PRISON LEGAL NEWS
Dedicated to Protecting Human Rights

2400 NW 80th Street #148, Seattle WA 98117 — 206-246-1022 fax: 515-581-0776
www.prisonlegalnews.org
Please Reply to Tennessee Office:

stein919@gmail.com
Direct Dial: 615-255-5357
5341 Mt. View Rd. #130
Antioch, TN 37013

April 18, 2007

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street SW
Washington, DC 20554
RE: Comment Regarding CC Docket No. 96-128 (Implementation
of Pay Telephone Reclassification and Compensation Provisions
of the Telecommunications Act of 1996)
Dear Ms. Dortch:
I am contacting you in my capacity as Associate Editor for Prison Legal News (PLN), a
nationally-distributed monthly publication that reports on criminal justice and corrections-related
issues, in reference to CC Docket No. 96-128.
Docket No. 96-128, referred to as the Wright petition, requests that the FCC enact rules
to require competition among prison phone service providers by prohibiting such providers from
entering into exclusive service agreements with contracting government agencies, and from imposing
other restrictions on prison phone calling options. The FCC has the authority to implement such rules
pursuant to 47 U.S.C. § 201(b).
PLN has reported extensively on prison phone services, including litigation, legislation and
reform efforts, and our experience in this area leads us to make the following remarks in support of
granting the rule-making requested in the Wright petition:

1. Competition, or Lack Thereof
Upon entering into contracts with correctional agencies, prison phone service providers
enjoy a complete monopoly on phone services within the jurisdiction controlled by the contract.
This legalized monopoly, with a resultant lack of competition, is in effect during the term of the
contract. And while such contracts may be rebid, the company that currently holds the contract
has a significant advantage in terms of winning the rebid and maintaining its monopoly, since
competitors must factor in start-up costs and equipment costs.

In a free market economy, competition acts to lower prices to the benefit of consumers.
In the prison phone service market, however, competition exists only when a contract is initially
bid, and perhaps during rebids. Even this level of competition makes a mockery of free market
economics, however, as the lowest cost for providing prison phone services is rarely taken into
account as a contract requirement.
This lack of consumer-friendly competition is due to the industry-standard practice of
providing “commissions” to the contracting governmental agencies, which is the polite term for
contractually-agreed kickbacks. Prison phone service providers agree to pay a certain percentage
of their revenues to the contracting agency as a type of profit-sharing agreement – with these
commissions ranging up to 60% of billed phone revenues. Such collusive arrangements, which
result in millions of dollars in “commissions,” create a vested interest by the contracting agency
to maximize the rates charged to consumers in order to increase the resulting shared profits; or,
at least, not to actively seek lower rates that would decrease their kickback.
These “commissions” are passed on to consumers in the form of higher phone rates.
Notably, the consumers who actually pay the inflated rates – primarily the family members and
friends of prisoners, not the prisoners themselves – have no say whatsoever in the contracting
process or the selection of the phone service provider.
While phone rates available to the general public have dropped dramatically in recent
years, with phone companies routinely touting long distance rates of $.10 per minute or less,
competition in the prison phone service industry has, to quote one writer, “worked in precisely
the opposite direction, with companies offering the highest bids (in terms of rates and commissions) routinely awarded contracts, the costs of which are passed on to the (literally) captive
market.” [Steven J. Jackson, “Ex-Communication: Competition and Collusion in the U.S. Prison
Telephone Industry”].
In 2005, Virginia received $7 million in commissions from MCI’s prison phone service,
at a 40% commission rate. New York has reaped more than $200 million in prison phone service
profits since 1996 under a 57.5% commission. At least ten states reportedly take in $10 million
or more each year from prison phone commissions; California alone receives over $20 million in
annual prison phone profits. The states that have the most expensive prison phone rates include
Washington, Montana, Arizona, Kansas, New Jersey and Arkansas.
MCI has acknowledged that commissions of 20-63% are “customary.” Consider what this
means in terms of prison phone service providers’ profits in comparison to their billed phone
rates. Since these companies generate a profit despite paying hefty kickbacks to the contracting
agencies, absent such “commissions” they could provide the same phone services, and still make
a profit, at rates up to 40-60% lower than those presently billed. The higher rates charged under
exclusive prison phone service contracts represent excess profit paid to the contracting agency at
the expense of consumers, who have no say in the contracting process.

