Out of prison, into a business crusade

When Brian Prins was released from prison in May 2002, the first thing he did - before he saw his parents, before he met with his friends, before he bought himself a decent meal - was head to a small, spanking new office on Long Island, N.Y.

His goal: to start a business that would reduce the crippling phone rates prisoners' families pay to keep in touch with their loved ones. But after 16 months, his company, Outside Connection Inc., is almost bankrupt because a powerful alliance of big business and state government has taken aim at Mr. Prins' operation.

The result is a classic battle that pits prisons, which cite the high costs of their phone security, against inmates' families and prison advocates, who claim the arrangement violates freedom of speech, gouges customers, and protects a monopoly. (Prins' family phone bills ran as high as $1,000 a month when he was incarcerated.) Lawsuits are pending in New York and other states.

"Effectively, this is a tax that's been imposed on inmates' families without legislation," says Barbara Olshansky, an attorney with the Center for Constitutional Rights who has filed class- action suits on behalf of families.

The battle stems from the strange and little-known workings of the prison telephone industry.

Most states require inmates to make collect phone calls. And because these states (with a few notable exceptions, like Nebraska) have struck lucrative, exclusive deals with major telecom companies, they force inmate families to pay collect rates as much as four times higher than regular customers pay.

In New York, the Department of Correctional Services (DOCS) has a contract with MCI/WorldCom that gives the company exclusive control over prison telephone services and allows it to boost long-distance rates to 16 cents a minute on top of a $3 hookup fee for every call. Until August, MCI and DOCS charged as much as 36 cents a minute for long-distance calls but opted to reduce those rates and double the cost of local calls, which also require a $3 fee.

In exchange, the state keeps more than 60 percent of MCI's revenue from prison calls. Last year, DOCS netted roughly $24 million.

Prison officials defend the policy, explaining that the higher cost pays for extra security measures that allow them to monitor the numbers inmates dial, whom they talk to, and what they talk about.

Without these measures, they say, inmates could hatch escape plots or dial numbers that have not been approved by prison authorities.

To avoid undermining prison security, "there is no third-party calling," says Linda Foglia, a DOCS spokeswoman.

The department contends Prins's company supplies an "illegal call-forwarding service" and acknowledges punishing a number of inmates for using it.

Full disclosure

But Prins describes the department's security concerns as more ruse than reality. "I designed the system not to interfere with security," he says, explaining that his service does not stop prisons from recording phone conversations and that he offered to supply the agency with daily billing information for inmate calls.

"I said they could have full access to my server, everything, including my books. But it is not in the department's best interest to allow me to do business," adds Prins. He spent five years in prison on charges of aggravated assault and criminal possession of stolen-car transmissions he intended to sell to support his cocaine addiction. Prins kicked his cocaine habit in prison.

At first, Prins's "call-routing" strategy showed promise. He provides families with a telephone number that is local to their relative's prison. When the inmate dials that number, Outside Connection reroutes the calls to the family's home number, sparing them MCI's hefty long-distance rates.

Within his first few months in business, Prins says he signed up hundreds of customers, including Gillian Bennett of Albany.

She works two jobs to help pay the $300 to $600 monthly phone bills to talk to her husband at the Mohawk Correctional Facility in Rome, N.Y.

"My paycheck goes into my phone bill, but I don't want to work to pay a phone bill," she says.

After her first month with Outside Connection, her phone bill dropped to less than $50. But she didn't get to enjoy the service for long.

Weeks later, MCI began blocking her husband's calls home. Then the Department of Corrections threatened him with 90 days in solitary confinement for breaking prison rules (a punishment later reduced after he pleaded guilty to call-forwarding charges). Ms. Bennett's husband was just one of many inmates who got punished.

Within no time, families began canceling their accounts with Outside Connection. The company now has lost two-thirds of its customers since its peak last fall, and Prins has laid off two of his seven employees and taken a 75 percent pay cut.

Prins is not the first small businessmen to offer cheaper phone service to inmates' families.

Companies have tried for several years in New Hampshire, Ohio, and other states with varying degrees of failure and success, according to Kay Perry, the director of the Campaign to Promote Equitable Telephone Charges, a national effort that was launched by CURE (Citizens United for the Rehabilitation of Errants) in January 2000.

And while some have managed to operate below the radar, others, like Louisiana's Bellsouth Corp., have encountered the same blocks and threats as Outside Connection.

Lawsuits pending

Such crackdowns have spawned counterattacks.

In 2000, Ms. Olshansky of the Center for Constitutional Rights filed two class-action lawsuits in New York State against MCI and the DOCS, seeking $90 million in damages for inmates' families and an end to the contract.

In March of this year, Prins filed a petition with the Federal Communications Commission charging that MCI and the Corrections Department broke the law by harassing his customers and interfering with his business. The agency has previously called for more competition in the prison telephone industry.

But Prins is worried a decision might not come in time. "If I don't get help from the FCC, I'm destroyed," he says.

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