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    Debates about privatizing prison food service, healthcare, and prisons themselves have generated significant press coverage in Michigan. But other businesses whose profits are intimately tied to Michigan’s correctional system have remained largely unknown except to inmates’ families. These companies provide services that can be a lifeline for families trying to stay connected with their loved ones behind bars—but advocates say the price is unconscionably high.

    Connection, at a cost

    Jails and prisons have good reasons for controlling inmates’ abilities to communicate with the outside world. For example in Latin America, where such controls are largely absent, prisoners with cell phones routinely run extortion rackets and drug-trafficking rings from behind bars.

    .

    But talking on the phone with loved ones, and lawyers, is also an important way of allowing inmates to maintain human connections and exercise their rights. To maintain this balance, jails and prisons in the U.S. generally allow prisoners either to use pre-paid phone cards or to call collect—in either case, via a single designated service provider. While this keeps things simple for prison administrators, according to the advocacy group Prison Policy Initiative, “The prison telephone market is structured to be exploitative because it grants monopolies to producers, and because the consumers have no comparable alternative ways of communicating.”

    Prison phone service providers have milked this advantage. According to a report and documentary published recently by the nonprofit Center for Public Integrity, until recently prison phone companies charged up to $17 for a 15 minute call. Securus Technologies, one of the largest players in the prison phone industry, had total revenues of $360 million for 2009 the latest year publicly available in the SEC’s database.

    Prices came down considerably after the FCC ruled in August 2013 that “all rates charged for Inmate Calling Services and all Ancillary Charges must be based only on costs that are reasonably and directly related to the provision of [inmate call services].” The FCC established and established price ceilings of “$3.75 for a 15-minute call using Collect Calling” or “or $3.15 for a 15-minute call using Debit Calling, Prepaid Calling, or Prepaid Collect Calling.”

    But that’s still much more expensive than most phone calls outside prison, where numerous pre-paid calling cards offer rates below $0.01 per minute. (On the other hand, the prison rates are much cheaper than consumer collect calls—a 15-minute call placed through 1-800 CALL ATT could cost upwards of $30.)

    In Michigan the inmate phone call business is dominated by two companies: Public Communications Services, Inc., which provides services in all of Michigan’s state prisons, and Securus Technologies, Inc., which has contracts with most of the state’s county jails. A handful of Michigan counties contract with other major players in the industry such as GTL and ICSolutions.

    High prices for families, but a small dent in MDOC’s budget

    According to a Prison Policy Initiative report, local and state governments, not the phone companies, are the worst culprits. The FCC ruling earlier this year also backs this up, noting that “site commissions”—funds paid back to jails and prisons by the phone companies—are a major driver of prices, accounting for 20 to 88 percent of the fees charged to consumers. The FCC report says that some of these funds are used to cover inmate health and welfare, but others are used for “non-inmate needs” such as employee salaries, facilities maintenance, equipment.

    Michigan’s contract with PCS specifies that no “surcharges” are added to the base price, and in fact the state is praised by PPI as one of just eight in the nation that have banned such charges. One could be pardoned for wondering if these are just semantic shenanigans though: a “special equipment fund addition” still accounts for about 80% of the price of prison phone calls in Michigan. According to the House Fiscal Agency, state restricted revenues including “prisoner telephone surcharges” as well as prison industries and sources, generate $56 million per year. While that’s a lot in absolute terms, it only accounts for 2.8% of MDOC’s annual budget.

    As prison wages lag behind inflation, families pick up the slack

    Phone calls aren’t the only cost inmates’ families are hit with. Prison wages are very low and have not kept up with inflation; meanwhile, commissary prices have risen. Inmates increasingly depend on their families’ largesse for basic toiletries and other goods.

    Families and friends of incarcerated Michiganders can send them funds for use in the prison commissary through JPAY, a for-profit business based in Miami. Surcharges range from 4 – 25%. Michigan inmates’ families can also deposit funds to JPAY to allow them to send emails, at a cost of $0.25 per typed page.

