Prison Phone Justice

PRISONERS' LEGAL SERVICES OF MASSACHUSETTS
10 Winthrop Square, 3rd Floor • Boston, MA 02110 ra) www.plsma.org
tb.rne/prisonerslegalservices

l @PLSMA

1111 Main: 617-482-2773

Fax: 617-451-6383

State prisoner speed dial: *9004#• County prisoner collect calls: 617-482-4124

.Tune 10, 2016

• HAND DELIVERED
Ms. Sara Clark
Department Secretary
Department of Telecommunications and Cable
1000 Washington Street, Suite 820
Boston, MA 02118-6500

Re:

PETITION OF INMATE. CALLING SERVICE USERS FOR MODIFICATION
OF TARIFFS FILED BY SECURUS TECHNOLOGIES, INC., GLOBAL
TEL*LINK CORPORATION, DSI-ITI, PUBLIC COMMUNICATIONS
SERVICES, AND VALUE-ADDED COMMUNICATIONS, INC,
AND MOTION TO CONSOLIDATE WITH DTC

Dear Ms. Clark:
Enclosed please find an original and two copies of a Petition of inmate calling service
users for modification of tariffs filed by Securus Technologies, Inc. and Gl.obel Tel*Link
Corporation and three of its subsidiaries. Please note that Attorney Paul Besozzi has agreed to
accept service on behalf of Securus Technologies and Attorney Cherie Kiser agreed to accept
service on behalf of GTL and its subsidiaries. Please feel free to contact me should you have any
questions. I can be reached at 617-482-2773 x105.
Many thanks for your attention to this matter.

SincereW
z

Elizabeth Matos
Staff Attorney
cc:

Paul Besozzi, Counsel for Securus Technologies
Ch6rie Kiser, Counsel for GTL and Subsidiaries

COMMONWEALTH. OF MASSACHUSETTS
DEPARTMENT OF TELECOMMUNICATIONS AND CABLE
No. D.T.C.
PETITION OF INMATE CALLING SERVICE USERS FOR MODIFICATION OF
TARIFFS FILED BY SECURUS TECHNOLOGIES, INC., GLOBAL TEL*LINK
CORPORATION,
PUBLIC COMMUNICATIONS SERVICES,
AND VALUE-ADDED COMMUNICATIONS, INC,
AND MOTION TO CONSOLIDATE WITH DTC 11-16
Pursuant to G.L. c. 159, § 14 and 220 CMR § 1.04(d), the Petitioners in. D.T.C. 11-16,
Petition of Recipients of Collect Calls from Prisoners at Correctional Institutions in
Massachusetts Seeking Relief from the Unjust and Unreasonable Cost of Such calls, hereby
petition the Department to investigate the Inmate-Calling Services (ICS) tariffs filed by Securus
Technologies, Inc. (Securus), Global Tel*Link Corporation (GTL), and three GTI., subsidiaries,
DSI-ITI, LLC (DSI), Public Communications Services, Inc. (PSC), and Value-Added
Communications, Inc. (VAC) (collectively, "Providers").' The Petitioners further request that
this investigation be consolidated with DTC 11-16, the existing proceeding on ICS rates,
pursuant to 220 CMR § 1.09.

Petitioners protest the following tariffs filed with the Department in May 2016: Public
Communications Services, Inc. M.D.T.0 Tariff No. 1, DSI-ITI Massachusetts Tariff No. 1,
Value Added Communications M.D.T.0 Tariff No. 3, Global Tel* Link Corporation M.D.T.0
No. 2, and Securus Technologies, Inc, M.D.T.0 No. 1. Specifically, Petitioners protest the per
minute rate proposed by GTL and its subsidiaries (Public Communications Services, Inc., DSIITI, and Value Added Communications) of $ 0.27 per minute and the per minute rate proposed
by Securus Technologies Inc. of $0.35 per minute. In addition, Petitioners also protest the return
check fee of $20 in the Securus tariff revision (Frist Revised Sheet No. 18), which appears to be
prohibited by the FCC's 2" Order and Third Notice of Proposed Rulemaking issued in 2015.1
The prohibition on such ancillary fees went into effect on March 17, 2016 for prisons and will be
effective on June 20, 2016 for jails, which is the date the Providers have asked their proposed
rates be imposed. Securus provides ICS to jails in Massachusetts.

As the Federal Communications Commissions' recent Second Report and Order 2 goes
into effect for all ICS on June 20, 2016, the Departments' previous authorization of a per-call
surcharge of up to $3.00 will no longer be valid, and its limit of $0.10 per minute will remain in
effect.' In these tariffs, the Providers seek to fold the surcharge into their per-minute rates,
which jump from $0.] 0 per minute to $0.27 per minute for GTL and its subsidiaries, and to
$0.35 per minute in the case of Securus, as if the FCC regulation had never occurred.4
This must not be allowed. In DTC 11-16 the Petitioners have provided substantial
evidence that the 18-year old surcharge is no longer justified, as ICS costs have fallen
dramatically due to changes in technology and increased economies of scale. The Hearing
Officer opened an investigation into the surcharge based on this evidence, as well as on
voluminous public testimony.' To approve the proposed rates, which explicitly include this
surcharge, would negate the Hearing Officer's ruling and short-circuit the ongoing investigation.
It would also ignore the FCC's determination that such. rates are unjust and unreasonable, and. the
pleas of hundreds of Massachusetts 1CS consumers for lower rates in public hearings.6

In the Matter of Rates for Inmate Calling Services, WC Docket No. 12-375, Second Report
and. Order and Third FNPRN ("Second Report and Order"), adopted October 22, 2015.
3 See 47 CFR § 64.6080 (prohibiting surcharge); GTL v. FCC el ano.,
No. 15-1461, Order of
March 7, 2016 (D.C. Cir.) (leaving surcharge prohibition in effect); Investigation by the Dep't of
Telecomms. & Energy on its own motion regarding 1) implementation of §276 of the
Telecomms. Act of1996 relative to Pub. Interest Payphones, 2) Entry and Exit Barriers for the
Payphone marketplace, 3) .1Vell) England Tel & Tel. Co. d/b/a NYNEX's Pub. Access Smart pay
Line Service, & 4) the rate policy _fOr operator s'erv. Providers, D.P.U/D.T.E. 97-88/97-18 (Phase
II) Order on Payphone Barriers to Entry & Exit, & OSP Rate Cap (Apr. 17, 1998) ("1998
Order"). (establishing maximum $3.00 per call surcharge and $0.10 per minute rate).
4 Securus seeks a rate of $0.35 per minute by calculating the past cost of
a 12-minute call with
the $3.00 surcharge. See Securus "Letter of Explanation," May 18, 2016. GTL and its
subsidiaries seek a rate of $0.27 per minute by similarly calculating the costs of a 15- minute
call. See Letter of Explanation, May 20, 2016.
See DTC 11-16, Hearing Officer's Interlocutory Ruling, September 23, 2013, p. 26, affirmed
by Order of the Commissioner on February 26, 2014.
6 See http://www.mass.gov/ocabrigovernment/oca-agencies/dtc-lp/dtc11- I 6.h.tml.
2

