Egregious case of market failure
October 23, 2015 6:20 AM   Subscribe

The Federal Communications Commission is putting caps on the rates that inmates pay for phone calls, after a 14-year campaign by advocates for prisoners and their families. The order caps per-minute fees at 11¢ in state or federal prisons, and up to 22¢ a minute in local jails, depending on the size of the facility, while also capping the various fees that have been common on inmate calls to this point. posted by almostmanda (51 comments total) 32 users marked this as a favorite
 
About goddamn time!
posted by lalochezia at 6:26 AM on October 23, 2015 [16 favorites]


Also: Previously & previously.
posted by Fizz at 6:30 AM on October 23, 2015 [1 favorite]


The order caps per-minute fees at 11¢ in state or federal prisons, and up to 22¢ a minute in local jails, depending on the size of the facility, while also capping the various fees that have been common on inmate calls to this point. This is fundamentally cheaper than many current rates, which were as high as 89¢ a minute in 2013, even before factoring in fees.

So who is loosing the Federal contract to overcharge inmates and why did their lobbying efforts suddenly fail after all this time? Seems to me like someone decided they couldn't afford to play ball anymore so the ball was taken away.
posted by three blind mice at 6:38 AM on October 23, 2015 [5 favorites]


Prisons should not be profit centers.
posted by cjorgensen at 6:38 AM on October 23, 2015 [41 favorites]


Why isn't it free?
posted by oceanjesse at 6:42 AM on October 23, 2015 [14 favorites]


Prisons should not be profit centers.

Related: Police Leaders Join Call to Cut Prison Rosters [The New York Times]
More than 130 police chiefs, prosecutors and sheriffs — including some of the most prominent law enforcement officials in the country — are adding their clout to the movement to reduce the nation’s incarceration rate.

Asserting that “too many people are behind bars that don’t belong there,” the officials plan to announce on Wednesday that they have formed a group to push for alternatives to arrests, reducing the number of criminal laws and ending mandatory minimum prison sentences. Members of the group are scheduled to meet Thursday with President Obama.
posted by Fizz at 6:43 AM on October 23, 2015 [14 favorites]


Prisons should not be profit centers.

Well that can be debated, but this is not about profit. This is about theft enabled by a government monopoly which stinks of corruption. The "market" of competition and choice has nothing to do with it.
posted by three blind mice at 6:43 AM on October 23, 2015 [4 favorites]


Honestly even the new caps are obscenely overpriced. Wholesale US phone rates are typically somewhere in the tenths to half a penny per minute range.
posted by kmz at 6:44 AM on October 23, 2015 [18 favorites]


Prisons should not be profit centers.

Amen. The capitalist construct of prisoner-as-product is among the most evil of modern inventions.
posted by grumpybear69 at 6:44 AM on October 23, 2015 [28 favorites]


For context, the phrase "egregious case of market failure" is from this statement by FCC Commissioner Mignon Clyburn. I didn't realize it wasn't in either of the two links.
posted by almostmanda at 6:45 AM on October 23, 2015 [1 favorite]


FTA: "The commissioners also leave in place one of the odder aspects of the prison telecom industry. Facilities generally sign exclusive contracts with specialized phone carriers, which compete in part by offering to pay the prisons a portion of the money they collect from inmates’ phone bills. These commissions have ranged as high as 96 percent of call revenue, according to the FCC."

96%? Monetizing phone calls at 96% commission? Never has the phrase Prison-Industrial-Complex been so apt.
posted by marienbad at 6:53 AM on October 23, 2015 [9 favorites]


Why isn't it free?

Because as a nation we hate poor people?
posted by odinsdream at 6:55 AM on October 23, 2015 [13 favorites]


Why isn't it free?

Because that wouldn't be the asshole way. Every time you wonder why the US prison system does something a certain way, you just have to ask yourself what an asshole would do.
posted by pracowity at 6:57 AM on October 23, 2015 [25 favorites]


marienbad: 96%? Monetizing phone calls at 96% commission? Never has the phrase Prison-Industrial-Complex been so apt.

That struck me as well. I always thought prison calls and other fees were so high because there were so few providers, but it seems this is not the case. Rather, the prisons themselves have created a capitalist competition system that actually results in raising prices!!!! So messed up.
posted by bluefly at 6:57 AM on October 23, 2015 [4 favorites]


Are the salaries of prison wardens available? What am I saying, probably requires hundreds of thousands of freedom of information requests and then delivered with the essential details redacted.
posted by sammyo at 6:58 AM on October 23, 2015


Amen. The capitalist construct of prisoner-as-product is among the most evil of modern inventions.
posted by grumpybear69 at 9:44 AM on October 23 [1 favorite +] [!]


