State of Phone Justice 2022: The problem, the progress, and what's next

by Peter Wagner and Wanda Bertram

At a time when the cost of a typical phone call is approaching zero, a few companies are charging millions of consumers — the families of people in prison — outlandish prices to stay in touch with their incarcerated loved ones. The cost of everyday communication is arguably the worst price-gouging that people behind bars and their loved ones face. We gathered data showing that while some jails have negotiated rates as low as 1 or 2 cents per minute — proving the possibility of much lower phone rates — the vast majority of jails charge 10 times that amount or more.

For our complete dataset of phone rates in jails across the U.S., see Appendix table 3. For our complete survey of phone rates in state prisons, see Appendix table 1.

Why are the (mostly low-income) people who want to maintain a relationship with incarcerated loved ones forced to use services that charge shockingly high prices for basic communications technology? Because jails and prisons often choose their telecom providers on the basis of which company will pay the facility the most money in kickbacks. Combine the companies’ profit-seeking with the correctional facilities’ revenue-seeking, and the poorest families in the country end up paying higher rates to stay connected than anyone else.

Rates for telephone calls from prisons and jails have come down in recent years, thanks to regulatory action by the Federal Communications Commission (“FCC”), efforts by some forward-thinking state legislators and regulatory bodies, and strong advocacy campaigns. But costs are still generally too high (especially in jails), some of the smaller telecom providers are charging way too much for in-state calls to landlines, and the larger companies are rapidly evolving their businesses to undermine all of this progress.

In this report:

• We compile phone rates for almost every jail and prison in the country.
• We provide a national-level update on how some of the phone companies are exploiting loopholes in the FCC’s rules around abusive add-on fees.
• We sound the alarm that prison phone companies are evolving their services to evade existing regulations, specifically by creating and emphasizing other technologies like video calls and messaging, which inevitably come with hefty price tags.
• We offer specific guidance to federal and state regulators and legislators.

The progress

There has been significant progress on reducing prison and jail calling charges since advocates began mobilizing around this issue more than two decades ago, and even since our last major report in this series in 2019. This section presents an up-to-date and expanded view of the costs prison and jail families must pay, and will address both parts of the charges: per-minute rates (a set amount charged for each minute that a call lasts) and ancillary fees (additional charges to have, open, fund and close accounts).

Progress on phone rates

We built a nationwide database of phone rates in 50 state prison systems, as well as thousands of local jails and other detention facilities of various types. Our data, from December 2021, show that per-minute rates have been steadily falling over the last ten years, a result of action at both the FCC and at the state and local levels.

This graphic aggregates eight national prison rate surveys and three national jail rate surveys of the cost of a 15-minute call from a prison or jail to in-state and out-of-state phone numbers. For a table showing the average cost in each of these surveys, see Appendix table 2.

Prison and jail phone companies charge two separate (and often different) rates depending on whether a call is between people in the same state or people in different states. When the FCC capped the cost of out-of-state calls from prisons and jails in 2014, rates instantly fell below the less-aggressively-regulated in-state calls. Within a few years — largely because of pressure from family members — state prisons lowered their in-state rates as well. In locally-run jails, where family organizing is more difficult and the administrators often less aggressive negotiators, the too-high costs of in-state calls were much slower to catch up, but have made tremendous progress in the last few years.

There are two other markers of progress that stakeholders with experience in this field should note:

• Collect calls largely don’t exist anymore and where they do, under the FCC’s newest rules, those calls may not cost more than pre-paid calls.
• The FCC prohibited, for out-of-state calls, the practice of charging more for the first minute of a call; and this reform spread to in-state calls as well. In fact, we know of only four jails in the entire country that still use this pricing model for in-state calls.

Progress on fees

For a long time, ancillary fees — fees to open, have, fund, and close prepaid phone accounts — added up to almost 40% of what incarcerated people and their families spent on phone calls. The progress on reducing these fees has been uneven compared to progress on reducing phone rates.

The FCC recognized in its 2015 order that ancillary fees “are the chief source of consumer abuse and allow circumvention of rate caps” and banned most fees except for five specific types, for which it set maximums that could not be exceeded. Then until late 2021, the FCC largely focused on the rates and did not devote much attention to the loopholes the companies were exploiting.

