HRDC's Prison Phone Justice coordinator Carrie Wilkinson on the FCC vote to cap prison phone rates
Why it won’t cost as much to call someone in prison
By Josh Kosman
October 23, 2015 | 1:52am
Federal regulators on Thursday capped rates on phones calls to jails and prisons across the country — handing a sizable victory to inmates’ families while slicing the profits of those prison phone companies, many of which are owned by private equity firms.
The buyout barons profited handsomely over the years by owning the prison phone companies, charging inmates’ families up to 32 cents a minute to call an incarcerated friend or family member.
The Federal Communications Commission on Thursday capped that rate at 11 cents.
Prisons have their own closed phone systems that connect with outside phone networks.
Inmates make calls, and the people who accept the charges pay the prison phone systems, mostly through prepaid phone cards. Private equity firms own the two dominant prison phone companies.
New York has been charging only 5 cents a minute, but Rikers in recent months signed with a PE-owned phone company, Securus, and has not released details of the new phone contract.
“There are over 2 million incarcerated people,” Carrie Wilkinson of the Human Rights Defense Center told The Post. “Compared to what people have been paying, this is a tremendous result.”
American Securities-owned Global Tel-Link feels differently. “The FCC’s latest order creates a financial tsunami,” it said in a statement. It plans to appeal the decision.
“The order reduces rates below the sustainable cost of service. … This could have a crippling impact not only on service providers, which may be forced to cancel contracts, but on inmates
and their families, many of whom may be left with no service at all.”
Abry Partners in 2013 bought Securus, the other large prison phone company.
In a April 2015 lender presentation Securus said it generated $84 million in free cash flow from its $415 million in revenue.