Serial’s $2,500 Phone Bill and the Prison-Calling Racket

Photographer: Corbis

The final installment of Serial, a cult-favorite podcast reinvestigating a 15-year-old murder case, will begin just like every other episode with the names of two companies: First a partially mispronounced plug for the show’s sponsor, then an unpaid mention of a prison telecom provider. “This is a Global Tel-Link prepaid call from Adnan Syed, an inmate at a Maryland correctional facility.”

For those who haven’t followed along over the three-month run of Serial, Syed was convicted in the 1999 murder of his high school ex-girlfriend. The journalist retracing every facet of his story, Sarah Koenig, recorded 40 hours of phone conversations with Syed over the course of her reporting. Clips from their conversations—at turns awkward, revealing, and intimate—form the backbone of the podcast. Without Global Tel-Link, the show wouldn’t be possible.

The company itself, while hardly a household name, is painfully familiar to hundreds of thousands of families on the receiving end of prepaid calls from inmates. More than 1.5 million prisoners were held in state and federal prisons in 2013, and Global Tel-Link provided phone service to more of them than any other business. And while the prison telecom creates the backdrop for Serial, it’s at the center of a very different drama of its own. Prisoners and their families have long complained about the exorbitant rates for phone service. Now, after years of inaction, the federal government is getting serious about reform.

Take Koenig’s 40 hours of taped calls with Syed, a detail she mentions in the second-to-last episode (the finale makes its debut on Thursday morning). In 2013, the top rate for telephone calls to prisons in the U.S. was 89¢ per minute plus a $3.95 per-call charge, according to data collected by the Federal Communications Commission. At that rate, Koenig and Syed conversations could have easily exceeded $2,500. Representatives for Serial and Global Tel-Link declined to comment for this story.

Here’s another way to think of the exorbitant phone rates paid by prisoners: For the price of single hour-long phone call at 89¢ per minute, you could buy a monthly wireless plan from Verizon that includes unlimited voice calls and text messages, as well as 1 gigabyte of data service.

The market for inmate phone services is unusual, to say the least. The prisons generally sign exclusive contracts with specialized phone carriers. Instead of competing by offering the lowest-priced calls or the best sound quality, companies such as Global Tel-Link win contracts largely by offering to pay the prisons a portion of the money from inmates’ phone bills. Some carriers pay the prisons up to 96 percent of their call revenue, according to the FCC.

Advocates for inmates and their families have a term for this: “reverse competition.” Higher commissions for prisons mean higher prices for the actual customers—inmates themselves—who have no choice about which company they use. The FCC was first asked to step in to regulate the inmate calling system in 2003 by Martha Wright, a woman living in Washington, D.C., who spent an estimated $1,000 each year to speak to her incarcerated grandson. While federal government has been slow to act, some states enacted reforms on their own. New York’s prison system stopped taking commissions from phone providers in 2007, causing the price of calls to drop nearly 80 percent.

Doing so cost New York $20 million annually, according to a 2013 letter to the FCC from Anthony J. Annucci, acting commissioner of the New York State Department of Corrections. But it also meant that inmates kept in touch with their families, which has been shown to lower recidivism rates. The cheaper phone calls have changed life in New York’s prisons, too, as Annucci told the FCC. Inmates are making more than two-and-a-half times as many phone calls, and cheaper rates have led to a major reduction in the black market cellphone trade. On the other hand, he wrote, the increased interest in prison phones has led to a rise in extortion by gangs who try to control access to the phone banks, which means guards have to spend more time focusing on the phones.

The FCC recently started catching up. Its current stance is that competition is failing in the prison telecom market. Federal regulators imposed caps on interstate phone calls in February, prohibiting companies from charging more than 25¢ per minute for collect calls and 21¢ per minute for prepaid calls. The caps are temporary and serve partially as a way to gather data so the commission can implement wider reforms. In October, meanwhile, the FCC began taking comments on proposed regulations that could fundamentally change the economics of the industry. In addition to putting permanent caps on rates, the commission is considering banning commissions paid to prisons and further regulating other fees that providers charge related to phone calls.

With the rate caps in place, inmates immediately started making more calls to other states. According to the FCC, one provider’s rates on these calls declined 39 percent and call volume went up between 20 percent and 30 percent. But most calls that prisoners make are local. Ronald Schackart, who is on death row in Arizona, says the changes were a “godsend”—and a painful reminder of just how ridiculous the rates still are on the majority of the calls he makes. “Most of my family members that I call at least once per week live in Tuscon, AZ—only 100-150 miles from here—and I’m charged $5.99 to make a 15-minute call to them!” Schackart explained in a handwritten filing to the FCC. “Why do I have to pay six dollars to call someone who lives 100-150 miles from here, and only three-four dollars to call someone who lives on the other side of the continent?!”

A handful of other prisoners made similar arguments in public responses. Their longhand filings stand out among the form letters from sheriff’s offices and the legalese of lawyers and policy advocates.

The phone companies say they’re on board with reform. Three of the largest providers—Global Tel-Link, Securus, and Telmate—submitted a proposal to the FCC in September that would reduce commissions, set rate caps of 24¢ per minute for collect calls and 20¢ per minute for prepaid calls, and put new restrictions on fees charged for such things as payment processing. The prison telecoms are itching for change because they have grown tired of competing among themselves to outbid one another on what they’re willing to pay prisons, says Peter Wagner, the executive director of the Prison Policy Initiative. “They made this monster, and now they’re unhappy,” he says, “and they want the FCC to break it for them.”

The agreement that there’s a problem with inmate phone rates doesn’t mean everyone sees eye to eye on a solution. Several carriers sued to block the FCC’s temporary regulations from going into effect. Advocates for prisoners are calling for much lower caps on the per-minute calls than the proposal from the large companies. There’s also widespread suspicion that what the industry wants to do is simply shift revenue from per-minute charges to other fees that aren’t regulated.

Advocates and smaller carriers claim the flat fees assessed on each call and other associated phone services have been steadily increasing since February. Vincent Townsend, founder of Pay-Tel Communications, believes these fees are the primary reason inmates pay so much for calls. Shifting prison phone revenue away from high rates and toward these discrete charges is also a way to hide revenue from prison systems, which receive commissions only on the per-minute calling revenue. “Until you fix the fees, it’s like spitting in the wind,” he said at an FCC hearing in July. “You’re wasting everybody’s time.”

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