2

Furthermore, the filed tariffs seek to maintain a regime in which the Providers have
channeled over half their revenues back to the correctional facilities in the form of site
commissions, which are nothing more than kickbacks and have more than doubled the ICS rates
that prison families are forced to pay. The FCC has made clear that these commissions may not
be considered a cost of ICS for purposes of rate-setting.' Nevertheless, Massachusetts
Consumers must not be required to continue subsidizing correctional costs through inmate
calling, a service that is key to rehabilitation. and. reentry.8
Neither should the proposed rates be approved on an interim basis, as the Providers have
requested. This would immediately impose unjust and unreasonable rates on. ICS consumers.
The Providers have failed to demonstrate a need for an interim rate or to provide any evidence to
show that the current $.10 per minute rate is today confiscatory. While the Petitioners strongly
oppose the imposition of an interim rate, if the Department elects to impose one, it should look to
the tiered rate structure which the FCC recently established. These rate caps, determined through
an extensive analysis of data provided by ICS providers, were designed conservatively to protect
provider profits, such that states were encouraged to consider setting lower caps.9
Background
This Petition to investigate tariffs filed by the ICS Providers is brought by ICS consumers
who are the Petitioners in an existing proceeding investigating ICS rates and quality of service,
DTC 11-16. That proceeding, to which GTL, Securus and ICSolutions, Inc. are also parties, was
docketed on November 10, 2011. Ruling on the Providers' motions to dismiss, the Hearing
Officer in 2013 found sufficient cause to investigate the lawfulness of a $3.00 cap on per-call

Second Report and Order'rj 123-124.
Second Report and Order €1,1 3-5.
Second
9
Report and Order11210.
8

3

surcharges that had been allowed in Massachusetts since 1998, but dismissed the Petitioners'
challenge to the $0.10 cap on per-minute charges, Ending that their original petition had not
presented sufficient evidence to investigate this rate.1° However, the Hearing Officer also noted
that the per-minute rate could be challenged in a tariff proceeding; while tariffed rates are
presumed reasonable, "that presumption is rebuttable," and tariffed. rates are not entitled to
greater weight than evidence of the reasonableness of other rates. II
Most recently, the Hearing Officer in DTC 11-16 asked the parties to address questions
regarding the scope of the proceeding in light of the FCC's Second Report and Order. 12 The
relevant portions of the FCC Order prohibit per-call surcharges13 and limit per-minute charges
for debit calls to $0.11 in state prisons and $0.14- $0.22 per minute in county facilities,14 but
permit states to set lower rates.'' A federal appeals court stayed the per-call limits I6 but the ban.
on surcharges took effect with regard to state prisons on March 17, 2016 and will take effect with
regard to county facilities on June 20, 2016.
In response to the Hearing Officer's questions, the Providers stated that the investigation
in DTC 11-16 should be closed, but they also made clear their opposition to the $0.10 per minute

1° See DTC 11-16, Hearing Officer's Interlocutory Ruling at 26. The Hearing Officer also

refused to dismiss the Petitioners' claims regarding line quality, dropped calls and billing
oblems.
See id. at p. 9 n. 6, quoting G.L. c. 159. § 17,
12
See DTC 11-16, Notice of Briefing Schedule, March 11, 2016.
1
3 47 CFR § 64.6080.
14
47 CFR § 64.6010. During a phase-in period lasting until July 1, 2018, Providers are
aermitted to charge higher rates for collect calls.
5 Second Report and Order at IT, 210.
16 See GTL et al v. FCC et ano., No. 15-1461, Order of March 7, 2016
(D.C. Cir.). The stay of
the per-minute caps leaves in place a previous, interim cap of $0.21. per minute for debit and
prepaid calling, and $0.25 per minute for collect calling, which applies only to interstate calls. 47
CFR § 64.6030.

r'

4

cap and indicated their intention to seek higher rates through tariff-mg or rulemaking.1 7 The
Petitioners responded that their challenge to ICS rates was the appropriate venue for
investigating the $0.10 per-minute cap; that the surcharge question should also be decided, since
the FCC's prohibition may be overturned on appeal; and that to set rates through rulemaking
would be prejudicial to consumers and wasteful.18 The Hearing Officer's resolution of this
dispute is pending. Between May 17 and May 23 the ICS providers filed the tariffs at issue here.
lE

The Rates Sought Are Unjust and Unreasonable

A. The Elimination of the Surcharge Does not Justify the Proposed Rates
The filed tariffs seek to enshrine a rate structure based on an 18 year-old surcharge that
the Hearing Officer in DTC 11-16 has determined must be investigated. The Providers are clear
in their intent to preserve their revenues by incorporating the $3.00 surcharge into the per-minute
rate for a call of average duration. 10 However, the Petitioners in DTC 11-16 have provided
evidence that the ICS costs which justified the surcharge in 1998 have dropped tremendously due
to the growth of automation and other radical. changes in technology; the shift from collect to
pre-paid calling; reduced labor costs; increased centralization; and economies of scale in the ICS
ind.ustry,20 and the Department has found the Petitioners' allegations sufficient to open an