If you're interested in this kind of history, I highly recommend reading Michel Foucault's Discipline & Punish [.pdf]. Despite being placed in the sometimes intimidating criticism/philosophy genre section of the book store, the ideas introduced are not difficult to comprehend and the translation is easy to read.
“Discipline 'makes' individuals; it is the specific technique of a power that regards individuals both as objects and as instruments of its exercise. It is not a triumphant power...it is a modest, suspicious power, which functions as a calculated, but permanent economy.”
posted by Fizz at 7:01 AM on October 23, 2015 [10 favorites]


Prisons should not be profit centers.

Why isn't it free?


NPR
Brian Oliver, CEO of GTL, the biggest player in the prison phone calls market [paraphrased by NPR]:
If the commission really wants to do something about prison phone rates . . . it should go after what are known in the business as site commissions — what activists call kickbacks to the county sheriff or state corrections department. . . . Site commissions can account for as much as 60 or 70 cents of every dollar an inmate's family spends [on prison phone calls].

"Rates are high because people want commissions. . . . And the people who set the rules, the counties and the states who want that income, directly create the high rates. When there are no site commissions, the evidence is clear: Rates become extremely affordable."
[Of course, you could do both. -- H]

NPR
Some states — including New York, Ohio, and Rhode Island — have already outlawed site commissions.

In those places, the FCC says prison phone rates are down and call volumes are up.

The people who run jails and prisons defend site commissions . . . [saying that they] have to make sure that inmate calls don't create a threat to the community. And that takes money.

Jonathan Thompson, the CEO of the National Sheriffs' Association:
[M]onitoring that phone call takes manpower, that takes time. We're looking at upping the number of calls, right? But yet, not increasing capabilities or the resources that go with it. That is a huge challenge for sheriffs.
Thompson says some sheriffs will likely stop allowing inmate phone calls at all if the FCC votes to cap rates. But regulators insist the proposed caps would still leave counties and states with enough money to cover their security costs.

Activists say rate reform might actually save states and counties money — in the form of lower recidivism rates.

Miguel Saucedo:
Us having that line of communication is vital for [my brother] to rehabilitate. And for me to cut that line off for him, and say, 'Sorry Luis, I can't answer your phone calls this month' — it's not imaginable.
posted by Herodios at 7:04 AM on October 23, 2015 [11 favorites]


Why isn't it free?

Indeed. I would go a step further: I would like to see an experiment where inmates were allowed private, unmonitored cellphones.
posted by jedicus at 7:05 AM on October 23, 2015 [6 favorites]


So it's great that they're capping the rates. However: It's still unreasonable that calling card providers are able to charge $3 to add money to your account electronically ($5.95 if you talk to a person). If you can only afford to add $20 at a time, that means that you're losing 15% of your money (or 30%!) straight away.

And it doesn't look like their rules are affecting the scam where the providers make it impossible to find out how much money you have remaining on your account. If you want to be sure your spouse's call will last a full hour, you'd better add even more money to their account, just to be safe.
posted by Banknote of the year at 7:06 AM on October 23, 2015 [5 favorites]


In a statement, Brian Oliver, Global Tel-Link's chief executive, called the rules disastrous. "This action creates significant financial instability in the industry and ultimately hurts inmates and their families—the very people the FCC set out to help," he said. Securus argued that the rate caps are below its costs of doing business and said it would appeal to the D.C. Circuit of the U.S. Court of Appeals, while also asking for a stay on the FCC's order.

Below your costs of doing business, but you can pay a large commission to the LEA running the prison... ok.

And this doesn't fix the other huge problem in this system... that inmates can't call cell phones without a complicated process for the callee involving depositing money into an account after the first call and waiting for the inmate to call again... and that's only in some places, many can't call cell phones at all.
posted by Huck500 at 7:06 AM on October 23, 2015 [4 favorites]


This was long, long overdue, but the penal system isn't exactly a model for sensible telecommunications, despite that being the only way some inmates might reasonably be able to communicate with loved ones. A tangential issue, but one that illustrates the "fuck you, you're a criminal" attitude of jails and prisons is the fact that cell phones can't receive collect calls.

