Your Honor.
Sorry about that.
JUDGE COCHERES:
W~ll,
you've been overly optimistic
22
on almost all of the pleadings you've sent me.
23
would note that you continue to add Bell Atlantic's
24
caption to all of your pleadings.
25
not appropriate.
And it's just simply
KEENAN REPORTING SERVICE (717)
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onor.
1
JUDGE COCHERES:
2
3
All right.
Now, sir,
up.
4
JOHN MALCO., called as a witness,
5
sworn, was examined and testified as follows:
6
7
8
. JUDGE COCHERES:
THE WITNESS:
Good afternoon to you.
BY MR. LOVE:
Q
12
record?
14
Please be seated and
DIRBCT BXAMINATION
11
13
Thank you.
having been duly
good afternoon to you.
9
10
if you stand
Mr. Malcom, can you give your full name for the
Yes, it's John, B, as in boy, Malcom,
A
M-A-L-C-O-M, Jr.
15
Q
And your current position?
16
A
I'm the telephone technology services manager
17
18
19
20
for the Commonwealth of Pennsylvania.
And what are your resoonsibiltties in
Q
4
•
•
th~t
position?
I manage the telephone system for the
A
21 . Commonwealth of pennsylvania, all of the voice
activi~ies.
22
Q
And how long have you held that position?
23
A
That would be 19 years.
24
Q
Same position or have you been promoted or?
25
A
Well, we change titles about every two or three
KEENAN
R~~ORTING
SERVICE (717)
665-4060
110
1
years.
Tne
2
1986.
3
the same thing.
4
equipment, everything.
t~t.Le
I'm uS1ng now was
prov~QeQ
to me in
It went away for a few years, came back.
But I do
We manage the networks, we manage the
5
Q
And just briefly, your educational background?
6
A
I'm a graduate of Bowdoin College in Brunswick,
7
8
9
10
Maine.
I also have an MBA.
Q
And your prior experience to working for the
Commonwealth of pennsylvania?
A
Well, let me put it this way, I walked in to
11
Bell of pennsylvania as a trainee, management trainee in
12
March of 1959.
13
Q
14
Pennsylvania?
15
A
For 12 years.
16
Q
And from there, you went?
17
A
Started our own firm for a couple of years and
And how long did you work for Bell of
18
then I came with the Commonwealth and have been doing this
19
ever since.
20
Q
Okay.
NOW, within your responsibilities, does
21
that include the contract between Bell, AT&T and the
22
Commonwealth of pennsylvania on behalf of the Department
23
of Corrections?
24
",
A
"
It includes the current contract between the
25 . Commonwealth and'Bel1 and the former contracts between the
KBENAN RBPORTING SBRVICB (717)
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'
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1
commonwealth and
2
were alluded to this morning that are in between.
3
Q
AT&T
and allot the
serv~ce
oraers tnat
And just so we have a better understanding,
4
where does the pennsylvania Department of Corrections fit
5
into this contract, if at all?
6
7
A
They are an agency of State Government.
My
office is responsible for the overall management of all of
8 ,the voice telecommunications systems which includes tliose
9
in the Department of Corrections, both their
10
administrative system and this contract that involves pay
11
phone.'
12
the inmate service.
13
14
And when you say pay phones, what do you mean by
A
Public pay phones such as you would see in the
hall right outside here.
17
18
Q
that?
15
16
This is one contract that involves pay phones and
Q
Are those all pay phones or is there a public
private pay phone or how does that work?
19
A
I'm not sure where you're going with that.
Let
20
me answer it this way, that the pay phones that are under
21
the
22
Governor's office, are all provided currently by local
23
exchange companies.
24
is the distinction
25
allowed by the law in our operation.
ju~isdiction
~~ENAN
of the Commonwealth, in other words, the
There are no private companies which
~
think you're headed for as is now
And the Commonwealth
REPORTING SERVICE (717) 665-4060
•
112
~
owns notnlng.
2
3
Q
Would they be pay phones that are on
Commonwealth property?
4
A
Yes.
S
Q
So the contract includes pay phones on
6
Commonwealth property and all of the Department of
7
Corrections' pay phones or telephones?
8
9
A
well, they have pay phones in
property.
on Commonwealth
One was alluded to this morning being in the
-'
~o
visitor's area.
~~
Q
Right.
~2
A
Plus the inmate's systems, yes, because they are
13
considered telephones.
14
Q
Can you tell me how much_of the contract is DOC
15
calls and how much are these other pay phones, if you
~6
know?
~7
A
Frankly not really in this.
But the greatest
18
majority of calls are on the.inmate side as you would
19
suspect.
20
jurisdiction over about 2,000 pay stations.
21
the pUblic phones.
To put that in prospective for you, we have
22 "and so forth.
Now, tnat's
And they're in places like state parks
Now, this is pUblic knowledge.
State
23
parks, buildings, right out here in the hallway, over in
24
the capital as you saw at lunchtime.
25
uses typically.
Not a lot of heavy
KEENAN REPORTING SERVICE (717) 665-4060
"
11.3
1.
I
Q
m~gnt
aSk Mr. KOn.1er a
quest~on.
DO
you Know
2
how many pay stations there are within the Department of
3
Corrections?
4
A
.. ~.
I can't give you an exact number.
5 ·I can guess.
I don't know.
But you're probably better off asking
-~
6
Q
well, just roughly.
7
A
You're talking about inmate stations or the
8
public· pay phones?
9
Q
Inmate stations?
10
A
My figures are dated because they may have added
1.1.
some.
But let's say you have 24 institutions times 25
12
would be how much?
13
Q
If I told you there was 1.,360 such stations --
14
A
It's probably what was in the RFP that created
15
this contract.
1.6
Q
I suspect there are more today.
And do you have any ideas of the breakdown of
17
the revenues generated by the inmate. calls
18
other calls, the overall revenues?
19
20
A
versu~
the
Yes, the majority of the revenues come from the
inmate side.
21
Q
And how much is the average revenue per year?
22
A
The contract itself makes about $6 million a
23
year.
24
it's hard to tell.
25
It seems to be growing a little at this point, but
Q
And how much of that six million is generated
KEENAN REPORTING SERVICE (717)
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1.
tnrougn 1.nmate
ca~~s,
MR. KOHLER:
2
1.1: you knoW?
Your Honor, I'm going to object to
3
relevancy in how much the Commonwealth receives by an
4
aggregate or by pay phone or at least an aggregate is not
5
relevant to the rates that AT&T charges.
JUDGE COCHBRBS:
6
Well, now wait a minute.
He's
7
already testified as to what the aggregate is.
He said
8
the total for the entire contract is about $6 million a
9 _year.
10
MR. KOHLER:
I may have objected late, Your Honor.
11
But the line of questioning is going to the revenues
12
collected by the Commonwealth which is not relevant to the
13
rates that AT&T charges.
JUDGE COCHBRES:
14
1.5
And what is your response, Mr.
Love?
MR. LOVE:
16
Well, I can't think of anything that's
1.7
more relevant, Your Honor.
18
the revenues generated by the contract are part and parcel
19
of the
20
Commonwealth and AT&T to provide phone service in exchange
21
for certain revenues.
22
and
23
and you have to look at every element of the contract.
24
And that's what I'm
25
~o
sa~e
thing.
The rate or the contract and
There's a contract between the
And I think to look at a contract
look at the rates, you have to look at a contract
MR. KOHLER:
do~ng.
Your Honor, if he wants to ask how much
KEENAN REPORTING SERVICE (717) 66.5-4060
of
115
1
revenue does tne
2
might be a relevant question.
commonwea~tn
3
MR. LOVE:
4
JUDGE COCHERES:
5
MR. LOVE:
6
JUDGE COCHERES:
receive trom
AT&<.r,
that
On this contract.
~
..:
well, I thought the --
That's what I thought he answered.
That's an interesting nuance.
7
right.
8
that the questions are somewhat preliminary in the
9
foundational format.
All
At least at this point in the examination, I find
And I'm willing to certainly give
10
Mr. Love the flexibility necessary to establish a
11
direction.
12
BY MR. LOVE:
13
..
Q
..........
So the objection is overruled.
The question was of that six million, do you
.. ' ..... .
-
14
15
have any idea how much is generated by the inmate phones?
A
Well, I've already said most -- to give you a
16
number', I can' t do that.
It's obviously i;\vailable.
17
get a monthly report of that thing.
18
Q
Five million, five. and a half million?
19
A
?robably five.
20
Q
Five.
21
NOW,
you're familiar with the current
contract, I take it?
22
A
Absolutely.
23
Q
And how did you become familiar with that?
24
A
Well, because I guess I wrote it, not the
25
We
contract per se, but the RFP lawyers, of course, get
KEENAN REPORTING SERVICE (717) 665-4060
116
1
l.nVOl.vea l.n tne
2
basically I was the lead person from the Commonwealth side
3
from General Services on the Commonwealth, yes.
~egal.1.st1.CS
ot tne contract.
But
o
So the current contract was put out to bid?
5
A
Absolutely.
6
o
And are you familiar with the prior contract?
7
A
Absolutely.
8
o
Do you recall when the prior contract was put
4
.. ....
-
9
....
out to bid?
10
originally in 1988.
A
As a result of Judge Harold
11
Green's Order ·to deregulate the pay phone, we had 30 days
12
to do an RFP.
13
Q
14
So the contract had not been put out to bid
between 1988 and 1999; is that right?
15
A
No, it is not correct.
16
0
And why did you decide to put this particular
17 . contract out to bid?
18
A
In what year?
19
Q
This new contract.
20
A
We had this contract out in 1992.
We had it out
21
again in I guess you can say, since it takes so long to do
22
these things in particular, this type of technology, in
23
' 94 .
24
o
When you say out, out for bid?
25
A
On the street, yes.
KEENAN REPORTING SERVICE (717) 665-4060
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1
Q
Go aheaa.
2
A
This project actually had an RFP one, two,
3
4
5
6
three,' four times.
And you said it was time.
Q
What factors go into
the decision as to what time it is?
Well, the Commonwealth has a policy of trying to
A
7
put operations that can be competitive on the street from
8
time to time so that other vendors have an opportunity to
9
participate.
And as you know from the telephone business,
10
that didn't happen until 1984.
11
what we can ever since.
12
0, ' .
So we've been trying to do
.
.. ........
'
And there also are some industrial telephone
13
indust~y
factors here that when in this case Commissions
14
start to become effective for us, the customer, then it's
15
time to put it on the street.
Okay.
Now, who was the prime contractor in the
16
Q
17
old contract?
18
A
At&T.
19
Q
Who was
20
A
Well was the first contract.
."
There was two
21
really, Bell and AT&T.
Now, because you had -- remember
22
you got at that point in '88, you got your intraLATA and
23
your interLATA operation.
24
time around which was the '92 one that went over into '93
25
and it went over in to there.
They came together the next
That was awarded to AT&T.
KEENAN REPORTING SERVICE (717) 665-4060
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1
Bell was a sue along
2
company in the Commonwealth.
3
4
Q
w~tn
every otner l.ocal. excnange
Which contract would have been in effect in
April of 1998 when Ms. Feigley began this procedure?
5
A
Extensions of the contract that was put together
6
at that time.
7
Q
And the prime contractor was AT&T at that time?
8
A
Yes.
9
JUDGE COCHERES:
Excuse me, I got lost here.
In
10
1998 when -- what contractor were you working pursuant to?
11
Was there a contractor let bid in 1998?
12
13
THE WITNESS:
No, there were extensions made really
of the one that went back to '8e.
!f you look at Mrs.
14 -Feigley's files from this morning, she has copies of the
15
service orders, all duly authorized that were added to
16
that contract to keep us going during all of these
17
acquisition proceedings.
18
that goes back if you want to go all the way to '88.
19
JUDGE COCHERES:
20
MR. KOHLER:
21
JUDGE COCHERES:
So you're really looking at one
Stop.
I'm confused.
I'm confused too.
22
was let in 1988, right?
23
Bell and AT&T, correct?
24
THE WITNESS:
25
JUDGE COCHERES:
You told me that the first contract
And the successful bidders were
Correct.
All right.
NOw, you then told me
KEENAN REPORTING SERVICE (717)
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119
1
tnat the contract was J.et aga1n 1n
2
right?
3
THE WITNESS:
4
JUDGE COCHERES:
5
THE WITNESS:
'512
ana
514;
1S that
No, it was put on the street.
What does that mean?
It went to bid.
Ou~
request for
6
proposal was issued in '92 and then again in '94.
7
I'm right on those years.
8 "in, Your Honor.
9
enjoined.
think
And the -- this will fill you
The one in
that started in '92 was
That's the one I mentioned went to court.
10
Judge craig upheld the injunction.
11
per his order.
12
~
And we started again
So we had the next addition.
JUDGE COCHERES:
Before you leave that point, if the
13
contract process was enjoined, does that mean that you
14
were required to extend the existing '88 contract?
15
THE WITNESS:
16
JUDGE COCHERES:
17
18
'94.
Yes.
There we go.
Now, let's move to
What happened in '94?
THE WITNESS:
We got
19
Commonwealth, threw it out.
20
JUDGE COCHERES:
21
THE WITNESS:
22
JUDGE COCHERES:
23
THE WITNESS:
~
result and we, the
You threw it out?
We threw it out.
What does that mean?
It means that the whole RFP process
24
was declared by the Commonwealth as is allowed by the
25
process null and void.
KEENAN REPORTING SERVICE (717) 665-4060
.
1.20
1. r---JJUrrniE<:_!C:f(~~rr:~
s: -C51<
ol,k~lal3y'T..~-:Altiln~LQaww~o~ulI,1:cT"a1t:'J,nlciaiitc=-=--------,
2
THE WITNESS:
3
JUDGE COCHERES:
4
And would that have resulted again
in an extension of what was the '88 contract?
5
THE WITNESS:
6
JUDGE COCHERES:
7
well, the fact we threw it out, yes.
You had to have somebody providing
service.
8
THE WITNESS:
9
JUDGE COCHERES:
Yes.
1.0
THE WITNESS:
1.1.
JUDGE COCHERES:
All right.
14
While you did it again?
Correct.
Okay.
And how long did that
1.2 'process take to start over again?
,~
..
-.-,
Do it again.
If you throw it out,
don't you rebid it?
THE
WT~NF.SS:
Yes: we rebid.
This is not an easy
1.5
technology.
It probably took a year or more to get it
1.6
back on the street.
1.7
had to be basically rewritten except for style.
1.8
that's the one that was awarded and sUbsequently signed
1.9
February 1.0, 1.999.
Some of the things that kept changing
20
JUDGE COCHERES:
21.
THE WITNESS:
22
JUDGE COCHERES:
1.999.
we're in it now.
So whatever was -- that's how AT&T
23
kept on going from 1.988?
24
THE WITNESS:
25
JUDGE COCHERES:
KEENAN
And
That is correct.
Okay.
Now, it makes a little more
SERVICE (71.7) 665-4060
RE~ORTING
•
121
1
sense.
2
Kohler, do you have a comment?
3
sorry to 1nterrupt you.
MR. KOHLBR:
wait a minute nere.
I'll wait my turn.
4
confused, but I'll wait my turn.
5
BY MR. LOVB:
6
Mr.
I'm still a little
.....
Can you tell us the major differences between
Q
7
the current contract and the contract that was in effect
8
when Ms. Feigley filed her action in April of 1988, other
9
than the fact that there's a new prime contractor?
10
A
I don't believe there are any really.
There's
11
been changes in the technology, but that would happen
12
anyway.
13
0
Why is it -- what's the difference of having a
14
prime contractor versus a subcontractor?
15
difference?
16
- '.
A
Is there any
Well, the Commonwealth typically does deal with
. '.
17
one contractor, thus a prime.
If there's a consortium
18
involved which this obviousl¥ was and is, we still want
19
one prime for us to contract with.
20
subs are up to that prime.
The contracts with the
21
Q
well, why did you switch from AT&T to Bell?
22
A
Bell submitted a -- a matter of fact, they
23
submitted two proposals.
24
AT&T submitted zero.
25
Q
On the request for proposal,
AT&T subbed to Bell.
And are the rates different or the same?
KEENAN REPORTING SERVICE {7'7)
•
665-4060
122
1.
A
Wh1Ch rates?
2
Q
The rates under the old contract and under the
3
new contract?
4
A
Let's go back to the rates again.
Which rates
5
are you talking about, the Commission rates or are you
6
talking about the rates of the telephone calls, all of the
7
above?
....
8
Q
All of the above.
9
A
Well, the rates on telephone calls, let's start
1.0
with that, they tend to vary with the industry without any
1.1
question.
1.2
Telecommunications Act of 1996, and I'm sure recognizes
And everybody has read it in the
hnm~
••• "".: ,.. ""
15
recent years.
16
Q
04
1.7
1.8
19
20
.... __ .. --
.:,..
bills that long distance rates
_
.....
..
~~n"e
'7\ ".. f" ".., ,..
--. ..,
So is this as a result of the Telecommunications
Act of 1996?
It's a result of
A
~he
competition that started
with the divestiture and was continued with the Act of '96
,which was really an amendment of the Telecommunications
21
Act of 1934.
We, the Commonwealth, have obviously taken
22
advantage of it.
23
was the Commission rates.
24
gone up.
25
competition, yes.
Because the second part of your question
And, yes, they have changed and
The percentages went up as a result of this
KBBNAN RBPORTING SBRVICE (717)
of
6~5-406C
"
."-
123
Q
1
2
CommissJ.on races are tne rates tnat tne
Commonwealth gets?
... :.
3
A
AS commissions, yes.
4
Q
That percentage has gone up?
5
A
Yes, it has.
6
Q
Do you know the numbers?
7
A
The current contract has a range in it for both
Percentages, yes.
8
intraLATA which we're not talking about today.
9
obviously a factor.
That's between 32 and 38 percent of
10
gross billed revenue.
11
is obviously public knowledge.
12
Commission rates on
::.3
~O
14
15
But it's
That's an important distinction and
th~
The rates -- the
interLATA piece are between 47 and
percent.
Q
Now, that Commission rate is a percentage of the
gross revenues?
16
A
Gross billed revenues.
17
Q
Gross billed revenues.
18
A
Billed is important.
19
Q
So the Commonwealth is taking as much as 50
20
percent?
21
A
We could.
22
Q
At the moment what are they taking?
23
A
Forty-seven percent.
24
25
At the moment, we don't, no.
I better explain that for
the JUdge's edification anyway.
Q
Go ahead.
. KEENAN REPORTING SERVICE l717) 665-4060
..
...
124
part ot tn1s concract 1ncJ.uaes serv1ce
A
1
2
administrators provided by one of the subs at correction
3
facilities.
4
scale of numbers, numbers that are out there that
5
change these Commission rates because there's a cost to
6
them obviously.
7
there now, we're at 47.
As long as they are out there, and there's a
ca~
And as long as the numbers that are out
Should we reduce it by those
8
.levels that are in the contract and, therefore, public
9
knowledge, the rate would grow closer to 50 and could
10
11
12
become 50.
'Q
Remember it's an AT&T interLATA.
Now, interLATA is sort of like long distance
calls?
This is long dis ta:"'l~t::
. ,,- .
,
W.LI.U.LU
the state.
14
Somebody made the distinction intrastate.
15
we're talking about here I understand.
16
calls that cross a LATA boundary of which there are six in
17
pennsylvania.
18
IXC, interexchange carrier. ,And the one under contract to
19
us is AT&T.
20
21
22
And that's all
Yes, they are
Therefore, they got to be carried'by'an
Q
And the intraLATA calls are essentially local
A
No, there is a distinction there that's becoming
calls?
23
important.
Some firms are saying local calls.
24
think calling your friend across the street as long as
2S
there's no toll barrier, that's a local call, local
KEENAN
R~~URTING
SERVICB (717) 665-4060
of
You would
125
1
excnange we
ca~~
1.t:.
we're not talK1.ng aDout tnose callS.
2 .we're talking about calls that have a toll charge but·are
3
inside a LATA boundary.
4
were set up to build a fence around the Bell system
5
they-broke them in to seven companies.
7
~hen
the prior contract?
A
8
9
The LATAs
If you recall, what were the percentages under
Q
6
They are purviews.
If you want to go back to
Obviously, we have that.
know.
--
oh, gosh, I don't
But you would think prior
10
to the ' 88, prior to '88, that's a place to start.
11
show you what's happened.
12
public telephones in the tariff.
13
they still are.
14
is in the industry today.
15
perc~nt
16
Q
TwO, three, four percent?
17
A
Yeah, depending on who you were dialing.
I
Inmate stations were considered
th~t's
think
I'll
And in many
respect~,
why some of the
co~fusion
At that point, two, three, four
was the Commission.
And
18
somebody mentioned probably what is a service order this
19
morning in 1983.
20
been.
21
some reason.
22
started with Judge Green's dictum in 1988.
23
a very interesting baLl game ever since as you obviously
24
gather.
25
That's all it would have had to have
And I may have gotten 5 percent for corrections for
Q
I don't know.
The competition really.
And it's been
Do you have any idea what they were in April of
?EEN~N
REPORT!NG SERVICE
of
- .... --
t:t:C_ilne:n
-
.... .,
126
1
-, 98 when Ms.
startea tnls actJ.on?
Yes, that I think -- and I could have kicked
A
2
FeJ.g~ey
3
myself this morning, frankly, when that came up because I
4
don't know what that is.
5
into place in January of '97 which was the last extension.
6
The files Ms. Feigley has would show that.
7
time it was when we got to the 50 percent which is the
8
interLATA.
9
was 26 or something like that.
But I think I put that
Frankly, I don't remember.
Ame~dment
And at that
That was the extension I
did.
11
where the sizeable commission, if you want to look at it
12
that way, occurred.
The last extension I did of that contract is the one
Q
If you recall, what was the total amount of the
14
commission that the Commonwealth made when the rates were
15
2
......
and 4 percent?
16
A
I have no idea.
17
Q
Moving on now.
Can you give us an overview of
18
what the pin system is?
19
utilize to access this contract, this phone system?
20
A
Yes.
. '.
The.system that the inmates
Let's break the equipment that we use at
21
corrections in to three parts.
22
you have what we'll call for this purpose control
23
equipment, and let's make the third part the monitoring
24
and recording.
25
'
I think the intra
10
13
.. " .
You have the telephone,
Monitoring came up this morning, recording didn't.
KEENAN REPORTING SERVICE (717) 665-4060
of
...
.
127
1
And tnat's
2
involves all three obviously but is keyed to the control
3
room.
4
actua~~y
more pert1nent..
NOW,
tne p1n system
The equipment that is in each of the state
5
correctional institutions requires an inmate pin to
6
access.
7
an automated attendant and was, as expressed this morning,
8
there's no human intervention.
9
not allow it.
It is an automated system.
There cannot be.
That does a couple of things.
10
It functions through
We will
All to the benefit
11 . really of the inmates and the inmate families because 'it's
12
all cost.
Prior to the introduction of these automated
13
systems, and they started being developed in about 1988
14
also; all of these calls went through live operators.
