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Article on prison phone rate reforms quotes PLN editor Paul Wright

NY Post, June 18, 2015.

Feds want to curb profits on prison phone systems

The feds are getting close to putting a lock on the profits private equity firms ring up on their phone systems in the nation’s jails.

Prison-rights advocate Paul Wright told The Post he met three weeks ago with acting Chairwoman Mignon Clyburn of the Federal Communications Commission. “It sounds like they will do something in regards to capping the rates,” he said.

In a cruel twist, buyout barons have been seen as being behind a business that gouges inmates’ family and friends with much higher phone rates for calls than those not in prison. “It’s pretty clear it is profiteering and gouging,” Wright said.

“I’ve been suggesting they should cap in-state rates at 5 to 7 cents a minute,” Wright said. He expects the FCC to make a ruling by September.

Buyout-owned telecoms currently charge rates ranging from 24 cents to 32 cents a minute in Connecticut (lower if one uses a prepaid phone card) to a more reasonable 13 cents in New Jersey, according to

Generally the rate depends on what cut the state takes on the phone service, Wright said.

New York, which does not contract with a private equity-owned prison phone system and has made kickbacks illegal, charges only 5 cents a minute, roughly the same as the civilian rate.

The issue will get attention Thursday when advocacy group Silent Sentence is expected to tell FCC commissioners at a public meeting that almost a year has passed since it held a workshop on prison rates without action.

Prisons have their own closed phone systems that connect with outside phone networks.

Inmates make collect calls, and the people who accept the charges pay the prison phone systems, mostly through pre-paid phone cards.

Private equity firms have found no hang-ups with the two dominant prison phone operators.

American Securities LLC bought Global Tel-Link for $1 billion from peers Veritas Capital and Goldman, netting the sellers better than 300 percent profit over three years.

Abry Partners in 2013 bought Securus from fellow PE firm Castle Harlan for $640 million. Securus told lenders in April that its pro-forma Ebitda has grown from $100 million in 2013 to $115 million last year, according to the Huffington Post.