2

2. Impact on Families of Prisoners
Price gouging is an ugly phrase, but as indicated above, that is exactly what prisoners’
family members and friends experience when they accept collect calls from their imprisoned
loved ones. An estimated 1.5 million children have a parent in prison, and almost 500,000
women are married to incarcerated spouses. Sixty-five percent of female prisoners have minor
children. These families and children, and their incarcerated family members, do not live in a
vacuum.
Phone calls are a vital resource for maintaining parental and spousal relationships over
years of incarceration. Yet prisoners’ families are subject to extortionate rates charged by prison
phone service providers and the agencies they contract with – rates that often average over a
dollar a minute for long distance calls when the connection fee is included. A fifteen-minute call
can cost as much as $17.77. Under the Arkansas Dept of Correction’s contract with MCI, prison
calls are billed at $.89 per minute with a $3.95 connection fee for interstate collect calls ($30.65
for a 30-minute phone call). This results in socio-economic disparity – families who can afford to
accept such expensive phone calls do so, while impoverished families do not.
Such grossly inflated rates are not justified except as a means of monopolistic pricegouging; as indicated above, if the contractual kickbacks were excluded, prison phone service
providers could charge about half the current rates and still remain profitable. This is fact, not
theory. The Federal Bureau of Prisons (BOP), for example, does not accept prison phone service
commissions; consequently, the rate for out-of-state debit calls from BOP facilities is $.17 per
minute. The prison phone service industry’s argument that technical expenses and equipment
costs justify high phone rates does not explain why such rates vary widely from one jurisdiction
to another, with states that forgo “commission” kickbacks having the lowest rates.
There have been many reported cases of families having to cut off telephone contact with
their imprisoned loved ones due to outrageous phone bills – bills that exceed $700 per month for
some families. In one case, a concerned mother was billed $7,000 over a ten-month period after
accepting calls from her 18-year-old son jailed in Panama City, Florida. Certainly consumers
have a responsibility to budget for the phone services they accept. But what mother would refuse
a phone call from her imprisoned son? And what choice does she have as to the cost of those
calls if there is only one prison phone service provider, and only one rate?
The inflated rates charged by prison phone service companies should not be borne on the
backs of prisoners’ families, who are overwhelmingly the ones who must pay such exorbitant
costs and the least able, financially, to make such payments. Families of prisoners, whose only
“crime” is having a loved one in prison, should not be punished for that familial relationship by
having to pay exorbitant phone rates. As stated by Madeleine Severin, there is “something fundamentally unjust about families of prisoners being charged outrageous prices solely because they
accept collect calls from people in prison.” [“Is There a Winning Argument Against Excessive
Rates for Collect Calls from Prisoners?” 25 Cardozo L. Rev. 1469 (2004)].

3

3. Impact on Prisoners and Society – Rehabilitation
Research has indicated that of the 2.2 million men and women held in our nation’s
correctional facilities, almost 70% perform at the lowest levels of reading and are considered
functionally illiterate (more than triple the rate in the general population). For these prisoners,
writing letters is not a viable substitute for contacting family members and maintaining family
and parental relationships.
Further, many prisons, both state and federal, are located in rural areas; prisoners may be
housed far across the state from their families or, in terms of federal prisoners, clear across the
country. There has also been a growing trend over the past several decades to transfer prisoners
to other states under contracts with private prison companies. Thus, Hawaiian prisoners have
been moved to prisons in Mississippi and Oklahoma, California prisoners have been shipped to
Indiana, Alaskan and Washington prisoners have been moved to Arizona, etc. As of July 1, 2005,
at least seven states housed prisoners in out-of-state prisons. For these prisoners, family visits are
not a viable option for maintaining family and parental relationships.
Such prisoners who cannot adequately read or write, or who are unable to receive visits,
must rely on prison phone services. And when the cost of such phone services is excessively
high the ability to make such calls is diminished or even extinguished, with family contact and
relationships suffering as a result. This impacts more than just prisoners and their loved ones.
Several studies have shown that practices and programs which “facilitate and strengthen
family connections during incarceration” can “reduce the strain of parental separation, reduce
recidivism rates, and increase the likelihood of successful re-entry” of prisoners after they are
released. [Re-Entry Policy Council Report, 2005].
According to a 2004 study by the Washington, D.C.-based Urban Institute, "Our analysis
found that [released prisoners] with closer family relationships, stronger family support, and
fewer negative dynamics in relationships with intimate partners were more likely to have worked
after release and were less likely to have used drugs." The study authors, Christy Visher, Vera
Kachnowski, Nancy La Vigne and Jeremy Travis, noted that "It is evident that family support,
when it exists, is a strong asset that can be brought to the table in the reentry planning process."
For many prisoners, phone calls to their families and children are the primary means of maintaining family ties and parental relationships during their incarceration.
These findings are recognized by the Federal Bureau of Prisons, which states, in its
institutional policy regarding phone services, that “[t]elephone privileges are a supplemental
means of maintaining community and family ties that will contribute to an inmate's personal
development ... [and are] a valuable tool in the overall correctional process.” Further, Donal
Campbell, former Commissioner of the Tennessee Dept. of Corrections, stated in reference to
prison phone calls, “As you know, maintaining contact with family and friends in the free world
is an important part of an inmate’s rehabilitation and preparation to return to the community.”

