Higher Commissions at the Expense of Safety and Security, and Going Against the Federal Government (FCC) Looks Like a Failed Business Model
DALLAS, Feb. 8, 2016 /PRNewswire/ -- Securus Technologies, a leading provider of civil and criminal justice technology solutions for public safety, investigation, corrections and monitoring, announced today that Praeses, a consultant for some prisons and jails, does not work in the best long-term interests of their customers, they only award contracts to a single "favorite" provider, and they routinely contradict federal rules/laws as promulgated by the Federal Communications Commission (FCC).
"In an environment where minimizing the cost of calls for friends and family, complying with FCC existing and new rules, and constantly needing to improve security and investigative features that are important to our facility customers – Praeses is at odds with all of these directions," said Richard A. ("Rick") Smith, Chief Executive Officer of Securus Technologies, Inc. "Praeses' business model is based on maximizing commissions paid to facilities with high(er) calling rates, not following clear FCC rules regarding cash payments to prisons/jails, and relegating safety and security features to a low priority. We continue to be at odds with them and how they look at the long-term interests of their customers."
"It is clear from the first FCC order on interstate rates that we could not pay interstate commissions and the FCC told us that directly, face-to-face multiple times – but Praeses continues to argue that we should be paying interstate commissions – a clear violation of FCC rules," said Smith. "Since Praeses is paid based on increasing commissions, I understand their motivation but that is at odds with FCC rules – and we can't break those rules. In addition, Praeses' RFP criteria and requirements are slanted towards having the provider focus money and development resources on making Praeses' job easier. In many cases, Praeses still uses criteria from many years ago in their RFPs, despite the enormous changes that have occurred in technology and in the needs of law enforcement. Securus sees Praeses awarding contracts disproportionately to a single provider that holds a very small market share overall. The public data shows that Praeses contracts are awarded to this same provider approximately 60% of the time. When Praeses is not involved in an account, Securus' data shows this competitor wins less than 2% in the entire market. Securus contends that this shows a bias."
"I do not see that Praeses is acting in an independent manner, or acting in the best interests of law enforcement, corrections, victims, inmates, or their friends and family," said Smith. "That's why we are going to focus our time working with agents and facilities who value the technology that helps law enforcement do its job better, driving better customer economics, deploys today's innovations, and agrees to follow the rules of the FCC. In our opinion, Praeses has done their accounts a disservice and we question the value they provide in our industry. I disagree with the FCC eliminating interstate commissions and trying to curtail intrastate commissions, but those are the rules that I have to follow and implement as a regulated carrier. It's easy and convenient for Praeses to tell their clients that we owe them interstate commissions and that we should increase commission payments – that's what customers want to hear. Unfortunately, we have to comply with the rules and orders of the FCC as well – we take that responsibility very seriously and will not breach that. We are fighting the FCC new rules at the US Court of Appeals and hope to win, but if we don't, we have to follow the law. Praeses is already advising facilities to continue paying commissions after the new rules go into effect as well - in clear violation of the order's intent. The problem with that is that Praeses continues to get paid but the facilities are left holding the bag when rates are further reduced, commissions are eventually eliminated anyway and security features are lost due to the lower rates."
Securus will continue to work with its base of Praeses-managed accounts. "We will continue to work closely with our accounts that have chosen Praeses as an agent. We deeply value our customer relationships and will work hard to make sure our customers always have the best service possible—regardless of who they choose to represent them," said Joshua Conklin, Securus' Vice President of Sales. Securus will now selectively focus its attention on only those new opportunities where we can effectively demonstrate how a modern approach, with recent innovations can create safer communities and more secure environments, while following the regulatory rules issued by Federal and State governments that apply to our business.
Securus' mission will remain as it always has: to improve the capabilities of investigators, create more secure jail/prison environments, and promote programs that help inmates stay in contact with their families and reduce recidivism. "Securus is simply committed to a different and better mission, one that embraces more than what Praeses cares about," Smith said.
ABOUT SECURUS TECHNOLOGIES
Headquartered in Dallas, Texas, and serving more than 3,450 public safety, law enforcement and corrections agencies and over 1,200,000 inmates across North America, Securus Technologies is committed to serve and connect by providing emergency response, incident management, public information, investigation, biometric analysis, communication, information management, inmate self-service, and monitoring products and services in order to make our world a safer place to live. Securus Technologies focuses on connecting what matters®. To learn more about our full suite of civil and criminal justice technology solutions, please visit SecurusTechnologies.com.
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SOURCE Securus Technologies, Inc.
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