1 7 See DTC 11-16, briefs of GTL, Securus and ICSolutions (April 26, 2016)
and reply briefs of
GTL, Securus and ICSolutions (May 23, 2016).
1 See DTC 11-16, brief of Petitioners ((April 26, 2016) and reply brief of petitioner
s (May 23,
2016)).
19
See Securus "Letter of Explanation," May 18, 2016 (seeking to recover $4.20 for an "average"
twelve minute call); identical Letters of Explanation filed by GIL and its subsidiaries DSI-ITI
and PCS on May 20, 2016 and by GTL subsidiary VAC on May 23, 2016 (seeking to recover
$4.05 for a 15-minute call). This would, of course, make the cost of longer-duration calls higher
than it was under the surcharge regime. A 20 minute call which previously could cost no more
than $5.00 would, under Securus' tariff, cost $7 and under GTL and its subsidiaries' rates would
cost $5.40.
20 See Petition, Au.gust 31, 2009 at 16-22 (providing web citations for evidence
of decreased
costs in the ICS industry); Memorandum of Petitioners Opposing Dismissal, March 23, 2012 at

5

investigation.21 To re-impose the old rate structure would grant the Providers a bonanza at the
expense of consumers.
As the Hearing Officer noted, the 1998 Order did not employ rate-of-return methodology,
but implemented an incentive regulatory scheme. The surcharge was designed to allow ICS
providers to recover legitimate costs associated with ICS and to allow providers to reap the
benefit of above-average efficiencies, and so it was permissible for the companies to share
increased profits with correctional facilities as commissions. 22 However, the Hearing Officer
held that an incentive regulatory scheme such as the one established for ICS in 1998 "must not
go on so long that price caps are maintained on assumptions that become invalid or fail to
account for changes in the industry. 23 It is clear that rates must now be adjusted to account for
the Providers' greatly enhanced profitability.
One demonstration of the need for adjustment is the level of site commissions, which
under the 1998 rate caps reached well over 50 percent of ICS revenue.24 The FCC has
concluded, based on the evidence submitted to it, that site commissions "are not reasonably
related to the provision of ICS and should not be considered in determining fair compensation
for ICS calls."25 The FCC, considers site commissions to be an "apportionment of profits, and

7; Petitioners' Appeal of Hearing Officer Interlocutory Ruling, October 16, 2013, at 5-6 (further
discussing decline of costs in ICS industry).
21 See Hearing Officer's Interlocutory Ruling at 26.
22 Id. at 24; 1998 Order at 9.
23 Hearing Officer's Interlocutory Ruling at 24.
24 See Response of Petitioners to Information Requests of Global Tel* Link. and
Securus
Technologies, Response to Secures 1-3 and 1-4 which includes multiple correctional ICS
contracts and commission reports, filed with the DTC on 4/29/14 and located at bate stamp #s 1003747 and 003766-003848; Second Amendment to G-TL contract with Massachusetts DOC,
attached as Ex. 1 to Petitioners Reply in Response to Hearing Officer's Notice (May 23, 2016)
(commissions of 55 percent).
25 Second Report and Order ¶ 123.
6

therefore irrelevant to the costs we consider in setting rate caps for ICS."26 Similarly, the
Hearing Officer in DTC 11-16 held, "[w]hether an ICS provider treats those extra earnings [from
improved productivity] as profit, or utilizes them to improve its bidding position to provide. ICS
through offering lower rates or more generous commissions to a correctional facility, is at the
discretion of the provider."27 The fact that these "extra earnings" now exceed 50 percent of
revenues clearly indicates the need to adjust rates.
The Providers have consistently defended the use of site commissions as a necessary
requirement in order to gain ICS contracts, and as helping — at least in part — to pay for costs
incurred by facilities related to ICS. Neither rationale holds up. Massachusetts law does not
require that site commissions be paid. Should rate caps be set that do not allow tbr commissions
at the current high levels, the standard Massachusetts government form used for ICS contracts
contains a change of law provision that would allow for the renegotiation of contracts.28
Nor arc commissions necessary to ICS provision. Those paid to the DOC are transferred
to the General Fund of the Commonwealth, and not available to the DOC. 29 Site commissions
paid to county facilities are placed in an inmate benefit fund for use by the facilities.' ° These
facilities have vociferously defended site commissions — not as a means of recovering ICSrelated costs, but rather as a means of paying for educational and treatment programs and other
benefits for prisoners. In the public hearing held in DTC 11-16, a representative of the Suffolk
Id. at ¶124.
Hearing Officer's Interlocutory Ruling at 24.
28 See Response of Petitioners to Information Requests of Global Tel* Link and
Securus
Technologies, filed with the DTC on 4/29/1.4, Response to Securus 1.-3 including the Standard
Contract Form located at bate stamp tis 003743-003747.
29 Id. at 4, citing G.L. c. 29 § 2 (April 1, 2003),
" See DTC 11-16, Memorandum of Petitioners Opposing Dismissal (March 23, 2012), Ex. 1,
"An Act transferring county sheriffs to the Commonwealth," Senate. No. 2045, Section. 12.a.
(enactment of the Senate and House of Representatives providing that inmate telephone funds
shall remain with the office of the sheriff in abolished counties) (2009).
26

27

7

County Sheriffs Department urged the Department to sustain commissions precisely because
they are used solely to benefit prisoners, through educational and treatment programs and inmate
supplies.31 "The [site commission] funds that we derive that go into that inmate benefit fund
have to be spent for the benefit of inmates... They aren't used for staff. This is not used for
building maintenance. This is used to benefit simply the inmates themselves."32
Allowing rates to remain exorbitant in order to fund rehabilitation programs is absurd
social policy, especially given that reducing barriers to such communication has been shown to
lower recidivism and provide immeasurable benefit to children of incarcerated parents,33More
importantly, the payment of commissions may not lawfully be authorized at its current extreme.
Permitting Providers to double ICS rates for purposes unrelated to ICS costs is incompatible
with the Department's mandate to set just and reasonable rates.
It is conceivable that in at least some counties site commissions may, in part, be used to
defray the costs of activities related to facilitating ICS, by helping to pay for correctional escorts
to telephones, recording and monitoring of calls, etc. But providing access to telephone
communication with lawyers and loved ones is a core correctional function, which benefits
prisons and society at large.34 Access to telephones is as necessary to a well-run prison as
recreation space or a visiting room. Prison families should no more be forced to pay for the
monitoring of phone calls than they should be charged for the correctional officers who monitor
prison visits or mail. Indeed, call monitoring is not done in order to facilitate the provision of
ICS, but rather to gather intelligence and provide for institutional. security, which are correctional