15
that fraction of the inmate population that was bent on
16
continuing their various activities of an unlawful nature
17
shall we say within the walls of our prisons were scamming
18
live operators.
19
costs a
hi~her
So
And it also. affected that a live operator
surcharge than an automated operator.
An automated operator hasn't been around all that
20
21
long either.
That came in after divestiture as well., But
22
how it simply works is that the inmates complete a form
23
with their authorized -- so many pin numbers on their pin
24
list~
25
Corrections.
And they process that through the Department of
And the equipment that we have in each
..
"
".
···0·
128
1
pr1son nas 1t 1n 1t.
2
inmate puts in the pin nUmber, the control system comes
3
back and says, hi, you want to make a call, put the" number
4
in and the way they go.
5
number, it processes it in very much the way it was
6
described this morning.
7
If the system recognizes
th~
If it is not on the pin system, it will reject it.
8
And the inmate cannot make the call.
9
answer more
10
("
Ana. wnat nappens 1S tnat wnen tne
works.
And I'd be happy to
But that's essentially how it
question~.
It's similar to going to the MAC machine.
1~
Q
well, hopefully Mr. Shaffer can expand on that.
12
A
He certainly can tell you how corrections uses
Q
What is the voice recognition system?
A
voice recognition is something new in the
~3
~5
that.
16
current contract.
17
technology had been introduced a few years ago not very
18
satisfactorily.
19
Many of you are aware that that
It's getting better.
In qther words, if you have a cold, your voice may
20
not recognize you in the machine.
It's a voice print.
21
And we are putting it in a game to help the cost factor as
22
well as reduce some of the activity in the prisons that we
23
view as not appropriate.
24
marketing of pin numbers.
And that is the potential black
And that happens because
25 "typically, on average, an inmate has about ten numbers on
KEEN&~
REPORTING SERVICE (717)
of
129
1.
a pJ.n
2
Shaffer can testify far better than I can on that.
3
that is industry average.
4
bent on
5
may influence another inmate to allow one of their phone
6
numbers to be on the other pin.
7
It's rare to tlna one wltn 20.
~J.st.
cont~nuing
A.l.tnougn Mr.
We have inmates that seem to be
their businesses from inside.
JUDGE COCHERES:
But
An~
they
That's a very well emphatic way of
8 .putting that.
9
THE WITNESS:
I'm trying, Your Honor, some inmates.
1.2
the pin in, you have to speak your name into the system
13
and, of course, it won't be recognized so it will reject
14
the call.
15
more useful and friendly for the largest majority of
16
inmates who are, unfortunately, there for whatever.
1.7
BY MR. LOVE:
18
19
Q
It will cut down still further and make far
Are you familiar with the rates that are
ch~rged
under the current contract?
20
A
Rates for calls?
21.
Q
Calls.
22
A
Yes.
23
Q
I'd like to show you an Exhibit that you have
24
given me which I've labeled P-4, AT&T cost calculations,
25
15-minute call duration.
..
u"",..,,---.uuv
130
(COmpla1DaDt.'8 BX1'O~"'~t. HO.
ma:z:ked fo:z: identification.)
1
2
THE WITNESS:
P-.
was p:Z:OC1uceC1 aDo.
Yes.
3
4
BY MR. LOVE:
5
Q
Are you familiar with that document?
6
A
Yes, I am.
7
Q
And who composed that document?
8
A
I did.
9
Q
And when did you compose it?
10
A
Well, originally in 1988.
It was something we
11
were doing then.
12
just changed it yesterday as you see.
13
Honor, was the per call compensation line.
14
you look to the right, it's the one just before the equal
15
sign.
16
was mentioned this morning.
17
suspect, incorrectly.
18
Telecommunications Act of
19
20
21
And actually in view of this hearing, I
The change, Your
It's the -- if
That is a new input and it is a cent figure that
Q
And it is a result of the
19~6.
And can you correct the record on that
particular column?
A
One is correctly and one, I
What is that about, that $.30 c h a r g e ? "
What per call compensation means that as a
22 -result of the Act of '96, carriers are ordered to
23
compensate pay phone owners for the use of their pay phone
24
to make calls for which they normally, and I'm being
25
generic here, but they normally do not collect revenue.
KEENAN REPORTING SERVICE (717)
66~-4060
131
1
Tne maJor 1nput nere was 800.
Ana you're all tamJ.J.1ar
2
with dialing the 800 numbers.
And the lobby in Washington
3
had got this, part of the Act and simply said that
4
competition created this in a bunch of small pay
pho~e.
5 . operators which were now getting into the business aS'a
6
7
(
result of the Act and rightfully so.
And said, hey, wait a minute, we're not making any
8
commission on these.
We don't carry the calls, 'therefore,
9
we want some compensation for using the box.
And that's
10
what it's all about.
The FCC in their wisdom put a test
11
figure on the street of $.27.4.
12
business find it kind of hard to bill $.04 on a coin
13
station.
14
to 30 and so on.
15
really know the derivation of why the rUling now is
16
inmate telephones fall into this category.
17
interesting point.
And those of us in the
So most carriers went to 28.
One of them went
And I cannot explain this.
I don't
t~at
.,
18
That's an
There is no possible way that somebody from the
19
public, you know, could walk up to an inmate station and
20
make a call or we got some corrections people that need to
21
be replaced.
22
It's something that we don't control.
23
control it and it is on the bills.
24
it this morning and the other lady did too.
25
it was
And so I don't know, but that's what it is.
misinterpreted .
..
AT&T does not
Ms. Feigley mentioned
And I think
132
Your Honor, I tn:lnK cnl.s 1S gooo
1
2
testimony.
3
about trying to straighten out the record on what AT&T
4
actually charges.
5
morning, and I didn't go in to it too deeply with the
6
witnesses that was incorrect and inconsistent with the own
7
bills they were putting forward.
And there was some testimony this.
Mr. Malcom's testimony is correct.
8
9
I actually wanted to talk to Mr. Love at lunch
And Ms. Calega
will explain how that comes across on the bill and try to
10
complete the circle for you.
11
at this point.
12
record.
This is helpful because it's clearing the
THE WITNESS:
13
Thank you.
c~:~~~~:ly ~~d
Let me explain this chart
"CWO~aperb ~eC
14
those.
15
involved, Your Honor, on this very question from time to
16
time.
17
Philadelphia Inquirer.
18
this simple to understand because it really is.
19
I
But I wanted to state that
it because the
And the one involved here happened to be the
And so I said, okay, I got to make
The AT&T side is far more simple to understand than,
20
frankly, is the Bell side at this point.
21
the mode of so much for the initial period, so much for
22
extended period and a rate band area.
23
down and push a pencil.
24
interLATA period, $.27.
25
Bell still is in
So you got to set
AT&T charges one rate intrastate,
So what this was designed to do was to take an
.. __ ........
--- ---_ .. - ------ -- _. -"
,
.
133
1
aDSOl.ute apples-to-appl.es.
Because another
2
being made this morning was apples and oranges at best.
compar1.~on
3 'We have an inmate station, that's the top set of blocks.
4
And we have a public telephone as you would find out here
5
in the hall or in the visitor's location.
6
Now, remember this is an AT&T one.
So that we're
7
comparing apples and apples.
You have a permitted charge
8
of $.27.
9
will probably learn later, one of the time frames
I picked 15 minutes for the time because as you
10
corrections tends to use is 15 minutes of calling.
11
thought that's good so everybody can understand that.
12
So I
Minutes of the call being 15, the transport charge
13 .is just the multiplication.
~"~~,~
14
~~
-
The service charge is the
~m~~~~~-~
-
15
surcharge on lots of calls that are not directly dialed.
16
Person. to person has a surcharge.
17
has one surcharge.
18
higher.
19
An automated attendant
A live operator has another surcharge,
You can see if you look at this chart that on the
20
inmate side, the service charge is a one-time charge.
21
it was correctly described this morning.
22
how long the call lasts, it's $3.
23
pUblic pay phone side, that surcharge is 2.10.
24
difference being $.90.
25
And
Regardless of
You can see on the
The
You can see I've added on the per call compensation.
of
134
1
you're gOJ.ng to near tnat reterreQ to as PCC ana Just
2
added it up.
3
between an inmate call and a public call in the same
4
circumstances is $.90, the difference in the surcharge.
5
BY MR. LOVE:
6
Q
It's that simple, folks.
The difference
:.
Is it possible for you to break down that $3
7 'into different -8
9
A
NO, I can't.
These kinds of cases have been
heard in other states.
And that question comes up as
10
well:' No, I can't do that.
11
proprietary on the part of AT&T or any other carrier.
12
I will say this about it.
13
that are in.
14
And that definitely would be
But
There are two major factors
And they're in the $.90 .
.. "" ....
- •• -
..,
, ('\
_. -
-
.. "" eo-
i
- •• -
~
-
,n
• - ..
~~
--
~~~--_~
_ •• -. • .::::J .... -
~_
..... ,.J
-- --
""" ¥:
•• -
15
going out here in the hall and making a collect pay phone
16
station-to-station call between these cities.
17 .we're talking about $.90.
Now, so
Now, you breakdown the $.90 in
fo~
18
that somebody has to pay
19
prisons and the monitoring and recording equipment.
20
enti~e.
21
the control equipment in the
This
contract is at no cost to the Commonwealth, zero.
Plus, of course, we get commissions which you get on
22
pay phones anyway.
And the other factor that is in that
23
$.90 is that there is much evidence in the business.
24
Statistics are available that the -- I don't want to use
25
the word fraud -- that the uncollectible -- let's use bad
KEENAN REPORTING SERVICE (717) 665-4060
of
:.
.....
"
77
1.
MR.
LOVE:
your Honor, MS. HOJ.J.iS brougnt these
2
today.
3
happy to make copies at the break or whatever the court
4
pleases.
5
rather than introduce.
6
7
I didn't have a chance to make copies.
In that case, Mr. Kohler, I suggest
.
....... -,...
"
"'
you go up and look over her shoulder.
8
MR. KOHLER:
9
THE WITNESS:
1.0
example~
I was going to have her read a few
JUDGE COCHERES:
I'll be
Thank you.
Did you still want a couple more
examples?
11.
MR. KOHLER:
I'm fine.
12
MR. LOVE:
13
THE WITNESS:
Go ahead.
I called Quakertown, Pennsylvania for
that's furthsr a·.;ay
~.;
1.9 minutes.
1.5
husband was incarcerated.
No',,;,
thQ~
And that cost was $5.70.
1.6 . it was 19 minutes and it was farther away.
And
And most of
1.7
his phone calls are like $7.35 for 15 minutes.
~e
Scranton, pennsylvania which. is farther
19
11 minutes,
20
from my husband was still like $7.35.
21.
BY MR. LOVE:
that call was $3.30.
. -.
·,:;h.:=:: my.
a~ay
I called
yet.
And for
And that 1.5 minute call
22
Q
And the carrier of those calls was?
23
A
AT&T.
24
Q
Same carrier that carries the prison calls?
25
A
Yes.
, ..,., '7 \
'II'
•
-',.
.:
78
you Cl.gree
1
WJ. t
2
that 'they're approximately three times as high as the
3
other calls?
4
A
Or maybe higher, a little higher maybe.
5
Q
Are you familiar at all with the surcharges that
6
MS. Feigley discussed?
A
7
8
Quite honestly I wasn't until today until I
heard her talk about them.
Q
9
If the charges were similar to the charges for
'
10
these other calls, what impact would that have upon you
11
and your husband?
12
A
Well, it certainly would put less of a financial
13
burden on me and other family members and allow us more
14
cCr:1municaticn.
15
you need to talk to your husband about or vice versa.
16
it would give you more opportunity to do that.
sometimes
you~
And
And what are your monthly phone bills running?
18
A
Two hundred to $3QO a month.
19
MR. LOVE:
20
MR. KOHLER:
I have nothing further.
Can I just review the bills?
One
moment, Your Honor.
CROSS BXA¥%HATIOH
MR. KOHLER:
23
66
go on in
Q
22
£
thing~
17
21
..
,.
Let's see if we can do this from here.
24
If I have to come up and actually show you the bill, I
25
will.
it .tit JU.SvC..'i...
The first call you testified about was -- well, let
•..."'!,444 us. .t.t.L.:;)h. .. ....
3Mi
•
.....xu.,,!
44.¥..o.u..J.k ,.c.4.b.w ..
......$.3.&43.0' " ' .
H
t.MP.&t.?;:V'.'~'lJ¥V<i(M)Q(
J.A,((
. AQ.Q.Q.( .,.
79
........
1.
me come up.
May:I approacn tne w1tness, 'X"our HOnOr?
JUDGB COCHBRBS:
2
3
to Steelton.
4
BY MR. KOHLER:
5
Q
6
Certainly.
It was from her house
......
,
The first call you testified was a 15 minute
call from your husband to Millersburg; is that correct?
7
A
Right.
8
Q
And the location here was?
9
A
That was Coal Township at· that point.
1.0
Q
And Coal Township is in the 71.7 area code; is
11
. ...', ., •..
that right?
12
A
Just changed.
13
Q
And was making a call to the 717 area code?
14
A
Right.
1.5
Q
Now, do you know whether that call is an
16
At that point it was 717.
A
I'm not sure I follow you.
18
Q
All right.
1.9
A
.I'm not sure I understand what your question
was.
21
22
Q
Strike the question.
25
When you get a call from
your husband, you heard Ms. Feigley's testimony about the
23 ,message that precludes the call.
24
.............
intraLATA call or an interLATA call?
1.7
20
'
Is that your experience
also?
A
Yes, it is.
Sometimes they go through that
KBENAN REPORTING SERVICE (717) 665-4060
•
,
.......
80
1
recorcl1ng ana you're saY1ng nel.l.o, nel. l.0, ne.1..J.o.
2
then, you know, finally maybe it will connect.
3
it doesn't connect so you hang up again.
4
through the same recording.
Ana
Sometimes
I've gone
..
.....
,
'
5
6
And at the end of the recording is there always
Q
a question as to whether you want to accept the call?
7
A
Yes, will you accept this call?
8
Q
And does it ask you to respond?
9
A
Yes.
10
11
12
If you accept this call, press one now.
If not, hang up.
So you have to make an affirmative action in
Q
order to accept the call; is that right?
13
A
Yes.
14
Q
And you have to press one to accept the call?
15
A
Right.
16
Q
Now, you can also communicate with your husband
17
'by letter; is that right?
18
A
19
Q
20
21
You can hang up or press one.
Yes.
'And I would guess you frequently do; is that
correct?
A
Yes~
but sometimes mail takes a week maybe
22
sometimes to get through.
23
you really need to talk to him about before then, you
24
know, that can't wait for a week or however long.
25
Q
Sometimes there's matters that
And you can also visit your husband if you
KBBNAN RBPORTING SBRVICB (717) 66'5-4060
•
'
.. -:. ..
. 81
1
2
A
Yes.
3
Q
And I suspect that you do; is that fair?
4
A
But there are sometimes, ten days, two weeks go
5
buy or something comes up.
There's a distance between
6
your visits.
7
to be very careful of what you say.
8
be cutoff.
Our phone calls are monitored.
So you have
Your phone call could
So besides letters and visits, you have no
'"'
9
privacy to discuss things.
10
sexual things.
11
a man, a wife and a family.
12
13
14
And I'm not talking about
I'm talking about private matters between
So you have more privacy if you visit or write
Q
letters?
You have no privacy on the telephone.
A
Where my
15
husband is incarcerated right now, every phone call is
16
monitored.
17
MR. KOHLER:
18
MR. LOVE:
1.9
JUDGE COCHERES:
20
MR. LOVE:
21
JUDGE COCHERES:
24
25
A few redirect.
No redirect?
A few redirect.
Oh, fine.
RBDIRBCT BXAKINATION
22
23
Nothing further, Your Honor.
BY MR. LOVE:
Q
You indicated that the phone calls are
monitored; is that correct?
.
KEENAN REPORTING SERVICE (717) 665-4060
..
........
'
."
82
1
A
Yes, sl.r.
2
Q
What that always the case, if you know?
3
A
No, it wasn't, not until a couple years ago.
4
Q
So this monitoring is something new?
5
A
Within the last several years, yes.
6
Q
Now, Mr. Kohler indicated that you had.the
7
option" of visiting Doug.
8
permitted and for how long?
9
A
Can you explain when visiting is
visit the whole day.
11
it gets
12
stay an hour.
13
And you may have a visit once a week.
crowded~
You are only required to be permitted to
If it gets crowded, they ask you to leave.
17
And it has to be
It has to be between......
those days.
Q
And you indicated you work two jobs; is that
correct?
18
A
Yes, I do.
19
Q
And how many days off a week do you normally
A
One day off during the week and that's with my
20
21
22
23
24
25
get?
husband.
Q
So you normally take your day off and visit your
husband?
A
.....
It might be 8:30 until 3:30 unless
14 . from like a Monday to a Sunday.
16
.
YOU're allowed one visit a week and you can
10
15
:
I usually go during the week.
I work every
" KEENAN REPORTING SERVICE (717) 665-4060
•
83
1
ot
tS.
2
MR. LOVE:
3
JUDGE COCHERES:
4
MR. LOVE:
5
6
7
8
9
10
13
14
15
The witness is excused.
I would like to call Robert France to the
stand, Your Honor.
ROBERT PlANTZ, called as a witness,
having been duly
sworn, was examined and testified as follows:
JUDGE COCHERES:
Thank you.
Please be seated.
THE WITNESS:
Good morning, sir.
pIRECT EXAMINATION
BY MR. LOVE:
Q
Mr. Frantz, can you give us your full name and
address for the record please?
A
My name is Robert Frederick Frantz, F-R-A-N-T-Z.
16
I live at 3130 Trolley Bridge Circle, Quakertown,
17
code 18951.
18
Q
prison issues?
20
A
I'm a member of PA CURE.
21
Greater Friends Board.
22
Pennsylvania Prison Society.
23
Organization for Parole Relief.
25
Q
P~,
zip
And are you a member of any advocacy groups of
19
24
And
good morning to you.
11
12
Nothing further.
I'm a member of the
I'm also a member of the
And I'm President of the
Can you briefly explain what those organizations
are and what their mission is?
KEENAN REPORTING SERVICE (717) 66-5-4060
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Pennsylvania
A
~JRE
workS on programs tor 1nmates
2
for better conditions basically.
3
works on programs for inmates and also publishes a monthly
4
newsletter that goes out to families, friends all across
5
the country and not just in Pennsylvania.
6
Society works on issues of rehabilitation for inmates
7
whenever they're released to help them, to help families
8
with visits, to help with medical problems such as that.
11
The prison
And the Organization for Parole Relief, it's new.
9
10
The Greater Friends
It's something that I have organized in the last several
,months by dealing with State Senators and State
12
Representatives in order to get them to look into the
13
issue of why inmates are over their minimums whenever they
14
are first-time offenders.
15
inmates over their minimum.
16
are first-time offenders.
17
mine.
18
across the state.
19
bracket of' that number.
20
Senators for an independent investigation.
21
22
23
24
25
There is approximately 9000
Approximately 6500 of them
And that's state figures, not
I have collected information from these inmates
Q
Right now' we're at about a 15 percent
And that's being presented to the
And how long have you been involved with these
prison advocacy groups?
A
I've been involved with them officially since
probably about October of '97.
Q
And what led you to become interested in these
KEENAN REPORTING SERVICE (717) 66'5-4060
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2
1ssues, 1t anytn1ng?
I was incarcerated myself from December 8th,
A
3
1992 through September 4th of 1997.
And I knew the'
4
inconsistencies of what happens with the DOC and with the
5
parole board and with the state in general.
6
out to work with these organizations to help them with my
7
knowledge from the inside to get some of this changed for
8
the inmates.
And I went
-,
9
10
11
12
13
14
NOW, where were you incarcerated?
Q
You indicated
you were in jail.
I was incarcerated for most of my time at Coal
A
Township near Shamokin.
And is that part of the Pennsylvania Department
Q
of Corrections system?
15
A
Yes, sir.
16
Q
That's the state correctional institute in Coal
17
Township?
18
A
Yes, sir.
19
Q
'And are you married?
20
A
Yes, sir.
21
Q
How long have you been married?
22
A
I've been married 42 and a half years.
23
Q
And did you ever have occasion to call your wife
24
25
when you were incarcerated?
A
Yes, sir,
I did.
I called her from Shamokin
KEENAN REPORTING SERVICE (717)
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depend~ng
2
and then other times it got lenient, and you were allowed
3
to call three or four times a week even.
4
5
on the allowance.
somet~mes
1t was once a week
o
And do you recall how much it cost for those
A
I think on my statement there that I gave you,
_.
calls?
6
'
7
back in August of '93, a call for approximately 18 minutes
8
was $5 and some cents.
9
10
Q
Now, you have given me some phone records.
'.,
......
Are
those reflective of these?
11
A
Yes, sir.
I will tell you that item number six
12
and seven, for some reason when I copied them, they did
13
not copy the prices on item six and seven.
14
three, four and seven does have the prices that was listed
15
on the phone bill.
MR. LOVE:
16
But one, two,
Your Honor, I have -- Mr. Frantz has
17
given me three copies of these phone' bills.
18
ask the Court's indulgence, 1 would like to submit these
19
into evidence.
20
JUDGE COCHERES:
If I could
We'll mark them as documents P-2.
21
For the purposes of your examination, please give one copy
22
to Mr. Kohler and one copy to the witness and I'll pass on
23
my copy for right now.
24
(Complainant's Bxhibit No. P-2 was produced and
marked for identification.)
25
.
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Now, you were indicating that you had made a
Q
3
call to your wife when you were incarcerated.
4
please show us where that would be reflected in these
5
documents?
6
.,'
"
_.....
Can you
•• 0_.
okay.
A
On the top page there I have a number one
7
circled up in there.
8
1993.
9
Waymart.
The date of the bill is August 18th,
You'll see the calls there from Shamokin and
They were both to my home phone.
The calls from
10
Waymart was from another inmate that was coming to his
11
wife who was at that time living there with my wife
12 -helping her out.
13
"
~
LOVE:
BY MR.
2
....
But the one from waymart, for instance, on number
14
three at 8:24 a.m. was the 717 area from Waymart which was
15
15 minutes and it was $5.65.
16
Waymart, number five item, the Shamokin item.
17
was 7:18 p.m.
18
If you go back to item seven; sheet seven, you'll see
19
number 17 which is a call from the same Waymart
20
Institution in Shamokin.
21
call now costs $7.05.
The -- I'm sorry not
Number 5
That was a 13 minute call that cost $4.30.
It's a 15 minute call.
And that
22
Q
The date of that call is what?
23
A
The date of the first call was August 10th of
24
'93.
The most recent call that I brought a sheet was for
25
April 25th, of '99.
KEENAN RBPORTING SERVICE (717) 66,5-4060
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2
Q
wnat,
1f
anytn1ng, occurrea Detween tnose two
dates as far as the phone system, if you know?
A
3
The phone system has -- the prices had gone up
4
quite a bit and they put the phone system in.
