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National Overview and Update
CURE (Citizens United for The Rehabilitation of Errants)
The Michigan Chapter of CURE has for years been at the forefront of efforts to end prison payphone abuses. The eTc Campaign (Campaign to Promote Equitable Telephone Charges) has built a web site that provides a national overview, current rates listed by state, and contact information for legislators, public utility commissions, departments of correction, and telephone companies. Access CURE's eTc site here.
Following are reports on proceedings in a few selected states.
Florida
Over the last decade, the states have been confronted by these issues with increasing frequency. For example, presently pending in Florida is an investigation of a prison phone provider believed to have prematurely disconnected calls that were purportedly but inaccurately detected as 3-way calls, costing consumers an estimated $6.3 million over a four-year period. This abusive practice occurred in at least one Florida correctional facility, the Miami-Dade County Detention Center. In addition to restitution with interest, public staff has recommended a fine in excess of $1.25 million. On 18 August 2009, the Florida Public Service Commission accepted an offer of settlement in which the prison phone provider, TCG Public Communications, agreed to pay $1.25 million into the State's General Revenue Fund and submit to monitoring for an 18-month period. Regrettably, the consumers who were bilked out of $6.3 million dollars by these sharp practices were not compensated. “Compliance investigation of TCG Public Communications, Inc.” (Docket No. 060614-TC).
Washington
In a recent Washington State investigation, telephone service provider AT&T overcharged families $67,295 for more than 29,000 calls placed from only two correctional facilities over a four month period in 2005. AT&T agreed to reimburse the families and friends of Washington prisoners in a settlement agreed on 13 December 2007, and on 13 February 2008, AT&T paid $302,705 in fines levied by the Washington Utilities and Transportation Commission. (Docket No. UT-060962).
Maine
Maine saw the vast profits that prison phone services generate and set up its own operation. The Department charges 30¢ per minute, an amount it admitted is far in excess of actual costs. On 23 June 2008, the Maine Public Utilities Commission determined that it had jurisdiction over the Maine Department of Corrections telephone system and planned to open rate proceedings. The decision was appealed to the State Supreme Court, which reversed the PUC's determination. According to the Maine Supreme Judicial Court, the PUC lacked legal authority to regulate another state agency - even one that operates a telephone system. Maine v. Pierce, et al., ME S.Ct. Docket No. 2007-467, 2009 ME 40 (Utilities Commission Docket No. PUC-08-456)(21 April 2009).
Alabama
In Docket No. 30632, the Alabama Public Service Commission conducted a general proceeding to determine the applicability to inmate phone service providers of the state's Communications Reform Act of 2005. Title 37, Code of Alabama, Chapter 2A, § 37-2A-1, et seq . Three service providers claimed the act applied and that they were free to charge what they chose for prisoner calls. One provider acceded to the position of Public Staff that the prison phone providers are subject to regulation. Ultimately, the Commission concluded that it retains jurisdiction over inmate phone service providers who are subject to all previously issued Orders and Rules. Order of 10 March 2008 (Docket No. 30632).
On 10 June 2008 the Alabama Public Service Commission issued an Order in Docket No. 15957 seeking comments on the Public Staff's proposed rule revisions and rates for Inmate Phone Service (“IPS”). The proposed rates for collect calls were: $2.25 (“set-up” charge) + 50¢ per minute for local calls and $2.25 + 30¢ per minute for toll calls (plus applicable taxes). On 3 March 2009, after receiving comment from prison payphone providers, the Commission adopted these rates, limiting the maximum charge on a 20 minute call to $2.75 for a local call and $8.25 for a long-distance call. The Commission also allowed correctional facilities to establish debit and pre-paid calling accounts. Since $2.25 of the cost for both local and long-distance calls is attributed to "operator services," and since no operator is required to initiate a pre-paid or debit call, it seems that only per-minute charges would apply to such calls.
New Mexico
There are two related proceedings in New Mexico.
Case No. 08-00142-UT (T-Netix); Case No. 08-00143-UT ( Evercom Systems, Inc.); and Case No. 07-00316-UT
On 25 July 2007, the New Mexico Public Staff petitioned the Commission to make an inquiry into the rates charged by prison phone providers in the state. The Commission issued a Notice of Inquiry on 31 July 2007 in Case No. 07-00316-UT.
On May 13, 2008, the Commission consolidated two previous protests of proposed tariff changes (T-Netix Telecommunications Services, Inc., Case No. 08-00142-UT, and Case No. 08-00143-UT – Evercom Systems, Inc.) with Case No. 07-00316-UT described above. This inquiry will now include a review of prison phone provider costs for all rates, including any fees charged to open accounts or to make payments.
Actually, three kinds of non-tariffed fees are at issue –service fees (charged to customers setting up an account for the first time), “recharge fees” (billed when a customer reopens an account), and processing fees – imposed either by a service provider or a third party business – for processing a customer's payment.
On 3 July 2008, an Order issued in Case No. 07-00316-UT (Document #1048477) that required the inmate phone service providers to: 1) file all cost information related to all of their existing or proposed rates, charges, or fees; 2) participate in a status conference at the Commission's offices to discuss the cost data and scheduling matters; and 3) that allowed the Evercom and T-Netix processing fees to go into effect, subject to refund.
Case No. 07-00442-UT ( Public Communications Services)
On 6 December 2007, the Commission issued an Order to Show Cause against Public Communications Services, Inc. (PSC), Case No. 07-00442-UT, regarding untariffed fees charged “each time the customer sets up or recharges a prepaid service account.” These charges were not disclosed to or approved by the PSC.