31 DTC

11-16, Public Hearing testimony, July 19, 201.2, Testimony of Russ Homsey, Assistant
General Counsel for the Suffolk County Sheriffs Department, p. 88, attached as Ex. 1.
32 Id. at 91-92.
33 Second Report and Order 713-5.
" Id.
8

functions. The Supreme Judicial Court has held that prisoners may not be forced to pay for any
of the costs of their incarceration without explicit statutory authorization. 35
She commissions are not a cost of ICS. They are, as the Hearing Officer said, a way for
ICS providers to improve their bidding positions with correctional facilities. 36 And they have
mushroomed into an intolerable burden on a low-income and vulnerable group of consumers,
which is perpetuated in the proposed tariffs. While the Providers are free to share profits with
facilities in the form of commissions, the may not ask consumers to subsidize this by doubling
the rates charged. The Department must establish just and reasonable rate caps in order to
protect ICS consumers from a non-competitive marketplace.37
B. Plentiful evidence suggests that ICS can be provided within the current rate cap of
$0.10 per minute
GTL's most recent contract with DOC provides ICS at $0.10 per minute and still offers
commissions of 55 percent38, demonstrating how profitable I.CS has become — without
commissions, GTL could provide service at under $0.05 per minute and still make a profit.
Indeed, the FCC noted seven states where ICS providers have been willing and able to provide
service for $0.05 to $0.06 per minute.39 GTL's publicly posted rates show per-minute charges of
$0.10 or less in fifteen states, with eight of these at $0.06 or under, and the New York

35 See Souza v. Sheriff of Bristol County, 455 Mass. 573 (2010) (invalidatin
g daily incarceration
fees, medical copayments.. GED testing fees, and haircut fees charged by county sheriff).
Furthermore, any such ICS-related costs cannot possibly justify doubling ICS rates to pay 50
percent commissions. Facilitating telephone access is no more than a tiny portion of any
Correctional Officers' duties and is appropriately part of an Officer's job — just as supervising
visitation or rehabilitative programming. It is not even clear that the monitoring of telephone
calls is much of an expense, as it is generally done selectively, by recording all calls and then
reviewing calls when relevant to an investigation.
36 Hearing Officer's Interlocutory Ruling at 24.
37 1998 Order at 9.
38 See supra, n. 24.
39
Id., at 49.

9

Department of Correctional Services at $0.048 per minute.40 The Petitioners in DTC 11-16
submitted expert affidavits concluding that ICS can profitably be provided for $0.07 per
minute.'" These affidavits pointed to the plummeting costs of ICS due to changes in technology,
and noted that at least nine states at that time provided ICS as cheaply as $0.04, $0.05 and $0.07
per minute, which is an indication that ICS can be offered for under $0.10 given the "lack of
variability of costs" between states.42
Smaller county facilities may have higher costs, but if ICS can profitably be offered
(without commissions) at under $0.05 in the MA DOC and at similarly low rates elsewhere,
there is no reason to believe it could not be offered profitably at $0.10 per minute in
Massachusetts' county houses of corrections. The FCC found that, on the whole, jails had higher
costs, largely because prisons have more stable, long-term populations, and less "chum" (or
turnover) than jails, and thus a lower share of costs such as setting up an account, allowing an
initial free call, or closing an account. 3 Massachusetts differs from most states, however, in that
its county facilities house populations with far longer sentences than in other states.
Massachusetts county facilities house prisoners sentenced to 2.5 years or less, while county
40

See Ex. 2, printed out from GTL's affiliate connectnetwork.com. State DOC' s charging $0.06

or less include Delaware, Maryland , Minnesota, New Jersey, New York, Ohio, Rhode Island
and Virginia; those charging between $0.06 and $0.10 include Arizona, California,
Massachusetts ,North Carolina Nebraska and South. Dakota; South Carolina DOC charges $0.09
for pre-paid calls but $0.11 for collect. Four additional states charge $0.11: Florida (for pre-paid;
collect is $0.12), Mississippi, Tennessee and Washington. Similar information is not available
for Securus because it does not publicly post a list of rates, but rather requires consumers to input
a calling number and get a quote for each facility.
49
See Eh. 2 to Petitioners' Appeal, DTC 11-16 (Oct. 16, 2013), Second Affidavit of Douglas A.
Dawson, attaching Declaration of Coleman Bazelon in the FCC proceeding, WC 12-375. The
Commissioner at that juncture declined to consider this evidence because it had not been
presented to the Hearing Officer. DTC 11-16, Order on Appeal, February 26, 2014.
4
Dawson Affidavit p. 3.
43
Id at 1 33. The FCC also found. higher costs in jails because prison populations make fewer,
but longer, calls and incurred fewer bad debt costs than jail populations, id., and because prisons
benefit from economies of scale. Id. at `41 34.
10

facilities in nearly every other state hold only those sentenced. to 1 year or less.44 With
populations serving substantially longer sentences, Massachusetts counties have far less "chum,"
more stable populations, and correspondingly lower ICS costs. And there are counties in other
states which offer ICS at rates well below $0,10.45
C. The Proposed Rates are Unjust and Unreasonable Under the FCC's Evidence and
Analysis
After twelve years of proceedings, the FCC on November 5, 2015 established tiered rate
caps for ICS in order to "answer the call of those millions of citizens seeking ICS reform.46 The
Report stated, "there is little dispute that the ICS market is a prime example of market failure," in