5
phone system that went in where when you first got on.the
6
phone and you connected through to your party or to my
7
wife in this case, they gave a little spiel about this
8
comi~g
9
accept it, press one.
from a correctional institution.
It was a
If you want to
Don't do a three-way, don't do
10
different connections so on and so forth or you'll be
11
disconnected.
12
Q
They added that?
13
A
That's at the beginning, yes.
14
Q
So that's been added since the first call?
15
A
It's been changed.
Then they
It was basically the same.
16
The first call at Shamokin SCI Coal Township was done by
17
operators.
18
it was changed over to compllter-initiated.
19
when the new phone systems went in where you had a set
20
time, it was computer-generated with that particular
21
statement.
22
23
24
25
Q
In '96, I think it was '96, approximately '96,
And then '97,
If you know, is this when the monitoring of
phone calls also began?
A
At the beginning of '97 monitoring of
calls began at that time at Coal Township.
KEENAN REPORTING SERVICE (717) 665-4060
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Q
1
2
NOW,
1n '93, Q1Q you nave -- was tnere any
~1m1t
to the' number of people you could call?
It was permitted in '93
A
3
the institution
4
opened on May 27th of '93.
S
there was only 27 inmates on the first bus load.
6
was rattling around in a pretty empty place.
7
until the end of the following year of '94 to get Coal
8
Township filled.
So it was not
9
And when we first got there,
it was restricted.
So we
It took them
You didn't.get
10
as many phone calls as you wanted.
11
permit you to have a phone call a day if your work
12
schedule and everything permitted it.
13
it back to two a week.
14
lS
back then?
A
Not at that time, no, sir.
That did not go into
effect until '97.
So you could call anyone you wanted back then?
18
Q
19
MR. ·KOHLER:
20
And then they cut
Did you have to give a list of numbers to call
Q
16
17
But the guards did
Your Honor, I'm going to object.
This
line of questioning has nothing to do with AT&T'S rates.
21
JUDGE COCHERES:
22
MR. LOVE:
Mr. Love?
Your Honor, there was a substantial
23
change in the methodology of inmate phone calls around
24
'96.
2S
that were made because it is relevant to the charges that
And I'm just trying to get on the record the changes
KEENAN REPORTING SERVICE (717) 665-4060
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are bel.ng chargeC1.
2
devices added.
Tnere was some aC1C11tl.Ona.l
• '0".
"
ant3.-~rauC1
Monitoring, as he's testified, was added
3 'and there were costs incurred.
In order to be fair to all
.
4
parties, we have to talk about the costs as part of the
5
overall picture of how much these calls cost.
6
JUDGB COCHBRBS:
7
is overruled.
8
BY MR. LOVB:
9
All right.
Q
I agree.
Continue.
The objection
Mr. Frantz, you were indicating that
10
initially you could call any number of people and this was
11
limited.
.
12
A
Yes.
13
Q
And you also testified that the monitoring .
14
equipment was added?
15
A
Yes.
16
Q
And this all occurred around 1996?
17
A
Late '96, somewhere around there.
18
Q
And did it, to the' best of your knowledge,
19
20
increase the costs of these phone calls?
A
Yes, it did at the time.
I'm sorry, the phone
21
bills did not show up on here for some reason when I
22
printed them out for item five and six that I gave you.
23
But if you look at item seven, they did printout.
24
know the reason for that.
25
-,:
I q.on't
But if you look on '97, the rate for 15 minutes is
KEENAN REPORTING SERVICE (717) 665-4060
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now
2
the operator or the computer gives.
3
June the 22nd, in fact, as it's already installed on some
4
of the phone systems in some of the prisons now, there's a
~7.05.
InC.Luaed 1n tnat 1S tnat 1n1t1a.L sp1el tnat
I pay for that.
On
'.
5
new spiel sticking out.
6
about coming from a correctional institution and so on and
7
so forth and then to accept it, press one.
Now, they interrupt my phone calls with my son
8
9
They go through the initiai thing
appr~ximately
every four minutes or so on an average at
10
any time because it just started this week.
Every four
11
minutes or so, the computer breaks in and says this phone
12
call is coming from a correctional institution which
13
they've already told me at the beginning of the
14
conversation.
15
minutes, three or four times and I'm paying for that
16
again.
17
call is interrupted.
But they interrupt my conversation in 15
So I'm paying for the initial spiel plus my phone
Can you talk over-that?
18
Q
19
A
20
Q
21
that correct?
22
A
Yes, he is.
23
Q
And where is he incarcerated?
24
A
He'S at SCI waymart up in wayne County, sir.
25
Q
And so you continue to receive phone calls.
. No, you cannot .
Now, you indicated your son is incarcerated; is
KEENAN REPORTING SERVICE (717) 665-4060
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7
phone at the prison and call home?
A
8
9
Yes, sir, I have.
Whenever we visited my son
back in approximately March, I called AT&T.
And I
10 -questioned AT&T personnel on the phone of what a breakdown
11
of the $7.05 was.
The information that the lady very
12
graciously gave me after we discussed it for some time was
13
that 'I' was paying $.25 a minute for the phone call, and I
14
was paying a $3.30 surcharge which totaled the $7.05.
Now, this came from her, from AT&T.
15
I questioned
16
this surcharge on what was done.
17
surcharge is a portion of the bill that is paid back to
18
the Commonwealth of Pennsylvania.
19
phone
20
21
22
Q
And she says, well, the
There was also a
I'm sorry, the $3 surcharge goes to the
Commonwealth of pennsylvania?
A
Part of that.
She said a portion of that goes
23
to the. Commonwealth of pennsylvania.
NOw, there's also a
24
pay phone at SCI Waymart that's available for the general
25
public, but not available to an inmate.
That is in the
KEENAN REPORTING SERVICE (717) 665-4060
of
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93
1
v~s~t~ng
area as you enter ana leave to
2
inmate.
So as a matter of interest on the way out two
3
months ago, I stopped and I said to my wife, I said I'm
4
going to make a phone call.
5
asked for an operator, got the operator on.
6
her, I said I would like the charges to call from here to
7
my home phone.
8
back and she said is that automatic or operator 'assisted?
9
I said operator assisted.
v~s~t
w1tn an
So I picked up the phone,
And I asked
And I gave her the phone number.
She came
That's what I want from this
10
phone call, a collect call.
11
said the figure was $1.92 surcharge and $.16 per minute
12
which is a big difference from what the charges my son
13
pays in that.
14
time is not available to an inmate, but is probably about
15
200 feet or so plus or minus from where the phones for the
16
inmates are.
17
And she came back and she
The phone that I had in my hands at that
So it's a difference of $2.73 or $.71 or something
18
like that difference in the'phone bills from what I pay to
19
callout of that pay phone to my home phone compared to
20
what an inmate pays from a pay phone inside.
21
these phones are on prison grounds.
And both of
22
Q
And are you employed?
23
A
No, sir, I'm retired, disability.
24
Q
And does your wife work?
25
A
No, sir, she worked up until two months ago.
.
.
KEENAN REPORTING SERVICE (717) 6'65-4060
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1.
sne nas been dl.agnosea as a mUltlple mye.Loma cancer
2
patient.
3
she's not able to do anything.
And she is not able to work at all.
Right now
Q
So you live on a limited fixed income; is that
6
A
Very limited, yes, sir.
7
Q
How often does your son call?
4
5
right?
"
8
9
:-. .
A
Well, due to the finances,
are, he calls twice a week.
he knows what they
He would like to call more
10
because of the condition of his mother, but he calls twice
11
a week because it costs $7.05 to call for 15 minutes.
12
he's trying to
1.3
keep them down.
And
knowing the finances, he tries to help
14
Q
Now, are his calls limited to 1.5 minutes?
15
A
Yes, sir, 1.5 minutes and you're cut off.
If you
16
don't have your conversation done at that point, they'll
17
cut you off in the middle of a line.
18
1.9
Q
So if he -- if the' rates were lower, would he
have the ability to call more frequently?
20
A
Definitely.
21
Q
How often could he call?
22
A
They cut them rates down to the rate that it
23
would cost to call from -- if he would call with the rates
24
that I was able to place that call from,
25
$4.30 some cents.
it would be like
He could call four times a week in
KEENAN REPORTING SERVICE (717)
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665-4060
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p.tace at two t1mes a week tor wnat he is paying.
2
times a week cost $14.10.
3
was
4
$4, he would be able for call three or four times for that
5
same rate and, you know, at this point talk to his mother
6
who, like I said, is in very ill health and not in
7
promising health, put it that way.
~ble
TWO
If he called at the rate that I
to make that phone call from the prison phone,
8
Q
How old is your wife?
9
A
My wife just turned 60.
10
Q
And your son is how old?
11
A
My son is 40.
12
Q
Has he always been in waymart?
13
A
Other than the initial at Camp Hill which
:...
14
everybody goes to Camp Hill for two or three or four
15
months.
16
Q
And he's been at waymart ever since.
NOw, you had heard some earlier testimony about
17
a policy with the Department of Corrections to house
18
inmates far away from your family.
19
that?
20
A
Are you familiar with
Yes, sir, I read the directive whenever I was an
21 . inmate.
22
23
24
25
Q
And is that partly why your son is at waymart as
opposed to somewhere closer to where -I would say yes that that's a good possibility.
We don't know for sure.
But that's where they sent him.
KEENAN REPORTING SERVICE (717)
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665-4060
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1
My Wl.te had. ta.1.Kea to a state senator and asKea tor a
2
closer institution, which there is several closer, due to
3
the fact of her health even back then and the idea of
4 'being able to get to see him.
5
6
But it was denied and he
was sent to Waymart.
Q
As both an ex-offender and an advocate, do you
7
have ·any thoughts on the families' role in the
8
rehabilitation process?
9
MR. KOHLER:
Objection, relevancy, Your Honor.
1.0
JUDGE COCHERES:
11
MR. LOVE:
Counselor?
Your Honor, it's our contention that the
12
high rates charged for inmate calls which we contend are
13
much higher than rates on almost every other circumstance
1.4 ,impede the ability of inmates to rehabilitate themselves.
15
And as such, the pUblic interest is in favor, in my
16
opinion, of rehabilitating inmates.
17
impediment to that process and, therefore, relevant to
1.8
these proceedings.
19
MR. KOHLER:
20
JUDGE COCHERES:
And this policy is an
A little far fetched, Your Honor.
Mr. Love, I'm having trouble
21
accepting your problem here.
22
the subject of today's hearing is the size, the alleged
23
unreasonable size of AT&T's interLATA charges.
24
25
MR. KOHLER:
I think I clearly told you
Your Honor, if I could add, intrastate
interLATA charges .
. KEENAN REPORTING SERVICE (717) 665-4060
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IJUU\iJS
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Yes,
I
don' t nave J url.Sdl.ctl.On
2
beyond the boundaries of Pennsylvania.
Do you think that
3
financial hardship is a criteria that a Commission uses to
4
set rates for telephone service for any utility service in
5
the Commonwealth?
,
.
.........
"
MR. LOVE:
6
I think financial hardship is a factor
7
that is utilized in certain activities of the Public
8
Utility Commission but not necessarily in the setting of
9
rates.
I think there'S discussions in cutoff terminations
10
and other areas of interest to the Public Utility
11
Commission that this would come in to play.
12
is relevant to the business of the Public Utility
13
Commission.
So I think it
14
I think that my understanding'of the case law as to
19
And there"s an important reason for them to be doing what
20
they're doing, an important public reason for them to be
21
doing what they're doing.
22
unjust and, therefore, relevant to these proceedings.
23
MR. KOHLER:
24
JUDGE COCHERES:
25
MR. KOHLER:
And to pose a burden on this is
Your Honor, can I?
Certainly, Mr. Kohler.
I think Mr. Love is coming about it
KEENAN REPORTING SERVICE (717) 665-4060
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t"rom tne wrong way.
Your Honor, tne comm1ss10n nas no
".'.
2
discretion to charge different customers different prices
3
-- different customers under the same circumstance
4
different prices for the same service.
5
The Commission does have jurisdiction and is
6
involved in numerous programs to try to relieve any
7
financial hardship involved with low income customers in
8
paying those rates.
9
may be relevant to what those programs should involve and
1.0
And, you know, Mr. Love's argument
-
'
whether there should be additional programs potentially
1.1. .for families of inmates.
But I don't see what relevance
1.2
they have to what AT&T'S rates for inmate services should
1.3
or shouldn't be.
1.4
1.5
. . .......
. JUDGE COCHERES:
Do you understand the distinction
that Mr. Kohler just drew for me?
1.6
MR. LOVE:
I heard him.
1.7
him or agree with it.
1.8
JUDGE COCHERES:
I'm not sure I understand
Well, "I'm sure you don't agree with
20
this Commission administers public regulation in certain
21.
aspects by focusing on the economic hardship to the
22
customer.
23
And I agree with you.
They do.
And I have substantial history, as every judge does,
h~aFing
24
in
what we have called ability-to-pay cases.
25
Whatever the utility is gas, electric, water, but gas and
KEENAN REPORTING SERVICE (71.7) 665-4060
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electrl.C partl.CUlarly ana telepnone.
Ana l.t tne customer
2
is unable to pay the bill, then one of my duties as a
3
Judge is to set up some sort of payment plan where our
4
income low customer can pay the current charges plus
5
something towards their arrearage.
.....'.
Now, there is a bright line between that and the
6
7
rate setting procedure for utilities to charge.
And based
8
on my experience, the Commission does not normally take in
9
to account the impact of the charges on the customer.
10
There are some limited exceptions, for example -- and I
11
know that Mr. Kohler as a representative of the telephone
12
company is familiar with them -- and that is Lifeline
13
rates.
14
their income is so low that their continuation as a
In instances where the customers can justify that
15 . customer is in doubt, the Commission will allow a tariff
16
in effect that sets a special rate in the parlance for a
17
poor person to receive limited phone service.
18
But that rate is set as part normally of an overall
19
rate case and is a requirement the Commission has imposed
20
on telephone companies generally.
21
comes to mind immediately where there is a direct
22
correlation between the customer's ability to pay the bill
23
and the size of the rate set by the Utility Commission.
24
MR. LOVE:
After that, nothing
If I might respond, Your Honor, I'm
25 . sorry.
KEENAN REPORTING SERVICE (717) 665-4060
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Tne test1mony you are otter1ng l
2
while it may come under the general rubric of the public
3
interest, it iS
4
say indirect because of one particular case that sticks in
5
my mind that was mine.
6
is located not too far from Frackville.
I
at best l an indirect influence.
And I
It dealt with a water company that
And if youlve
7
been up in that area, you know that that is not the"
8
wealthiest part of pennsylvania.
9
it.
I
not impressed by the wealth of the population that lived
12
there.
MR. LOVE:
13
You have that.
That is why the prisons
are up there, Your Honor.
JUDGE COCHERES:
15
It could be."
It could very easily
16
be.
17
nerve to suggest that these people could take a really big
18
increase.
19
seen the general condition that was in that area.
And I had people walk into my Courtroom and have the
And I was not pleased with that because I had
And my Commission ultimately accepted my
21
recommendation that a really big increase in rates was not
22
such a good idea for the Frackville area.
23
based in part and very indirectly on the general economic
24
conditions of the geographic area.
25
.:
canlt speculate about
11
20
,.;
But when I drove up there for the hearings, I was
10
14
..
And that was
Those two instances; the Lifeline rates and my
..
KEENAN REPORTING SERVICE (717) 665-4060
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101
1
exper1ence w1th the water company are the
.• j. ... :. ...
two
on~y
2 . instances that come to mind where the ability-to-pay by
to ••, .
3
the customer influences the setting of rates.
4
said my piece about rUling on the objection.
5
something more you want to tell me?
6
MR. LOVE:
Yes, Your Honor.
Is there
... ,.
.~
Through this witness
7
and other witnesses, we're attempting to show as Ms.
8
Feigley indicated that a certain class of people are
9
charged three times the normal rate.
10
11
12
It's alleged that
they are being charged three times the normal rate.
",.
family members of individuals who are incarcerated.
13
Now, it's our contention that this particular class
14
of individuals are, for the most part, low-income people.
15
And the burden of charging -- and let me add these people
16
committed in crimes.
17
what they're doing is of a public good trying to
18
strengthen family ties of people who have gone astray.
19
And it is an important part of the rehabilitation process
20
as Ms .. Hollis of CURE has testified to.
They did not commit any crimes.
1~
So it's our position that they are attempting' to do
22
something good, that they are people generally of limited
24
people of limited means.
25
and being charged three times the rate of other folks.
And they are being singled out
So
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And
21
ii, 3...
.
. .. "..
This particular class of people largely consists of
23 . means because people who go to jail statistically are
,L
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Now, I've
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102
1
tlle CurClen 1S tnat: mucn more s1gnl..I:l.Cant on tnl.s
2
particular class of people which is why MS. Feigley goes
3
so far as to suggest that this is an unconscionable tax on
4
her free speech.
MR. KOHLER:
5
:.
Your Honor, just getting back to my
6
original point, I don't want to sound like a harsh
7
individual.
8
But the way that the law is set up to deal with that
9
circumstance is and the Utility commission maybe could
I have some sympathy with Mr. Love's views.
10
have a role in this, I don't know, is to set up programs
11
to help those individuals pay their bills.
12
You know, it gets back to businesses have to recover
13
their costs.
That's what the Commission's jurisdiction
14
looks at when it regulates utility rates.
15
the flip side of the coin where the customers have to be
16 'able to pay those rates.
There's
And those are typically dealt
17
with by the Commission under two completely separate
18
roles.
19
And'it may be that families of inmates deserve, you
20
know, some sort of rate paying program to help them pay
21
their bills.
22
that.
23
AT&T'S rates should or shouldn't be.
25
I certainly don't want to be the judge of
But this line of testimony is not relevant to what
JUDGE COCHERES:
24
I have to agree.
I have sat
through -- even in that water case, I sat through lots of
KEENAN REPORTING .. SERVICE (717) 665-4060
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test1mony.
2
I went- there because the Commission requirement is that
3
when we have a rate case, it's to the best of our ability
4
that we at least have hearings in the territory where the
5
compan~'
6
tell us about the company.
7
I
tOJ.d you
~e!'!ders
I
arove up to tne FracKvJ.J.J.e area.
service.
So the customers can come and
And I had many of those kinds of cases.
Many of
8
them I had gone and listened to many witnesses, retirees
9
like Mr. Frantz who tell me they're on a fixed
income~
... _....
I
10
had legislators testify that the entire population,
],1
significant portions of the entire population of the area
12
are on limited fixed incomes.
13
true, for example, in the scranton area.
],4
elected officials tell me the same thing.
15
has never amended the Public Utility Code to allow the
16
Commission to use directly information about the ability
17
of the customer to pay the rate as a -criteria for setting
18
the rate.
19
should be sustained.
20
And that's particularly
I've had other
The legislature
Therefore, I must-rule that the objection
MR. LOVB:
For the record, I'd like to note that
2].
we're dealing with a very small class of individuals,
22
people who receive phone calls from correctional
23
institutions, largely family members.
24
small group is being charged, we're alleging, three times
25
the normal rate.
And this particular
And that's why we bring this issue to
KEENAN REPORTING SBRvrCB (717) 665-4060
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104
1
your attent10n.
2
JUDGE COCHERES:
Please continue, sir.
3 'BY MR. LOVE:
".
4
Mr. Frantz, were there any other phone bills
Q
to allude to
5
that you
6
you brought today?
A
7
~!anted
C~
your phone
~----~..
c:: ... v .. \,,/,~
"'\"'-"-
l..UCll..
And if so, could you point them out?
The only thing that I showed was the idea that
8
the phone calls from SCI Waymart is for 15 minutes is
9
$7.05 on Exhibit 7.
From SCI Coal
~ownship
which is item
10
17 and 18 which exchange is -- 644-3140 is the number.
11
They're both in the 570.
12
call, $7.05.
That is also for a 15 minute
.......-.
The information that I have submitted here
13 .in testimony and on my documents there that I had given
14
you came directly from AT&T personnel and from these
15
bills.
16
17
. Q
-'.
So I believe you indicated that your son calls
approximately twice a weak?
18
A
Yes, sir.
19
Q
And that would be $14.10 as a weekly charge?
20
A
Yes.
21
Q
And for a month, we're talking $60, roughly $60?
•
22
A
Well, usually more because he'll call sometimes
23
more than twice a week because of his mother being
24
ill and not knowing the status.
25
one or twice because he knows the finances.
He tries to call maybe
KEENAN REPORTING SERVICE (717) 665-4060
..
qu~te
-
0 .•
135
1
aeot.
2
inmate calls is higher than the bad debt on the pUblic
3
same collect call side.
4
statistics about that.
5
as the cost of why we use this control equipment to keep
6
the costs down so that the fraud stays at a minimum.
7
Somebody has got to pay the bill.
The oaa aeot on the
And there's all kinds of
allud~d
Part of that is what I
to
Now, can you just walk us through the particular
Q
8
9
That m1ght be even Deeter.
ones that you've mentioned on this chart?
10
A
Well, I've gone across the various charges, Mr.
11
Love.
The reason we picked different cities was to just
12
give -- actually in this case it was a reporter, the feel
13
because, you know, some people come from different areas
14
of the State.
15
the middle part of the state.
16
Commonwealth territory, kind of northeast to us and
17
Huntsville, you'll have to ask Deputy Commissioner
18
Shaffer.
19
Q
20
A
~o
Camp Hill is obviously right out here in
Dallas is up here in
the rates are all the same?
I have stated that the intrastate interLATA rate
21 .for AT&T is the same regardless of distance.
22
23
Time is·the
only factor.
Q
Now, moving on, you had indicated earlier that
24
the Commission's portion of this contract is 47 percent
25
and generates approximately $6 million a year.
..
KEENAN REPORTING SERVICE (71?) 665-4060
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136
1
3
A
we~~
Q
Right.
tnat 1ncl.uaes tne PUO.lJ.c sJ.ae, yes.
And five million or so of that is from
the DOC; is that right?
4
A
Yes, that's what I said.
5
Q
Now, where does that money go?
6
A
The -- by law, money coming in to the
7
Commonwealth unless it is by law designated as going in to
8
a special fund -- and the best example of that that
9
everybody would be familiar with is known as the motor
10
license fund.
11
license fees, driver's license fees.
12
fund that that goes directly in to and has to do with what
13
it can be spent for.
14
That would be your registrations and
There is a special
In the case of anything that is not a special fund
15 'account, the law says the money must go in to the
16
Commonwealth general fund.
17
Corrections has had for many, many years a fund known as
18
the inmate general welfare fund.
19
traditionally the monies coming from the pay phone
20
revenues which is the commission for inmate benefits
21
through that fund.
22
Now, the Department of
And they have used
And when we got in to the higher commission scales,
23
and I was not involved in these meetings, but I'm
24
obviously aware of the outcome, a decision was made by the
25 . administration that the Department of Corrections would
.
KEENAN REPORTING SERVICE (717) 665-4060
137
1
contJ.nue to receJ.ve tne
2
getting traditionally for many years from our pay phone
3
operators, you know, the inmate station.
4
remainder of the funds would remain in the general fund to
5
be used for who knows.
