New jail phone plan may be a win-win

Families of Los Angeles County inmates who’ve been forced to pay unusually high rates for collect calls from jail telephones could soon find relief under a proposed new contract that also would generate more county revenue.

A proposed change of vendors, outlined in a letter to the Board of Supervisors from Sheriff Lee Baca and Chief Probation Officer Donald Blevins, would cut rates for an average phone call from the county lockup by about 30% while adding millions in guaranteed annual funding for key inmate programs and jail maintenance.

Tentatively scheduled for consideration by the board on September 20, the recommendation to hire Public Communications Services, Inc., is the result of a competitive bidding process urged by critics, including Supervisor Zev Yaroslavsky, who complained that families were paying too much for jail phone calls and that the county was receiving too little in the existing contract’s revenue sharing provisions.

“My argument from Day One has been that if the rates were less burdensome on inmates families who were being overcharged, then more calls would be made and more money would be generated for the Sheriff’s Department,” Yaroslavsky said. “Now we have a proposal in place that hopefully will achieve those objectives.”

The price of phone calls from county jails has been controversial. Studies show that maintaining close contact with families via phone, correspondence and visits, can reduce recidivism among inmates and improve their chances of a successful reentry into society.

High phone rates deter that crucial communication. But they can also indirectly benefit inmates because, by law, the county’s portion of revenues from jail phones must go into special Inmate Welfare Funds that underwrite educational, recreational and other projects that are geared to them.

Debate over the rates charged to Los Angeles County jail phone users dates back several years to early preparations for the renewal of the current contract, which is held by Global Tel*Link Corp., a private, Alabama-based company that provides jail and prison phone systems nationally.

GTL had offered a $3.5 million fee to the county in exchange for a contract extension. The sheriff, meanwhile, argued against opening the contract to competitive bidding, saying that it might damage the department’s revenue stream.

But the supervisors and County CEO William T Fujioka insisted that putting the contract out to bid would be the best way to lower prices and maintain funding.

“I’m absolutely convinced, you put this out on the street, we’re going to get a more competitive contract,” Fujioka told Supervisors in 2008. Ultimately, in the fall of 2009, a competitive process was undertaken, leading to the new proposal.

The push for more competitive rates comes amid a shrinking competitive landscape. In fact, the winning bidder, PCS, was acquired by GTL three months after the bidding closed. GTL is among the larger firms in the prison telecommunications sector; PCS, whose customers include the Michigan Department of Corrections, was its Los Angeles-based rival.

Earlier in 2010, GTL acquired another competitor, Digital Solutions Inc., and has announced plans to acquire at least two more this year, Conversant Technologies Inc. and Value-Added Communications.

Unlike phone contracts that govern the rates of residential users, jail phone pacts have had little regulation, allowing a handful of specialized service providers to charge whatever the market will bear.

Such high prices allow carriers to offer counties lucrative revenue sharing arrangements on contracts that, in Los Angeles County’s case, have typically amounted to millions of dollars a year.

But the situation has had its downsides. Families of inmates—many of whom are among the poorest people in the county—have borne some of the highest phone rates in California at a time when the price of phone service in even far-flung places has been slashed by technology.

Under the county’s current contract, GTL charges families of Los Angeles County jail inmates $3.54 for the first minute of a collect call—more than almost every other county jail in Southern California and about seven times the price of a 50-cent pay phone call. The Sheriff’s Department gets 52% of the revenue generated by the roughly 5,400 phones in the county’s jail system—a split that last year generated about $10 million for the county’s Inmate Welfare Fund.

In contrast, the 5-year PCS plan would cut the first-minute rate to $1.25, with a 15-cent-per-minute charge thereafter. The cost for an average 17-minute inmate phone call would fall from about $5.20 to around $3.65. The new contract also would increase the county’s share of revenue to 67.5 percent, with a guaranteed minimum of $15 million annually for the Inmate Welfare Fund and $59,000 for the county’s Probation Department.

Lt. Ronald E. Gilbert of the Sheriff’s Inmate Services Bureau said PCS was one of four bidders whose names will become a matter of public record after the supervisors’ upcoming vote.

Gilbert said PCS submitted its proposal before bidding was closed in August, 2010, three months before its acquisition by GTL. The terms of PCS’ bid would be binding, despite the change in ownership, Gilbert said, adding: “They’re still their own entity. As far as the contract is concerned, we’re dealing with them as PCS.”

Gilbert said the proposal’s guaranteed revenue is especially welcome in a time of constricted state funding. In recent years, Gilbert said, the county’s share of money has dropped as steep budget cuts have prompted the release of thousands of inmates from overcrowded jails while the tough economy has forced families to limit phone time with those who remain incarcerated. Gilbert predicted that the lower prices would likely increase inmate calls, which during the first six months of this year numbered 2.4 million.

“It generates a more stable income stream for the Inmate Welfare Fund, and it benefits the inmate and family population,” he said. “Everybody seems to win on this deal.”

Posted 9/8/11