44

Massachusetts, Colorado, Iowa, Maryland, North Carolina, Pennsylvania, and Vermont are
the only states which send people with sentences longer than one year to county jails.
See
httpsWcsicivilrights.com/2015/0 3 /10/the-laws-are-a-changin-a-look-into-the-n.orthcarolinas-statewide-misdemeanant-confinement-program (North Carolina);
www.myoregondefenselawyer.comfcrirninal-charges (Oregon);
http://statelaws.net/South-Dakota-Felony.ph.p (South Dakota); "State Prisoners in. County
jails" page 13
http://www.naco.org/sites/clefault/files/documents/State%20PrisonersY020in%20Count
y%20Jails%20Updated.pdf (South Carolina); http://misdemeanorguide.com
(Pennsylvania, Rhode Island. and South Dakota);
http://www.criminaldefenselawyer.com/topics/classification-crimes (all other states).
45 In New Jersey, GTL's contract with the Department of Correction has
provided ICS rates
of under $0.05 per minute since April 27, 2015. See
http://www.state.nj.us/treasury/purchase/noa/contracts/t1934 1/1-x22648.shtml#clocumen2. At least 16 New Jersey counties have adopted this contract in
recent years, and while it is difficult to determine the current contract for most counties, Bergen
County and Cumberland County adopted the GTL contract in February 2016 and. July 2015,
respectively. Seven other counties currently list GTL as their vendor. See websites of Atlantic,
Hudson, Middlesex, Morris, Ocean, Sussex and Union Counties' websites currently list GTL as
their vendor. See http://www.a.clink.org/publicsafety/pdf/jail-information-guide2016,pdf;
http://www.hudsoncountynj.org/hccc-links;
www.co.middiesex,nj.us/Government/Departments/PSH/Pagesladult telepho e.aspx;
http://morriscountynj.govicorreetions/inmate-visitationinformation;
hap ://www.co .ocean.ni .us/CorrectionsWebSite/ContentPagel.aspx?ID—ec4ce9le-810b-4281
a3fd-1d,78 d246599: http://www.sussexcou.ntysheriffic;omicorrectionslinmate_visitation/:
http://ucni.org/correetional-servicesiimpate-mail-accounts/: see also Exh. 2 attached to
Petitioners' Reply to Hearing Officer's Notice of March 18, 2016.
46
Second Report and Order 2.
11

which "ICS providers operate as unchecked monopolists."47 Accordingly, it established rate
caps "designed to ensure that efficient providers will recover all legitimate costs of providin

g

ICS, including a reasonable return."48 Debit calls were limited to $0.11 per minute in state
prisons and $0.14- $0.22 per minute in county facilities, while collect calls would be phased
from $0,1 1 i.n prisons and $0.49 in jails to the debit calling caps by July 1, 2018. The FCC

in

set

these caps high enough that states were encouraged to set lower rates. The report notes evidence
that ICS can be provided at $0.05 per minute, and adds, "State requirements that result in

rate

caps below our caps advance our purpose. and there is no credible record evidence demonst

rating

or indicating that any requirements that result in rates below our conservative caps are so

low as

to clearly deny providers fair compensation." 49
The Providers nevertheless ask the. DTC for the status quo ante, without even a nod to the
FCC's determination that such rates are unjust and unreasonable. The fact that the rate caps

have

been stayed, and challenges to them will be decided. in federal court is no reason to discard

the

FCC's research and analysis. Arguments over the FCC's jurisdiction to cap intrastate rates

have

no bearing on the Department's unquestioned authority to do so. Arguments that the caps

are too

low are seriously flawed, and the Department should not defer to them in light of the weight

of

evidence and logic in the FCC's Order.
Challengers have asserted that the FCCs rate caps are too low because they wrongly
exclude commissions as a cost of ICS and because they do not accommodate the highest-c

ost

Providers.5° Even if commissions are "required" by existing contracts or by laws in some
47 id.
Id. ¶ 96.
Jc. at 210.
50 See GTL et al v. FCC et ano., No. 15-1461, (D.C. Cir.), Brief of State and Local Government
Petitioners (June 6, 2016); Joint Brief for the ICS Carrier Petitioners (June 6, 2016). The
filings
are not attached here due to their length but the Petitioners' will provide them upon request.
The
48

49

12

jurisdictions, that is clearly not the case in Massachusetts. Just as GTL re-negotiated its contract
with DOC after the elimination of the $3.00 surcharge, contracts with county facilities must all
be renegotiated as the FCC's prohibition on surcharges takes effect. The law permits the
Providers to share profits in the form of commissions, but it does not dictate the level of
commissions to be set in. arms-length negotiations between. Providers and facilities. As discussed
supra, commissions are not used to cover ICS costs but rather core correctional expenses. They
are a regressive tax on ICS consumers that some Providers employ to gain advantages in
securing ICS contracts.
One group of Providers, including GTL and Securus, has argued that even if
commissions are excluded, the FCC caps are below ICS costs in some jurisdictions.51 The FCC
has not yet responded in court, but its Order explained why even Providers who reported the
highest costs could be fairly compensated under the caps. First, the FCC noted that reported
costs were likely inflated
Our analysis shows that providers generally may have been over inclusive in reporting
their costs and that the supply of ICS is not fully competitive, implying Providers may
have over-reported costs and that the adopted rate caps are conservative. We also note
that no providers have submitted evidence that their higher costs may be attributable to
higher-quality or more technologically advanced ICS.52
The FCC observed that the reported costs of the seven largest firms (including GIL and Securus'
exceeded the costs of smaller firms, when economies of scale would lead one to expect the
reverse, and concluded that either the larger firms' costs are above efficient levels, or those films
are inefficiently large and should not be subsidized. 53 The FCC also noted that other providers
had asserted flaws in the data provided. by GIL and. Securus, and disputed GIL's and Securus'
FCC Brief will be due on August 5, 2016 and that of intervenors defending the regulation on
August 22, 2016.
'1 Brief for the ICS Carriers at 29-39.
" Second Report and Order at 59.
53

Id,

at '111 60, 61.

13

claims that the FCC's proposed rates were too low to permit cost recovery.54 CiTL, and

Securus

were criticized for claiming a cost of capital of 11.25 percent, without supporting this rate,
for also including the coat of financing and interest expenses, potentially double-counting

and

those

expenses.55
The proposed tariffs should not be presumed reasonable in the face of the testimony, data
collection and analysis reflected in the FCC's Report and Order. The harms of excessive

ICS

charges so eloquently set forth in the FCC's order, and expressed by testimony from hundred
Massachusetts' consumers in DTC 11-16, would continue. The FCC suggested that rates
below its caps may be just and reasonable,56 and its analysis demonstrates the need for

s of

well

the

Department to determine just and reasonable ICS rates.
IL

The Proposed Rates Should Not Be Permitted on an Interim Basis
For all of the reasons set forth above, the proposed rates should not be imposed on

consumers even on an interim basis. The unique costs of ICS that justified the $3.00 surcharg

e

in 1998 are no longer justified and cannot be folded in to per-minute rates now. Indeed, those
calling for longer than the 12 and 15 minutes used by GTL and Securus, respectively, to
calculate the per-minute rates would now pay more than they had previously. Furthermore,

the

proposed rates require a largely poor and vulnerable group of consumers to subsidize
Commissions that effectively more than double ICS rates. ICS charges which permit
commissions at such high levels are prima facie unjust and unreasonable.
An investigation must ultimately determine a just and reasonable rate, based on
contemporary ICS costs and practices. In the interim, the Providers have provided no evidence

" Id. at 41:: 70.
55 Id. at ,T,72.
56
Id.
14

demonstrating a need for relief from the current legal limit of $0.10 per minute. GTL

clearly can

provide ICS profitably at this rate, as it does so through its DOC contract while offering
commissions of 55 percent, meaning that CITL. retains only $0.045 per minute. This
that, if commissions are not factored as a cost, ICS can be offered at f $0.10 or less
.smaller facilities, even. if their costs are higher than in the DOC. As noted above,

demonstrates

even in.