This is less a problem once you've actually been convicted and processed (where you can then get screwed over by rates on pre-paid accounts), but if you've just been arrested and are trying to get in contact with someone to bail you out, let work know you won't be in, or just let someone know where you are... good luck. Hopefully you know someone with a landline you can call, because the penal system still assumes it's the 1980s.

And, of course, who remembers anyone's phone number these days? I once ended up calling a childhood friend's mom to let people know I'd been arrested. It was literally the only person who a) had a landline and b) had a number I remembered from the days when you actually had to dial numbers.
posted by Panjandrum at 7:14 AM on October 23, 2015 [22 favorites]


Securus argued that the rate caps are below its costs of doing business and said it would appeal to the D.C. Circuit of the U.S. Court of Appeals, while also asking for a stay on the FCC's order.

From elsewhere:
A presentation that the privately-held prison telecom company Securus made to investors that The Huffington Post obtained shows just how much money there is to be made as the state-sanctioned middleman between prisoners and the outside world: $404.6 million last year alone.

Securus, which provides phone services to 2,600 prisons and jails in 47 states, made $114.6 million in profit on that revenue in 2014. Securus’ gross profit margin -- a measure of the difference between the cost to provide its services, and what it charges for them -- was a whopping 51 percent.
Bzzt. Try again Securus. Looks like you've got quite a bit of margin to play with.
posted by dis_integration at 7:19 AM on October 23, 2015 [4 favorites]


So even after the 96% kickback they are still making $114.6 million! Nice work.
posted by marienbad at 7:22 AM on October 23, 2015 [1 favorite]


Why isn't it free?


[Fade in: black and white still photo of oceanjesse]

V.O.: Oceanjesse thinks convicted criminals should be allowed free phone calls while ordinary hardworking American families struggle to pay the phone bill.

[photo reverses to negative image]

V.O.: What is Oceanjesse trying to hide?

Paid for by Citizens for ricochet biscuit.
posted by ricochet biscuit at 7:26 AM on October 23, 2015 [39 favorites]


this is not about profit. This is about theft enabled by a government monopoly which stinks of corruption.

Profit is the revenue left over after expenses, no "free market," whatever that means, required. It's completely about profit. Your market fundamentalism is blinding you.
posted by Steely-eyed Missile Man at 7:41 AM on October 23, 2015 [4 favorites]


Why is "prison telecom" a thing? Is it different than other telecom in terms of service or equip. Or is the only difference fees?
posted by sio42 at 7:44 AM on October 23, 2015


I would like to see an experiment where inmates were allowed private, unmonitored cellphones.

Are you mad?! They would all become criminal masterminds who run huge networks of underworld deviants from the comfort of their prison cells!

Or they would just talk with their families and lawyers.

One way or the other, we just cannot let this happen! (Without getting our cut.)
posted by pracowity at 7:49 AM on October 23, 2015 [3 favorites]


the penal system still assumes it's the 1980s.

Also I believe the only reason Western Union still exists is to transmit bail bonds (they usually don't take credit cards or PayPal)
posted by RobotVoodooPower at 8:03 AM on October 23, 2015 [1 favorite]


Prisons should not be profit centers.

Well that can be debated


It would be a fairly short debate. When an industry's growth and profitability is directly tied to the number of people incarcerated... do I have to finish this thought?
posted by Artful Codger at 8:07 AM on October 23, 2015 [9 favorites]


[M]onitoring that phone call takes manpower, that takes time. We're looking at upping the number of calls, right? But yet, not increasing capabilities or the resources that go with it. That is a huge challenge for sheriffs.

Just ask the NSA for transcripts.
posted by Devonian at 8:09 AM on October 23, 2015 [3 favorites]


Amen. The capitalist construct of prisoner-as-product is among the most evil of modern inventions.

It's hardly modern; given the racial disparity in the criminal justice system, it could be argued to be a way of extending the peculiar institution of slavery by other means after its overt form had been outlawed.
posted by acb at 8:10 AM on October 23, 2015 [4 favorites]


Don't want to derail too much but regarding prison history [wiki]:
However, the concept of the modern prison largely remained unknown until the early 19th-century. Punishment usually consisted of physical forms of punishment, including capital punishment, mutilation, and whipping, branding, and non-physical punishments, such as public shaming rituals like the stocks. From the Middle Ages up to the 16th and 17th centuries in Europe, imprisonment was rarely used as a punishment in its own right, and prisons were mainly to hold those awaiting trial and convicts awaiting punishment.

