The Federal Communications Commission decided to cap the cost of prison calls. This is good news for prisoners and their families and bad news for phone companies that make a fortune connecting inmates with the outside world.
Two years ago authorities approved a cap that helped significantly reduce rates by a quarter to a half. But talking to an inmate can still be a serious financial drain. Last week, FCC authorities voted to cap prison phone rates at 11 cents a minute and minimize transaction fees.
Business Ending Event?
One of the major players in the prison communication business is Securus. The company told the FCC that the rate cap could be a "business ending event" and has threatened to sue if passed as proposed.
According to the phone companies, they cannot afford the rate cut because they must pay commissions to prisons. The commission costs are prohibitive and will be unaffordable if the FCC approves lower rates for telephone exchange with inmates.
Commissions or Kickbacks?
Securus calls the fees it pays prisons commissions. Federal authorities have called them kickbacks. In other words, some government officials say, communications companies are paying prisons for lucrative contracts.
The deals help prisons build bigger budgets and secure contracts for the communications companies. But they lead to increased fees for prisoners and their families trying to stay in touch.
Some have said that the companies wanted the FCC to eliminate the commissions altogether, enabling companies to keep a bigger chunk of the change made on pay phones. But the agency has declined to do that, instead discouraging the exchange of percentages for contracts but not outlawing them.
That means that individual companies will have to tell prisons they don't want to pay commissions instead of blaming it on the FCC, which would be more convenient. Securus, which predicted the end of its business, actually discontinued commissions in 2013. As a result, Securus has been putting more profit in its pockets recently anyway.
Drop a Dime
Families will likely rejoice at the news of the 11 cent cap. Prohibitive communications costs impact not only convicted criminals, but also people in immigration detention.
Cesia Pineda told the Huffington Post that she spends about $250 a month to speak with her husband in immigration detention. Right now she is paying over 26 cents a minute, not including processing fees (calculated at a rate of $5.25 for a 20-minute call). But by January, her bill could be less than half as much. That will make it a lot easier to keep in touch.