GTL itself

provides ICS at $0,06 or under in several jurisdictions.
Alternately, the FCC rate caps provide a prudent interim alternative, As discussed above,
these rates were set conservatively and designed to protect profitability, and the FCC

itself

encouraged states to set lower rates. While subject to legal. challenge, these rates were
exhaustively researched and supported by voluminous data gathering. The legal challeng

e to

these rates does not undermine their utility. The Hearing Officer in DTC 11-16, in

a ruling

affirmed by the Commissioner, already indicated that commissions are appropriately
profit sharing rather than a. cost of ICS.57 The arguments made by some Providers

considered

that the rates

are too low even without commissions are refuted by the FCC's analysis, as discusse

d above.

While the Petitioners believe that a a investigation by the Department will support lower

rates,

the FCC caps at least offer some measure of protection from the profiteering and kickbac

ks that

have prevailed under the $3.00 surcharge and are reflected in the proposed rates.
HI.

The Department Should Consolidate this Petition with DTC 11-16
A. Consolidation is Appropriate

Assuming the DTC agrees to open a separate adjudicatory matter regarding this petition

's

protest of the ICS Providers' proposed changes to the tariffs, the matter should be consolid

ated

with DTC 11-16. Under 220 CMR §1.09, the DTC may consolidate proceedings involvin

g

57 See supra note 36.
15

common issues of law or fact.58 The two matters clearly involve cbmm.on issues of law and

fact

as they are about determining just and reasonable ICS rates in Massachusetts and necessarily
require the Department to reconsider the ICS rate structure currently in place. Furthermore, both
actions would require the Department to gather and assess information through discovery
necessary to make such determinations. Consolidation, therefore, is completely appropriate
under the rules.
B. Consolidation Will Avoid Prejudice to Consumers and Waste of
Resources.
Any consideration of a proposed increase in rates by the Providers of ICS in
Massachusetts should occur in DTC 11-16 because to do otherwise would prejudice consumers
of ICS and waste resources. Establishing rates through a separate adjudicatory tariff proceeding
would prejudice Petitioners and ICS consumers because their interests are already the subject of
DTC 11-16. Since DTC 11-16 was brought under the 20 ratepayer statute (G.L. c. 59 §24) it is,
by nature, a proceeding brought in the interest of the public, and specifically, the class of
consumers most impacted by these rates. Accordingly, as required by the statute, the
Department held an extensive public hearing in that action in July of 2012 during which it heard
and received comments from hundreds of impacted consumers regarding all issues initially
raised by Petitioners, including the per-minute rate.59 The concerns raised by those consumers
are directly related to th.e Department's investigation into the potential impact on the public of
the tariff revisions. Consolidation of the matters would ensure that those public comments are
fully considered by the Department in determining the reasonableness of those rates.

58 See 220 CMR 1.09.
59

http://www.mass. go v/ocabegovernmentioca-agenci esidtc-Ip/dtc-11-16.htrnl.
16

In addition, it would be a waste of the Agency's resources to consider a change to the
per-minute rate in a separate tariff proceeding. The petition in DTC 11-16 was filed seven years
ago and docketed over four years ago. All parties, including the Petitioners, have invested
significant resources in that matter. The Petitioners have served extensive discovery requests on
the parties which are directly relevant to the Providers' costs and justifications the Providers
might have for now asserting that an increase in the per-minute rate is warranted.w Furtherm

ore,

the Petitioners have asked the Hearing Officer in DTC 11-16 to maintain the investigation into
quality of service and billing issues, and it makes little sense to have rates addressed in a separate
proceeding. Although Petitioners would make every effort to participate in both proceedings,
being involved in multiple active proceedings would seriously tax the resources of many
Petitioners who are low-income or incarcerated. It will be far more efficient for all parties for
the Department to consolidate the investigation into the reasonableness of the per-minute ICS
rate and rate-setting mechanism with DTC 11-16. The Department has, in fact, consolidated
matters in similar circumstances to prevent waste of Agency resources and in fairness to the
parties involved. 61 In the interest of administrative efficiency and fairness, therefore, the
Department should consolidate the two dockets as it has previously under similar circumstances.

60 •

http://www.mass.goviocabr/docs/dtc/doekets/11-16/plsistirsal.pdf,
httpliwww.mass.goviocabr/d.ocsidte/dockets/11-16/plsreuproddocgt1.pdf,
http://www.mass,gov/ocal-llidocs/dte/dockets/11-16/n1sistirsseetirus.pdf.
http://www.mass.gov/ocabr/d.ocs/dte/dockets/11- I 6/plsreqdocsecurus,pdf,
http://vvww,mass.gov/ocabr/doc.s/dteidockets/11-16/pIsIstirsies.pdf,
http://www.mass.ovloc,abr/docs/dte/dockets/11-16/pisreqproddoeies.pdf
61 See Order Consolidating Proceedings, In the Matter of Comcast Cable
Communications Inc.
Docket no. CTV 04-3/CTV 04-4 (October 21, 2004) available at
http://www,ma.ss.goviocabr/docs/dte/catv./orders/ctv043044ordrconsktpdf; see also Order to
Consolidate, In re Elec. industry Restructuring Notice of Inquiry/Rulemaking DPU 96-44
(November 27, 1996).
17

Conclusion
For the reasons discussed above, the Department should open an investigation into the
tariffs proposed by Securus, GTL and GTL's subsidiaries, and it should consolidate this
investigation with DTC 11.-16. The Department should suspend any increase in rates pending
that investigation, and during the course of an investigation should maintain tariffs at $0.10 or
adopt the rate structure recently established by the FCC.