4

An estimated 95% of prisoners currently in custody will one day be released. To the
extent that strong family support and relationships during incarceration result in lower recidivism
rates (e.g., less crime), this issue affects society as a whole. And to the extent that prison phone
calls are a primary means to maintain such strong family relationships during incarceration, the
affordability of such phone calls is also an issue that affects society as a whole.

4. Abuse, Corruption and Lack of Accountability.
There is little oversight over prison phone service providers or their prison phone service
contracts, other than through the contracting government agencies. The “commissions” paid to
such agencies cited above result in a natural incentive to maintain a hands-off approach in terms
of investigating abuses by prison phone service providers, as such investigations or scrutiny may
jeopardize the lucrative kickbacks that the contracting agencies receive.
While state public utility regulatory agencies may have the authority to investigate and
make rules related to prison phone services, in practice this is rarely done. Prison phone services
are not a significant issue for state regulatory agencies; also, prison phone service companies
employ many attorneys and lobbyists to protect their business interests, while there is no similar
representation for the consumers – primarily prisoners’ family members – who are most affected
by exorbitant prison phone rates. When state public utility regulatory agencies have intervened,
however, they frequently uncover gross abuses by prison phone service providers.
The prison phone service industry has been repeatedly sanctioned for overcharging and
fraudulent practices. In Louisiana, the state Public Service Commission ordered prison phone
service provider Global Tel*Link to refund $1.2 million in overcharges from June 1993 to May
1994. In 1996, North American Intelecom agreed to refund $400,000 overcharged to members
of the public who accepted prison phone calls, following an investigation by the Florida Public
Service Commission. The following year, the Florida Public Service Commission ordered MCI
to refund overcharges on collect calls made from state prisons; to settle the claims, MCI paid a
$10,000 fine and placed $189,482 into a prisoner trust fund. More recently, on May 4, 2001, the
California Public Utility Commission ordered MCI to refund $522,458 in overcharges on collect
calls made by California prisoners between June 1996 and July 1999.
The prison phone service industry has also been plagued by conflicts of interest and
outright criminal practices. In October 2001, the Georgia Public Service Commission opened an
investigation into complaints that MCI was charging separate connection and per-minute fees,
which violated state tariff rules. As part of this investigation, the State Ethics Commission noted
that Senate Majority Leader Charles Walker’s family-owned business, CresTech, was an MCI
subcontractor that was involved in the state’s prison phone services under a multi-million dollar
contract. Walker had failed to disclose his interest in CresTech.
In Florida, a 1996 report faulted the state Dept. of Correction for a prison phone contract
with WorldCom because the contract was not competitively bid. WorldCom lobbyist Liddon
Albert Woodard, Jr. was a personal friend of Deputy DOC Secretary William Thurber, which,
according to the state Attorney General’s office, created an "appearance of impropriety."