However, an important innovation at the time was the Bridewell House of Corrections, located at Bridewell Palace in London, which resulted in the building of other houses of corrections. These houses held mostly petty offenders, vagrants, and the disorderly local poor. In these facilities, inmates were given jobs, and through prison labor they were taught how to work for a living. By the end of the 17th century, houses of correction were absorbed into local prison systems under the control of the local justice of the peace.

posted by Fizz at 8:17 AM on October 23, 2015 [1 favorite]


I'm honestly surprised they don't charge $28 fo a bar of soap in the dispensary and $62 per meal in the cafeteria.

Or do they? Evil industry pretty much top to bottom.
posted by gottabefunky at 8:21 AM on October 23, 2015 [1 favorite]


There is no reason for the phone calls to cost money AT ALL. Phone use by prisoners is capped and opportunities to use the phone are restricted. These are only people calling their attorneys, bail bondsmen, emergency friend/family contacts, employers. These are all necessary calls for minimal amounts of time.

This is not 1972. Jails aren't running up huge phone bills. Most likely they could easily pay a flat fee for their lines and incur no additional expense whether they're used heavily or not at all. Even if they do have to pay by the minute, SO WHAT? Prisoners use water, too. Are we going to bill for that?

This is such bullshit. The only reason this even sounds like good news is because we're so conditioned to see our prisoners exploited and abused that curbing said exploitation and abuse to any slight degree exceeds our pathetically low expectations.
posted by DirtyOldTown at 8:41 AM on October 23, 2015 [5 favorites]


I'm honestly surprised they don't charge $28 fo a bar of soap in the dispensary and $62 per meal in the cafeteria.

Or do they? Evil industry pretty much top to bottom.


Hmm, well don't forget, prison labour typically pays a fraction of minimum wage. Pennies per hour. The price you pay for a bar of soap at T-mart or a bagoshite meal at MacD's is already overpriced in about that proportion.
 
posted by Herodios at 8:42 AM on October 23, 2015 [2 favorites]


Every time you wonder why the US prison system does something a certain way, you just have to ask yourself what an asshole would do.

Many years ago, I got a call from a cousin who was in prison. His hunger for a meaningful conversation with someone outside of the system, to speak to someone who thought of him as a human being and not a number or an object to be used and condemned, was palpable. He and I weren't particularly close, I'm very much not a phone call person and we didn't have much in common, but once I understood how important the call was to him, I worked with him to stretch that conversation out to the entirety of the time limit. We talked about all kinds of shit.

So, yeah, when you see authorities trying to make it more difficult for the folks being ground up in the gears of our "justice" system to make those kinds of connections with loved ones, it is one hundred percent because they are unrepentant assholes who are pretty sure they and their loved ones will never be where the prisoners are, so fuck 'em.
posted by lord_wolf at 8:43 AM on October 23, 2015 [20 favorites]


it is one hundred percent because they are unrepentant assholes who are pretty sure they and their loved ones will never be where the prisoners are, so fuck 'em.

Even unrepentant assholes shouldn't count on that in this country. What is it, one in three Americans have been or know someone who has been? People making these decisions aren't all 1%ers.
 
posted by Herodios at 8:48 AM on October 23, 2015 [1 favorite]


Phone use by prisoners is capped and opportunities to use the phone are restricted. These are only people calling their attorneys, bail bondsmen, emergency friend/family contacts, employers. These are all necessary calls for minimal amounts of time.

You are confusing prisons with jails. Prisons are long term facilities for the convicted. Jails are holding pens for the arrested. Prisoners can be transported far away from family and friends, meaning a phone call is often the preferred affordable means of contact. If you want to reduce social isolation on release in hopes of reducing recidivism, you probably want to allocate more than 'minimal amounts of time.'
posted by pwnguin at 8:57 AM on October 23, 2015 [2 favorites]


If you want to reduce social isolation on release in hopes of reducing recidivism, you probably want to allocate more than 'minimal amounts of time.'

That'd assume a belief in rehabilitation, though, and everyone knows that that's a librul myth just like evolution and climate change.
posted by acb at 9:03 AM on October 23, 2015 [1 favorite]


Even if I fumbled a few of the particulars, it doesn't really change that phone service is pretty cheap these days and they could easily grant it as a basic right were they not incredible assholes.
posted by DirtyOldTown at 9:11 AM on October 23, 2015 [3 favorites]


kmz: "Honestly even the new caps are obscenely overpriced. Wholesale US phone rates are typically somewhere in the tenths to half a penny per minute range."

