Prison Phone Calls Prove Costly for Family Members

The private phone business going on in American prisons leaves family members and friends of the incarcerated emptying their pockets for just minutes of conversation. In some states, like Pennsylvania, a 15-minute call to certain prisons can cost an upward of $12 — it would be around 60 cents for a similar non-prison call.

The costs — much like service charges buried in payments for purchasing sporting or concert tickets online — feature fees that drive the cost up even higher for family members trying to stay in contact. Seventy percent of the private phone business in prisons is owned and managed by just two companies, Global Tel-Link Corp. (50 percent) and Securus Technologies (20 percent), allowing the rivals to keep prices relatively high because of the lack of competition in the billion-dollar industry.

Global Tel-Link contributed to nearly half of the country’s 500 million prison phone calls, totaling more than 6 billion minutes in 2014. If each of the 215 million prison calls came with a price tag of $12 per 15 minutes, Global Tel-Link would have made $2.58 billion last year, without factoring in business operations.

Securus, according to a New York Times report and company documents, “imposes dozens of fees for call and basic services, including establishing, maintaining and closing an account.” The company insists it needs to include these fees in order to maintain its operating margins, which helps oversee and monitor phone calls for security purposes.

In this facet, the companies aren’t wrong. Sheriffs and county officers are paid on commission for each phone call they monitor, a price that comes right out of these private prison phone companies’ pockets. The reason Global Tel-Link and Securus are so widely recognized in the industry is because they can offer the highest commission to the officers providing the security, making prisons more interested in doing business with them.

Over the last 10 years, Securus said it generated around $1.3 billion in commissions, making it one of the most sought-after phone companies for officers and prison guards alike. Meanwhile, at a July 2014 hearing with the FCC, Securus CEO Rick Smith said the company truly doesn’t net that great of a profit annually, the International Business Times reported.

In fact, he said the same sentence three times consecutively for emphasis. “We don’t earn excessive profits,” Smith said at the hearing. “We don’t earn excessive profits. We don’t earn excessive profits. I said that three times for the egregious and abusive and predatory kinds of comments that come at us most of the time.”

But who defines “excessive” is unbeknownst to the people pouring in sometimes thousands of dollars yearly to communicate with their loved ones who are behind bars. Smith compares his “embellished profits,” as he said in 2013, to Verizon and AT&T -- companies worth $202.5 billion and $173 billion, respectively.

Contrary to Smith’s statements, the Huffington Post reported that Securus earned $114.6 million in profits in 2014, on revenues of about $404 million — turnarounds that put the company in a tier with Apple and Google. Securus representatives have since denied the accuracy of these figures, telling the FCC in a letter, “The figures set forth in the article are simply incorrect or taken in the incorrect context."

Because of the uproar and unhappiness with the current prison phone business, the FCC is expanding its 2013 regulations come fall of this year. The regulations could completely change the way the prison phone business is handled. The FCC could potentially cut the commissions paid to sheriffs and also cap unnecessary and excessive fees companies like Securus charge consumers.

Sheriffs, obviously, are unpleased with the FCC’s speculated proposal, threatening to rip the phones off the prison walls if the government limits their commissions. Global Tel-Link and Securus are also pleading for the FCC to reconsider its revisit to the regulations, claiming its charges are completely necessary to count for all the operating and quality costs for the company.

Global Tel-Link and Telmate, another prison phone company, tried to strike middle-ground with the FCC in a nine-page letter urging the commission to institute “flat rate caps” of 20 percent per minute. Although 20 cents per minute would considerably shrink the cost of the standard 15-minute conversation, advocates are pushing for numbers as low as 6 or 7 cents per minute.

The United States has the largest prison population in the world, and the number isn’t slowing down anytime soon. According to the International Center for Prison Studies, the U.S. has more than 2.2 million prisoners incarcerated, half a million more than China, the next closest country — and China has over 1 billion citizens more than the U.S. For every person swept off the streets and thrown into jail, it’s yet another $12.95 per 15 minutes for one of the leading phone companies.

Image credit: Flickr/Jason Farrar