    Families wishing to buy special snacks or gifts for incarcerated Michiganders must do so through Access SecurePak, which advertises itself as “the most comprehensive custom package program in the correctional industry.” According to the website’s Michigan section, inmates are allowed one package worth up to $85, including a processing fee, once every three months.

    Many Michigan counties now offer video visits. (Some have gotten rid of real face-to-face visits altogether—a visitor and an inmate might “visit” by sitting in front of different screens in different parts of the same jail facility.) Allegan and Kalamazoo counties, for example, contract with the company TelMate.)

    Rich and Carol Rienstra, prison reform advocates from West Michigan whose son is serving a life sentence in the state’s prison system, told this site that the fees don’t stop there: Books must be purchased new through Amazon—no used books are allowed. Razors for shaving were recently banned in at least one facility (perhaps with good reason), but that means another expense for inmates or their families of $17 for the approved electric shaver, plus batteries.

    In summary, fiscal hawks can point to all of the above to show that taxpayers are not shouldering the price of nonessential services for prisoners whom, after all, have mostly been found guilty of committing crimes against other individuals and society.

    But policymakers would do well to evaluate whether these additional burdens erode the abilities of already struggling inmates and their families to build stable finances and move out of the situations of poverty that may have contributed to criminal behavior in the first place.

    Sources:

    Cawley, Marguerite. “Guatemala Prisoner Details Operations of Extortion Ring.” InSight Crime, August 14, 2013.

    http://www.insightcrime.org/news-briefs/guatemala-prisoner-details-operations-of-extortion-ring

    Decker, Charles. “Time to Reckon with Prison Labor.” Institution for Social and Policy Studies. Yale University, New Haven, Conn. October 1, 2013.

    http://isps.yale.edu/news/blog/2013/10/time-to-reckon-with-prison-labor-0#.VFryUfmUeFR

    http://isps.yale.edu/news/blog/2013/10/time-to-reckon-with-prison-labor-0#.VFPQPvmUeFQ

    Kukorowski, Drew. The Price to Call Home: State-Sanctioned Monopolization in the Prison Phone Industry. Prison Policy Iniative, September 11, 2012. http://www.prisonpolicy.org/phones/report.html

    Kukorowski, Drew; Peter Wagner; and Leah Sakala. Please Deposit All of Your Money: Kickbacks, Rates and Hidden Fees in the Jail Phone Industry. Prison Policy Initiative, May 8, 2013.

    http://www.prisonpolicy.org/phones/pleasedeposit.html

    Lacey, Marc. “Mexico’s Drug Traffickers Continue Trade in Prison.” New York Times, August 10, 2009.

    http://www.nytimes.com/2009/08/11/world/americas/11prisons.html?pagewanted=all&_r=1&

    Risko, Robin R. “Background Briefing: Corrections.” Michigan House Fiscal Agency, December 2013. http://www.house.mi.gov/hfa/PDF/Briefings/Corrections_BudgetBriefing_fy13_14.pdf

    Securus Technologies, Inc. Form 10-K, 2009. Filed with the United States Securities and Exchange Commission (SEC). http://www.sec.gov/Archives/edgar/data/1320051/000132005110000002/form10-k.htm#item6

    State of Michigan, Department of Technology, Management and Budget Procurement. Contract No. 071B1300208 between the State of Michigan and Public Communications Services, Inc. including Change Notices No. 1, 2, and 3. Lansing, Mich. February 9, 2011.

    http://www.michigan.gov/documents/buymichiganfirst/1300208_348329_7.pdf

    United States Federal Communications Commission (FCC). Report and Order and Further Notice of Proposed Rulemaking on the Matter of Rates for Interstate Inmate Calling Services. Washington, D.C. August 9, 2013. (FCC 13-113; WC Docket No. 12-375).

    https://apps.fcc.gov/edocs_public/attachmatch/FCC-13-113A1.pdf

    Wagner, Daniel and Eleanor Bell. “Prison Bankers Cash In on Captive Customers.” Center for Public Integrity. September 30, 2014.

    http://www.publicintegrity.org/2014/09/30/15761/prison-bankers-cash-captive-customers

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