California’s Legislature Made Prison Phone Calls Free—Utility Regulators Can Handle the Rest

On the heels of groundbreaking federal prison phone call legislation, public utility commissions across the country can also regulate exploitative prison telecoms.

by Kalena Thomhave

May 8, 2023

5:15 AM

Kirby Lee via AP

In 2021, the California Public Utilities Commission capped calling rates at detention facilities in the state at $0.07 per minute.

Before Abby Salim's husband was transferred to a prison closer to her home in Sacramento, California, he was imprisoned near San Diego, more than nine hours away from her. In order to visit him, Salim would spend late nights and early mornings driving nearly the entire length of the state. She would spend between $600 and $800 on food, hotels, and gas. Salim could and did write letters to him. Handwritten letters may sound romantic, but part of that is because they take so long to get to where they’re going. And when they’re going to a prison, and subject to inspection, the romance quickly dissipates.

Talking on the phone was easier, but also expensive. Before her husband was transferred to the state prison in San Diego, Salim would sometimes spend $300 per month on the phone calls her husband placed to her from the Sacramento County Jail. And once the two hit the jail's cap on calls—the time limit on her husband's calls to her—she couldn't talk to him at all.

The consequences of the barriers that keep prisoners from talking with their families go beyond mere frustration. "This is what they need to rehabilitate," Salim says. Phone calls and other communications can give prisoners the encouragement they need to go to their classes, put in their time, and ultimately get home. The research bears this out: Family support is associated with reduced recidivism and better adjustment to life post-release. Salim would know, as she started Empowering Women Impacted by Incarceration, a nonprofit in California that supports women with loved ones in prison and jail, helping them support their families on the inside.

More from Kalena Thomhave

But there's a high cost to staying in touch. Prisoners and their families often pay exorbitant prices to connect with each other. The good news for Salim and her husband is that California's legislature recently passed a law making all prison phone calls free. (It's the second state to do so; Connecticut was the first.) Yet there are other pricey forms of communications that weren't included in the law—video calls, electronic messaging, and phone calls made not from state prisons but from county jails.

Prisoners and their families are an easy mark—a captive audience in the most literal terms—for telecom corporations. And these corporations, ever innovating, will continue to try to find new ways for prisoners to communicate with their families—provided that these new ways can squeeze money from the incarcerated and their families.

But telecoms are a utility. And states—and the federal government—regulate utilities.

IN 2021, THE CALIFORNIA PUBLIC UTILITIES COMMISSION (CPUC) capped calling rates at detention facilities in the state at $0.07 per minute as part of a rulemaking officially called "Rulemaking to Consider Regulating Telecommunications Services Used by Incarcerated People." The CPUC regulates privately owned public utilities, including energy, water, transit, and telecommunications companies. It has jurisdiction over the major prison telecom companies, like industry giants Securus and GTL/ViaPath. Its current proceedings, a long process first begun in 2020, will decide how to regulate these companies. In short, the commission has the power to finish what the legislature started.

Prisoners and their families are an easy mark—a captive audience in the most literal terms—for telecom corporations.

Due to the new California legislation, "the regulation the CPUC passes will not matter to the prison system because all the phone calls will be free," says Bianca Tylek, executive director of national prison advocacy group Worth Rises. "But it will matter to the jails."

And it could still matter to the prison system if the CPUC opts to regulate the video calls or electronic messaging that weren't made free by the legislature. In California, about 350 facilities provide prison or jail phone services; these services are enabled by contracts between prison telecoms and jurisdictions or facilities themselves. There are five prison telecoms operating in the state.

Every state has a public utilities commission, whether it's known as a public utilities commission, public service commission, corporation commission, or by other similar names. Public utilities commissions (PUCs) don't need to go through the legislative process—and many of them (though not all) can pass rules and regulations to manage the prison phone industry.

Until this year, the Federal Communications Commission (FCC)—the federal agency that regulates communications—had ostensibly done what it could. In 2015, the FCC capped prison and jail phone call rates nationwide, whether calls were made to people within the state or those in other states. But in 2017, the D.C. District Court of Appeals struck down part of the ruling, arguing that the FCC did not have the authority to regulate intrastate calls, that is, phone calls prisoners made to people within their own state (which account for most—80 percent—of prisoners’ phone calls).

Regulating the prison phone industry for instate calls would thus be up to the states—that is, until the passage of the Martha Wright-Reed Just and Reasonable Communications Act, which President Biden signed into law in January of this year. This landmark law clarifies that the FCC does indeed have power to regulate instate calling rates, as well as video calling rates, to ensure "just and reasonable rates."