5

Former Alabama state auditor Terry Ellis, former Mobile County Commissioner Dan
Wiley and another defendant pleaded guilty in July 1999 to federal charges of tax evasion and
money laundering related to a prison pay phone scam involving Global Tel*Link. Two other
defendants, including lobbyist Willie Hamner, were also implicated. Ellis was a co-owner of the
phone company, then known as National Telcoin, from 1990 to 1995; Hamner was a salesman
for the company. Ellis hid his interest in the company to avoid an apparent conflict of interest.
The federal indictment further stated that Global Tel*Link added extra time to bills for collect
calls originating from prisons and jails, usually one or two minutes, and added an extra charge of
about 25 cents to each call. Ellis, Hamner and Wiley submitted fake accounting reports to hide
the excess billed revenue.
And in North Carolina, a scandal involving the North Carolina Coin Tel Company’s $1.2
million contract to provide prison phone services resulted in criminal charges. Former North
Carolina DOC director of departmental services D.R. Hursey and AT&T employee Michael A.
Weaver, who was one of the owners of Coin Tel, were indicted in 1993; six other state officials
resigned, retired or were transferred to other jobs. Hursey and Weaver were accused of engaging
in a bid rigging conspiracy involving prison pay phones, as well as fraudulent billing.
Due to the lack of effective regulation and oversight of the prison phone service industry,
such abuses, overcharges and outright criminal enterprises are difficult to detect, with the result
that consumers are defrauded and subjected to overcharges with little or no recourse.

5. Absence of Other Regulatory Means
With rare exceptions, state and federal courts have failed to provide relief related to
prison phone services, “commission” kickbacks, high rates charged to prisoners’ families, etc.
Generally, such issues do not raise constitutional claims on the federal level and are often dismissed under the filed rate or primary jurisdiction doctrines. As noted above, in some cases state
public utility regulatory agencies have taken action; however, in other cases even that avenue of
redress is blocked. For example, in 1998 the Colorado Supreme Court held that the state’s Public
Utilities Commission lacked jurisdiction over the Dept. of Corrections in regard to excessive
prison phone rates charged by Sprint Communications, as Sprint was providing an “unregulated
utility.” See: Powell v. Colorado Public Utilities Commission, 956 P.2d 608 (Colo. 1998).
Some state Departments of Correction have voluntarily reduced prison phone rates,
including Nebraska, New Hampshire and West Virginia, as well as the District of Columbia.
Recently, Florida DOC Secretary James McDonough reduced prison phone rates by about 30%.
Such voluntary rate reductions, often by forgoing lucrative “commissions,” are dependent on the
stance of individual state policymakers in regard to economic fairness and social responsibility.
The vast majority of states prefer to keep prison phone rates high so as to maximize their share
of the profits generated by prison phone calls.
Legislative regulation on the state level is extremely difficult to achieve, as prisoners are
a disfavored population who have no political voice (e.g., they cannot vote), and their family
members have no political advocacy group to speak on their behalf. Further, lawmakers have

6

little desire to be seen advocating for prisoners or their families, lest they be perceived as “soft
on crime.” In fact, bills addressing prison phone rates have been introduced in only three states
(New Jersey, Oklahoma and Washington). Considering that most states receive millions of
dollars from prison phone service providers, which helps reduce ballooning state budgets, there
is little incentive for state lawmakers to provide relief from exorbitant prison phone rates.
Professional organizations such as the American Correctional Association (ACA) and the
American Bar Association (ABA) have passed resolutions against excessive prison phone rates;
the ACA specifically stated that “[c]orrectional agencies should discourage profiteering on tariffs
placed on phone calls which are far in excess of the actual cost of the call, and which could
discourage or hinder family or community contacts.” However, these organizations carry little
weight in terms of effecting institutional policy change.
With a hands-off policy by the courts, infrequent actions taken by state regulatory
agencies, the lack of a strong lobby for prisoners’ families who are victimized by excessively
high prison phone rates, and unreceptive lawmakers who are unwilling to take a stand on this
issue, there is virtually no effective regulation of prison phone service providers.

Conclusion
Prison Legal News strongly encourages the FCC to consider the above comments when
reaching a decision regarding the rule-making requested in the Wright petition, CC Docket No.
96-128. We urge the FCC to grant the remedies outlined in the Wright petition pursuant to the
authority granted under 47 U.S.C. § 201(b), including the establishment of reasonable benchmark rates and rate caps, as well as other appropriate actions to protect against price-gouging and
monopolistic practices of prison phone service providers.
Such action is necessary because free market forces have consistently failed to provide
reasonable, competitive phone rates for the captive market that consists of prisoners and their
families, to the detriment of consumers and society as a whole.

