Inmate telephone system

Operation

For prisoners and their families and legal counsel, the ICS is meant to offer a consistent communication that is a crucial rehabilitation tool. It also is used by facilities' staff to record and monitor the inmate's telephone activities.

The Inspector General argued in a report published in August 1999 report that "as many as 150 crimes were committed by inmates using the ITS."

On April 2, 2001, the Federal Bureau of Prisons announced a new policy that limited "inmates' use of the telephone to a total of 300 minutes per month." In 2002, in many prisons, phone credits are accessed via an inmate account card. Inmates have to register to be able to use the service, and need to provide a list with names and numbers of people they will be allowed to call. In 2009 prison systems limited the calls to a fifteen minute maximum, and inmates have to wait thirty minutes before being allowed to make another call, though the call limitations vary depending on the prison's house rules.

Service rates

Before the 1990s, in the United States, service rates for phone calls within jails were similar to those available to the general public through commercial providers. Since then jail phone service providers began to charge higher rates for the phone services than traditional home phone service. Congressman Bobby L. Rush(D-Illinois) introduced the "The Family Telephone Connection Protection Act of 2007" that began the discussion of rate regulation for inmate telephone calls. This Bill brought about the defining of the actual costs of telephone services from jails and it was hoped would result in a standardization of rates among inmate telephone providers in 2009 or 2010.

One of the reasons for the significantly higher telephone rates stems from the way in which exclusive contracts are granted by prison operators who in turn benefit from a lucrative system of collecting fees from the providers. In a 2015 article in The New York Times, it was reported that facilities enter into these exclusive concession contracts with a specific company to provide these services for all their inmates, typically favoring the provider that can provide larger commissions to the facility via their service fees. A Congressional Research Service 2010 report cited concerns expressed by Citizens United for the Rehabilitation of Errants (CURE), that "telephone providers often pay prison operators a high percentage of the fees they collect for prisoners’ collect calls, and then charge inmates well-above general market rates for service...with commissions on telephone service... as high as 45- 65% of gross revenues generated by the service." Federal officials and States had become "dependent on a small group of companies" and the rise of a "prison-industrial complex" is "dependent on government funds" and has a "vested interest in the continuation or expansion of the prison system." The National Sheriffs Association claim that the contractual arrangements with service providers "ensure security and allow them to monitor inmate phone calls" and that "changing the rules could endanger public safety". Bloomberg Businessweek reported in 2014, that exorbitant rates are typically meant to compensate for the high commissions paid to the facilities the provider serves. These practices have been frequently criticized by the families of inmates, who feel that these providers had exploited their personal situations in order to turn a profit. Corrections facilities and law enforcement agencies typically resisted attempts to lower these fees, arguing that they provide additional funding to support a facility's operations, such as security. Jail phone service providers traditionally charge higher rates for the phone services than traditional home phone service since the phone systems are much more sophisticated, difficult to manage and require more service repairs.

On August 9, 2013, the United States Federal Communications Commission adopted a report on the high cost of Inmate Calling Service (ICS), the term used by the FFC, with proposed reforms. A 2013 FCC analysis, described how, in some cases, long-distance calls are charged six times the rate on the outside, or in other instances, a fifteen-minute call could cost upwards of $15. It also reported that phone rates had "caused inmates and their friends and families to subsidize everything from inmate welfare to salaries and benefits, states’ general revenue funds and personnel training". At that time the FCC proposed capping the charge for interstate inmate phone calls at $3.75 for 15 minutes. The proposal was approved in 2014; a cap was also implemented to reduce the high long-distance charges that inmates incurred to eleven cents per minute, so that a fifteen-minute call should not cost more than $4. According to the FCC, Global Tel-Link had been charging as much as $17.30 for such calls under contracts with facilities in Arkansas, Georgia and Minnesota, which resulted in "unreasonably high" phone bills for inmates' families. In retaliation for the change, service providers raised the rates on local calls.

In the United States, by 2015, the market was dominated by two providers, Global Tel-Link and Securus Technologies, with Global Tel-Link controlling approximately 50% of the market and Securus with 20%. The New York-based private equity firm, Veritas Capital, with assets of over five billion, acquired GTL under the tenure of Veritas' founder and CEO Robert B. McKeon. Mobile, Alabama-based GTL was a subsidiary of GTEL Holdings in 2009 and offered "inmate communications, investigative, facility management, visitation, payment and deposit, and content solutions". According to The New York Times, by 2015 Global Tel-Link Corp. and Securus Technologies had each "changed hands twice among private equity firms since 2009". New York-based American Securities purchased GLT for $1 billion in 2011 and Boston-based ABRY Partners purchased Securus in 2013 for $640 million. In September 2015, Human Rights Watch requested that Michael Fisch, CEO of American Securities, a private equity group that owned GTL, step down from their board of directors as " GTL’s exploitation of the ability of prisoners to communicate with their families and children is the antithesis of upholding human dignity and advancing human rights, and is in direct conflict with Human Rights Watch’s mission." When the global private-equity company Castle Harlan purchased Securus Technologies from Miami-based private equity company, H.I.G. Capital in 2011, they claimed that Securus was "the leading provider" of "inmate telecommunications for the corrections industry".

In April 2014, according to The Wall Street Journal, GTL was the "largest U.S. operator of prison phones" and its private-equity owner was again selling GTL.

By 2015, FCC's decision was threatening profits, and GTL, under the tenure of American Securities's President and CEO Michael G. Fisch, sought judicial review of the FCC's regulation order aimed at lowering the cost of ICS. At the time American Securities held assets of $15 billion.

In November 2016, the FCC again failed to lower prison phone rates through the courts. Ajit Pai criticized Democrats for appealing and the courts for intervening on ICS rate regulations. The two ICS providers, GTL and CenturyLink Public Communications, asked for a delay in another FCC hearing in Washington, that was set for February 6, 2017. By January 19, 2017, the D.C. Circuit still refused to pause the FCC challenge to reform inmate calling rates. Commissioners Ajit Pai, Mignon Clyburn, and Jessica Rosenworcel, who were on the August 2013 Commission when the reform report was adopted, had dissented in 2013, and were likely to find for GTL and Century Link. Both Rosenworcel and Pai were nominated by Donald Trump to the FCC. In his first week as FCC Chairman Pai released a dozen actions that stunned "consumer advocacy groups and telecom analysts" including the withdrawal of support for the FCC case which was calling for curbing of "extraordinarily expensive phone call prices."