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HRDC's FCC comment on corruption in prison phone industry profiled

Law360.com, Oct. 5, 2015. http://www.law360.com/articles/711008/fcc-urged...

FCC Urged To Probe Lobbying For Prison Call Contracts

Law360, Washington (October 5, 2015, 6:26 PM ET) -- An advocacy group urged the Federal Communications Commission in a letter made public Monday to investigate lobbying by prison call service providers as it considers an order that would place caps on the rates that inmates could be charged for phone calls, alleging abuse and corruption in the industry.

The Human Rights Defense Center, a nonprofit group that publishes monthly newsletter Prison Legal News, said in its letter to FCC Chairman Tom Wheeler that it had detailed instances of “abuse, corruption, and … lack of accountability” by Inmate Calling Service, or ICS, providers to FCC multiple times going back to 2007.

According to the group, these issues stem from a lack of oversight and a lack of market competition that has allowed ICS providers to win “extremely lucrative monopoly contracts” from correctional facilities, often with “legal kickbacks” — ongoing commissions paid to the contracting agency — attached.

“Unfortunately, nothing has changed in the eight years since our first filing,” it said.

It cited as an example a recent federal indictment against Sam Waggoner, a consultant for ICS provider Global Tel*Link Corp. Waggoner subsequently pled guilty to bribing the former commissioner of the Mississippi Department of Corrections, Christopher Epps — who has also been indicted on bribery charges — in order to win or retain contracts for GTL, in return taking a 5 percent cut of the revenue generated by those contracts. This is only one example of corruption in the ICS industry, in which relevant deals are often shrouded in secrecy, HRDC said.

The group called on the FCC to use its subpoena powers to investigate the practice of ICS providers hiring consultants to lobby correctional facilities for contracts, arguing that — in light of the Waggoner case — the commission should at the very least require all such providers to identify all paid consultants and their pay structure.

HRDC is one of several parties to make public comments on the issue since Wheeler and Commissioner Mignon Clyburn announced on Sept. 30 that they had circulated a proposed order proposing an expansion of a 2013 rule that had placed caps on the rates prison inmates could be charged for interstate calls.

That 2013 order was “only a first step,” Clyburn, a longtime advocate for overhauling what she has called “egregiously high” prison calling rates, said in a statement. The 2013 caps were only intended as interim rates and did not apply to intrastate calls, she noted.

Under the proposed caps, state and prison call rates would be cut roughly in half, going from an average of $2.96 for a 15-minute in-state call and an average of $3.15 for a 15-minute interstate call, to a maximum of $1.65 — based on an 11-cent-per-minute cap — according to an FCC fact sheet. Jails, typically smaller than prisons, would get more leeway, with a cap of between 14- and 22-cents-per minute, depending on their size.

Some inmates would likely see much greater savings than the averages listed by the FCC, with several public comments also filed with the commission Monday stating that prison- or jail-originated calls in some states are currently charged at rates of close to a dollar per minute for intrastate calls.

Flat-rate calls, billing the same rate for calls of up to 15 minutes regardless of length, would be banned, and various ancillary or third-party service charges would also be banned or limited.

And the payment of “site commissions” from providers to institutions, as cited in HRDC’s letter, would be “strongly discouraged,” the fact sheet said. Inmates and their families have accused phone service providers in several lawsuits of using those commissions to pay prisons to continue monopolizing inmate phone service contracts.

The commission is set to consider the proposal at its monthly open meeting on Oct. 22.

--Additional reporting by Bryan Koenig. Editing by Patricia K. Cole.