Does this mean that state PUCs need not concern themselves with the prison phone industry? Not exactly, because states can always do more than whatever the FCC decrees—and per the new law, the FCC cannot enact new regulations until mid-2024 at the earliest. When that happens, state PUCs could follow up with their own rules, filling in any gaps.

So far, however, major state regulation is not easily found, despite states being encouraged to act. In 2020, then-FCC commissioner Ajit Pai sent a letter to the president of the National Association of Regulatory Utility Commissioners (NARUC). "Given the alarming evidence of egregiously high intrastate inmate calling rates and [what was then] the FCC's lack of jurisdiction here," Pai wrote, "I implore NARUC and state regulatory commissions to take action on intrastate inmate calling services rates to enable more affordable communications for the incarcerated and their families."

In turn, NARUC published a statement pledging that it was "asking our members to review [inmate calling rates] and act, where appropriate."

These gentle asks may have spurred California to act, but they fell flat with most states’ PUCs. To be sure, not all states have jurisdiction over prison calling rates. Many state PUCs have lost authority over various areas of telecommunications as deregulation of the industry has soared over the past couple of decades.

Throughout the early 2000s, more than half the states deregulated the telecom industry in various ways, whether fully eliminating their PUCs’ regulatory authority or simply weakening it. The right-wing American Legislative Exchange Council has suggested model language for such deregulatory legislation. (Here's ALEC's policy statement.)

Over the past two decades, some state legislatures stripped their PUCs of authority over Voice over Internet Protocol (VoIP), which is any system that transmits voice, data, and video communications using an internet connection—like WhatsApp or Skype—as opposed to wireline (landline) services. Relatedly, since 2004 the FCC has refused to classify VoIP as either a "telecommunications service" over which it has regulatory authority or an "information service" over which the FCC has limited authority. Today, VoIP has still yet to be fully classified by the FCC. As a result, state commissions have very different rules concerning VoIP.

The Martha Wright-Reed Just and Reasonable Communications Act clarifies that the FCC does have power to regulate instate calling rates.

Limited oversight combined with furious mergers of prison telecom companies quickly led to consolidation of the prison phone industry—not the increased competition promised by deregulation's advocates. Today, just two companies, GTL (formerly Global Tel*Link, now rebranded as ViaPath Technologies) and Securus, control the majority of the prison telecom market, a lucrative industry in the era of mass incarceration.

But many state commissions do still have regulatory power over prison telecoms—they just haven't used it.

California's legislature limited the CPUC from regulating VoIP in 2012, but that statute sunsetted in 2020. With a new opportunity to regulate prison communications, the CPUC soon opened its rulemaking on the prison phone industry.

So far, the CPUC has held public hearings on the topic and issued the interim decision to cap rates. When its rulemaking is completed, it may cover areas—like jail phone calls—that the state legislature hasn't dealt with. That would show that, even though the FCC can now cap instate as well as out-of-state prison phone calls, there's still a role for state regulators to play.

Engaging the state PUC "might be a lever that people who want reform can pull in their state," says Anne Stuhldreher, director of financial justice for the city and county of San Francisco. "But people may not even know it."

Regulatory change processes can be rather lengthy and dry, with participation procedures perhaps more obscure than those for lobbying the state legislature. In California, however, grassroots organizations have long been involved in PUC proceedings. On this topic, that's because the CPUC has designed the proceeding to include not only public feedback, but also the perspectives of incarcerated people.

The CPUC "really went out of their way, with the guidance of advocates like [us]," says Tylek (whose organization, Worth Rises, is part of five groups within the Californians for Jail and Prison Phone Justice Coalition), "to create avenues for people who are currently incarcerated to participate in the hearings." Incarcerated individuals were able to anonymously call in to the public hearings, get moved to the front of the public comment line (because of prison and jail call time limits), and share their experiences with the commission. The CPUC required prison telecoms to make these phone calls free—and to include an automated message advertising the upcoming hearing whenever a prisoner made a phone call. According to Tylek, who has long worked on reforming prison telecoms, "that's not something we’ve actually seen any other PUC do, or even legislative body."

CALIFORNIA’S LEGISLATION MAKING PRISON PHONE CALLS FREE originally included jail phone calls, too. Jail calls tend to be more expensive than prison calls since centralized state prison systems may negotiate better rates for all state prisons, whereas counties negotiate separately for the phone and other communication rates at their jails.

The language including jail calls, however, was cut from the California legislation due to a powerful lobby—the sheriffs.

