This week the FCC adopted new phone rates for people in prison, jail or detention centers. Under the new rules, interstate collect phone calls can cost no more than 25 cents per minute and debit or pre-paid phone calls can cost no more than 21 cents per minute.
Before the rate caps, an interstate call could cost as much as $17 for a 15 minute call. Under the new rate caps, a 15 minute call would be about $3.15.
"This is essentially the federal government putting its foot down on a system that’s been broken for a decade," said Leah Sakala, a policy analyst with the Prison Policy Initiative.
Sakala said the prison phone industry preys on people who can’t afford it.
"This is a market that profits from exploiting communities who are the most economically vulnerable," said Sakala.
Sakala claims that the more notable phone companies used to profit from the prison phone industry, but were bought out by companies owned by investment banks.
Below is a rundown of how much certain compnies charge in fees for calls from prison:
The Los Angeles Times reports that the prison phone market brings in over $1.2 billion every year.
Today's prison phone market, which brings in $1.2 billion annually, is dominated by two little-known phone companies. Global Tel-Link, based in Atlanta, and Securus Technologies of Dallas, both backed by private equity firms, make up more than 80% of the market, according to Standard & Poor's.
The phone companies insist it simply costs more to provide inmate phone services, which require security features such as call screening, restricting phone numbers and blocking three-way calls.
"All the real work to allow an inmate to make a call happens before the call is even accepted," said Stephanie Joyce, counsel for Securus. Securus and other companies charge fees to initiate a call, add funds to an account or receive statements, partially to help recoup those costs, Joyce said.
Securus Technologies said the new caps on phone charges will cost them over $10 million in revenues.
In an interview with Bloomberg BNA, Securus Technologies CEO Richard Smith said he's unsure of what the real impact will be:
“Securus is committed to providing high end security features that one third of all the prisons in the U.S. require and we will continue to fight for prisons and jails to fight for the prices that they deem are necessary to support their own prisons and jails."
The U.S Court of Appeals denied a bid to stay the FCC's new rate caps.