Besides the fact that these interim caps were set in 2015 and should be further reduced, there are four other classes of abusive fees that the FCC has recently addressed or is starting to address:

• Banning the seizure of unclaimed funds. While the FCC banned “inactivity fees” in its 2015 order, that order did not explicitly prevent the companies from just seizing unused balances. The FCC closed this loophole in paragraph 71 of the September 2022 Fourth Report and Order, requiring the companies to either refund unused balances or turn over unused funds to state unclaimed asset programs. The funds at stake are substantial, as evidence released in a recent consumer protection settlement with ViaPath (formerly called Global Tel*Link) shows that the company took over $121 million from inactive accounts between 2011 and 2019.
  
  We expect the Fourth Report and Order to take effect sometime in 2023.
• Reining in the practice of providers colluding with Western Union and MoneyGram to inflate payment fees. When the Fourth Report and Order takes effect in 2023, this fee will be set at $5.95, which should eliminate most or all of the potential for abuse.
• Banning the practice of “Double dipping,” i.e. charging two deposit fees for the same payment transaction. As the Prison Policy Initiative has explained to the FCC, at least six providers are charging both the $3 automated payment fee and “passing through” their card processor costs for the same transactions, which results in charging the consumer, on average, 21% more than the intended $3 cap. The FCC appears to be concerned about this practice and has invited comment on these issues in paragraph 65 of the Further Notice of Proposed Rulemaking.
• Ending “single call” fee abuse. The FCC’s 2015 ancillary fee reform left a loophole by which providers could deliberately and repeatedly steer consumers to a uniquely expensive call type, the “single call,” which is intended for people who do not have accounts with the provider. This practice is particularly exploitative in the jail context, where families are typically simultaneously in crisis mode and often do not have familiarity with the providers’ less-publicized and cheaper options. In 2015, these calls could cost as much as $9.99 or $14.99 each. In 2021 the FCC tweaked the rules to limit these calls to $6.95. In the FCC’s September 2022 Fourth Report and Order, the FCC adopted part of our proposal, limiting these calls to the applicable deposit fee plus the actual per-minute cost of the call. The FCC did not, however, endorse our suggestion that the FCC immediately reduce the deposit fee amounts.

How states have brought down costs

The struggle for prison phone justice has shown that state governments are well positioned to bring down communications costs for incarcerated people and their families. States, unlike the FCC, are not hemmed in by constraints around their jurisdiction (see footnote 6); they also have the authority to set the rules and priorities for state and local correctional facilities, as well as for state regulators.

State governments are well positioned to bring down communications costs for incarcerated people and their families.Some steps that state legislatures have already taken to lower costs for families include:

• In-state rate caps. States can regulate the price of calls that start and end within the state — and the FCC’s out-of-state rate caps (which apply to most phone calls, as we explain in Progress on rates) will automatically be reduced to follow lower in-state rate caps. This type of regulation can take a variety of forms, but the most common are rate caps that specify the maximum per-minute rate that companies can charge. California has been the most aggressive state in this respect, setting an interim cap of 7¢ per minute in 2022 that applied to both prisons and jails (and, separately, the legislature passed a law months later making phone calls from state prisons free). To be effective, state rate caps should be lower than the FCC’s caps on out-of-state calls — since state rate caps equal to or greater than the FCC’s rate caps have little impact — and under the FCC’s rules, lower caps on out-of-state calls will also automatically apply to in-state calls.
• Ancillary fee reform. Under paragraph 217 of the FCC’s 2021 order, states can also set caps on ancillary fees lower than that set by the FCC. So far, California is the only state to take such steps: Its utility agency prohibits all ancillary fees except those charged when someone deposits money into an incarcerated person’s account via a third party. Alternatively, state and local governments can simply negotiate contracts that do not include payment fees.
• Prohibiting site commissions. A handful of states have restricted prisons and jails from accepting site commission revenue (kickbacks) from telecom providers, although some states have been more effective at closing all loopholes. Unfortunately, some jurisdictions have simply prohibited facilities from taking cash payments — which correctional facilities can circumvent by demanding commissions in the form of equipment, fancy cruises, and other forms of kickbacks.
• Agency-sponsored calls. Popularly known as “making calls free,” some jurisdictions have enacted a promising type of reform under which governments that incarcerate people also pay for necessary communications costs. Even though only a handful of states and large cities have implemented this type of system, there are already multiple models of agency-sponsored calling from which counties and states can choose.
  