Sincerely,

Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor

7

PRISON LEGAL NEWS
Dedicated to Protecting Human Rights

2400 NW 80th Street #148, Seattle WA 98117 — 206-246-1022 fax: 515-581-0776
www.prisonlegalnews.org
Please Reply to Tennessee Office:

May 14, 2007

stein919@gmail.com
Direct Dial: 615-255-5357
5341 Mt. View Rd. #130
Antioch, TN 37013

SENT VIA ONLINE FILING

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street SW
Washington, DC 20554

RE: Reply Comment Regarding CC Docket No. 96-128 (Implementation
of Pay Telephone Reclassification and Compensation Provisions of
the Telecommunications Act of 1996)
Dear Ms. Dortch:
On April 19, 2007 I submitted a letter in reference to CC Docket No. 96-128 (the Wright
petition), in my capacity as Associate Editor for Prison Legal News, a non profit, nationallydistributed publication that reports on criminal justice and corrections-related issues.
On May 10 I received a responsive e-mail from Douglas Galbi, an FCC economist, who
requested clarification of one of the statements in my letter, in which I said, "almost 70% [of
prisoners] perform at the lowest levels of reading and are considered functionally illiterate…."
That statement was made in the context that phone calls provide an important link between
prisoners who have literacy problems and their families and children.
The basis for my statement that almost 70% of prisoners perform at the lowest levels of
reading and are considered functionally illiterate can be found at the below link, based on a 1992
report by the National Institute for Literacy (NIFL).
The relevant section states, "In 1992, 40% of the prison population was at quantitative
literacy Level 1, compared to 22% of the household population; 32% were at Level 2, compared
to 25% of the household population; 22% were at Level 3, compared to 31% of the household
population; 6% were at Level 4, compared to 17% of the household population; and 1% were at
Level 5, compared to 4% of the household population (Haigler, p19, Table 2.3)." See:
http://www.nifl.gov/nifl/facts/NALS.html

For a more detailed analysis, please see the following link for a report on the 1992
National Assessment of Adult Literacy (NAAL) study of prisoners, which states, "About 7 in 10
prisoners perform in Levels 1 and 2 on the prose, document, and quantitative scales. These
prisoners are apt to experience difficulty in performing tasks that require them to integrate or
synthesize information from complex or lengthy texts or to perform quantitative tasks that
involve two or more sequential operations and that require the individual to set up the problem."
http://nces.ed.gov/naal/index.asp?file=OtherResources/ExecSumLitBehindPrison.asp&PageId=1
57
Also see the following link to the National Adult Literacy Database, which describes the
two lowest levels of literacy in relation to illiteracy rates for prisoners (with footnotes):
http://www.nald.ca/fulltext/hudson/bringing/page06.htm

There is a more recent and comprehensive 2003 report from the National Center for
Education Statistics available at the following link; however, please note that the definitions for
the lowest literacy levels may not be completely identical between the 1992 and 2003 reports:
http://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2007473

Also note that levels of illiteracy among prisoners vary according to the study and other
factors (e.g., prison vs. jail populations). For example, a 2005 UK study found that about half of
prisoners suffered from "poor literacy and numeracy skills; 1998 test results from the UK prison
service found 60% of prisoners "had problems with literacy, and 40% had a severe literacy
problem." And according to a report from the director general of HM Prison Service, "Half of all
prisoners have serious problems with reading, two-thirds with numeracy and four-fifths with
writing." For references please see the following link:
http://www.nationalliteracytrust.org.uk/Database/stats/keystats3.html

I trust this information is helpful; please do not hesitate to contact me should you require
any additional information on this point or related to other issues raised in my letter regarding the
Wright petition.
Sincerely,

Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor

2

PRISON LEGAL NEWS
Dedicated to Protecting Human Rights

2400 NW 80th Street #148, Seattle WA 98117 — 206-246-1022 fax: 1-866-735-7136
www.prisonlegalnews.org
Please Reply to Tennessee Office:

September 21, 2008

stein919@gmail.com
Direct Dial: 615-495-6568
5341 Mt. View Rd. #130
Antioch, TN 37013