Date: June 10, 2016

Respectfully submitted:

Bonita Tenneriello, Esq.
Elizabeth Matos, Esq.
James Pingeon, Esq.
10 Winthrop Square, 3cd Floor
Boston, Massachusetts 02110
(617) 482-2773 (telephone)
(617) 451-6383 (facsimile)
htenneriello@plsrn.a.org
ematospisma.org
jpingconAplsma.org,

18

.7Y---TRTMENT

OF DTLECOMMUNTCATIONS AND CABLE

88
MR. HOMEY: Good afte=oon, 'I am Russ
2

Homsy. I am the Assistant General Counsel with the

3 !Suffolk County Sherriff's Department.
4

THE HEARING OFFICER: Since you are
Inot entered into `his matter, if I could just ask you

6

o spell your name for the court reporter.

7
8

MR. HOMEY: Sure, R-U-S-S E-L-L,
H-0-M-E-Y.

9
10

THE HEARING OFFIC R: And tha phone
number I have for you is 617-704-6-:;35.

11

FR. HOMEY: That's correct.

12

THE HEARING OFFICER

Then you may

begin.
14

MR. HOMEY: Thank you.

I just wanted

15

to point out that the use for the funds we receive

16

from the commissions, what those are actually used

17

for.

18

Those funds are generally used for lots

101

of inmate programming. Life-skills programs,

20

programs for inmates, vocational programs and

1

reentry programs. They're also used for inmate

22

HsuPplies. These are generally not of the types that

23

are necessary but things that help inmates during the

24

time of their incarceration like library supplies,
AMIE
ENIELWASSIMMBE

ti 5)/
11'

INEMONOMMINNAMMAk

DEPAR.TMENT OF TELECOMMUNICATIONS AND CABLE

7

Icertain recreational supplies, computers and

2 so.ftware. This is what thR
the unds from those
3 commissions derived are used. to spend
4

I also want to point out that the

5 telephone systems that are used in these facilit i es
6 lare not garden-variety telephone systems, which is
7 what I'm hearing it's often compared to. Where you
buy a calling card and it's very similar in terms of
the cost of those systems.
10

Here we have a system that's tied to
inmate accounts, which costs considerably more.

12

There's a very advanced system in pomace for

=3

monitoring the telephon- calls. And it protects the

14

and victims from harassing calls. It also

15 provides unfettered attorney-client communication.
16 Those are all things that are used as part of this
17

18
19

system.

The benefits of those funds I think we
all can agree are beneficial to the inmates

20 themselves. They are beneficial to the staff and
21

security of the institutions And they are also very

22 beneficial to the public as a whole.
Those funds are used to help prevent
24 ! recidivism. They provide security to the staff at

DEPARTMENT OF TEL COMMUNICATIONS AND CABLE

1 the institution. They provide security to the
2 inmates themselves. We overhear during the
2

monitoring or telephone

s whether there is going

to be a hit on a Particular inmate.
5
6

It's also used. to help provide
assistance in classification of inmates. One of the
most important functions in an institutions is to

8 !make sure that inmates that are a danger to each other
are put into separate areas. This provides a
10 .valuable tool for classification.
11
12

it also prevents contraband
I pctentiallv from entering the facility. And it

13 !provides security to the public with a very valuable
14

law enforcement tool.

15

The effect of a fee reduction for those

16 icommissions would be complete loss or a virtual
17 loomplete lass of the programming that I just
18 !mentioned, a reduction of the inmate suppl
19
20
22

that

just mentioned that would result in higher levels
recidivism, increased security concerns and
increased downtime for the inmates.

22

That provides also a mental-health

23

problem for the inmates

24

for them

There would simply be less

to do during their incarceration, moi-c.

DEPARTMENT OF TELECOMMUNICATIONS AND CABLE

downtime. What I think we have going o here reall
y
2 is, I think we all can agree that use of those funds
3
4

s very beneficial to all those inmates .
What we are trying to do, T think,
!to shift the burden of those fees from.

6

the inmates

I themselves and their families to the taxpayer.

7 ' Tnere is just simply no additional tax revenue to
make
8 up that budget shortfall.
9

And I'm hearing a lot of people

10 i c.lassifying the population that is affected by
these
11

par t icular fees as either poor or minority. Put

12

think the more appropriate categorization of thes,
.

13 ,peocle are people that are incarcerated for the
commission of a crime.
These are the people where the burden
has been placed. Notwithstanding the fact that
17

where is simply no additional budget funding and that

18

these commissions are reduced, these programs are

19

going to disaopear. And placing the burden for those

20

fees on those that are benefiting the most is reall
y

21 what is actually fair.
22

By law, the funds that we derive that

23

go into that inmate benefit fund have to be snent for

24

the benefit of the inmates. These are not funds that

_DEPARTMENT OF TELECOMMUNICATIONS AND. CABLE

1 go to the general fund for t_se sheriffs or the s. ate
2 pfacilities to just use for genera annropriations.
3

'Ti ese are 't used for staff. This is

not used for building maintenance. This is used to
ibenefit simply the inmates themselves.

6
7

Dan Martini, the CFO from my office
would like oc just speak to some of the detail

8 specificity as to the trocTam loss that would result
9 lin a reduction of these commis ions. Thank you.
13

THE HEARING OFFICER:

Daniel Martini.

MR. MARTINI: Good mornincs.
THE HEARING OFFICER: Good morning or

13

good afternoon. If I could ask you to spell your name

14 I and *provide your contact infot,rmation for the court
reporter.
16
17

MR. MARTINI: Sure. It's Daniel
Martini.

T

am the CFO at the Suffolk County

18 !Sheriff's Department. My telephone number is
19 1617-704-6531. I think I provided my email address.
20

THE HEARING OFFICER: Yes, you did.

21

MR. MARTINI: I just wanted to briefly

22

point out a couple of facts that face some of the

23

sheriff's denartments and certainly the Suffolk

24

County Sheriff's Department. Having been with the

DEPARTMENT Or TELECOMMUNICATIONS AND CABLE

Suffolk County Sheriff's Department for the last 25
2 'years, I've seen how the budget cycles have gone.
'‹ And. in the last six, seven, eight years the budg
e

7

4 cycle has been going in a downward trend similar to
the national economy.