In California, as in other states, a telecom company contracts with either the facility or the government agency (e.g., the California Department of Corrections or the county sheriff). The facility or agency typically receives a commission, or kickback, from the telecom company as part of the contract. (These kickbacks are no longer allowed in California—at least at the state level. Kickbacks are still the norm in the jails.) With kickbacks, profits are usually split based on a per-call basis; for example, the Yuba County Sheriff's Office receives 25 percent of GTL/ViaPath's gross revenue on video calls made from tablets. The sheriff's office in Yuba County, however, gets a fixed commission for phone services: $130,000 as of the 2020-2023 contract, which has since been extended to 2025. This revenue is then usually placed in the "inmate welfare fund," which is meant to be used on prison or jail programming like GED classes, though in some states, kickback revenue goes to the general fund.

Sheriffs in California largely opposed the provision that would make jail phone calls free, arguing that without kickbacks, prison programming would suffer. "Many counties pay for vital rehabilitative and treatment programs out of the [inmate welfare fund] … there will likely not be funds available to backfill the loss of revenue … from the provision of inmate communication services," according to the statement by the California State Sheriffs’ Association (CSSA) at a 2022 state Senate hearing on the bill.

Sheriffs in California largely opposed the provision that would make jail phone calls free.

That said, California inmate welfare funds do not only fund prison programming. According to the California penal code, "The money and property deposited in the inmate welfare fund shall be expended by the sheriff primarily [emphasis added] for the benefit, education, and welfare of the inmates confined within the jail. Any funds that are not needed for the welfare of the inmates may be expended for the maintenance of county jail facilities." "Primarily" does not mean "only." Accordingly, The Sacramento Bee reported in 2021, the Sacramento County Sheriff's Office also used inmate welfare funds on maintenance, salaries, travel, and equipment like security cameras. Similar spending patterns, according to the Bee's report, have also been documented in Santa Clara County, Butte County, San Diego County, and Orange County, while inmate welfare funds across the state enjoy surpluses even as spending on prison programming stagnates.

At the end of the 2022 fiscal year, Los Angeles County's inmate welfare fund had a balance of nearly $26 million. The Los Angeles County Jail is the largest in the state, indeed the largest in the country, with an inmate population of 14,867 in June 2021. A 2021 audit of the jail's inmate welfare fund stated that the Los Angeles sheriff's "historical practice is to annually allocate and spend at least 51% on inmate programs and up to 49% on jail maintenance" and that the department "may not be identifying additional inmate programs … that provide direct benefits to inmates housed in the County's jail facilities."

Stuhldreher, the San Francisco financial justice director, has firsthand experience with jail phone call reform. In 2020, San Francisco became the first county in the country to make all county jail phone calls completely free. The effort was led by Stuhldreher's San Francisco Financial Justice Project, which is housed within the San Francisco treasurer's office, with backing from community organizations and even the sheriff's office.

San Francisco's sheriff's office had previously lowered prices for jail phone calls, and after a review of the department budget and contract with the telecom provider (GTL/ViaPath), it discovered that San Francisco's revenue from phone calls was declining while GTL/ViaPath's revenue was increasing.

The sheriff considered that the revenue the office was receiving didn't offset the threat to recidivism that was linked to limits on family communication. A more important consideration, according to a county report, was that San Francisco was shifting its responsibility to provide these services to prisoners and their families, who spent $1.1 million annually on phone calls at the county jail.

The county then released a request for proposals in order to adopt a new, fixed-rate contract. Instead of a company earning its fee per each minute of a phone call, San Francisco would pay based on the actual cost of phone equipment—a payment scheme that hadn't yet been tried in U.S. prisons and jails. Five prison phone companies bid, and GTL/ViaPath was once again selected. With the new, "cost-effective" contract, according to the county, San Francisco (not the prisoners or their families) pays GTL/ViaPath approximately what the company profited when phone calls cost prisoners money—and much less than what incarcerated people and their families were paying.

After phone calls became free, prisoners spent 81 percent more of their time communicating with their families and friends. Since then, San Diego County has made its jail phone calls free (with a 15-minute time limit), and the Los Angeles Board of Supervisors has directed Los Angeles County and its sheriff to do the same.

"A lot of times in California," says Stuhldreher, musing on the impact of the change in San Francisco, "once a county does something, it piques interest at the state level."

YET EVEN IF STATES PASS LEGISLATION to make phone calls free, as California and Connecticut have done, prison telecoms will search for other ways to make a dime off the backs of prisoners. "Companies have realized the risks that they are under with regulation of voice calling rates, so they’re pushing tablets and video," says Stephen Raher, former general counsel for the Prison Policy Initiative, a criminal justice think tank.

