Even state government sometimes has trouble parsing the hidden charges in a phone bill.

In April, Dallas-based Securus Technologies won a bid to provide inmate telephone service to six state prisons. Now, the New Mexico Department of Information Technology is cancelling the contract after discovering bid evaluators miscalculated how much Securus would charge inmates and their families.

Public Communications Services, which currently holds the New Mexico Corrections Department contract, formally challenged the contract, saying bid evaluators did not include Securus' $10 worth of bill-statement and credit card processing fees when it calculated the cost for inmates.

"It's in the best interest of the state to cancel the contract and start over again," NMDIT spokeswoman Deborah Martinez tells SFR, adding that the information on rates and charges "was not as clear as it should have been."

The contract and challenge are now part of an ongoing investigation of prison phone companies initiated by the New Mexico Public Regulation Commission in 2007. In January 2009, PRC Utility Economist John Reynolds provided testimony to the PRC that inmate phone providers may be unfairly price-gouging inmates.

The PRC is considering capping the amount companies can charge inmates for calls. Reynolds recommended the PRC closely watch the Corrections Department's contract in order to determine the market rate.
So far, PCS is the only company to voice support for a rate cap, with some conditions.

"Debit calls, where you pay up front, have a lower cost associated with it than collect calls, which are the most expensive in the business," PCS Chief Executive Officer Paul Jennings tells SFR. "We are supportive of any PRC price cap as long they implement one for debit calls and one for collect calls."

According to the NMDIT's calculations used when evaluating the bid, a 20-minute call from prison would cost approximately $11.34 using Securus' service and $11.25 using PCS.' In its challenge, PCS argues that, with fees included, Securus would actually cost the inmate or family member $20.78.

New Mexico jails and private prisons contract telephone services separately from the Corrections Department. Existing Securus and PCS customers report similar price discrepancies.

Mrs. Mathews, who asked that her first name be withheld, says a 14-minute collect call from her grandson when he was at the Metropolitan Detention Center in Albuquerque—where PCS provides phone service—cost $4.74. Once her grandson was moved to the Lea County Correctional Center in Hobbs, a private prison that contracts with Securus, her cost for a 14-minute collect call nearly tripled to $12.21.

"People can't afford this," Mathews, who lives a six-hour drive away from the prison, tells SFR. "We are already sending money for food and, when you send money for calls, too, it becomes a hardship."

Other inmate family members and friends report bills as high as $800.

"When I got the first bill after six weeks, I practically fainted," Mariam Adams, who was advocating for an immigration detainee at a federal prison, says. "It was hundreds of dollars for maybe three or four calls a week. The second bill came in at almost $800. I could not understand how there could be these ridiculous fees, like $17 for the first minute. I was mad as hell."

Adams testified before the PRC in early 2008 along with several other individuals with friends or family behind bars.

National prisoner rights organizations say they're seeing cheaper bills, but not necessarily because of public outcry. "We're seeing two significant trends," Campaign to Promote Equitable Telephone Charges coordinator Kay Perry tells SFR. "One, many more systems are offering debit calling instead of just collect calling and that tends to be cheaper. The other, we are starting see more and more departments of corrections foregoing commissions."

The New Mexico Legislature banned commissions—in which jails receive a percentage of the money spent by inmates on phone service—in 2001. But hidden charges continue to be a problem: PCS refunded nearly $100,000 to inmates and their families in 2008, after a billing subcontractor tacked on additional fees.

Perry says PCS is taking the right position.

"Companies and corrections departments should be promoting telephone contact between family members and those incarcerated," she says. "…to charge you extra to process your money? That makes no sense at all."