6
7
And the
Let me take a guess.
A
11
year·'98.
12
will find it was July 1, '97.
13
I'm going to guess
Q
It certainly was in fiscal
I think if we check it, I think we probably
So that would be the current administration that
made this decision?
15
A
Yes.
16
Q
And you indicated that traditionally all of the
money had gone to the inmate general welfare fund?
18
A
Of the inmate commissions.
19
Q
Correct.
20
A
Commissions off of inmate calls, yes.
21
Q
And that was traditionally about $3 million a
A
It had grown to that.
22
23
~
probably fiscal year starting -- it might have been fiscal
year starting July 1, '97.
17
... •..
was made?
10
14
tnat tney nave Deen
Do you recall approximately when that decision
Q
8
9
:;;3 mJ.~~ion
year?
Obviously when we're down
24
to 4 and 5 percent or 2 and 3 percent, it wasn't kicking
25
in things like that.
:..
.
KEENAN REPORTING SERVICB (717) 665-4060
138
1
Q
And. tnen 1n
2
A
Well, it grew.
'';j7,
1t Jumpea 1:0
6
m1.J..l10n?
But, yes, that's where I went to
3
the 50 percent commission from a much lower figure.
4
asked that before, I believe, and I really didn't answer.
5
There was somewhere around 25 or 26 before that.
6
7
8
9
You
What do you attribute this significant increase
Q
in revenues for the Commonwealth?
We got a lot of traffic.
A
And competition said
if AT&T doesn't want the business, MCI does.
10
Q
So this was as a result of the --
11
A
Competition.
12
Q
-- the competition?
13
A
Absolutely.
14
Q
Was that the Telecommunications Act of 1966 --
15
16
I
mean 1996?
A
Yes, the combination of all things that had gone
17
on of bringing other people into the business and bringing
18
competition.
19
Q
So the deregulation, spurred on by that
20
particular Act, virtually doubled the revenues of the
21
Commonwealth in this particular contract?
22
23
24
25
A
Yes, to the detriment of the revenues of the
long distance carrier I might add.
Q
And to the detriment of the families to pay
these commissions.
KEENAN REPORTING SERVICE (717) 665'-4060
139
I can't saytnat becauseche rates are someEning
A
1
2 I that we didn't get in to.
The rates we used, and we
3 I covered that on this chart,
are the very same rates the
.........
4 1 public has except for that $.90.
5
But a large percentage of that contract is
Q
6 I inmate phone calls?
, '.
7
A
Yes, it is.
8
Q
90 percent?
9
A
And that figure is available actually.
10
Q
So the excess is just going to the general fund
11. I of the state;
12
is that correct?
By law it has to.
A
Now, ic would then get by
13 I budget allocation going somewhere,
~4
i idea.
15 I
1.6
and I don't have any
r
Are you familiar with other state contracts of a
Q
similar nature?
17
A
TO some extent, yes.
:1:8
Q
Have any other states tried to reduce those
. '.
1.9 I rates for i:nmate calls?
20
The.only one that I know of that tried was
A
21. I wisconsin.
And I really don't know what happened.
The
22 I thrust there was to, I guess, reduce the cost of inmate
23 I calls for some reason.
I don't know.
Who knows?
But
24 I that's kind of the way that RFP was being developed.
25 I I really don' t know what happened to it.
KEENAN REPORTING SERVICE (717)
~
And·
It's certainly
665~4060
.."
140
1 I information we -coula cretermine.
2 I
There was one other ·state and I'm trying to think
3 I who it was.
4 I
I guess it was Tennessee was trying - - they
actually put the inmate calls on a state network for. an
5 I entirely different business.
No different reason.
It
6 I turned out to be a disaster.
And it was not to, if you're
7 I implying, to reduce the cost of inmate calls below that of
8 I the pUblic.
That wasn't why they did that.
.
".
But they're
9 I. redoing their process right now and that's not happening.
;,.
10
IS it fair to say that but for the
Q
11 I Telecommunications Act of 1996 and the resulting
12 I competition, the Commonwealth would still be getting the
13 I $3 million a year?
14
Well, my crystal ball is not really that good.
A
15 I But the factors you mentioned that directly impacted the
16 I fact that these commission rates have gone up
17 I significantly is certainly a correct one.
18 I
Competition that was created, it was the purpose of
19 I that Act to create competition to drive costs down anq to
20 I drive prices down.
And it certainly has created that
21 I without any question.
And I don't think anybody would
22 I deny" that.
23
Q
But it hasn't crp.ated any
comp~tition
for
24 I inmates or their families; is that right?
25
A
They're with one contract, one employer and one
.
KEENAN REPORTING SERVICE
(717) 665"-4060
14~
~
r-Opt10n.
They are onl.y because they are -1nc-arceratec1Tn
2 lour facility.
And the contract is ours and we have one
3 I' carrier on that contract.
There was a case a few years
.. ....
~
4 I
back that could have impacted the inmate world as it. was
5 I definitely going to impact the colleges and universities
6 I and so' forth known as billed party preference.
7 I
And the FCC finally, sorry to use this term again,
8 I Judge, threw it out.
The decision on pay phone
9 I compensation in the FCC has pretty well taken the issue.
10 I And there is a brand new law that's now in place that says
11 I that as you make a
long distance call, many of you have
.......
J.2 i experienced it I'm sure, you have the right to get the
~3
I. cost before you place
~4
I variety of ways depending on the technology that's being
t~e
call.
That's being done in·a
15 I used to provide the pay phone service.
16 I
. And it's going to be expensive for the carriers
17 I which means it's going to be expensive for the users in
18 I the long run.
The fact is though those two factors have
19 I caused the' FCC to decide against any rUling for billed
20 I party preference.
And while I'm using a term you may
21 I never have heard before, that is the only way that we
22 I could possibly provide what you're suggesting.
-....
And'then
23 I you have that issue of who's going to pay for the control
24 I equipment and all of the rest of it?
25
JUDGE COCHERES:
Just a minute.
...
:
KEENAN REPORTING SERVICE (717) 665-4060
142
MR. LOVE:
1
2
second?
JUDGB COCHBRBS:
3
4
We'll be off the
(Discussion off the record.)
BY MR. LOVB:
Q
7
8
Certainly.
record.
5
6
can I conter W1.cn Mr. KOhler tor one
Mr. Malcom, do you know if the contract is a
pUblic document?
A
9
The contract is a public document, yes.
Now,
10
there are three parts to the contract.
11
suspect is in your hand now which is a lot of the legalese
12
~~~
13
language as the standard conditions.
14
en
~orth.
You have what I
We typically refer to that in
O~=
cwn
But there are two other parts to the ultimata
15
contract using the Commonwealth definition.
16
for proposal or whatever the procurement document was that
17
developed that or led to that document, plus the response
18
of the awarded vendor.
19
have the Bell Atlantic response and we have what we refer
20
to as a blue-back contract.
21
MR. LOVE:
Okay.
The request
So in this case we have an RFP, we
I want to show you -- again, Your
22
Honor, I apologize.
I just have one copy that Mr. Kohler
23
has provided to me.
But I'd like to make copies of it
24
later this afternoon and submit them as an Bxhibit.
25
JUDGB COCHERES:
KBEN~N
That will be
P-s.
What are you
REPORTING SERVICE (717) 665-4060
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· 143
1
snow1ng a contract?
2
MR. LOVE:
Yeah.
3
(Complainant's Bxhibit Ho. p-s was produced and
marked for identification.)
4
MR. KOHLER:
5
Your Honor,
just so the record is
6
clear, this is a document that we've produced in discovery
7
to Mr. Love.
8
it came from our records and we were uncertain of whether
9
it was a public document or what restrictions it might be
We marked the document proprietary because
10
subject to.
11
document, so AT&T would have no objection to removing that
12
classification.
JUDGE COCHERES:
13
14
19
20
21
22
Thank you.
Mr. Malcom, is that the contract we've been
Q
discussing?
17
18
Fine.
BY MR. LOVE:
15
16
It's now been clarified that it is a pUblic
A
It certainly appears to be.
I'm only up to page
Q
I think section 5.2 indicates the term of. the
15.
contract.
A
Can you tell us what the term is?
5.2.
at 5.20.
YOU're way up in the front.
I was looking
Term, yes.
23
Q
And what's the term?
24
A-
Well, do you want me to read it?
25
Q
Yeah.
KEENAN REPORTING SERVICE (717) 665-4060
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144
A
1
Tne term ot tn1s contract
sna~~
commence on tne
2
effective date defined below and shall expire on Degember
3
31st, 2001, subject to the other provisions of the
4 'contract.
The effective date shall be the later of
-
"
5
January 1, 1999 or the date the contract has been fully
6
executed by the contractor and by the Commonwealth, all
7
approvals required by Commonwealth contracting procedures
8
have been obtained and the contract has been sent to the
9
contractor.
And there is another paragraph.
10
",
It says that the
11
Commonwealth is hereby granted two successive options to
12
renew the term of the contract for a period of one year
13
each, which shall begin respectively at the expiration of
14 .the then current term, upon the same terms, covenants'and
15
conditions, provided, however, that the contract has not
16
been terminated.
17
too,
'Mr.
And then do you want the next paragraph
Love?
.'
18
Q
Yes, please.
19
A
~ext
paragraph is notice of the election by the
20
Commonwealth to exercise each option hereunder shall be
21
given to the contractor in writing at least 90 days prior
22
to the expiration of the then current term, provided,
23
however, that the Commonwealth's right to exercise any
24
option hereunder shall not expire unless and until
25
contractor has given the Commonwealth written notice of
. KEBNAN RBPORTING SBRVICB (717) 665-4060
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th~
...'. '
1.45
1.
tne commonwealtn's ta1..1ure co t1.meJ.y exerC1.se 1.ts opt1.on
2
and 1.5 days opportunity from the Commonwealth's receipt of
3
the notice to exercise its option.
4
And then it has a concluding sentence in it.
No
5
further instrument shall be required to be executed to
6
renew the term of the contract.
7
Now, if you could turn to Section 5.1.6, the rate
Q
8
section.
9
A
5.1.6, okay.
1.0
Q
NOw, you've been thorough and I don't want to be
..'
1.1.
repetitive.
1.2
haven't gone over?
Is there anything new in there that we
1.3
A
In 5.1.6?
1.4
Q
Yeah, the rates.
1.5
A
Well, this just refers to the, again, the other
1.6
part of this contract which is the RFP proposal paragraph.
1.7
And I think we've covered that.
18
does get in to,
19
It's in
20
to time to make sure that the rates being charged by the
21.
t
th~
One of the things that
I guess it's· that paragraph, I'm not sure.
document anyway that we will check from time
what could be various carriers.
In this case it's --
22
well, it looks like AT&T, obviously, then Bell and GTE.
23
They are still within the constraints that we put in the
24
original RFP which simply said that those rates may not be
25
higher than those of the dominant carrier for the same
KEENAN REPORTING SERVICE (71.7) 665-4060
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146
1
2
3
4
serv1ces.
Q
Now, Section 5.17, commissions, is there
anything new in that section that we haven't gone over?
Again, I think not.
-~
But I should point out that
5
I've said earlier, so that this all ties together, that
6
this is a range of commissions.
7
intrastate, intraLATA, interLATA, excuse me.
8
Q
Correct.
9
A
Being 47 to 50.
Let's talk about the
What we did in the final
10
negotiation on this was create that little matrix that I
11
mentioned to you earlier that involved the number of
12
service folks that are in the field that are supplied by
13
the contractor.
14
inserted in the actual response that is part of this
15
overall contract and initialed by myself and the sales
16
manager from Bell Atlantic in making that part of the
17
contract.
18
And that is done.
And those pages.are
And moving on to Section 5.23, subcontractors.
Q
19
Is there anything new you'd like to add based on that
20
information?
21
A
Not that I'm aware of, no.
22
Q
Just one final question, Mr. Malcom.
Has the
23
competition in the phone industry peaked or is it getting
24
more intense as the years go buy?
25
A
Good question.
I should retire and try to
KEBNAN REPORTING SERVICE (717) 665-4060
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1
answer tnat for very h1gn tees.
Mr. Love, I W1sn .[ Knew.
2
Some folks in the room are very well aware that my
3
prediction all along for this divestiture under the Act of
4
'96 and so forth is that we're going to end up in this
5 . country with five or six AT&T's, if that makes sense, 'in
6
7
other words, big companies.
And what has transpired in the last four or five,
8
six months, my crystal ball is getting to be more accurate
9
all the time with these mergers and acquisitions tpat are
10
going on.
If you're driving at the point do I see
11
commissions increasing more, the answer is no.
12
Q
You think they've leveled off?
13
A
Oh, as a matter of fact,
in a period of time
14
much to the unhappiness of the then representative of AT&T
15
in the later stages of I guess it was '96 when I was
16
trying
17
you've decided that our last extension was a very
18
satisfpctory one from the Commonwealth standpoint.
19
weren't very happy with me.
20
period of time, AT&T had made the decision they were going
21
to get out of business.
22
reorganizations and here we are.
23
to
negotiate a rather good, as by implication
They
And, in fact, during that
And they added some
chau~es,
Now, at this point in time, if you were to ask me
24
where U.S. Sprint, the long distance Sprint in this'
25
business, this is a very narrow business.
pay phones and
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are very narrow, very unusua .
nmate~
2
they are.
3
this acquisition.
4
know.
5
business decision.
ere
Believe it or not, they did not participate in
They had been in once before.
I don't
It's one of those things that a business makes a
6
But, again, if you're talking about -- I mentioned
7
where I think commission rates are going.
8
to the transport rates.
9
business changing a whole lot in the next couple of years?
..
Let me take it
Do I see transport rates in this
10
No.
We're getting to a point where, in my opinion,
11
because, obviously, I'm not proprietary in that
12
information.
13
guess.
I try to guess because it's my business to
If I guess right,
14
I~m
doing well.
If I don't, I
15
didn't make too much money.
16
seen
17
even talk about at home, they're leveling off.
18
all playing games around $.10 a minute where we'll give
19
you this and give you that.
20
that we've reached a plateau some place, I think.
21
22
23
--
you'll notice on the long distance rates which you
MR. LOVE:
They're
That's telling us something
Thank you very much, Mr. Malcom.
No more
questions.
MR. KOHLER:
24
25
But the -- I think that we've
Just a few questions, Your Honor.
CROSS BXAMIHATIQU
BY MR. KOHLER:
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scenarlO unaer whlcn Dotn
2
both general contractors continued from '88 until '99?
3
A
Be~~
ana
AT&T
essentJ.a.l.lY were
Yes, there were several contracts.
In fact, if
4
you look at the service order, there's separate service
5
orders for each.
6
Q
Okay.
And under those previous contracts, it
7
was Bell that was responsible for the local and the
8
intr~LATA
9
responsible for the interLATA part of the service; is that
10
11
part of the service and AT&T that was
right?
A
AT&T only the interLATA.
The better answer for
12
you is Bell and the other LEes in which prisons are
13
located.
14
Q
Right.
And the way the scenario is changed is
15
now there'S only one general contractor, that being Bell;
16
is that right?
17
A
Correct.
18
Q
And AT&T is a subcontractor for the sole purpose
19
of providing interLATA services; is that correct?
20
A
As a sub to Bell, yes.
21
Q
NOw, in questions from Mr. Love, you talked a
22
little bit about the payment of commissions from AT&T to
23
the Commonwealth.
24
through their -- by way of their subcontract relati9nship
25
with Bell pays a commission obligation to Bell who turns
So the way that works is that AT&T
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Mr. Malcom, I Cn1.nK you t:eSC11:1ea tnat tne
Q
2 . Commonwealth receives from the inmate business
3
approximately $5 million a year.
4
AT&T, right?
5
6
7
8
9
10
11
A
No, that's right.
Now, that's not all from
There is some intraLATA
business from the local exchange carriers in there, yes.
Yes.
Q
And there would be received from GTE and
from Bell; is that right?
A
Large, yeah.
The biggest part being out of the
Graterford prison outside of Philadelphia.
Q
Now, you lost me a little bit in the beginning
12 .of your testimony about how the contract progressed from
13
'88 to the present.
AT&T was one of the general
14
contractors in 1998, I'm sorry, 1988, the other being
15
Bell; am I right there?
16
A
As a result of an RFP, yes.
17
Q
And then there were several RFP's issued in the
18
interim.
19
resulted in a contract?
But for one reason or another, none of them
20
A
An actually executed contract, correct.
21
Q
And so the result was that the '88 contract was
22
extended until a new contract was signed in February of
23
99; is that right?
24
A
Through, yes, painful negotiation.
25
Q
So if I understand your testimony right, the
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that money over to tne commonwealtn.
2
workS?'
IS tnat tne way l.t
3
A
4
contract, yes.
5
fact, we were working on it again yesterday.
NO.
As a matter of
commissions, correct?
A
8
9
Has it started yet?
Under the old contract, AT&T paid the
Q
6
7
That's the way it is intended under the new
The way it works -- let's talk about the old
contract.
AT&T sent the commission checks to a large.
10
group of addresses that we provided.
11
welfare hospital and
12
The
13
because they have the building, that sort of thing, same
14
thing with Bell, General, United, ALLTEL and so forth.
15
The state parks got their checks directly.
:1.6
Qn~s
Q
In other words, the
X, Y, Z got their check and so on.
in the hallway out here go to general services
Okay.
You mentioned that the payment of the
17
arrangement for the payment of commissions under the new
:1.8
contract is being worked out.
19
AT&T paying commissions?
20
A
What's happening now?
They're still going direct.
Is
And Bell is putting
21
together the file now so that as the prime, they will come
22
indirectly.
23
JUDGE COCHERES:
Your saying then that AT&T under
24
the new contract will pay to Bell which will turn the
25
money over as one lump sum.
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2
time is that those locations that have been getting checks
3
over all of these years that still have pay phones will
4
continue to get that check.
5
getting two or three or whatever, they will get one.
6
JUDGE COCHERES:
7
THE WITNESS:
8
JUDGE COCHERES:
9
10
But instead of potentially
They'll get it from Bell?
'
Okay.
BY MR. KOHLER:
Now, when Mr. Love was going through the
Q
contract with you, you testified about a provision in the
12
RFP that established end-user rate ranges for the general
13
contractor and the subcontractor; is that right?
14
A
You mean the commission ranges?
15
Q
No, the end-user rate ranges.
17
..
Yes.
11
16
...
Maybe I
misunderstood you.
JUDGE COCHERES:
He's saying end-users meaning
18
customers, people who use the phone.
19
BY MR. KOHLER:
20
Q
Let me ask it a different way.
Are there any
21
restrictions in the contract or the RFP which is part of
22
the contract that you're aware of that restrict the rates
23 . that AT&T can charge to end-user customers?
24
A
25
carrier.
Yes, they cannot charge more than the dominant
And now, that dominant carrier, as I'm sure you
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know ana probably the Juage,
2
right now because of what the FCC is doing.
3
themselves for some years because of their dominance in
4
the business when divestiture occurred was considered the
5
dominant carrier.
6
the FCC and the PUC and must be approved.
7
8
Q
J.S
a questl.onaC.1e sucJect
AT&T
But I just want to
does the Commonwealth
Absolutely.
~O
Q
And so my question is what is actually the rate
~~
ceiling in the contract
~2
the subcontractor?
A
s~nce
If you want to look at it that way, you could
make a case that there isn't any.
~5
they decided to raise that, they're going to have to
16
convince the FCC and the PUC that they should do that.
17
And you're going to have
Q
Understood.
Mel
But the fact is that if
and Sprint right behind them.
So is it true that it's AT&T that
sets its rates for inmate services, not the Commonwealth?
20
A
Oh, absolutely.
2~
Q
And AT&T could decrease or increase those rates
22
as long as it was approved by the regulators without
23
violating the contract?
24
25
".
AT&T is both the ceiling and
~4
~9
"
~.:
still consider AT&T the dominant carrier?
A
~8
-
Their rates still must be filed with
9
~3
:::
A
with our concurrence.
Remember, we retain a
30-day termination on everything.
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oKay.
Q
NOW, you
ta~Ked
a
~lottl.e
Clot about
2
dial-around compensation or you called it a per call
3
compensation.
4
A
Urn-hum.
5
Q
And you testified, I believe, that you were a
6
little bit puzzled about why that applied to inmate
7
services.
8
the reason that it applies to inmate services because --
9
because the FCC ordered that it apply to inmate services?
10
A
Is the reason, putting aside the rationale, is
I don't know that.
I've tried to find in the
11
FCC documentation the term inmate.
12
haven't been able to find it.
13
there's apparently been a rUling.
14
either.
15
them an option because I'm concerned about that on this
16
contract.
17
And up to now, I
And on the intraLATA side,
I haven't seen that yet
But I had a call on it the other day that gives
On this contract on the intraLATA side,
18
important point on your question.
19
carried by a firm called Qwest.
i~'s
an
The intraLATA is being
NOw, my question was,
20 ,okay, on this PCC, how is Qwest compensating Bell Atlantic
21
since Bell Atlantic owns them both in their territory at
22
least?
23
And it turns out that the -- apparently the rUling
24
gives one option or another.
25
it.
And one is to actually pay
In other words, to charge the customer the $.30 which ..
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1S wnat's nappen1ng on tne IXC Sl.de, the l.nterexcnange
2
carrier side and, of course, remit it direct to the-pay
3
phone ownership.
4
The other option is to reduce the percent commission
~
5
commensurately to be compensated for what they charge the
6
cu~tomer
7
some of the accounting out of the process.
8
that's what it means to me.
9
options that I discovered over the last week or so.
10
Q
but they're not remitting it.
So you're taking
At least
Those are apparently the two
would it surprise you that AT&T is strongly
11
opposed to per call compensation both for pay phones and
12
inmate services?
13
..
A
.......
,.
It wouldn't surprise me in the least.
If
14 -they're looking for another vote, they should ask.
15
NOW, you're not sure why, but you are aware that
Q
16
AT&T has a per call compensation obligation in the inmate
17
services context; is that right?
18
A
Yes.
19
Q
Now, do you know who AT&T pays that per call
20
21
compensation to?
A
I don't know who specifically or how.
But they
22
are supposed to be paying it to the owners of the phone.
23
That's why I've gotten in those areas because the owners
24
of the phones vary depending on what -- by and large, -
25
Bell, I guess.
:.
KEENAN REPORTING SERVICE (717)
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Q
Right.
The Commonwealth is not gettl.ng tnat?
2
A
Oh, no, we own nothing and don't want to.
3
MR. KOHLER:
4
JUDGE COCHERES:
Understood.
Before we have redirect, there's a
couple questions that I have for you because I want to
6
understand your chart that you did.
7
call P-4, the chart that you prepared?
THE WITNESS:
9
JUDGE COCHERES:
Do you have what you
Good.
When you say that the
commission, that the Commonwealth receives 50 percent of
11
the gross billed revenue, does that mean that the -- since
12
it is gross billed revenue that you get 50 percent of
13
$7.35 on line one of your column?
15
THE WITNESS:
it on the $.30.
Good question.
I don't know.