  Connecticut’s system is particularly clever, because the law that created it sidesteps the risk of being undermined by revenue-hungry facilities. In order to guarantee that facilities do not use other exploitative services to generate commissions they previously received from phone calls, the Connecticut law states that corrections administrators “may supplement…voice communication service with any other communication service, including, but not limited to, video communication and electronic mail services,” but that “any such communication service shall be provided free of charge to such persons and any communication, whether initiated or received through any such service, shall be free of charge to the person initiating or receiving the communication.”

How telecom companies are evolving to evade regulation

One development in the prison telecom industry threatens to undo much of the progress described above: The exploitation families experience at the hands of prison telecom companies is no longer only (or even predominantly) related to phone calls.

As consumer protections around phone calls have become stronger, the companies have expanded the number of costly “services” they offer to incarcerated people. ViaPath (GTL) and Securus — the two giants dominating the prison phone industry — have both expanded their offerings in recent years by buying up competitors that sell products like video calling, tablets, electronic messaging, release cards, and money transfer platforms that family members use to send their loved ones money for all of these products.

While these kinds of products can be a boon to families trying to stay connected, families frequently report issues such as dropped video calls and nonexistent tech support. Even when they work properly, services like video calling vary widely in price from place to place and are sold in inconvenient, inflexible time chunks — as our survey of video calling rates illustrates — showing that companies are charging consumers arbitrarily high costs for services that most families use cheaply or for free.

These non-phone products are, for the most part, less regulated than phone calls — and the companies have argued that they are outside the purview of state and federal regulators — meaning higher profits for the companies. Most federal and state policies seeking to lower phone call costs do not address video and other services. But there is no reason for regulators to turn a blind eye. For instance, we laid out a comprehensive legal roadmap for the FCC, explaining why the agency has the authority under current law to regulate correctional video calling. Alternatively, the Martha Reed-Wright Act, currently pending in Congress, would clarify the FCC’s jurisdiction over video calls. And if Congress fails to act, then any individual state legislature could either impose a statutory rate cap on services like video calling or explicitly grant jurisdiction over such services to the state’s utility agency. No matter who takes on these reforms, however, oversight over these companies, their contracts, and their products will be critical to ending the exploitation of incarcerated people and their families.

What’s next: recommendations for further progress

While considerable progress has been made to reduce prison and jail telecom costs, prison telecom companies are still charging the families of people behind bars grossly inflated rates and inappropriate fees to communicate with their loved ones. The companies are also foisting more and more unregulated products onto the market for prison communications, and prisons and jails, eager for kickbacks, are signing contracts for bundles of these services. Families cannot help but use them.

Additionally, it is likely that there are county jails where the FCC’s recent regulation of phone call costs has not been applied. 552 county jails charge higher in-state rates than the FCC allows for out-of-state calls. We know that at least some of the smaller companies were unaware of the new rules about how to classify calls as in-state or out-of-state. Therefore, while some of these counties are likely charging the in-state rates as the FCC intended (i.e. only to customers with landlines located in the same state as the facility), some counties may be illegally — if unintentionally — charging a higher in-state rate for calls that the FCC has determined are out-of-state calls. Determining which of the 552 rates fall into which category requires facility-level usage data held by the companies that was not available for this report, but that can be accessed by federal or state regulators and may sometimes be available in regular commission reports sent to the facilities by their provider.

A list of the most expensive in-state phone rates charged by jails in each state is in Appendix table 6.

Families of incarcerated people deserve relief from the burden of phone call costs and an ever-growing list of unregulated technologies. Below, we offer recommendations for the government bodies with the most power to bring reform, including state legislatures, which can implement changes that dramatically reduce costs for prison and jail families as early as the next legislative session.