Well to be fair the delivery price per minute isn't the only cost. There are end loop and billing costs.

DirtyOldTown: " These are only people calling their attorneys, bail bondsmen, emergency friend/family contacts, employers. These are all necessary calls for minimal amounts of time.
"

No it's the people phoning there spouses/kids/family while in prison for multiple years that this is going to benefit in a big way. A half hour call is going to cost $3 instead of $30. As someone who was in an international LDR before cheap telephony who used to stay up to 11pm to take advantage of a 70% discount that is a really huge difference in ability to maintain ties.
posted by Mitheral at 9:18 AM on October 23, 2015 [1 favorite]


The discussion on the news sites has been making me see red. Way to many "If you don't want to go to prison, don't commit the crime" talking points. It's not just the privilege, lack of compassion and vengeance seeking that gets me, it's the massive short-sightedness and acceptance of corruption. Goddamnit people.
posted by happyroach at 9:20 AM on October 23, 2015 [5 favorites]


When you say "xxx shouldn't be a profit center" I almost certainly agree with you but I'd also say that we're in conflict with modern conservative thought that the government doing ANYTHING is bad and that EVERYTHING should be a profit center for industry.
posted by LastOfHisKind at 9:33 AM on October 23, 2015 [2 favorites]


Because that wouldn't be the asshole way. Every time you wonder why the US prison system does something a certain way, you just have to ask yourself what an asshole would do.

No joke, when I was studying for and writing the New York Bar Exam my thought process was to think of what the law in Canada was and then make it more assholish (well I used the term jerkier, because Canadian, but the intent is the same). I did end up passing the exam.
posted by any portmanteau in a storm at 9:34 AM on October 23, 2015 [13 favorites]


For context, the phrase "egregious case of market failure" is from this statement by FCC Commissioner Mignon Clyburn. I didn't realize it wasn't in either of the two links.

This phrase is like saying the underpayment of slaves is an egregious case of market failure. There's no market when you've deprived people of all rights and autonomy. How about just, an egregious case of exploitation.
posted by zipadee at 10:31 AM on October 23, 2015 [2 favorites]


I had a family member talking to someone in prison. The rates were approximately $1 per minute with all kinds of fees, etc. The company also captured my credit card information at one point and started auto-charging and automatically adding minutes. I got a $400+ bill in the space of a few weeks. I strongly suspect that their web site UI was intentionally bad in order to make this kind of thing possible. These companies can rot in hell as far as I'm concerned.
posted by idb at 11:33 AM on October 23, 2015 [5 favorites]


More than 130 police chiefs, prosecutors and sheriffs — including some of the most prominent law enforcement officials in the country — are adding their clout to the movement to reduce the nation’s incarceration rate.

In the 70s and 80s, people were horrified that judges were reducing sentences due to prison overcrowding. Then came mandatory minimums. Even the NYT article ignores the fact that we could reduce prison terms and achieve the same result -- but courts would be much happier handling fewer cases with longer sentences.
posted by RobotVoodooPower at 11:33 AM on October 23, 2015


No reason not to lock fewer people up and lock them up for shorter periods of time.
posted by Mitheral at 1:30 PM on October 23, 2015


Prisoners use water, too. Are we going to bill for that?

Please don't give them any more ideas.
posted by Hactar at 2:07 PM on October 23, 2015 [5 favorites]


Thompson says some sheriffs will likely stop allowing inmate phone calls at all if the FCC votes to cap rates.

Welp, time to make that illegal too.
posted by emptythought at 2:59 PM on October 23, 2015 [2 favorites]


Prisons are one of the most corrupt institutions out there. I've written about my family's experience with "justice" on this site before, but holy fuck. My brother just had to decide what three items to give up in order to get the three new pairs of underwear (his first in over two years) that my parents bought for him. Because GOD FORBID the prison provide underwear to the prisoners. Or toiletries. Or actual food.

And there are lots of people in prison who have been railroaded or falsely convicted or had charged trumped up. Adnan Syed, the subject of the podcast Serial, is not exceptional. That shit happens every day in this country.
posted by guster4lovers at 6:40 PM on October 23, 2015 [2 favorites]


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