A lot of :he things that we fund through
the telephone commission funds that come in, reallV

8

are supplementing the things we would not be able
to

9

do as a result of the lUSA. of ha ically appropriations
that we have received.

ii

When Russ Rornsy mentions programs, we

12 have a series o vocational programs where we
13

actually take those funds and have our inmates learn

14

things like food sanitation programs so they can seek
gainful employment in places like restaurants and

16
I7

food prep areas in hotels.
We also provide OSHA certification for
the inmates so thaw they can go into any construction

1.9

world and be able to say I have my OSHA certification.

20

A lot of the benefits twat are derived as a resu l t
of the funds that are received go directly to the

22

inmates exactly as Russ Homsy has just mentioned.

23

Recently, the Commonwealth of Mass.

24

had cut all of the HIV state grant funding to the

DEPARTMENT Or TELECOMMUNICATIONS AND CABLE

Isheri

' departments. Because we receive these

2 lcommissions, we were able. to continue our KTV
iprogramming, whichcritical and

- nv imPorta t
e

4 !to the inmate populations, because it's a highly

affected population.
8

j

Had we not had those kind of fund ings

7 when the State cut the Ely programming
8

essentially would have meant for Suffolk County that

9

there would be no AIM programming.

10

it isn't just a simple matter
saying that these funds are going to the

12

Commonwealth. They're not, They ' re going directly

13

to the benefit of the inmates and that is exactly what

14 we are using the funds for.

15

We have another program called Project

16

Place, which is a step-down men o.ing program so we

17 try to reintegrate inmates into our communities.
18

And it's done through a series of erocxrams that they

19 have to go through within the facility. Then there
2n

is a mentorship program where they actually meet with

21 mentors. When they are released, they continue that
22 relationship on the outside to help them to
23

24

r eintegrate into the community.

So,, these and. many other types of

DEPARTMENT OF TELECOMMUNICATIONS AND CABLE

programs would all but fade away if not

the fact

2 that we are receivino. commission-based revenues.
3

That is the only point Ireally wanted to make

that

reality if we lose the commissions, the State is
not going to then. turn around and say, here's more
6 money for you to
7

these things. They are not and

they haven't. Just like HIV happened this year, we

8 know that's not aoing to happen because of the
9
10

downward trend in the economy ria.ht now.
That is really the only point I wanted

1 to make is that a lot of these things would go away
12
13
14

16

if the commissions go away.
THE HEARING OFFICER: I am going to go
off the record just

a moment.

A recess was taken)

17
THE HEARING OFFICER:

Let' s an back on

19 the record. The first thing I want to do

give a

20 chance for the representatives of Securus to make a
statement if they so wish at this time.
22

MR. HOPFINGER: Yes.
THE HEARING OFFICER: Mr. Holofinder,

24 please have a seat. Do you want your statement to

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AAFES_KS-FORT LEAVENWORTH JRCF
AAFES_KS-FORT LEAVENWORTH 1.1508

MASSACHUSETTS DEPARTMENT OF CORRECTIONS

MARYLAND DEPARTMENT OF CORRECTIONS

3/1.2)426

MI

ID

GEO-Group MI - t...1,othlake Detention-VT DOC
MI
3/17/2016

MARYLAND DEPARTMENT OF JUVENILE SERVICES

GEO-Group MI - Noi thlake Detention-WA DOC
MI
3/17/201g

•

MICHIGAN DEPARTMENT OF CORRECTIONS
MN

NJ

MitiA
0.9500

0.2500

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0.11
0C12
0.11
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6.11
0.11
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0.24
0.24
0.24
0.74
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0.24
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0.41
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C.OLLEZT
0,40
0.40
0.40
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0.41
0.41
0.41
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3117/2016
ADVANCEPAY .
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ADVANCEPAY
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3/17/2016
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MINNESOTA DEPARTMENT OF CORRECTIONS
MINNESOTA MOOSE LAKE MSOP
MINNESOTA SECURITY HOSPITAL
MISSISSIPPI DEPARTMENT OF CORRECTIONS
CROSSROADS CORRECTIONAL, MT (CCM
GED_Group NC-Rivers Correctional
NORTH CAROLINA DEPARTMENT OF CORRECTIONS .
NEBRASKA DEPARTMENT OF CORRECTIONS

NEW JERSEY DEPARTMENT OF CORRECTIONS

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31,19
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51.19

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CIMARRON CORRECTIONS, OK (CCAI

0111D DEPARTMENT OF YOUTH SERVICES

OHIO DEPARTMENT OF REHABILITATION AND CORRECTIONS

NEW YORK DEPARTMENT OF CORRECTIONS

GEO_Group NY:Dueens Detention Facility

NEW JERSEY DEPARTMENT OF YOUTH SERVICES

OK

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OH

OH

NY

NV .

NJ

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3/17/2013

3/17/2016

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PAGE 3 of 3

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3/17/2016

GEO_Group OK-Great Plains Correctional

OK
3/17/2016

66

OKLAHOMA DEPARTMENT OF CORRECTIONS
PA

3/11/2016

6EO__Group OK- Lawton Correctional

GEO_Group PA.Moshartnon Valley Center
PR

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RHODE ISLAND DEPARTMENT OF CORRECTIONS
SC

SD

5011711 CAROLINA DEPARTMENT OP CORRECTIONS
SOUTH CAROLINA DEPARTMENT OF JUVENILE JUSTICE
SOUTH DAKOTA DEPARTMENT OF CORRECTIONS
TENNESSEE DEPARTMENT OF CORRECTIONS

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TX

3/17/464

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3/17/2016

3/17/2016

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TX

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VA

GEO _Group TX-Rio Grande Detention Center
GEO Group TX-Val Verde Correctional

VIRGINIA DEPARTMENT OF JUVENILE JUSTICE

VIRGINIA DEPARTMENT OF CORRECTIONS. and

WASHINGTON DEPARTMENT OF CORRECTIONS

AAFE5 WA-JOINT BAST LEWiS-McCHoRD

VERMONT DEPARTMENT OF CORRECTIONS

WA

WA

VT

3/17006

.3/1212016

3/17/2016

COLLECT/DIRECT REMIT

0.41

0.059
0.40

0.059

0.41

0.40

0.1175

0.1175

0.41

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