Policy recommendations for Congress, the FCC, and state and local governments

Congress:

• Pass the Martha Wright-Reed Just and Reasonable Communications Act, which would authorize the FCC to set “just and reasonable rates” for all calls made from correctional facilities, whether in-state or out-of-state, from jails or prisons, by phone or by video.
• Reform fees supporting the Universal Service Fund, thereby immediately reducing the cost of out-of-state calls by the current rate of 33%. The Universal Service Fund is an important program that raises revenue from telecommunications carriers (who pass the charge on to their customers) to support communications services for low-income people. Everyone in the U.S. who makes phone calls pays this fee in one form or another, but because incarcerated people and their families are typically poor, the federal government should exempt the industry from paying these assessments, who in turn would cease making their low-income consumers pay this fee. (The Federal Communications Commission could grant the prison and jail telephone industry a temporary forbearance immediately and make that change permanent as part of a larger effort to update the Universal Service Fund.)

FCC:

• Regulate the cost of video calling from prisons and jails. As noted above, while phone call costs have come down due to regulatory action, most prisons and at least several hundred jails now offer video calling at rates that are arbitrary and exploitative. The FCC should, at least, take immediate steps to clarify its authority to regulate video calls.
• Take immediate action to end prison phone companies’ practice of charging multiple transaction fees for a single payment transaction (“double dipping”).
• Penalize companies that do not comply with the requirements instituted in 2015 in 47 C.F.R. S 64.6110 to “clearly accurately, and conspicuously disclose their interstate, intrastate, and international rates…to consumers on their Web sites.” As we describe in the methodology, many companies do not publish rates on their websites, and one company chooses to price its products not in dollars per minute but in dollars per megabyte.
• Determine whether companies are getting away with charging in-state rates for calls that should be considered out-of-state, by collecting data on call volume for out-of-state and in-state calls. (To both simplify the data collection and make its purpose clear, the FCC could choose to require this data only when different rates are charged for in-state vs out-of-state calls.)
• Lower caps on per-minute phone rates further, and end the “facility size tier” rules that allow higher caps for smaller jails. (Companies and jails have argued for years that the cost of delivering services to smaller facilities is higher, thus justifying higher rate caps. But as our analysis of Michigan rates in the 2019 State of Phone Justice report shows, facility size does not actually correlate with rates.)
• Lower caps on ancillary fees. If the FCC cannot immediately set new permanent caps, the interim caps set in 2015 should be reduced based on the available data.

State governments (local governments can pass some of these reforms on a municipal scale as well):

• Enact legislation to provide agency-sponsored calls for people in prisons and jails, and such legislation should include a “technological parity” provision guaranteeing that other communications services, such as video calling and electronic messaging, are also provided for free. (Otherwise, it’s almost inevitable that prisons and jails will use other communications services to make up the lost voice calling revenue.) See our discussion of agency-sponsored calling above for more detail and links to model bills.
• While agency-sponsored calling is the most efficient solution to high communications costs in prisons and jails, states can also pass more moderate reforms:
  • Direct the Public Utilities Commission to cap rates and fees for in-state calls at amounts lower than the 21c/minute caps set by the FCC for out-of-state calls. Because of how the FCC structured its rate caps, lower caps on in-state calls will automatically also apply to out-of-state calls, thereby automatically reducing the costs for all calls.
  • So that counties can benefit from economies of scale, negotiate the state prison phone contract so that small counties can opt-in to its rates and terms.
  • Ensure that contracts require prison and jail telephone companies to comply with unclaimed property laws, and state treasurers should be asked to monitor compliance.
  • Ensure that contracts always specify the amounts of each fee that a company may charge. Government agencies should negotiate for lower fees so that families will have more money to spend on calls and other urgent needs. Despite the protestations of the companies, agencies will have considerable success with lowering fees when they try. For example, our November 2020 fee survey found that 15 state prison systems successfully eliminated credit card deposit fees for prepaid accounts.

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For more information, including additional visualizations, phone rates for nearly every prison and jail in the country, detailed footnotes, and our methodology, see see the full version of this report on our website.