I doubt
Prior to that, yes.
16
JUDGE COCHERES:
17
THE WITNESS:
So you'd get 50 percent on $7.05?
I think, yes.
Yes, assuming it was
18 ·billed.
19
20
JUDGE COCHERES:
And I always thought that Albion
was sort of just South of Erie?
21
THE WITNESS:
22
JUDGE COCHERES:
23
......
Yes.
10
14
.
Nothing further.
5
8
~
I'm going to suspect you're right.
I had the honor of being there
once.
24
THE WITNESS:
25
MR. LOVE:
Fortunately I have not.
Hopefully it wasn't winter.
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2
was W1n
redirect?
3
MR. LOVB:
4
~UDGB
5
No redirect, Your Honor.
COCHBRBS:
THB WITNBSS:
7
MR. LOVB:
9
Fine.
The witness is excused and
thank you for coming.
6
8
ere any
Thank you.
I call Deputy Commissioner Shaffer to the
stand.
JOBH SBA'.BR, called as a witness, having been duly
.. '
10
11
12
13
sworn, was examined and testified as follows:
JUDGB COCHBRBS:
16
17
Please be seated.
Good
...'.
afternoon to you, sir.
THE WITNESS:
Good afternoon.
DIRBCT BXAMINATION
14
15
Thank you.
BY MR. LOVE:
Q
Good afternoon, Mr. Shaffer.
I appreciate you
coming.
18
A
Good afternoon.-
19
Q
Your full name again for the record please.
20
A
My name is John S. Shaffer,
21
Q
And your current position?
22
A
I'm the Deputy Secretary for Administration with
23
--.
S-H-A-F-F-B-R~
the pennsylvania Department of Corrections.
24
Q
And how long have you held that position?
2S
A
Since December of 1997.
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Ana prJ.or to cnat, wnat POSJ.tion aJ.a you nOld7
2
A
I was the deputy superintendent for facility
3
management at the state correctional institution in.
4
Somerset.
5
0
And how long were you at that position?
6
A
I was there from
~992
to 199 -- it gets a little
7
complicated.
8
jail for most of the year of ~996.
9
at Somerset from '92 until '97 except for that interim
10
~~
I was the warden for the Allegheny County
But I was essentially
period when I was at the Allegheny County jail.
And how long have you been with the Department
Q
~2
of Corrections except for this brief period when you were
13
with the Allegheny County Jail?
14
A
I have been with the Commonwealth since May 25th
15 .of 1977.
~6
~7
18
I've been with the Department of Corrections
since April of
~986.
And what are your responsibilities in that
Q
position briefly?
19
A
My current position?
20
Q
Yeah.
21
A
I'm responsible for all fiscal administration.
22
I'm responsible for construction, engineering and
23
operations, food service, all of the inmate health care,
24
all of the staff development and training, bureau of human
25
resources, equal opportunity.
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.Q
Br1eI:.1.Y, wnat's your eaucaC10na.1. oacKgrounc1?
2
A
I have a Bachelor's Degree in sociology from
3
Westminster College.
4
administration from the University of Pittsburgh, and I
5
have a PhD in public administration from the University
6
of pittsburgh.
7
Q
8
kn~wledge
of the current telephone
system that the Department of Corrections operates?
9
A
Yes.
10
Q
Do you have knowledge of the current contract
11
(
Do you have
I have a Master's Degree in pUblic
under which that service is provided?
12
A
Yes.
13
Q
And can you give me just a little bit of an idea
14
of how far back your knowledge would go with regard to the
15
telephone issue?
A
16
I served on two RFP committees.
The most recent
17
one that resulted in a contract awarded in Febru?ry·of
18
'99.
19
resulted in the Commonwealth rejecting that and not
20
awarding that.
21
Q
22
23
And I served on the one just prior to that that
would that have been the 1994 bid that Mr.
Malcom discussed?
ATO use his date, I mean it stretched over so
24
many years,
25
process.
'94, '95, '96.
It was a long drawn out
KBBNAN RBPORTING SBRVICB (717) 665-4060
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can you give us a aeSCr1.pt10n ot how an J.nmate
Q
would access the telephone system?
• ·'f •.•
3
A
An
inmate fills out a form that he may list up
4
to 20 telephone calls on.
In addition, he can list -- the
5
form allows for up to four attorneys.
6
if somebody has multiple counsels.
7
is 20 personal phone calls and four attorney calls.
8
inmate submits that list.
It is input into the inmate
9
telephone control system.
Once it's input, then the
We make exceptions
But generally the list
The
10
inmate can place the calls as previously described.
Do
1.1
you want me to go through and repeat what we've already
12 "heard?
13
14
1.5
o
No, just to fill in the blanks so to speak.
say there's two attorney calls?
~
The form itself allows four lines.
16
don't have four attorneys.
17
have more and we make accommodations for that.
Most inmates
There are exceptions.
1.8
o
Are there time limits placed on calls?
1.9
A
Yes, sir.
20
o
And what are the time limits?
21.
22
You
Some
Are they uniform
or are they different for different people?
A
It's based on the inmates custody level.
23
There's a classification system.
All inmates receive a
24
classification level which can change based on their
25
behavipr and various factors.
A custody level five inmate
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1
is an l.nmate wno's nousea 1n tne rescrl.ctl.ve nous1ng un1.t.
2
Those inmates can only access the phone for bonafide
3
emergency purposes, legitimate purposes and legal calls.
4
Custody level four inmates are permitted three 15
5
calling blocks per week.
m~nute
Understand a calling block does
6 -not necessarily mean a straight 15 minutes.
A calling
:.
7
block could be three five minute calls, it could be 15 one
8
minute calls, but essentially a custody level fOur inmate
9
gets three 15 minute phone calls per week.
10
three inmate
11
12
Custody level
At his discretion as to which way he utilizes
Q
his time?
13
A
Yes, custody level three inmate can make one 15
14
minute call block per day.
15
Custody level one and two inmates generally have unlimited
16 -access to the phone.
It could be any combination.
:.
They are cutoff after 15 minuteS.
:.
17
But they can get right back on and call again.
18
Do you recall Mr. Frantz testifying this
Q
19
morning?
20
A
Yes, I was.
21
Q
He indicated his son was at Waymart.
22
Were you present when he testified?
Do you
know what custody levels Waymart generally houses?
23
A
All of our facilities house inmates of all
24
custody levels.
25
two.
Waymart is classified as a security level
There's a distinction between the security level
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class1t1cat10n ot an 1nst1tuC:LOn ana tne cuscoay .LeVel
2
classification of an inmate.
We do classify Waymart as a
3
security level two facility.
But within the confines of
4
that facility, we have inmates ranging from custody level
5
two through five.
0
You don't know what level Mr. Frantz's son was
8
A
No, sir, I do not.
9
o
Does the Department of Corrections have a rQle
6
7
at?
10
in the development of the request for funding proposals
11
for telephone services?
A
We have representation on the RFP committee,
14
Q
And who would that representative be?
15
A
I was on that committee.
12
13
yes.
We also had
16
Superintendent James Morgan who is the superinte.ndent of
17
the State Correctional Institute at Smithfield.
18
had Mr. David Garlinger who
19
Services Division who essentially handles radio and
20
telecommunications services and vehicle maintenance
21
services for the Department of Corrections.
22
three Department of Corrections' representatives.
23
are also representatives from other state agencies as
24
well.
25
Q
~s
And we
our Chief of the Support
Those are the
There
So you participated in the last RFPi is that
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MR. KOHLER:
3
the evidence is clearly
4
MR. LOVE:
None of it is relevant, Your Honor.
As
It may not be relevant to Mr. Kohler's
5
position, but my client is here to protest the high rates
6
of telephone calls which have been going up, up, up in her
7
20 years of phone calls.
8
her position.
9
or attempting to put it on the record.
10
11
And it's certainly relevant to
And that's why I'm putting it on ·the record
JUDGE COCHERBS:
It is irrelevant.
The motion is
granted.
12
MR. LOVE:
13
JUDGB COCHERES:
14
(Complainant's Bxhibit No. P-9 was produced and
marked for identification.>
Note my objection for the record.
Your exception is automatic, sir.
15
16
17
BY MR. LOVE:
Q
Now, Deputy Shaffer, I want to show you a
18
Pennsylvania Department of Corrections Monthly
19
Institutional Profile which I am marking P-9 dated
20
February 28th, 1999.
21
with this document?
And I'll ask you if you're familiar
... '
22
A
Yes,
23
Q
And I draw your attention to the section
I
am.
24
regarding race, the DOC total, at the bottom line, DOC
25
total under raise.
Is it correct on the --
KEENAN RBPORTING SERVICE (717) 665-4060
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MR. LOVE:
1
Your Honor, tnere's no
I:ound.at~on
I:or
2
this.
3
service scenario, AT&T cannot tell what the race of either
4
the person calling is or the called person is.
5
statistics are of the racial makeup of a given
6
correctional facility has absolutely nothing to do with
7
what AT&T'S. rates should or shouldn't be in this -- in
8
this case.
9
I mean, the fact of the matter is that in an inmate
What the
I understand Mr. Love's -- the argument Mr. Love
10
wants to make.
11
standard' that the Commission is going to apply in this
12
case.
And it's getting late in the day more important.
JUDGE COCHERES:
13
14
But it's not relevant to the case in the
day.
No, it's not getting late in the
We'll be here for as long as it takes.
15
MR. KOHLER:
I understand, Your Honor.
16
JUDGE COCHERES:
17
MR. LOVE:
All right.
Mr. Love?
Your Honor, my client when she filed her
a~leged
18
complaint in April of 1998
19
racist because it had a disproportionate impact on racial
20
minorities, people of color.
21
this morning about the same thing without any objection
22
from Mr. Kohler.
23
accurate numbers of the racial characteristics
24
25
MR. KOHLER:
that the system was
And she testified earlier
And I'm merely trying to get the
Your Honor, let's put the document in
the record and leave it at that.
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4
5
on.
MR. LOVE:
Thank you, Your Honor.
BY MR. LOVE:
Deputy Commissioner Shaffer, you heard some
Q
6
testimony -- were you here this morning when several
7
family members of inmates testified?
..
. ......
8
A
Yes.
9
Q
And they essentially stated that they were of
,
10 ·the belief that contact with family members was imporeant
11
in the rehabilitation process.
12
statement?
Yes.
13
14
15
Would you agree with that
And would that include communications by
Q
telephone?
16
A
Yes.
17
Q
And were they correct that the Department of
18
Corrections has a policy that inmates, when they enter the
19
system, get sent to the institution farthest away from
20
their family?
21
A
NO.
22
Q
Could you clarify that?
23
A
There is no formal written or official policy to
24
25
that effect.
Q
There's no policy whatsoever that dictates the
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1
2
pos1t1on1ng ot an 1nmat:e w1tn respect: to n1S tam1.LY?
An inmate's placement in our system is based on
A
3
his programming needs, his custody levei and various other
4
factors.
5
Q
6
7
And has nothing to do with where their family
members are located?
When where possible we try to accommodate that.
A
8
But, frankly, that is a lesser criterion than the ones I
9
previously stated.
10
11
12
13
Didn't Commissioner Horn attempt to introduce
Q
such a policy about a year ago?
MR. GUZZI:
Objection, Your Honor, calls for
hearsay.
14
JUDGE COCHERES:
15
MR. LOVE:
16
Mr. Love?
:.
Commissioner Horn is his boss.
I would
assume he knows what he's doing.
17
uUDGE COCHERES:
18
Government, have you?
19
MR. LOVE:
20
MR. KOHLER:
21
MR. GUZZI:
You've never been in State
I am from Philadelphia, Your Honor.
It's also irrelevant, Your Honor.
If the Secretary of Corrections issues
22
such a verbal command to his field staff, he could have
23
subpoenaed the Commissioner himself.
24
25
JUDGE COCHERES:
the objection.
As a matter of fact, I'll overrule
I don't believe that it's hearsay.
KEENAN REPORTING SERVICB (717) 665-4060
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186
:..
1
cl1rectl.ve 1ssue 1n elle Ord.1nary course ot: DuSl.ness.
2
MR. KOHLER:
Your Honor, it is irrelevant though.
3
mean, there is now evidence on the record that our rates
4
are distant sensitive.
5
Corrections' policy is to placing inmates in facilities,
6
no matter what it is, could not be relevant to this' case.
JUDGE COCHERES:
7
8
9
10
11
12
13
14
15
So what the Department of
. ..
....
Love?
'
MR. LOVE:
I
would agree with Mr. Kohler for once.
JUDGE COCHERES:
sustained.
Good.
Move on.
The objection is
And it's the second time you two have agreed.
MR. LOVE:
Sorry.
I
stand corrected, Your Honor.
BY MR. LOVE:
Q
Are you familiar at all with the breakdown of
the $3 surcharge that is put on each phone call?
A
No.
17
Q
You don't know the breakdown?
18
A
No, sir.
19
Q
This 50 percent commission or 47 percent
20
commission that the Commonwealth takes, are you familiar
21
at all' with where that money goes and for what?
A
All I know is the $3 million per year goes to
23
the Department of Corrections in the general welfare fund.
24
The remaining goes to the Commonwealth general fund.
25
'" ."
How do you respond to that, Mr.
16
22
I
Q
It's all profit?
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1
A
It 1s comm1ss10ns pa1Q trom the 1nmate telephone
~
2
from the phone companies.
3
4
.Q
But it's not to pay for any services that your
organization renders?
5
Indirectly you could say that.
A
I mean, it goes
6
into the general welfare fund.
7
appropriations flow.
8
does come back, although it may not be that exact dollar
9
bill.
10
..
..
Right.
Q
And from that, all state
So, indirectly, some of that money
As part of the general appropriations to
11 .the Department of Corrections?
..
,
12
13
14
15
Among other state agencies, among all state
A
agencies .
. JUDGE COCHERES:
for your agency during the last fiscal year '98-99?
16
THE WITNESS:
17
JUDGE COCHERES:
18
MR. LOVE:
19
JUDGE COCHERES:
20
MR. KOHLER:
21
JUDGE COCHERES:
22
What was the general appropriation
Approximately $1 billion.
One billion.
Thank you.
I have nothing further, Your Honor.
Good.
No cross.
No cross?
case, the witness is excused.
23
THE WITNESS:
24
MR. LOVE:
All right.
In that
Thank you for coming, sir.
Thank you.
Your Honor, I'm going to rest at this
7••
25
time with the understanding that Mr. Kohler is going to
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1
call tne AT&T person and I w1IT have the opportuIl1ty to
2
cross-examine her rather than call her as of
3'
cross-examination.
4
JUDGE COCHERES:
All right.
Mr. Love, I'm not sure
5
what your general experience is but I'm going to get you
6
started down the right road.
7
move your exhibits in?
8
9
MR. LOVE:
And that is do you wish to
Oh, I'm sorry, Your Honor.
I always
forget that.
10
JUDGE COCHERES:
1.1.
MR. LOVE:
12
evidence, Your Honor.
1.3
JUDGE COCHERES:
1.4
admitted.
That's important Mr. Love
I'd like to move P-l through 9 into
P-1. through 7 are admitted.
P-9 is
P-8 is not admitted.
15
MR. KOHLER:
16
JUDGE COCHBRES:
17
(Complainant's Bxhibit Nos. P-l through P-7 and P-9
were admitted into evidence.)
No Objection, Your Honor.
That helps.
18
19
JUDGE COCHERES:
20
break.
21.
head.
All right.
We're going to take a
It's 20 minutes after by the clock above your
Be back in your seats by 3:30 please.
22
(Whereupon, a brief recess was taken.)
23
JUDGE COCHBRBS:
24
25
.. :''''''''
Let's go back on the record.
Mr.
Kohler, I see your witness is here.
MR. KOHLER:
Yes, Your Honor.
We will get in to
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room.
4
to sign the acknowledgment, we will not have to clear the
3
occurs.
2
proprl.etary
1
et you
at
But we do, assuming Ms. Feigley has or is going
Mr. Geller is fine.
JUDGE COCHERES:
5
6
Okay.
And I assume the people
behind you are your folks.
MR. KOHLER:
7
. ::"
Well, one is my folk and the other
JUDGE COCHERES:
9
works for Mr. Geller.
8
10
Okay.
All right.
Can you please
raise your right hand?
PA'rR];C:tA CALBGA, called as a witness, having been
11
12
dUly sworn, was examined and testified as follows:
13
1.4
JUDGE COCHERES:
Thank you.
Please be seated and
good afternoon.
DIRBCT BXA¥];NATIOH
16
Good afternoon, Your
1.5
THE WITNESS:
Q
20
A
19
Q
18
BY MR. KOHLER:
17
Honor~
Good afternoon, Ms. Calega.
Good afternoon.
Can you state your name and business address for
Court Reporter.
22
the record, and you might want to spell your name for the
21
23
A
My name is Patricia Calega, C-A-L-E-G-A.
My
19103.
25
address is 1600 Market Street, Philadelphia, pennsylvania
24
KEENAN REPORTING SERVICE (717) 665-4060
•
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3
A
2
Q
1
4
5
And by wnom are you
190
·
,
emp~oyed?
AT&T.
...
And can you tell us what your present job is
with AT&T?
A
I currently am -- my title is docket manager.
resolving customer complaints.
9
management, regulatory work, overseeing tariff files,
8
AT&T.
7
work in the law and government affairs department for
6
I
-
'
My responsibilities generally include docket
Q
And how long have you been in that
positi~n?
I've been in my current position for three years
A
12 'approximately.
13
I've been in the law government since
divestiture in various capacities.
14
Q
I won't go into your various positions with AT&T
present responsibilities with AT&T?
16
over 'the years, but can you summarize your past and
15
17
A
I began with AT&T as the secretary to the vice
addition, overseeing tariff filings, working with the
21
oversee all of the active dockets for pennsylvania.
20
currently work as a docket manager for pennsylvania.
19
president in law and government affairs.
18
As I stated, I
I
In
22 .Commission's staff on the tariff filing and the resolution
23
of customer complaints.
24
25
Q
And is it true you've been doing that back
almost. since divestiture?
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A
Yes.
2
Q
Now, during this period, did your job involve
3
familiarity with not only the tariffing process, but the
4
manner in which AT&T's rates and prices are regulated by
5
the Commission?
6
A
Yes, that's correct.
7
Q
And were you active in sUbmitting documents and
8
doing whatever was necessary to comply with that
9
regulation?
10
A
Yes, I am.
I am and I was.
11
Q
In that capacity, are you familiar with how the
12
regulation of AT&T'S rates and services have changed over
13
the years?
14
15
A
Yes, I am generally.
Prior to divestiture, AT&T
and the Bell companies were under a rate base rate of
16 'return regulation post divestiture with the introduction
17
of interLATA competition.
18
an operating ratio for the regulation of interexchange
19
carriers.
20
21
Q
The Commission transitioned to
And that was done by the Commission through
orders back around divestiture?
22
A
Yes.
23
Q
Now, can you explain your understanding of what
24
the difference in regulation is between rate base rate of
25
return and operating ratio?
~~~~AN
RBPORTING SBRVICB (717) 665-4060
192
1
A
Yes.
BaS:1ca~~y,
rate Dase rate ot return
2
permits a return on capital, while operating ratio permits
3
a return on total sales.
4
Q
Now, has -- when was divestiture?
5
A
1.984.
6
Q
Has this operating form of regulation -- strike
7
the question.
What type of carrier has AT&T historically
'
8
been in pennsylvania?
9
A
An interexchange carrier.
10
Q
And is the typical acronym for that an IXC?
11
A
Yes, it is.
12
9
Now, you've testified what the rate regulation
1.3
is.
Was that for all IXCs or just for AT&T?
1.4
A
That was for all IXCs.
15
Q
Now, has this operating ratio for rate
16
17
regulation for IXCs also changed overtime?
A
Yes, it has.
With the passage of Chapter 30,
18
Chapter 30 of the
19
deregulated a vast majority of services for interexchange
20
carriers.
21
the Commission are EAS, extended area services, and
22
zero-plus services which are services through an
23
aggregator.
24
phones, phones in hotels, hospitals.
25
includes inmate services.
pennsylva~ia
Public Utility Code .
The only services that are still regulated by
And this includes services such as pay
And this also
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1
2
Q
NOW,
tor tne recora, wnen was t:.ne cnapter. 30
passed, do you know?
j
A
I
believe it was 1995 -- 1993, sorry.
4
Q
Now, under the current form of regulation of the
5
services that are still subject to regulation, are these
6
services regulated on a service-by-service basis?
7
A
~es,
8
Q
And what is your understanding of how the
9
10
11
12
they are.
Commission has been regulating AT&T'S rates for zero-plus
service since the passage of Chapter 30?
A
The Commission hasn't developed a specific
standard for regulating on a service-by-service basis.
13 -But I know from working with the Commission's staff tnat
14
generally they focus on the relationship between the price
15
of the service or the revenue of the service and the
16
underlying cost of the service.
17
Now, are you -- do you have a general
Q
18
familiarity with AT&T's provision of inmate services in
19
Pennsylvania?
20
A
Yes, I do.
21
Q
And can you give a brief overview of AT&T'S
22
23
activity in that market?
A
Yes, AT&T serves local, state and federal
24
correctional facilities.
They're all served through a
25
collect call system, collect call only system which is
KBBNAN RBPORTING SBRVICE (717) 665-4060
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~
l.nstallea speC1.t1.Call.Y tor tne correctional. taC1.1ity.
Tne
2
service providers for the inmate services are selected by
3
the governmental entity that would issue an RFP.
4
Companies would provide bids on the service.
5
would win the bid for the service, they would provide the
6
portion of the service for which they bid on.
If AT&T
7
And currently AT&T provides interLATA services for
8
state correctional facilities as a subcontractor to Bell
9
Atlallt~c.
10
11
.......
. '.
..
Does AT&T charge the same rates regardless of
Q
the type of correctional facility?
~2
A
Yes.
13
Q
Are these rates governed by Commission tariffs?
14
A
Yes, they are.
.
'
15
Now, let's get in to
Q
--
there's been some'
16
general discussion about AT&T'S rate design.
17
Malcom shed some light on that.
18
Can you basically describe the rate structure of inmate
19
services?
20
A
'.,
.....
And Mr.
Let's get into that area.
. '.
Yes, there are three components of the rate
21
structure for AT&T'S inmate service.
The first service is
22
the prison collect surcharge which is a surcharge that is
23
applied to every call to recover the costs that are unique
24
to providing service from a correctional facility.
.. .
'
25
Q
What's the second component?
.....
"
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196
1
doesn't matter where you're Ca.lJ.1ng I:rom or wnere you're
2
calling to or what time of day you called.
3
4
5
Q
Okay.
NOw, let's take the first component of
.prison collect surcharge.
level of that surcharge is in Pennsylvania?
6
A
Yes, I am.
7
Q
And what is it?
8
A
It's $3.
9
Are you familiar with what·the
I'm sorry, what was -- was that your
question?
10
Q
Yes.
What is the level of the surcharge?
11
A
It'S $3 per call.