Again, three kinds of non-tariffed fees are at issue – “recharge fees” (billed when a customer reopens an account), service fees (charged to customers setting up an account for the first time), and processing fees – imposed either by a service provider or a third party business – for processing a customer's payment.
In a 13 May 2008 order, the Commission expanded the investigation to include all prison phone providers operating in New Mexico. This is an enforcement proceeding to “investigate any instance where any ICS provider imposed a charge that is not tariffed.”
Maryland
Docket # TE-9592 (Inmate Calling Solutions)
On 2 September 2008, Inmate Calling Solutions, LLC (ICS), proposed to revise the service descriptions for Prepaid Institutional Calling Services. Prepaid Institutional Calling Services offers prisoners (or their families) the option to set up a private account/card at the confinement institution. No refunds of unused balances will be issued after 6 months of inactivity on the account. In addition, ICS proposed to change the name of the “Prepaid Debit Account” to “Debit Card/Debit Account.”
Recommended Action: Staff recommended acceptance of ICS‘s tariff revisions with an effective date of September 11, 2008.
Commission Action: The Commission deferred action to further explore ICS's proposals. The matter is pending.
Docket # TE-9591 ( Global Tel*Link)
On 30 September 2008, Global Tel*Link (GTL) proposed to revise the service descriptions for the Advance Pay service, which offers called parties (“Customers”) a pre-paid account that can only be used for payment of collect calls placed by inmates to telephone numbers specified by the Customer. After release of the inmate from prison, the Customer is entitled to a refund for the amount of money remaining in the account. GTL is proposing to change the “break date” (the amount of time after which the account is permanently closed and refunds are no longer available) on its Advance Pay service from six months to three months.
PSC Recommended Action: Staff recommended that the Commission accept GTL's tariff. Commission Action: The Commission suspended the tariff to allow the Company to make textual changes to the tariff and to make a subsequent filing for consideration by the Commission. Subsequently, Global Tel Link Corporation (“Global Tel Link”) has notified the Commission of a transaction that will result in an indirect transfer of control of Global Tel Link to GTEL Acquisition Corporation. (“GTEL Acquisitions”).
Finally, GTL seeks to impose a charge of $1.95 for the purpose of offsetting the Company's billing and regulatory expenses associated with the services offered. This fee will be charged once per billing period regardless of the number of calls accepted. In addition, a surcharge of 25¢ per call will be imposed, together with an additional 45¢ charge per call to “validate” an inmate's identity.
Other Maryland Proceedings
In a tariff filed on October 2, 2008, Evercom Systems, Inc ., proposed to introduce the Credit Card/Check-by-Phone Payment Processing Fee. (ML# 112854) Additional information was filed on November 10, 2008. (ML# 113523)
T-NETIX Telecommunications Services, Inc. , proposed to introduce the Credit Card/Check-by-Phone Payment Processing fee. (ML# 112855) on 2 October 2008.
North Carolina
A result much more favorable to the prison telephone industry was achieved when, on 1 May 2008, the North Carolina Utilities Commission ruled in favor of providers of prisoner telephone services, allowing the companies to charge higher telephone rates to the friends and families of prisoners for local collect calls. Initially, petitioners sought waiver of a rule which limited the rates. The petition was supported by the Public Utilities Commission Staff with a recommendation that instead of waiver, the rule should be modified pending publication and an opportunity for public comment.
Unsuccessfully challenging the waiver request, the increased rates, and the proposed rule as revised by Public Staff, was North Carolina Prisoner Legal Services, a nonprofit organization that provides legal advice and assistance to prisoners. As in other cases, higher rates for prisoner-initiated telephone calls in North Carolina are driven by “commissions” paid to correctional facilities or agencies in exchange for the right to provide exclusive telephone services, thus creating a monopoly. The industry practice of paying “commissions” conveys an appearance of impropriety and will bring the corrections profession into disrepute as the matter gains greater notoriety.
Ultimately, the NC Utilities Commission adopted staff's recommendation and amended the rule to permit the rates prison payphone providers requested.
Other States
Meanwhile, other states have made serious efforts to put a stop to the abuses. For instance, Missouri, New York, and Michigan have significantly reduced prison telephone rates and commissions. And in one state, Nebraska, correctional officials have simply refused to accept any commission, preferring instead to choose prison phone services on the basis of quality of service, responsiveness, and other such ordinary consumer concerns. Thus, it is clear that prison telephone services can be provided without the payment of any commissions , exaggerated protestations regarding compromises to security and diminished access to prisoner phones notwithstanding.
State Utilities Commissions are Unable to Regulate This Nationwide Industry
This patchwork of widely varying regulatory approaches and outcomes demonstrate that a national framework is sorely needed. Lacking authority to act beyond its borders, state utilities commissions are simply unable to reign-in the abuses of a nationwide prison telephone industry. These state utilities commissions would greatly benefit from oversight of the industry by, and guidance from the Federal Communications Commission.
Definition of Call Rate Types: Local - a geographical area defined by tariff in close proximity; Intralata - a geographical area defined by tariff outside of local (toll); Interlata - a geographical area defined by tariff outside of intralata, but still within the state; Interstate - a geographical area defined by tariff outside of the state.
State of Michigan DOC Accepted Pricing for Embarq Inmate Telephone Services The following table contains the pricing rate information that has been modified as a result of the removal of the 50.99% premise fee and surcharges that were included in the previous contract. (Effective August 1, 2008.)
COLLECT CALL RATES DEBIT CALL RATES
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CURE is a membership organization of families of prisoners, prisoners, former prisoners and other concerned citizens. CURE's two goals are(1) to use prisons only for those who have to be in them (2) and for those who have to be in them, to provide them all the rehabilitative opportunities they need to turn their lives around.