SENT VIA ONLINE FILING

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street SW
Washington, DC 20554

RE: Supplement to Previous Comment Regarding CC Docket No. 96-128
(Implementation of Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996)
Dear Ms. Dortch:
This correspondence is to supplement comments submitted to the FCC by Prison Legal
News on April 19, 2007, concerning CC Docket No. 96-128 (the Wright petition). I serve as the
associate editor for PLN, which is a non-profit, nationally-distributed publication that reports on
criminal justice and corrections-related issues, including prison phones services.
On pages 5 and 6 of our earlier comments we described various examples of corruption,
abuses and lack of accountability in the prison telecommunications industry, which indicated a
need for regulation of prison phone service providers by the FCC since current regulatory means
have proven to be ineffective. We now supplement our compilation of abuses with the following
recent developments, which reflect a continuing need for intervention by the FCC:
1. Pursuant to a December 13, 2007 settlement between AT&T and the Washington
Utilities and Transportation Commission (UTC), AT&T agreed to pay $302,705 in fines as a
result of overcharges on collect phone calls made from two Washington state prisons in 2005.
The UTC determined that Zero Plus Dialing, a billing agent for AT&T, was charging $.89 per
minute plus a $3.95 connection fee and a $.47 prison surcharge – which resulted in a charge
of $22.22 for a 20-minute call. This was in violation of a state statute (RCW 80.36.130). From
March to June 2005, the UTC determined that 29,971 prison phone calls had resulted in overcharges. Source: Washington UTC, Docket No. UT-060962.

Secretary Marlene H. Dortch
Sept. 21, 2008
Page 2

2. The Florida Public Service Commission has found that TCG Public Communications
(TCG), a subsidiary of Global Tel*Link which provides phone services at Dade County jails, had
improperly disconnected phone calls from 2001 to 2007. The Commission has recommended that
TCG refund almost $6.3 million to consumers and pay more than $1.25 million in fines (this is an
ongoing and active case). The disconnected calls were erroneously identified as disallowed 3-way
calls and thus were terminated – resulting in consumers having to pay re-connect charges for callbacks. The Commission found that “TCG knew about this problem, but did not correct it during
the period in question. On the contrary, TCG continued to profit from these unjustified charges
over a period of approximately seven years.” Source: Commission Docket No. 060614-TC.

The two supplemental incidents described above evidence that abuses by prison phone
service providers are not relegated to the past; rather, they continue in full force. Further, note
that the misconduct by prison phone companies cited in PLN’s previous comments, and in this
correspondence, are only those that are publicly known.
Some may consider such examples to be an indication that no additional regulation is
necessary, since public utility commissions are reining in prison phone companies. However,
consider that there is no uniformity among the states in regard to public utility actions involving
prison phone service providers. The public utility commissions in some states are more attentive
to exorbitant rates, overcharges and other abuses by prison telecommunication companies (e.g.,
in California, Florida and Washington state), while others are not. This lack of uniformity means
that citizens in different states receive disparate regulation of prison phone service providers and
unequal remedies for their abuses. Regulation by the FCC would provide uniform requirements
and rules that would benefit consumers of prison phone services on a national level. This is of
particular importance for interstate phone calls made from prisons, which are within the FCC’s
province and clearly subject to federal jurisdiction and regulation.
Based upon the above information and the reasons cited in our prior comments, PLN
urges the FCC to grant the remedies outlined in the Wright petition pursuant to the authority
granted under 47 U.S.C. § 201(b). Thank you for your continued time and attention;

Sincerely,

Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor

2

HUMAN RIGHTS DEFENSE CENTER
Dedicated to Protecting Human Rights

www.prisonlegalnews.org

afriedmann@prisonlegalnews.org

Please Reply to Tennessee Office:

Direct Dial: 615-495-6568
5331 Mt. View Rd. #130
Antioch, TN 37013

April 25, 2011

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
Office of the Secretary
445 12th Street S.W.
Washington, DC 20554