Throughout the COVID-19 pandemic, many prisons and jails utilized video calls in place of in-person visitation due to the need for social distancing. Yet as pandemic restrictions fade or vanish altogether, prisons and jails are still curtailing in-person visits in favor of video calls. Indeed, some jails were entirely eliminating in-person visits long before the pandemic began. Companies like GTL/ViaPath have actively pushed for "facilities to transition traditional in-person visitation service to a more secure on-premise or remote alternative," using company technology. A 2015 Prison Policy Initiative report found that 74 percent of county jails that had implemented video calling technology had also banned in-person visits.

At least partly in response, the federal Martha Wright-Reed Act clarified that the FCC could regulate video calls as well as phone calls. But what of other communication technologies?

"As one technology is replaced by another one, we have to make sure that we are [forward-thinking] in ensuring that everyone has access to these technologies," says Constance Slider Pierre, organizing director at The Utility Reform Network (TURN) in California. That's part of what TURN is now advocating for at the CPUC—not just regulation of phone calls, but all ways that prisoners communicate with their friends and families.

Electronic messaging in prisons is a particularly lucrative form of inmate communication for the prison telecom companies.

In recent years, tablet use across the U.S. prison and jail population has soared. These tablets are not your typical iPads. Instead, prison telecom companies or prisons and jails themselves typically give tablets to incarcerated people "for free." Then, it's up to prisoners to pay to actually use the devices for the purposes they choose: video calling, electronic messaging, watching movies, playing games, reading e-books, listening to music, or whatever else the specific tablet offers. As with phone calls, rates tend to be vastly higher than what the same services would cost on the outside.

Electronic messaging in prisons—kind of like e-mail or instant messaging, but not really—is a particularly lucrative form of inmate communication for the prison telecom companies because it is as yet unregulated. Typically, prisoners pay per message or per photo. Salim, who co-founded Empowering Women Impacted by Incarceration, says she and an incarcerated friend can't easily text back and forth without ringing up a huge bill. The message limit for the service at her friend's prison is 2,000 characters, so she’ll send 2,000 characters of everything she wants to say, and then wait for him to write 2,000 characters in response. This type of messaging can cost anywhere between $0.05 per message and $2.00 per message, with exact prices varying by detention facility.

Prison telecoms aren't shy about touting such unregulated communications as video calling as new revenue streams; they’re part of their pitch to potential investors. When the FCC steps in to regulate video calling and further regulate phone calls, it's likely that prison telecoms will expand their electronic messaging and other services.

For its part, GTL/ViaPath is currently marketing its "SmartPrison" project. According to GTL/ViaPath, such an initiative works to "maximize integration between technology solutions," but multiple technology solutions provided by one company really means GTL/ViaPath can bundle their services—especially unregulated services with regulated services—and get more money from a single contract. When companies bundle phone and video calling, for instance, they can (currently) charge much more for video calls, thus making up some of the decline in revenue due to phone call regulation, even though the difference between the true cost of a phone call and video call is negligible. Besides communication tools, GTL/ViaPath and other companies are offering commissary and other inmate account management, prison intake kiosks, and mail scanning services to replace physical mail with digital copies.

Where the FCC does not regulate electronic messaging or other communication technologies, state PUCs can. Indeed, the CPUC is currently considering whether it has the authority to regulate not just video calls, but specifically: "remote video calling services, in-person video calling services, text (SMS) services, private messaging services, tablet services, photo sharing/music, video entertainment and/or internet access services." The commission is also considering whether to continue to permit service bundling.

IT REMAINS TO BE SEEN WHAT EXACTLY THE CPUC will decide in its rulemaking on regulating the prison phone industry, but we know at the very least that it will regulate the industry. It will soon release a decision on whether it has the authority to regulate video calling and other related services like electronic messaging; if the CPUC does rule it has authority over these services, perhaps it will even release interim rates for them. And following its interim ruling in 2021 that capped prison and jail phone rates, it will decide on permanent call rates, which very well may be lower than what the FCC puts forth and would primarily affect jails, since prison phone calls in the state are now free. The proceeding's statutory deadline—which has already been extended once—is currently set for late May of this year. In order for the CPUC to fully complete its work, it seems likely the deadline could be extended again.

There are also proceedings currently under way in Nevada to regulate the industry after a 2021 state law returned regulatory authority of prison and jail phone calls to the state utility commission. The Public Utilities Commission of Nevada had capped inmate calling rates in 1995, but state legislation in 2007 deregulated telecommunications.

And at the national level, the FCC will soon have new power to make changes in the prison phone industry. Many states—legislatures as well as public utility commissions—have had this power for a while. They could start using it.

Kalena Thomhave is a freelance journalist and a researcher at the Program on Inequality at the Institute for Policy Studies. She is a former Prospect writing fellow.

May 8, 2023

5:15 AM

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