12
MR. KOHLER:
Your Honor, I'd like to mark as AT&T
13
Exhibit 1, I happen to have a certified authenticated
14
document which I'll give the court Reporter.
15
MR. LOVE:
16
MR. KOHLER:
17
pref~r~nce
Are you marking this?
At&t Exhibit 1.
Does Your Honor have a
as to how the exhibits are marked?
18
JUDGE COCHERES:
That's fine with me.
19
(AT&T Bxhibit No. 1 was produced and marked for
identification.)
20
21
BY MR. KOHLER:
22
Q
Now, can you identify this document, Ms. Calega?
23
A
Yes, this is a portion of AT&T'S intrastate
24
tariff for the state of pennsylvania which defines AT&T
25
a service called AT&T prison collective controls which
. . KEENAN REPORTING SERVICE (717) 665-4060
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Tne secona component 1S pay pnone compensatl.on
A
2
surcharge which Mr. Malcom has already spoken about in
3
quite an amount of detail.
4
phone surcharge which is $.30 for every call placed from a
5
pay phone.
6
Q
That's the FCC ordered pay
Now, has the FCC ordered the surcharge or have
7
they ordered AT&T's obligation to pay per call
8
compensation?
9
A
They ordered AT&T'S obligation to pay per call
10
compensation.
11
Q
12
And is the purpose of that surcharge to recover
the costs incurred under that obligation?
13
A
Yes, it is.
14
Q
And what's the third?
15
A
The third is the transport charge which is the
16
charge for transporting the call from origination to
17
termination.
18
Pennsylvania is a $.27 postalized rate which went into
19
effect last June of 1998.
20
was a distant sensitive charge for the transport.
21
it's just a flat $.27.
22
23
24
25
Q
NOW,
That rate that is currently
tariff~d
in
Prior to June of 1998, there
But now
you use the term postalized charge.
What
do you mean when you say postalized charge?
A
It means that there is no distance or time of
day sensitivity to that rate.
It's a flat rate.
KEENAN REPORTING SERVICE (717) 665-4060
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correct?
.,.
2
A
That's correct.
3
Q
And did they
4
were you familiar with the bids
that were submitted?
5
A
6
Yes.
How many bids were submitted?
7
A
As I recall, this last one we had three bids.
8
Q
And who were those three?
9
A
There was two separate proposals from Bell.
10
I can't recall who was the third one.
11
Q
IS it a situation where you take a low bid?
12
A
No, sir.
13
Q
Was the low bid the one that was given?
14
A
I don't recall whether it is or not.
15
not a low-bid situation.
16
go to
17
18
And
An RFP is
It doesn't necessarily have to
~ow
bid.
Q
Was it the company that offered the greatest
commission that was awarded
~he
contract?
19
A
That was one factor of several.
20
Q
what were some of the other factors?
21
A
Who could provide the best call control
22
processing equipment, the most reliable equipment, things
23
like that.
24
25
Q
And you had heard testimony today that this
contract has generated about $6 million in profit.
.
Do you
165
1
couple Of years.
2
that, I really don't know.
... -.
aon't Know 11: 1t was pr10r to
I
And can you tell the Court what the inmate
3
4
But
general welfare fund is?
The inmate general welfare fund is a fund that
A
5
6
is established to provide services for inmates.
A lot of
7
that money is spent for recreational equipment;
8
basketballs, softballs, volleyballs, things like that.
9
provides for inmate entertainment.
It
10
occasionally contract for concerts, magicians, things like
11
that.
12
goes for the direct benefit of inmates.
13
It's also used for therapeutic services.
Okay.
Q
,-- .'.
For example, we
It all
I'm going to show you administrative
14
manual volume 30M022.01 revised dated October 16th, 1990
15
and ask you if you could identify this document.
16
JUDGE COCHERES:
We will mark this as?
17
MR. LOVE:
18
(Complainant's Bxhibit. No. P-6 was produced and
marked for identification;)
P-6, I'm sorry.
19
20
21
22
23
THE
WITNESS:
Yes, I'm familiar with this document.
BY MR. LOVE:
. '.
And is that the regulations that govern the
Q
inmate general welfare fund procedures?
24
A
Yes.
25
Q
Now, are there any statutes that dictate the use
KEENAN REPORTING SERVICB (717) 665-4060
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166
~
of tnese tunds?
2
A
Not that I'm personally aware of.
3
Q
Are there any regulations that dictate the use
4
of these funds?
5
A
Only our internal guidelines as far as
6
Q
And these are your internal guidelines?
7
A
Yes, sir.
Q
And if I turn to Roman Numeral ten on' page 5.
I
know.
'.'
'. "
8
9
Just to save some time, I'll briefly run through the
10
categories; recreation and athletics, audio, visual,
1~
outside entertainment, library, artist programs, visiting
~2
room area, day room recreation area, chapel activities,
~3
Christmas, CCC, which I assume is community correction
~4
centers?
'.
.
:.
...
~
~5
A
Correct.
~6
Q
And other one time purchases approved by
~7
counsel.
Would that be a fairly accurate portrayal of the
~8
areas that these monies are spent?
~9
A
Yes.
20
Q
Now, when I look at that last section, other one
2~
time purchases by counsel, what would inmate accounts
22
receivable be?
23
24
A
Supplies necessary to operate the following
income producing services not approved, inmate accounts
25 "receivable.
Essentially we don't use that for that
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1
purpose.
2
chose to was to offset the administrative costs of our
j
inmate account receivables department for those services
4
provided for the direct benefit of inmates, processing
5
checks and things like that.
7
that
al~ows
us to
QO
J.t
we ever
We don't currently do that.
So you don't use money from this account for
Q
6
What th1s cl1rect1ve
purpos~,
is that what you're saying?
8
A
We do not currently charge administrative costs.
9
Q
But the monies come from this fund -- I'm sorry.
10
A
You lost me.
11
Q
There's a cost of doing the inmates accounts,
12
13
What are you talking about?
correct?
A
There's a cost of business which the
14
Commonwealth absorbs.
It is not passed on to the inmates
15
or to the inmate welfare fund.
16
Q
But it is in here as a category?
17
A
It is a category but we did not use it.
18
o
Barber shop and cosmetology?
19
A
That's to purchase equipment for the barbershop.
20
For example, barber chair, combs, all the supplies
21
necessary for those programs.
22
programs.
23
inmates, the haircuts.
24
services.
25
o
Those are inmate training
And they also provide those services to
And for females,
the cosmetology
And the inmate has to get a haircut; am I right?
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2
3
4
"l'nere
A
~s
a groomlngcIlrectlve.
Tnere are some
exceptions.
If they don't get a haircut, they can be thrown
Q
into the restrictive housing unit; is that correct?
5
A
Subsequent to a due process hearing, yes.
6
Q
Shoe repair, what's that about?
7
A
There are some facilities for an inmate trade
8
program.
9
some of the equipment may be purchased out of the general
They teach inmates how to repair shoes.
And
'
10
inmate welfare fund if it's for the benefit of the inmate.
11
Q
And whose shoes do they repair?
12
A
Other inmates' shoes.
And there is a program
13
available that employees could bring their shoes in and
14
they would pay for the cost of the materials.
15
would go back into the inmate general welfare fund.
16
17
And that
And the Commonwealth does have an obligation to
Q
provide shoes to inmates?
18
A
That is correct.
19
Q
And repair them when they're not working
20
properly?
21
A
That is correct.
22
Q
And hobby and craft shops, what's that?
23
A
Again, there's an inmate trade program where
24
they learn to make things.
Generally it's woodworking.
25
There are some leather crafts, things like that.
KEENAN REPORTING SERVICE (717) 665-4060
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1
WOUlQ be to purcnase the equi.pment :tor tnose 1ncome
2
producing shops as the inmates make things; birdhouses,
3
signs, jewelry boxes, etc.
4
general public, to inmate families, to employees, to the
5 'general public.
6
Then they are sold to the
And the monies go back in the welfare
7
Q
And the automotive?
8
A
Same thing.
9
10
.........
fund.
We repair staff vehicles at the
cost of materials and supplies.
.'.
This category is to
purchase the tools necessary to run the program.
11
Q
Tailoring?
12
A
Essentially the same thing as shoe repair.
It's
13
a trade program where we buy sewing machines and related
14
equipment so the inmates can learn the trade of tailoring.
Q
15
16
17
And does that include tailoring staff clothes
also?
MR. KOHLER:
18
afield. here.
19
forward.
20
21
22
23
24
25
Your Honor, we're- going aWfully far
I'd just like
JUDGE COCHERES:
~o
move the proceeding
Where are we going, Mr. Love?
He's
asking for an offer of proof.
MR. LOVB:
I'm just trying to detail where the
revenues that are generated by the contract are going.
MR. KOHLER:
Your Honor, this line of questions has
been irrelevant from the beginning.
KEENAN REPORTING SERVICE (717)
I've let it go on.
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.f.
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170
1
2
3
4
5
MR. L-ovg:
1'11 be happy to move on.
speaks for itself.
The Qocument
I'll go on.
JUDGE COCHERES:
Fine.
BY MR. LOVE:
Turning back to number two, the scope.
Q
Inmate
6
general welfare consists of non-appropriated funds for the
7
following services:
8
commissary, hobby craft functions, personal services
Inmate individual account sales from
., .
9 . available to institutional employees, collect call
iO
telephone commissions.
So this is where this is part of
11
the revenues of this fund; am I correct?
i2
~
The inmate telephones?
13
Q
.. - - ..
14
A
Yes.
15
Q
And that's $3 million worth?
16
A
Per year, yes.
17
Q
And how much is the total spent on this?
~
~CCl.U.
How
18
much is the total
19
I'd like to show you the 1998-99 inmate general welfare
20
fund budget August 4, 1998 marked P-7.
21
......
I'll
wi~hdraw
that question.
......
Next,
(Complainant's Bxhibit No. P-7 was produced and
marked for identification.)
22
:
23
..
BY MR. LOVE:
24
Q
Could you identify this document?
25
A
This is the 1998 and 1999 inmate general welfare
KEENAN REPORTING SERVICE (717) 665-4060
..
171
a~~ocate
1
tuna Duaget where we
2
out of the inmate general welfare fund.
3
4
Q
tunas to eacn 1nst1tutTon
NOW, on page 3, am I correct that's the '98-99
bUdget for each institution of the overall budget?
5
A
That's correct.
6
Q
And am
7
A
Yes.
8
Q
So about 75 percent of the revenues from this
9
10
I
correct the total is 4.192750?
fund are generated from the
telepho~e
A
Yes.
1.2
Q
Now,
contract; is that
.. ':. ..
I
see item number 6 major purchases,
13 . Cambridge Springs - day-room furniture, $10,000.
Wha~
would that be?
15
A
Furniture for the day room in Cambridge Springs.
16
Q
And then Chester visiting room furniture,
17
18
1.9
20
21
.
correct?
1.1.
14
~
$1.5,000?
A
Same thing visiting room furniture for the state
correctional institute of Chester.
Q
IS the state obliged to provide furniture for
the visiting room?
.......
22
A
We do.
23
Q
And you also take some funds out of this?
24
A
That's correct.
25
Q
And the Cresson, install yard lighting, 24,000.
.
172
1
Isn't 1t an ob11gat10n to prov1ae .1.1gnt1ng tor tne yarC1?
2
A
We do.
3
Q
Same with the yard fence at Laurel Highlands?
4
A
Correct.
,
5
Q
What's the markup on commissary items?
6
A
Five percent on all items except cigarettes.
7
which is
MR. LOVE:
I'm just about finished this line of
testimony.
MR. KOHLER:
12
13
Your Honor, we're getting farther away
from;the case by the minute.
10
11
per pack.
MR. KOHLER:
8
9
$.~2
We're getting into commissary markup
and we started the case about AT&T'S rates.
14
MR. LOVE:
15
JUDGE COCHERES:
16
17
There is a reason for all of this.
And you're going to tell me right
now.
MR. LOVE:
There has been a debate within the
18
Department of Corrections over the years on how to use
19
this telephone money.
20
Deputy Commissioner Shaffer on what the Department of
21
Corrections' philosophies have been with regard to the
22
revenues from the telephone companies.
23
give us a starting point for that debate.
24
25
.... -..
MR. KOHLER:
And I want to get into that with
I'm just trying to
Your Honor, this is all interesting but
what does that have to do with AT&T's rates?
KEENAN REPORTING SERVICE (717) 665-4060
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173
1
2
that s wnat tnis case 1S aoouc.
JUDGE COCHERES:
Well put, Mr. Kohler.
What does
3
this have to do -- we know that now the $3 million goes in
4
to the prison welfare fund.
We know how it's spent and we
5
know what the total fund is.
Why should I care what they
6
use -- whether they buy visiting room furniture from it or
7
anything else?
8
9
MR. LOVE:
Ms. Feigley brought a complaint
JUDGE COCHERES:
11
MR. LOVE:
13
16
Yes.
.. :. ...
And we're concerned about the amount of
those rates.
JUDGE COCHERES:
MR. LOVE:
15
~
concerning her telephone rates.
10
12
. ,.., ....
money goes.
Yes.
And as such, we'd like to know where the
And that's what this is about.
MR. KOHLER:
Your Honor, we'll stipulate we don't
17
have control over where the money goes which is about the
18
only thing that's relevant
19
relevant is that we pay the Commonwealth a certain amount
20
of money.
21
pay the Commonwealth a certain amount of money as
22
commissions in order to provide -- in order to get their
23
busi~e~s.
24
this case.
25
interesting, but it's not part of this case.
t~
-- the only thing that's
That's not even on the record yet.
But
th~t
we
Where that money goes simply isn't relevant to
It may be public information.
It may be
KEENAN REPORTING SERVICE (717) 665-4060
..
~74
v
~
2
_
'IHi/~:
Mr. Love, tne expenses tnat tne
Department of Corrections incurs are not helping you.
3
MR. LOVE:
I'll move on then, Your Honor.
4
JUDGE COCHERES:
Good.
Let me qualify that.
The
5
expenses that they incur or the money they take to use the
6
commissions for is one thing.
7
terms of rendering phone service is relevant.
8
distinction.
9
MR. LOVE:
The expenses they incur in
That is what I'm trying to get at, Your
~O
Honor.
~1
with a contract and a certain amount of profit.
12
now we're looking at the profit portion of the
13
~4
15
16
Get the
That there is a certain amount of costs associated
MR. KOHLER:
And right
cont~act.
Your Honor we're supposed to be looking
'at the cost and the relationship of costs and revenue of
AT&T for this service, not the Commonwealth.
Your Honor, the last time I checked the Commonwealth
17
is not' regulated by the Public Utility Commission.
18
fact, the Public Utility Commission is an arm of the
19
Commonwealth.
20
but it's not here.
21
In
You know, there may be a forum for this,
JUDGE COCHERES:
22
makes real good sense.
23
MR. LOVE:
Mr. Love, a lot of what he's saying
..
It goes back to my initial argument where
24 ,I believe the Commonwealth is an indispensable party.' It
25
takes two to contract; the Commonwealth and AT&T.
KEENAN REPORTING SERVICE
of
(7~7)
665-4060
And I'm
~75
~
trylng to exam1ne tnls contract 1n les eoeaLlty so
2
make a record of this proceeding.
JUDGE COCHERES:
3
4
5
6
money.
I
can
The contract says to AT&T pay the
And it says pay the money to the Commonwealth.
MR. LOVE:
Right.
And we've seen for the last 20
years that's been paid, it has gone higher and higher and
7 .higher from 2 percent to 50 percent.
And I suggest to you
8
that this is relevant.
The fact that the Commonwealth can
9
go from 2 percent to 50 percent is extremely relevant to
10
what ;Mrs. Feigley's phone bill is.
1~
brought us here today.
12
JUDGE COCHERES:
And that's what
It is relevant in the historical
13
context that the Commonwealth has been able to garner more
14
money from the telephone industry.
15
deny that.
~6
the money on except for those telephone related expenses.
17
All right.
I don't
But I don't care what the prison system spends
And you had Mr. Malcom testify' that the Commonwealth
18
owns nothing.
Now, do you
19
to is that when a complainant such as Mrs. Feigley
20
chal~enges
21
have to be AT&T, but it is in this case, what we examine
22
are the reasonableness of the costs incurred by the
23
utility.
~-
what Mr. Kohler has alluded
a particular rate before a utility, it doesn't
24
Now, it's true that one portion of the costs that
25
are incurred by AT&T go to paying the Commonwealth, the
KEENAN REPORTING SERVICE
(7~7j
176
1
Department ot corrections.
Some ot it Qoesn't go to tne
2
Department of Corrections.
You haven't even focused on
3
that yet.
4
MR. LOVE:
I'm trying to get there, Your Honor.
I
5
will not ask anymore questions about current expenditures.
6
I just want to ask a couple about the history of the use
7
of this fund and then I'll move on if you'll permit me.
8
JUDGE COCHERES:
9
MR. LOVE:
10
marked P-8.
All right.
Mr. Shaffer, I'm showing you an Exhibit I
It's a letter from November 6, 1991 from then
11 . Commissioner Lehman to the Honorable Stewart Greenleaf,
12
13
Chairman of the Senate Judiciary Committee.
(Complainant Bxhibit No. P-8 was produced and marked
for identification.)
14
."
15
MR. GUZZI:
Your Honor?
16
JUDGE COCHERES:
17
MR. GUZZI:
Yes, Mr. Guzzi.
I'd ask for an offer of proof from Mr.
18
Love regarding this letter.
It is to the Senator written
19
by Commissioner Joseph E. Lehman.
20
the author of the letter, I don't know what he can testify
If Mr. Shaffer is not
21 ,to as to that letter.
22
MR. LOVE:
I would object to Mr. Guzzi.
If he wants
23
to be a party,' I'd be happy to let him be a party.
24
Otherwise, I don't think he has a right to ask for an
25
offer of proof.
KEENAN REPORTING SERVICE (717) 665-4060
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177
--
1
2
we.l.l, t.nat
3.S
an 1nterest1.ng
question, Mr. Guzzi.
3
MR. KOHLER:
4 .proprietary?
5
R!OO::
well, let's start with is this
It's a private letter to a state
senato~
from a commissioner.
6
JUDGE COCHERES:
Let me deal with Mr. Guzzi first.
7
But I
a
department letterhead that the Commonwealth paid for, it's
9
not proprietary.
~an
answer your question real easy.
If it's on
All right.
~o
MR. KOHLER:
Objection overruled, JUdge?
11
JUDGE COCHERES:
Yeah.
Mr. Guzzi, you have been
12
noticeably silent which is fine.
13
appearance in spite of whether the sUbpoena should be
14
issued which I took to be a special appearance.
And
15
that's fine.
You have
~6
not signed my green appearance sheet here which is for
17
attorneys basically.
1a
I have not questioned your role here.
19
it could
20
b~
You have entered your
I don't have a problem with that.
And I'm not suggesting you have to.
I have hinted that
in the role of a special appearance.
This is one of your major clients here sitting on
2~
the witness stand subject to a subpoena.
Clarify what
22
you're doing in my Courtroom and I'll then make a decision
23
as to whether I think you're allowed to speak in terms of
24
raising an objection.
25
MR. GUZZI:
well, my role here today, Your Honor, is
KEENAN REPORTING SERVICE (717) 665-4060
178
C~1.enc
1
to protect the 1.nterest ot my
2
Shaffer as well as the Commonwealth of Pennsylvania
3
Department of Corrections.
I would request that the Court
4
indulge me in granting me a
special.~ppearance
5
limited purposes for which I just stated.
6
JUDGE COCHERES:
7
MR. LOVE:
wn1.cn tOday 1.S Deputy
for the
.......
Mr. Love, do you have a resp?nse?
I have no objection to him entering an
8 'appearance.
.
JUDGE COCHERES:
9
10
MR. LOVE:
That's not what he said.
I don't know of any -- I don't know of
11
the legal term that he's referring to as a special
12
appearance just to raise an objection.
13
with that.
14
know of the law.
15
I'm not familiar
Either you're in or you're out from what I
JUDGE COCHERES:
Well, I will permit Mr. Guzzi to
16
participate in the defense of his client who is on the
17
stand.
18
from me -- opened his mouth.
19
appropriate where a witness is here by subpoena that they
20
may be defended by their own in-house counsel.
21
Guzzi and the Department of Corrections, as I've already
22
ruled, is not a party to this proceeding.
That is the only time he has -- without prodding
And I think it is
So Mr.
23
His subsequent completion of my appearance form will
24
not make him a party to the proceeding as did the pleading
25
he submitted to defend against the subpoena.
KEENAN REPORTING SERVICE (717)
So in that
66~-4060
.~
..
179
1
.
respect,
I
W1~i
now cons1aer tne oDJect10n.
2
MR. LOVB:
Can I just for the record __
3
JUDGE COCHBRBS:
4
f-1R. LOVB:
Yes.
make a statement.
My understanding of
5
these situations is that if his client wants to confer
6
with his attorney, he has every right to do so off the
7
record.
8
appears on the record, I think they should be considered
9
part of the record and a party.
10
For the record, I state that once an individual
JUDGB COCHBRBS:
Well, as I explained to you in a
11
private conversation in my office on the subject of
12
subpoenas, the system by which the Commission uses the
13
issuance of subpoenas as a procedure strikes me as poorly
14
laid out.
And--
15
MR. LOVB:
I'll agree with that, Your Honor.
16
JUDGB COCHBRBS:
Although we're in total agreement,
17
I also informed you that when I was' on the rules committee
18
which reviewed this section of the Commission regulations,
19
I lost the battle to change it.
20
that system as it is laid out.
21
gives rise to the problem that we have now where the
22
subpoena has been issued and, obviously, Mr. Guzzi has
23
been attending all day in the company of his client.
24
I'm going to allow him to defend his client on the stand.
25
Now, Mr. Guzzi, you have raised what I believe is a
And so I must enforce
And I think that also
KEENAN REPORTING SBRVICB (717) 665-4060
•
And
180 .
1
nearsay ODject1on.
2
3
MR. LOVE:
I don't believe he characterized it as
such.
JUDGE COCHERES:
4
Yeah.
But you said the witness
5 .isn't the author of the document, nor is he the recipient
6
of the document.
7
MR. GUZZI:
8
JUDGB COCHBRES:
9
MR. LOVE:
That would be correct, Your Honor.
And do you have a response, sir?
Your Honor, this is a public document
10
from the Commissioner of Corrections to the Chairman of
11
the senate Judiciary Committee.
12
under the hearsay exceptions thereof.
MR. GUZZI:
13
And I think it falls
Your Honor, I'm not objecting to the
14
entry of the letter into evidence.
15
having Deputy Shaffer testify as to whatever i t i s Mr.
16
Love wants him to testify about regarding this letter.
17
is neither the author, the recipient' and as far as we know
18
has
19
20
~o
I'm just objecting to
He
direct knowledge of tbis letter.
MR. LOVE:
Can I give an offer of proof, Your Honor,
to maybe clear some of this up?
21
JUDGE COCHERES:
22
MR. LOVE:
Fine.
Again, it was indicated that the
23
commission rates were as low as 2 percent and that they're
24
now as high as 50 percent.