RE: Comment Regarding CC Docket No. 96-128 (“Wright Petition”)
Dear Ms. Dortch:
I am the associate editor of Prison Legal News (PLN), a nationally-distributed monthly
publication that reports on criminal justice and corrections-related issues, and a project of the
Human Rights Defense Center (HRDC). This letter and the attached document are submitted as
a formal comment relative to CC Docket No. 96-128.
CC Docket No. 96-128, referred to as the “Wright Petition,” requests that the FCC enact
rules to require competition among prison phone service providers by prohibiting such providers
from entering into exclusive service agreements with contracting government agencies, and that
the FCC impose caps on interstate prison phone rates. The FCC has the authority to implement
such rules pursuant to 47 U.S.C. § 201(b).
PLN has previously submitted formal comments regarding the Wright Petition, on April
18, 2007, May 14, 2007 and September 21, 2008.
Following a multi-year research project, in April 2011 PLN published a comprehensive
cover story on prison phone services nationwide, including a state-by-state comparison of prison
phone rates, commission (kickback) percentages, and commission payments from prison phone
contracts. This is the most detailed look at the prison phone industry to date.
Our research revealed that based on 2008 data, 42 states received commission revenue
from companies that provide prison phone services, amounting to $152.44 million nationwide;
that commission rates ranged from 18% to 66.1%, with an average rate of 42%; and that long
PLN is a project of the Human Rights Defense Center

Secretary Marlene H. Dortch
April 25, 2011
Page 2

distance (interstate) prison phone rates ranged from $.048/minute in New York (which banned
commission payments in 2008) to $4.95 + $.89/minute in Washington State ($18.30 for a 15minute long-distance collect call).
Our research further found that prison phone rates are non-uniform and largely arbitrary,
with high rates in some states and lower rates in others; that there is little or no competition in
the prison phone market from the perspective of the consumer, since contracts are awarded not
on the lowest phone rate but on the largest kickback commission; that the prison phone industry
is consolidated among a shrinking number of firms, which reduces what little competition exists
(one company, Global Tel*Link, provides prison phone services in over half the states); and that,
notably, when states reduce or forgo kickback commissions, the cost of prison phone rates drops
significantly (based on before-and-after comparisons in states that have reduced or banned commissions). That is, but for the commissions, prison phone rates would be much lower.
A copy of our April 2011 cover story with an accompanying chart that reflects state-bystate prison phone data is attached, and we are submitting this document for consideration by the
FCC relative to CC Docket No. 96-128.
We are in the process of putting all of the underlying research data that contributed to our
April 2011 cover story online, and would be glad to share such data with the FCC. Thank you for
your time and attention in this regard;

Sincerely,

Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor
Attachment

HUMAN RIGHTS DEFENSE CENTER
Dedicated to Protecting Human Rights

www.prisonlegalnews.org

afriedmann@prisonlegalnews.org

Please Reply to Tennessee Office:

Direct Dial: 615-495-6568
5331 Mt. View Rd. #130
Antioch, TN 37013

June 16, 2011

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
Office of the Secretary
445 12th Street S.W.
Washington, DC 20554

RE: Comment Regarding CC Docket No. 96-128 (“Wright Petition”)
Dear Ms. Dortch:
I am the associate editor of Prison Legal News (PLN), a nationally-distributed monthly
publication that reports on criminal justice and corrections-related issues, and a project of the
Human Rights Defense Center (HRDC). This letter and the related attachments are submitted
as a formal comment relative to CC Docket No. 96-128.
CC Docket No. 96-128, commonly known as the “Wright Petition,” requests that the
FCC enact rules to require competition among prison phone service providers by prohibiting
such providers from entering into exclusive service agreements with contracting government
agencies, and that the FCC impose caps on interstate prison phone rates. The FCC has the
authority to implement such rules pursuant to 47 U.S.C. § 201(b).
PLN has previously submitted formal comments regarding the Wright Petition, on April
18, 2007, May 14, 2007, September 21, 2008 and April 25, 2011. Our last comment included the
results of our comprehensive multi-year research project on prison phone services, including a
state-by-state comparison of prison phone rates, commission (kickback) percentages, and dollar
amounts of commission payments from prison phone contracts nationwide.
We now want to bring to your attention additional information regarding the actual cost
of prison phone services provided by telecommunications companies, which has been a point of
heated contention in the Wright Petition as evidenced by filings made by both the petitioners and
by companies that provide prison and jail phone services.

PLN is a project of the Human Rights Defense Center

Secretary Marlene H. Dortch
June 16, 2011
Page 2

As indicated in our April 25, 2011 comment, prison phone rates vary widely among different
states and even within the same state. Local collect calls cost as much as $2.75 + $.23/minute
(Colorado), intrastate collect calls cost as much as $3.95 + $.69/minute (Oregon) and interstate
collect calls range up to $4.95 + $.89/minute (Washington). This is despite the fact that prison
phone services all provide essentially the same service with the same security features.
Recently, in February 2011, the Michigan Department of Corrections (MDOC) entered into a
phone service contract with Public Communications Services, Inc. (PCS), which is now owned
by Global Tel*Link – the nation’s largest prison telecommunications company, which provides
prison phone services in more than half the states. Michigan is one of 8 states that do not accept
commission “kickbacks” from prison phone service firms.
Under the terms of the MDOC contract, the charged rates are $.0393/minute for collect calls and
$.0343/minute for debit calls regardless of whether the calls are local, intrastate or interstate. See
Exhibit 1, attached – excerpts from contract between the State of Michigan and PCS, effective
February 9, 2011 (first page and exhibits 5P and 6Pof the contract). The contract also provides
for “optional” services that can be added for an additional charge; such options include a “key
word search” feature and a “special equipment fund” charge.
On April 23, 2011, the MDOC executed Change Notice No. 1 to the PCS phone contract (see
Exhibit 2, attached). The change added the optional key word search feature for an additional
$.0075/minute and the optional special equipment fund charge for $.1532 to $.2430/minute,
resulting in total per-minute charges of $.20/minute for collect local and intrastate calls, $.23
per minute for collect interstate calls, $.18/minute for local and intrastate debit calls, and $.21
per minute for interstate debit calls.
It is important to note that the base per-minute rates under the MDOC contract ($.0393/minute
for collect calls and $.0343/minute for debit calls) are the lowest in the nation. According to
MDOC spokesman John Cordell in a June 10, 2011 email, the “[b]ase rate charged by PCS”
covers “the cost of operating expense and their capital costs.” The optional features that the
MDOC added in the April 2011 Change Notice are just that – optional. The word search option
is an extra security feature and the special equipment fund “will be used to install the latest cell
phone detection, jamming or managed signal technologies.” (see Exhibit 3, attached).
That is, the optional features are above and beyond the operational and capital costs of PCS,
which can generate profit at the contractual base rates of $.0393/minute for collect calls and
$.0343/minute for debit calls. These low rates demonstrate the actual cost (plus an unspecified
profit margin for PCS) in providing phone services to the MDOC, despite the claims of prison
phone service companies that their costs are much higher due to security features, specialized
equipment, etc. If PCS could not generate a sufficient amount of profit at the low base rates
specified in the MDOC contract, it would not have entered into that contract.

Secretary Marlene H. Dortch
June 16, 2011
Page 3

Further, since PCS is owned by Global Tel*Link, the largest prison phone service company in
the nation, such low rates could be offered in most other state prison systems, but are not. As we
found during our research into this issue, included with our April 25, 2011 comment submitted
to your office, prison phone rates are usually much higher due to commission “kickbacks” paid
to the contracting agency, averaging 42% of gross revenue generated by prison phone calls. And
since prison phone contracts tend to be awarded based on the highest kickback percentage rather
than the lowest phone rates, the usual competitive forces that result in lower prices to consumers
are largely absent in the prison phone service market.
We submit that the low base rates in the MDOC contract of $.0393/minute for collect calls and
$.0343/minute for debit calls demonstrate that prison phone companies are perfectly capable of
charging such low rates while still generating profit (despite protestations that their operating
costs are higher which they claim justifies higher rates). This is particularly true given that the
MDOC says the base rates cover PCS’s “cost of operating expense and their capital costs.”
Consequently, the caps on interstate prison phone rates requested in the March 2007 alternative
rulemaking proposal submitted in the Wright Petition would not unduly burden prison phone
service companies, as the MDOC contract evidences that such companies can generate profit
at rates of less than $.04/minute for both collect and debit prison phone calls.
Thank you for your continued time and attention in this regard;

Sincerely,

Alex Friedmann
Associate Editor, PLN
cc: Paul Wright, PLN Editor
Attachments: Exhibits 1-3

EXHIBIT 1

EXHIBIT 2

EXHIBIT 3