25
Department of Corrections' position on the utilization of
"
I'm just trying to get the
KEENAN REPORTING SERVICE (717) 665-4060
.
. ':.
181
1
the~r
2
prospective.
3
4
5
port~on
ot those revenues trom a
h~storlca~
And this letter gives me that.
MR. KOHLER:
All of which is completely irrelevant,
Your Honor.
JUDGE COCHERES:
What does a letter dated November
6
6, 1991 have to do with her complaint in 1998 that her
7
rates are too high?
8
9
MR. LOVE:
... ~~
Because Commissioner Owens in 1988 felt
distressed at the profits that were being made by this
10
contract to the point that he wanted to offer rebates to
11
family members.
12
about the large amount of profits that were being made
13
from this contract to the point that he was the one who
14
designated that the monies go to the inmate general
15
welfare fund feeling that that was what he called an
16
equitable, excuse me, equitable arrangement for the use of
17
telephone revenues.
18
19
Commissioner Lehman was equally concerned
And now we have a
posi~ion
where the Commonwealth is
has a windfall of several million dollars going into
20
the general fund.
So I'm just trying to show how, at
21
first, Commissioner Owens wanted to give the money back to
22
the families.
23
used for inmates.
24
administration and the current contract, we have a
25
windfall of several million dollars going into the general
Commissioner Lehman wanted the money to be
And now under the current
KEENAN REPORTING SERVICE (717) 665-4060
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I·.
197
1
Just outl1nes wnat tne serv1ces tnat we are prOV1Q1ng
2
through correctional facilities, through inmate service
3
facilities.
4
the surcharge rate of $3 per call.
Q
5
And at the bottom of the page, it identifies
NOw, down at the bottom of that page there,
6
there's a notation that says effective December 15,.1995.
7
Is that when this rate -- when this particular level of
8
the surcharge became effective?
A
9
10
"
..
.....
Yes, this rate became effective on that date and
it is currently in effect right now.
11
Q
Okay.
Let's go on to
I believe you said the
12
second component was the pay phone surcharge.
13
you and Mr. Malcom talked in some detail about what that
14
is.
15
you aware of what the level of the pay phone surcharge is?
And both
You may have already put this on the record, but are
16
A
What we're charging for?
17
Q
Yes.
18
A
AT&T is currently
19
MR. KOHLER:
20
'.
... "" ....
~harging
$.30 per ·call.
Your Honor, I'd like to mark a document
as AT&T Exhibit Number 2.
21
JUDGB COCHBRES:
So marked.
22
(AT&T Bxhibit Ho. 2 was produced and marked
for identification.>
23
24
BY MR. KOHLER:
25
Q
Can you identify this document?
KEENAN REPORTING SERVICE (717)
665-4060
:..
.'.
198
1
Yes,
A
tn~s
~s
anocner
sect~on
W1.tn1n
AT&T
2
Communications of pennsylvania's intrastate tariff which
3"
outlines the various surcharges that are added to operator
4
servic~s
zero-plus calls for interLATA calls.
Now, there's been some talk in the proceeding
Q
5
6
about comparing AT&T'S prices for different types of
7
calls.
8
zero-plus services generally due to the level of
9
surcharges which are on this page?
Is
~he
variation in price between different
10
A
Yes.
11
o
And let's just go through it really briefly so
12
that people understand what the various services are.
13
first one is collect?
14
A
Correct.
15
Q
Now, let's take a step back.
16
The
AT&T Exhibit 1, is
that the surcharge for just inmate services?
17
A
Yes, it is.
18
o
And are these, in essence, the other surcharges
19
that are applicable to other types of costs?
20
A
Yes, that's right.
21
o
Okay.
The first one is collect.
You probably
22
don't have to go into what a collect call is.
23
two categories; automated calls and operator-assisted
24
calls.
25
But there's
Can you explain what the difference is there?
A
Yeah.
The automated is when there's no operator
KEENAN REPORTING SERVICE (717) 665-4060
..
199
1
1.nVOlvea 1.n placing tne call.
2
assisted is when the operator actually dials the nUmber
3
for you.
Now, why doesn't AT&T charge more for a live
Q
4
Tne secona call operator
5 . operator call?
6
A
I believe actually Mr. Malcom had spoke about
7
this in his testimony too.
8
for
9
machinery in place to do it on an automated basis.
10
~
It is generally more expensive
person to place a call than it is to put the
Q
Now, bill the third party.
That's when you
11
don't bill it to the call party, but you bill it to
12
another party; is that correct?
13
A
Correct.
14
Q
And the surcharge is the same there?
15
A
Correct.
16
Q
Cent paid.
17
A
That's a non-coin service.
Do you know what that is?
18
not using coins to place the call.
19
to a credit card.
That's when you're
You're just billing it
20
Q
And?
21
A
And there's two different rates.
There, again,
22
the automated where you can do it yourself, where you can
23
actually get an operator on the phone and give them your
24
credit card number or your calling card number.
25
will charge it to your calling card.
And they
And that's more
KBENAN REPORTING SERVICE (717) 665-4060
197
1
Just
2
through correctional facilities, through inmate service
3
facilities.
4
the surcharge rate of $3 per call.
5
out~1nes
Q
wnat tne serv1ces tnac we are prOV1Q1ng
And at the bottom of the page, it identifies
Now, down at the bottom of that page there,
6
there's a notation that says effective December 15,.1995.
7
Is that when this rate -- when this particular level of
8
the surcharge became effective?
A
9
10
. . ...
..'.
,
Yes, this rate became effective on that date and
it is currently in effect right now.
11
Q
Okay.
Let's go on to
I believe you said the
12
second component was the pay phone surcharge.
And both
13
you and Mr. Malcom talked in some detail about what that
14
is.
15
you aware of what the level of the pay phone surcharge is?
You may have already put this on the record, but are
16
A
what we're charging for?
17
Q
Yes.
18
A
AT&T is currently
19
MR. KOHLER:
~harging
$.30 per call.
'
20
Your Honor, I'd like to mark a document
as AT&T Exhibit Number 2.
21
JUDGE COCHERES:
22
(AT&T Bzhibit Ho. 2 was produced and marked
for identification.)
So marked.
23
24
BY MR. KOHLER:
25
Q
Can you identify this document?
KEBNAN RBPORTING SERVICE (717) 665-4060
....
200
1.
expensi.ve.
2
3
And cent paid coin, that's when you are using
coins; is that right?
A
4
Correct.
So there is no differentiation between
5
automated or operator assisted because there would be no
6
operators involved in that.
7
8
Now, the person-to-person calls, is the
Q
difference there that you're asking for a specific person?
9
A
Correct.
10
Q
And the surcharges are much higher there; is
11
that right?
1.2
Yes.
1.3
Q
And what's the level?
1.4
A
$6.50.
1.5
Q
Okay.
Going down to the one we've been talking
1.6
about.
1.7
of the page there?
18
The second component, is that down at the bottom
Yes, it is.
A
It's
~he
third charge from the
1.9
bottom of the page, the pUblic pay phone surcharge whtch
20
is $.30 per call.
MR. KOHLER:
22
docu~ent
Okay.
Your Honor, I'd like to mark a
as AT&T Exhibit 3.
23
JUDGE COCHERES:
24
(AT&T Bxhibit NO. 3 was produced and marked
for identification.)
So marked
25
KEENAN REPORTING SERVICE (717) 665-4060
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201
1 r----m
MR).--;"~"'D'T.u'1Jl!
DI.::---If"T,TIT""
It:t~r~y~t.~o-=m:-:::o:":v':':e:::--q=::uT""-::c:T:J(:"': l~y~rt..~
n:r~o"'u~g~rn~-t~.n~l--1s-,--J
1::'1
2
Your Honor.
3 ·BY MR. KOHLER:
4
Q
Can you identify this document, Ms. Calega?
5
A
Yes, this is another section from AT&T's
6
intrastate tariff which defines - - this is the definition
7
part of the tariff which defines what the public pay phone
8
surcharge is and how it's applied.
Q
9
Without going into the words of the page, is the
10
bottom line that the public pay phone surcharge is applied
11
when there's a per call compensation obligation?
12
A
Correct.
13
Q
I think you testified that the third component
14
of the rate was the transport charge?
15
A
Yes.
What is the transport charge?
16
17
A
It's $.27 per minute.
18
Q
And what does the term transport charge refer
A
It'S just the charge for carrying the call from
19
20
21
22
23
to?
point A to point B.
MR. KOHLER:
Your Honor, I'd like to mark this as
AT&T Exhibit 4.
24
JUDGE COCHERES:
So marked.
25
(AT&T Bxhibit Ho. 4 was produced and marked
for identification.)
KEENAN REPORTING SERVICE (717) 665-4060
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1
BY MR.
IU
2
Q
Can you identify the document?
3
A
Yes, this is another section from AT&T'S
4
intrastate tariff in Pennsylvania which shows the price
5
schedule for operator station calls on an interLATA" basis.
6
And this is the rate that would be applicable to a call
7
placed from an inmate facility in pennsylvania.
-.. .
-
8
9
10
And is that the postalized rate we're talking
Q
about where you have the same rate for the initial period
as for each additional period?
1.1
A
Yes.
1.2
Q
And also is there the same rate for --
1.3
regardless of what the mileage is?
1.4
A
That's correct.
15
Q
And if they're a different rate, would that mean
16
that the rate was distant sensitive?
Yes.
17
A
18
JUDGE COCHERES:
19
Excuse me, is that a one or a
two-page dpcument?
20
MR. KOHLER:
21
JUDGE COCHERES:
22
.......
One page, Your Honor.
You accidentally gave me two and
I'm trying to figure out what the difference is.
23
THE WITNESS:
It was a trick.
24
MR. KOHLER:
25
JUDGE COCHERES:
I hope they're the same.
Good.
.
KEENAN REPORTING SERVICE (717) 665-4060
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1
BY MR.
2
3
Tl'
·u:
,N!~:
NOW,
Q
are all of Exhibits 1, 2, 3 and 4
Commission approved parts of the tariff?
4
A
Yes, they are.
5
Q
Your Honor, I think this is already in the
6
record, but I want to ask Ms. Calega some questions about
7
the stipulation of facts.
8
doesn't have it.
I have copies for anybody who
Does the witness have a copy?
9
A
Yes, I do.
10
Q
Before we do that, were you here this morning to
11
hear the testimony from Ms. Feigley and the other
12
witnesses?
..
-•..
Yes, I was.
13
14
Q
And do you recall that there were some exhibits
15
introduced which were bills that were received by the
~6
various witnesses?
17
A
Yes, I recall that.
18
Q
And there was some. discussion of the rates and
19
discussion of the charts and what the other underlying
20
rates were.
21
A
Yes.
22
Q
Was that discussion accurate?
23
A
No, it was not.
24
Q
Are the rates as you have described them just
25
'
now?
KEENAN REPORTING SERVICE (717) 665-4060
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1
A
Yes.
2
Q
And have you reviewed those bills?
3
A
Yes, I have.
4
Q
And have you at least on the calls you were able
5
to get to at lunch verified that the charges are
6
consistent with the rates you described this afternoon?
7
A
Yes, I was able to verify that.
8
Q
Now, there was some confusion this morning over
9
whether the rate was $.25 or $.27.
Do you recall that?
10
A
Yes, I do.
11
Q
Were you able to get an explanation for why that
12
appeared to be the case over lunch?
13
~4
A
The rate that was on the bill that
the price I believe was for a 15 minute phone caLL:
15
16
Yes, I was.
Q
Your Honor, let's refer to an exhibit so you can
actually see it, if I can find mine.
17
aUDGE COCHERES:
18
MR. KOHLER:
I believe that would be P-2.
Bear,with-me for one second, Your
19
Honor.
20
refer to what the witness marked as Number 7 which I
21
believe is the exact, the last page of the eXhibit.
22
Here we go.
THE WITNESS:
Yes, P-2, Your Honor.
Right.
And let's
I took a look at one of the
23
phone calls that I believe was a 15 minute phone call.
24
And I think it was the one placed on April the 6th.
25
think that's correct.
I
It was a 15 minute phone call
.
KEENAN REPORTING SERVICE (717) 665-4060
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1
placed trom a cOllect carr from an :Lnmate tac:L.1.:Lty.
Tne
2
price of the call came to $7.05.
3
it comes to -- it's $.27 for 15 minutes plus a $3
4
surcharge which equals the 7.05.
5
that bill is there's another section on the bill under
6
other.
7
other surcharges and taxes where you would have to total
8
up all of the calls from an inmate facility and multiply
If you break that down,
What doesn't
appea~
on
There would be another section on that bill. under
..
. ....
'
..
M
9
10
that by the $.30.
And that would come out as one number
.
So the per call compensation surcharge is billed
12
on a different part of the bill, is that correct, in the
13
beginning of the bill; is that correct?
14
A
Correct.
15
Q
Now, you have P-1, Exhibit P-1 at the stand with
17
A
I don't have that in front'of me, no.
18
MR. KOHLER:
19
20
you?
P-1.
.
Your ·Honor, if I could refer to Exhibit
I donit recall whose bill this is.
JUDGE
COCHERES~
21
BY MR.' KOHLER:
22
Q
23
'.
in the other surcharges and taxes part of the bill .
Q
16
~
It's Mrs. Feigley's.
You see at the top of the bill where it says pay
phone recovers, pay phone usage fee imposed.
24
A
Yes, I see that.
25
Q
And there's a charge of $9.
KEENAN REPORTING S$RVICE (71.7)· 665-4060
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1
A
R1ght.
2
Q
Is that what you're talking about?
3
A
Yes, I am.
4
for 30 calls.
5
Q
That $9 on this particular bill is
So if you were to identify the charge for the
6
$7.05 call, it's actually $7.35.
7
split; is that right?
The billing is just
:
8
A
That's correct.
9
Q
And who does AT&T'S billing in this context?
10
A
The local carrier would do AT&T'S
11
not sure in this context who it was.
bi11ing~
I'm
It was probably Bell
12 ·Atlantic.
13
14
Q
facts.
Okay.
Fir~t
Now, let's move on to the stipulation of
h~v~ yOU
of Rl1:
reviewed this?'
15
A
Yes, I have.
16
Q
And do you agree with all of the statements
18
A
Yes, I do.
19
Q
~
17
here?
lot of these have already been explained by
20
Mr. Malcom so I'm going to skip over them.
21
number 6 and, Your Honor,
22 .proprietary record.
Going to
I'll try to stay away from the
It says here tnat AT&T contracts·with
23
a third party to provide anti-fraud services and devices
24
for the system.
25
that "means?
Can you explain a little bit about what
KBENAN REPORTING SERVICE (717)
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1
A
2
JUDGE COCHERES:
3
MR. KOHLER:
4
JUDGE COCHERES:
Yes, we contract
5 . company.
w~th
a company
ca~~ea
Stop.
proprietary.
·
We all can read the name of the
Just tell us what the company does.
6
MR. KOHLER:
7
THE WITNESS:
,
.
· .....
The third party.
devices which are some of the software type devices that
9
Mr. Malcom has spoke about earlier.
It's programming in
10
to the phone for the pin number system that inmates use,
11
the new voice recognition systems that are being put in
12
place.
13
number calls.
14
anti-fraud services
It would screen and prevent 800 number calls, 900
..
Those are the sorts of things that the
MR. KOHLER:
.. -.
· .......
provid~ f~r.
Okay.
Now we're moving on to
16
This lists some of the costs.
17
have to go on to the proprietary record here.
18
well do it here.
19
'.
The third party provides anti-fraud
8
15
........
JUDGE COCHERES:
Yes.
numb~r
Your Honor, we are going to
And what I'm thinking is do
you have any other examination of this witness remaining
21
that is not proprietary?
MR. KOHLER:
23
JUDGE COCHERES:
Good question, Your Honor.
Okay.
No.
As I look out across the
24
audience, the only way I see here who probably hasn't
25
signed the agreement is Mr. Malcom.
KEENAN REPORTING SERVICE (717) 665-4060
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We might as
20
22
7.
-•..
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208
~
MR.
K(IHr.~~:
Your Honor, I'm oKay w1tn Mr. Malcom
2
staying in the room.
3
proprietary.
4
5
I think he understands that this is
(proprietary testimony continues on the following
page.)
6
7
8
9
~o
~~
~2
~3
14
~5
~6
~7
~8
~9
20
2~
22
23
24
25
KEENAN REPORTING SERVICE
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665-4060
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1.
2
.BY MR. LOVE:
Just a couple final questions, Your Honor.
Q
Are
3
you familiar with the commission rate that Bell charges
4
under this contract?
5
6
NO, I'm not.
A
I'm sorry, the commission to the
state through the Commonwealth of Pennsylvania?
7
Q
Right.
8
A
I thought we had established before that it was
9
1.0
.......
the 47 percent.
That was the AT&T rate.
Q
. ...." ..' .
'.
11
Okay.
A
YOU're right.
No, I'm not privied to
12
that part of the Bell Atlantic contract with the
13
Commonwealth of Pennsylvania.
14
15
And finally, you do agree that inmate telephone
Q
calls are sUbject to PUC regulation?
16
A
17
MR. LOVE:
18
MR. KOHLER:
19
20
Yes.
Nothing further.
I
have a few questions on redirect,
Your Honor.
JUDGE COCHERES:
Fine.
21
about that for a moment.
22
a moment.
wait a minute.
Let's go off the record for just
23
(Discussion off the record.)
24
JUDGE COCHERES:
25
Let me think
Ma'am, when you said you prepared
AT&T Exhibit 5 on a regional basis, what was the region
KEENAN REPORTING SilRVICE (717). 665-4060
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1
geograpnically you were
2
THE WITNESS:
3
I believe it was the mid-atlantic
JUDGE COCHERES:
THE WITNESS:
pennsylvania.
JUDGE COCHERES:
9
THE WITNESS:
JUDGE COCHERES:
11
you're talking about?
THE WITNESS:
No, I cannot.
JUDGE COCHERES:
15
MR. KOHLER:
16
JUDGE COCHERES:
20
I would have to yerify
Okay.
That's all I wanted to know.
I can, Your Honor.
Well, unless Mr. Love has an
objectIon, I'd like to know for the ~ecord.
MR. KOHLER:. Well, if M+. Love is willing to
stipulate to that.
JUDGE COCHERES:
He said he doesn't have an
21
objection.
22
organized their business is Virginia, District of
23
Columbia, New Jersey, Maryland, West Virginia and
The mid-atlantic region for AT&T the way they
24 . pennsylvania.
25
.
·. - .
that.
14
19
Can you easily name the states that
,
12
18
Not into New York?
Correct.
10
17
..
. ".
· ........
Virginia North to New Jersey and
8
13
So that would be Virginia North to
New York?
6
7
aDout?
-region.
4
5
ta~K1ng
JUDGE COCHERES:
And Delaware?
KEENAN REPORTING SERVICE (717) 665-4060
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~
2
JUDGB COCHBRBS:
3
MR. KOHLBR:
4
5
I suspected that was there.
It equates to Bell Atlantic South, if
you will.
JUDGB COCHBRBS:
Yes.
I understand.
Now, you had
~'
.
'.'-~
6
7
8
9
~o
redirect?
MR. KOHLBR:
Yes, sir.
Before I do redirect, can I
just have a moment to confer with the witness?
JUDGB COCHBRBS:
Yes, we'll be off the record.
(Discussion off the record.)
.....
RBDIRBCT BXAMINATIOH
~~
12
BY MR. KOHLER:
13
Q
Now, Ms. Ca1ega, Mr. Love asked you a series of
14
questions about the profitability of the service.
15
believe what he -- the term he kept using was under the
16
DOC contract or under the contract.
17
line of cross?
18
A
Yes,
19
Q
Were your statements intended to address the
20
And I
Do you recall that
I do.
intrastate component of the service?
21
A
Yes.
22
Q
Does AT&T also provide interstate service under
23
the DOC contract?
24
A
Yes, we do.
25
Q
And by whom is that service regulated?
KEENAN REPORTING SERVICE
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1
2
A
That 1S regulated by tne Federal. Commun1.cat1-ons
Commission.
. ·0
o
3
Q
4
Fede~a~
5
A
Yes.
6
Q
And are those rates higher or lower than those
7
And does AT&T also have rates on file with the
Communications Commission for inmate services?
charged in pennsylvania?
8
A
Those rates are higher.
9
Q
And have you done a profitability analysis of
10
AT&T'S interstate rates?
11
A
NO, I have not.
12
Q
Is that because those rates are not at issue in
13
this proceeding?
14
A
That's correct.
15
Q
IS it possible that the DOC contract is
16
17
18
profitable even though AT&T'S intrastate rates may not be?
A
Yes, if you took the interstate rates into
consideration.
19
MR. KOHLER:
20
JUDGE COCHERES:
21
MR. LOVE:
22
JUDGE COCHERES:
23
you for coming.
24
for me?
25
0
MR. KOHLER:
Nothing further.
Mr. Love?
Nothing further, Your Honor.
The witness is excused.
I thank
Mr. Kohler, do you have another witness
No, that's it.
KEENAN REPORTING SERVICE (717) 665-4060
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1
2
r---"J'tuJl51r~.:.:Jr
~'t_~_~~IfK:~RR!::S-;
s:::-r;r;eecr"iimiEeilsitEaarrt"t,yTco5iullaaQoj;w;rnnt~, nFlie;-'iis"ia'iTmj;:e....-;r:::;o~a~lQr:n
that I sent Mr. Love.
MR. KOHLER:
4
I move AT&T Exhibits 1 through 5. into
the record, Your Honor.
5
MR. LOVE:
6
JUDGE COCHERES:
7
8
No objection.
Without objection, they're
admitted.
(AT&T Bxhibit Nos. 1 through 5 were admitted into
evidence. )
9
10
11
JUDGE COCHERES:
Have we finished the
testimony portion of this hearing?
12
MR. LOVE:
13
JUDGE COCHERES:
14
All right.
minutes.
We have, Your Honor.
Good.
Let's talk for a few
It's been a long day.
I appreciate the
15 . cooperation that I've seen on the other side of the Bench.
16
In my own personal count, Mr. Love, the only document of
17
yours that I appear to be missing is P-5.
18
to go off the record fo~ just a moment.
19
(Diseussion off the record.)
20
JUDGE COCHERES:
And I'm going
Let's do that.
I think we resolved Exhibit P-5.
21
The Court Reporter has a copy and she and I will arrange
22
to make two additional copies; one for her and one for me.
23
Nw, are there any other administrative details that
24
I need to deal with before we get to a question of whether
25
we need briefs or not?
Hearing no administrative
.
KEENAN REPORTING SERVICE
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232
1
Mr. r.:.oye, do you l.ntend to prepare a J:.>rl.et on thl.S case?
2
3
MR. LOVE:
I'd like to do a short closing and a
brief.
JUDGE COCHERES:
4
All right.
Are you familiar with
5
the Commission regulations with regard to the preparation
6
of briefs and the number of copies?
MR. LOVE:
7
8
JUDGE COCHBRES:
MR. LOVE:
MR. KOHLER:
21
It's been a long time
Yeah, it is original nine, Your Honor.
I file all to many briefs with the Commission.
JUDGE COCHERES:
right.
19 'right.
20
I think.
since I had to look it up.
17
18
I do recall reading that yesterday,
JUDGE COCHERES:
15
16
Because I can tell you off
original and nine.
13
14
Good.
the top of my head, you need about nine copies.
11
12
. '.
Your Honor.
9
10
I will make myself familiar with those,
Yes, I'm only too well
aware~
All
And that's not ~ount±ng the copy you give me.
All
Let· me give you my standard spiel on the
preparation of briefs.
First of all, as Mr. Kohler reminded me, as I just
22
found 1n our regulation, you have to file the original and
23
nine copies.
24
as the word processing system.
25
your office, that's fine.
The -- my offices use Word 60 as a word -If you do not use that in
There are other systems and
KEENAN REPORTING SERVICE
(717) 665-4060
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233
1.
tl1eoret1cally I'm
aD.1.e
to convert tl1em.
But I
2 . that you give me a hard copy and a diskette.
3
MR. LOVE:
5
uUDGE COCHERES:
What system
I think we have 60.
Okay.
6
tell me what you're using.
7
that you tell me.
8
MR. LOVE:
9
MR. KOHLER:
1.1.
requ1re
do you use, Mr. Love, do you know?
4
1.0
00
. ':..
Fine.
If you don't, just
That's the important part is
I will make sure that's identified.
We use Word Perfect, Judge, but we'll
be glad to convert it for you before we give it to you.
JUDGE COCHERES:
Yes.
And my experience with your
1.2 . co-worker, Ms. Creed, who will be in front of me
tomo~row
13
and Friday is that your documents do not convert easily.
14
So if you can convert it to 60, I would appreciate it.
15
MR. KOHLER:
I'm sure Ms. Calega will remind me.
1.6
JUDGE COCHERBS:
Well, if she's the lady who will
17
have the ultimate responsibility, that's fine.
But I've
18
had some difficulty with your co-worker's presentations in
19
the last two weeks.
20
regular member of
Mr. Love, I do not recognize you as a
th~
Public Utility Bar.
'
21
MR. LOVE:
It's my first appearance, Your Honor.
22
JUDGE COCHBRBS:
Well, I'm
su~e
you have been able
23
to discern there are certain differences in the way we do
24
things between whatever law you have practiced like in the
25
Courts of Common Pleas or the Federal Courts.
KEENAN REPORTING ,ERVICE (717) 665-4060
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And one
1
o~
tne prOD.LemS you may run 1.n to
1.S
that
2
you may wish to look at case law from this· Commission.
3
And I will tell you that there are two public utility
4
reporter systems.
5
Utility Commission Reporter which I believe no longer is
6
printed.
7
ran out of money to do the contract and they finally
8
stopped.
One is called the Pennsylvania Public
I don't know what the last volume is.
But they
....
"
..
......
'
There's also 'something called the Public Utility
9
10
Reporter which is now in its fourth edition which carries
11
nationally many pUblic utility decisions, some of which
12
are ours.
13
understanding, although I can't tell you what the lag time
14
is, but the lexis likes to put all of our decisions on
15
line.
And you may also find on lexis.
I have access to lexis.
It is my
.. .:--,.'.
And I have access to all
16 'of the published volumes you may find.
17
In the event you decide, and I have no clue as to
act~ally
how you would
19
decide' to use a Commission decision that is not pUblished,
20
and that happe.ns most frequently with people who are
21
members of the utility bar and know that there'S a lag
22
time, then I require that a copy of that decision be
23
included with your brief.
24
to find copies of Commission's past decisions.
25
do
thi~,
18
but in the event you would
I no longer go to the file room
We will be closing the record today.
KEENAN
REPORT:~C
SERV!CE
.
And there is
.'
235
1
some- 1mportance to that.
2
a member of the Bar, you understand that the evidentiary
3
record is closed.
4
experience with the utility bar that occasionally somebody
5
gets what I call an afterthought and wants to add
6
something to the record after the record is closed.
7
In our
par~ance,
ana I'm sure as
And unfortunately, it has been my
I don't like that if the idea to do that is executed
8
by simply stapling it to the back of a brief.
There are
9
some ways to reopen the record including a petition tq
10
reopen the record with a request to recognize public
11
documents with a copy of a document and the indication of
12
where it was.
There are ways to do it.
The brilliant afterthought, as I call it, in
13
14
stapling it to the record at ten after one in the morning
15
and then sending it to be printed will result in me saying
16
bad things about you personally and your mother.
17
MR. LOVE:
She passed away, Your Honor.
18
JUDGE COCHERES:
Well, 'it's a pet peeve and I· always
19
raise it.
20
lawyers who violate that rule.
21
on my list.
22
'1 don't expect a problem.
There are a few
But when they do, they get
And it is one I keep.
You should know what will happen in terms of this
23
case.
First of all, I don't know if you plan to order a
24
copy of the transcript.
25
between you and the court R'eporter.
KEENAN REPORTING
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secona, tne court Reporter cy contract wJ.tn tnJ.s
2
agency in this case is required to produce- the transcript
3
within 15 working days; am I right?
So no copy of the
,-
~
4
transcript will be available before 15 working days from
5
this date.
6
calendar since I didn't bring one to the Bench with me.
7
8
9
I don't know what that means in terms of your
But I,now need to know from you how long do you need
to prepare a brief?
MR. LOVE:
Well, I guess I have to determine whether
10
or not I'm going to get the transcript.
11
informal applications available to waive costs under these
12
circumstances?
JUDGE COCHERES:
14
.-
MR. LOVE:
IS there any
NO.
To be on the safe side, assuming I do
15
order the transcript, 30 days after receipt of the
16
transcript.
.,
17
MR. KOHLER:
That will be fine with me.
18
JUDGE COCHERES:
All right.
We have two briefing
19
systems.
The primary one is the one we never use as set
20
forth in the regulation and that uses the system that
21
you're probably most familiar with.
22
with the burden of proof writes a brief first and a party
23
that didn't have or parties that didn't have the burden of
24
proof write a brief in response.
25
in this case if that's the way -- do you want to use that
And that is the party
We can use that system
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one?
2
MR. LOVE:
3
JUDGE COCHERBS:
4
That's what I'm use to.
~et
me tell you what. the other
system is so you know what's behind door number two.
The
5
other system is that both parties submit main briefs at
6
the same time and both parties submit reply briefs at the
7
same time, two rounds.
8
interested.
9
Mr. Kohler's brief will be due within 30 days of receipt
Fine.
.
More time consuming and you're not
of your brief.
11
to the following Monday.
12
brief, I will do something that normally has significance
13
to me only.
15
16
.:..
And if the 30th day falls on a weekend, go
MR. KOHLER:
After
I
receive Mr. Kohler's
Could I just clarify, Your Honor?
There's only going to be two briefs filed?
JUDGE COCHERES:
That's right.
17 -Commonwealth Court uses.
18
,
~.
Your brief will be due in 30 days and
10
14
....
.
,.':;,.
Much like the
That's not the system that you
normally use.
19
MR. LOVE:
No reply brief to his briefs?
20
crUDGE COCHERES:
Right.
No reply briefs, just two
21
briefs.
22
of Mr. Kohler's brief.
23
you but it is to me.
24
requires that a Judge do his decision within 90 days of
25
the close of the record.
;..
I will officially close the record after receipt
KEEN~N
This is not of any significance to
The reason is the statute I think
Obviously, if I close the record
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tOday and then we take three weeks to ao tne transcript
2
and 60 days to do the briefs, I don't have' much of that 90
3 . days left.
So I officially close the record upon the
4
receipt of the final round of briefs.
5
the decision in this case and it
6
90-day period, I will tell you that
7
over under some limited circumstances.
8
it, it will be sent to you much the way Mrs. Feigley
9
received my first initial decision.
10
When I finally do
~ill
likely be in the
am allowed to go
I
registered mail, return receipt card.
But when I receive
It will come in by
And with that is a
11 . standardized cover letter which tells you what your
12
13
And
I
don't expect to -- I'm not going to please
everybody on everything
15
want to file exceptions and somebody is going to want to
16
file reply exceptions.
17
is for.
18
standard time frame is.
20
.' '- .
exception and reply exception period is.
14
19
,
......
I
write.
So somebody is going to
And that's what that information
I don't -- it's in our regulation what the
And then the Commission is -- only if exceptions are
filed, the Commission is required to review it.
If you
21 ·are completely satisfied with what I've done and so is Mr.
22
Kohler, highly unlikely situation, but if you are
23
completely satisfied, then no exceptions are filed and the
24
Commission has the option of reviewing my decision because
25
they want to or just letting it glide and then it becomes
KBBNAN RBPORTING SERVICB (717) 665-4060
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t~na~.
Even in the second scenario of letting it glide in
2
3
4
and it becomes final, it's highly improbable that's going
.to be in this case, you would get a subsequent
5
notification from the Commission that my decision became
6
final.
7
that 'would also mark the beginning of the appeal period.
8
Do you have any questions about the proceeding?
So you wouldn't miss anything.
MR. LOVE:
9
And that -- and
Good.
very much.
~2
look forward to receiving your brief.
~3
and our Reporters are usually very good about --
~5
~8
19
,.
I will
And our contract
I was going to do a little closing but if
you don't want to hear
JUDGE COCHERES:
~6
~7
I think I understand both sides here.
MR. LOVE:
".
Then I want to thank you
~~
~4
~'.
None, Your Honor.
JUDGE COCHERES:
10
.- ."..
Do
y~ur
Yes, you asked to do that.
Fine.
closing.
MR. LOVE:
i
want to focus on what we consider to be
important.
20
JUDGE COCHERES:
21
MR. LOVE:
That's fine.
Sandra Feigley filed her complaint with
22
the PUC in April of 1998, concerned·about the high rates
23
of charges for her phone calls to her husband George and
24
other individuals.
25
that she construes this as a tax on free speech.
.....
She alleged that the rates are so high
And if
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it
2
we believe that this tax is not uniformly applied because
3
.it targets primarily the families of inmates serving time
J.S
a tax, tnen taxes nave to ce un1.tormly app11ea.
o~
4
in the Pennsylvania Department
5
good reason why those people would-be singled out for
6
higher rates than other folks.
7
t
Ana
Corrections without any
.. :.. ....
She further alleges that racism enters into the
8 'picture because of the predominantly high number' of people
...' " .
. ......
'
9
of color in the system.
As the record indicates, she
10
filed against Bell and AT&T but not against the
11
Commonwealth of Pennsylvania or the Department of
12
Corrections.
13
for reconsideration of that.
14
brought in, but we're thankful that the Commission allowed
15
a subpoena to bring them in to testify.
16
17
.Bell was dismissed.
Although we are asking
And the Department was not
The testimony that we provided today indicates that
part of the AT&T charges which are at issue before the
18 .Commission's reasonableness of. those charges includes'a $3
~ithout
19
surcharge.
getting into the particulars of the $3
20
and what not,
21
rate'charged by AT&T' is directly handed over to the
22
Commonwealth.
it's fairly clear that 47 percent of the
23
We heard testimony from Mr. Malcom that that
24
generates over $5 million per year for the Commonwealth.
25
Three million dollars of which goes to the Department of
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-Correctlons.
2
Corrections that that $3 million is then p~aced in the
3
inmate general welfare fund which has been the traditional
4
recipient of those funds for some time now as long as Mr.
5
we've neard test1mony trom tne DepartmeI).t ot
.
.
,
.
.....
Shaffer could recall.
6
We've heard testimony that AT&T was the prime
7
contractor of the contract with the Commonwealth of
8
Pennsylvania Department of Corrections to provide inmate
9
services going back to I think it was 1984 or somewhere
. . - ."
,
10
around there until this year when a new contract was
11
issued in February going back to 1/1/99 which made Bell
12
the prime contractor and AT&T a .subcontractor.
13
Ms. Feigley testified that ·she has been making phone
14
calls to her husband for 23 years and that the rates have
15
risen over that period of time and again.
16
testimony that AT&T collected this rate and primarily was
17
the collector.
18
We've heard
The testimony of Mr. Malcom indicated that with the
t~e
passage of
20
great deal of burst of competition.
21
competition, the Commonwealth chose to gain substantial
Telecommunications act in 1996, there was a
And because of this
22 'additional revenues without providing any additional
24
25
. '.
And now I guess Bell is the collector.
19
23
. ...
·services for those extra revenues.
And those revenues jumped from three million a year
up to over $5 million a year.
So due to the passage of
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th1s bl.lJ. to promote compet.1.t10n, tne Department or tne
2
Commonwealth has realized $2 million additional revenues
3
for which they provide no additional services.
4
.. .. :.. •..:
Now, the irony of this is that while competition was
inmat~s
5
promoted by the Telecommunications Act of 1996,
6
seem to be sUffering more so under this Act.
7
the Commonwealth to extract a larger commission from AT&T
8
than.was previously done.
9
cards.
It's allowed
.~
Inmates cannot use prepaid
They cannot choose their competitor.
They cannot
10
use 1-800 numbers.
All the things that we're bombarded
11
with with commercials in the free world.
12
hamstrung into a every increasing exclusive contract that
13
provides excess revenues of $2 million to the Commonwealth
14
for no apparent reason other than the structure that we
15
currently are operating under.
So they are
•. 0" •.•
16
This is how we come to the issue that this is, in
17
fact, a tax that is being imposed upon the families of
18
inmates in the system.
19
to a decision called supervisors of Manheim Township
20
versus Workman.
21
Court case in pennsylvania.
22
And we draw the Court's attention
Appears at 38 A 2nd, 73.
It's a Supreme
And basically it talks about what is a tax and what
23
is a contract.
And it says charges made in connection
24
with such operations are based upon contract rather than
25
taxation because those who consume the product or receive
-
.. ."
"
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the serv1.ce ana ao so voIuntar1.1y, e1tner as l.na1.V1.aUals
2
or as a distinct group and thereby agree to pay the price
3
of the product furnished or services rendered.
4
charges are separate charges for commodity as any other
5
person sell commodities.
6
Such
The Court goes on to state that they must be
7
reasonably proportional to the value of the product of
8
services received.
10
is in effect, undoubtedly a tax.
11
pay it could be treated only by the township's exercise of
12
its general taxing power.
As a
ta~,
And the obligation to
--.
it is palpably viOlative of our
14
constitutional provision requiring uniformity of taxation.
15
It's our contention that the Telecommunications Act has
16
created a $2 million windfall for the Commonwealth of
17
pennsylvania without giving anything-back to the.
18
individuals receiving th~ serVice.
19
and not a contracted-for service.
20
collecting this tax on behalf of the Commonwealth, they
21
are by implication involved in the taxation of a certain
22
group pf people without any services rendered.
23
..:
Or if imposed without due regard to
9 -that requirement, the charge provided for by the ordinance
13
~
As such, it is a tax
And because AT&T is
And that certain group of people is clearly subject
24
to equal protection in the uniformity clause of the
25
constitution.
And that's our argument that this is a tax
KBENAN REPORTING SERVICB (717)
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that AT&T
2
through this 47 percent commission.
3
cO~.lect:Lng
J.S
on behalf ot tne Commonwealth
Very briefly on the issue of race.
4
documents that indicate 55 percent of the public
5
corr~ctions
6
Hispanic.
7
incarcerated in the system are people of color.
8
fact that most folks call family, we can deduce that the
9
individuals that are paying this high rate are also people
~o
of color.
are African American.
. .'
We've introduced
w._ . . . . .
9.5 percent are
So we have two thirds of the individuals
Given the
And as such, the burden falls unfairly upon
..-... -.
"
~~
people of color who have to pay this tax.
~2
We also would like to just stress again that we
~3
believe that these folks, rather than be charged a higher
14
rate than everyday citizens, should be at least charged a
15
similar rate or even a less rate as they are a part, an
~6
important part of the rehabilitation that we all hope that
17
everyone in the system avails themselves of so that they
18
can get out of jail, le~d productive lives and not return
19
to prison which is one of the most costly operations in
20
the State Government and one of the most costly ways of
21
housing individuals on the public charge.
.
. .......
"
Finally, we would just like to say, we will do this
22
23 . in our motion, that we would like the Court to reconsider
24
its motion dismissing Bell via summary judgment because
25
we've now heard evidence that Bell is the prime contractor
KEENAN REPORTING
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as ot January 1st,
Tney own tne pnone systems.
2
They handle the local calls.
3
AT&T and pass it on to the DOC.
4
Department of Corrections as a
5
individuals that are really benefiting vitally from the 47
They take the money from
We'd also like to add the
p~rty
as they are the
.
6 .percent commission from availing themselves of the
7
Telecommunications Act of 1996 to put $2 million
8
additional money in the state coffers without offering any
9
services.
10
And I don't think that was the intent of the
11
Telecommunications Act to allow these sorts of situations
12
to occur.
13
some form of relief.
14
15
16
And that's why we're here asking the Court for
JUDGE COCHERES:
Thank you.
And do you have some definition of
the relief you're expecting?
MR. LOVE:
We would like the Court to rule that.this
17
charge and this 47 percent commission that AT&T is
18
collecting is
19
it is a tax and it has an impact on people of color.
20
21
22
unr~asonable
JUDGE COCHERES:
and go so far to suggest that
And of those remedies, how many are
within the jurisdict·ion the Commission grants?
MR. LOVE:
I contend they are -- they all are.
We
23
heard from the AT&T representative that this contract is
24
under the jurisdiction of the PUC.
25
AT&T is collecting a 47 percent commission from the·
And if they are and if
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commonwealtn, tnen tnat 1S part
2
regulatory responsibility.
3
JUDGE COCHERES:
4
MR. KOHLER:
5
JUDGE COCHBRES:
01:
.
.".. " .
-.'.
~omm1SS1on's
cn1s
.
.
Well
,~
Can I briefly respond?
All right.
,
6
MR. KOHLER:
7
JUDGE ,COCHBRES:
8
MR, KOHLER:
9
.
I will be very brief.
Fine.
What Mr. Love's client has to show in
.........
order to be successful in this case is essentially that
10 'AT&T violated the Public Utility Code, not the tax code,
11
not the Pennsylvania Constitution, not any other law
12
because the Commission only has jurisdiction over the
13
Public' Utility Code.
~
14
The issue here is whether AT&T is violating the
15
Public Utility Code by charging an unjust and unreasonable
16
rate for a particular service.
17
Commission has utilized in looking at this type of service
18
is a relationship 'between re'Zenue and cost of that
19
service.
The standard that the
I .don't think there's any doubt that that
20 . relationship between revenue and cost justifies the rate.
You know, AT&T is sort of in a way in the middle
21
.......... :
........
22
here.
We have a situation where
23
pressu~e
24
those rates think they're way too high.
25
AT&T to lower their rates . . At the same time, in this
th~re
is downward
on rates because the people that are charged
And one wants
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partiCU.Lar market, nl.storiCa.L.Ly tnere's oeen an upwara
2
pressure on costs.
3
whether to provide the service or withdraw from the
4
market.
,
-'.
And that leaves AT&T with one choice
.......
And that, in fact, as Mr. Malcom pointed out has
5
6
become a closer and closer call.
We entered in to this
7
contract.
8
We're incurring the costs we currently charge.
9
evidence shows that our intrastate rates with a reasonable
We are charging the rates we currently charge.
But the
~o
profit and reasonable contribution to overhead are not
~~
recovering our costs.
~2
whether the contract itself is profitable or is
~3
money, taking in to account the interstate rates.
And there's a legitimate question
.. . .
'
l~sing
That is really all that is at issue as to whether
~4
~5
AT&T violated the Public utility Code.
16
arguments are interesting.
17
the Commission's jurisdiction because they're essentially
18
allegations of
19
doesn't adm1nister.
JUDGB COCHBRBS:
20
21
violation~
The other
But they're just not within
of
~aws
which the Commission
Mr. Love, I don't want you to be
incorporating a false sense of security.
22
MR. LOVE:
Don't worry about that.
23
JUDGB COCHBRBS:
If you research the Public Utility
24 . Commission case law on appeal, I believe there's an oid
25
case.
And when I say old, I don't mean relatively your
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age or mJ.ne,
2
that the Commission attempted to impose a remedy either on
3
Philadelphia Electric Company or perhaps pennsylvania
4
Power and Light Company to alleviate a racial
5
discrimination problem.
6
clearly told the commission that was within the
I
mean perhaps wlthln the .Last
1.0
to
20
years
And the Commonwealth Court very
7 . jurisdiction of the pennsylvania Human Relations
8
Commission.
9
area.
10
And that we had no authority to act in that
I have not looked at that decision in quite a
while.·
And I don't want to misrepresent its content.
11
MR. LOVE:
I understand.
12
JUDGE COCHERES:
But I, in preparing my decision for
13
this case, I will at least review it to see whether or not
14
it has any applicability to the arguments that you have
15
raised.
16
In addition, since you live and work in
17
Philadelphia, you may be familiar with a small
18
company there called PEeo.
19
being the Judge in one of their financial restructuring
21
so much publicity in the Philadelphia area a couple of
22
years ago.
23
e~ectric
And I have a distinction of
The reason I say that and bring your attention to
24
that case is not because it was one of my moments of glory
25
but because one of the issues in that case was whether
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tn1s COmm1SS1.0n nad tne autnor1ty to rU.Le on
2
constitutional issues.
3
provid~d
4
indicated we don't.
... :. ..
And the parties in that case
in their briefs citations to material that
And I was required to agree.
However, the question in that case is or rather was
5
6
the ruling on the constitutionality of our own statute.
7
So it is not exactly the same as what you are proposing
8
here.
I will tell you that there is likely no appellate
.......
,
9
opinion on it because a settlement was reached after the
10
Commission rendered its decision to settle the appeals as
11
well.
12
wrote that decision,
13
the parties cited to me.
14
And even worse, I was so time pressed that when I
I
don't think I cited the cases that
And I do want you to understand the concept of our
15
view of constitutional issues has been litigated.
And to
16
the best of my knowledge, again, we don't have the
17
authority.
18
because I expect if you .raise those issues in your brief,
19
you must look at those cases in accordance with the.
20
Commission.
So I'm bringing these things to your attention
And since I know those cases exist, I thought
21 'I'd give you a running headstart.
22
I need from you gentlemen?
23
(No response.)
24
JUDGB COCHERBS:
25
MR. LOVE:
Okay.
Is there anything else
Thank you.
Thank you,' Your Honor.
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(Whereupon, at 5a04 p.m., the hearing adjourned.)
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TnanK you.
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. . KBENAN RBPORTING SijRVICB
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nereoy certify cnac tne prOCeeQ1ngs ana eVidence
2
are contained fully and accurately in the notes taken by
3°
me during the hearing of the within cause, and that this
4
is a true and correct transcript of the same.
5
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, rl --L~
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Court Reporter
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The foregoing certification does not apply to any
reproduction of the same by any means unless under the
direct control and/or supervision of the certifying
reporter.
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KEENAN REPORTING SERVICE
AMY S. KRISKO
87 South Grant Street
Manheim, Pennsylvania ~7545
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