By JENNIFER McKEE
Gazette State Bureau

HELENA — Long-distance phone rates for men incarcerated at Montana State Prison in Deer Lodge are nearly 16 times higher than those charged outside the prison system.

Although rates vary depending on where in the state an inmate wishes to call, a typical 15-minute phone call from the prison to Billings costs $16.41, said Gary Willems, manager of the Department of Corrections contracts division. The fee consists of a $3.95 connection fee, which includes the first minute of the call, and 89 cents a minute after that.

A long-distance call using Qwest long distance outside the prison system costs 7 cents a minute with a basic plan, according to company information. That means a 15-minute phone call from Deer Lodge to Billings costs $1.05.

Critics of the costly phone calls for inmates say Montana’s rates — and similar rates charged in many states — amount to a tax on the poor. State and county officials say the money goes back into services for inmates, such as cable television and gym equipment and to pay inmate medical bills at county jails.

All inmates at Montana State Prison must call collect, Willems said. Compared with other collect calls, prison rates are still high, more than twice as much, but more commensurate than non-collect calls made from outside the prison system. A typical 15-minute collect call from Deer Lodge to Billings using AT&T outside the prison walls would cost about $7.99, including a $2.39 connection fee that includes the first minute and 40 cents a minute after that.

The rates are high for a variety of reasons, Willems said, and the state doesn’t actually make any money off the inmates.

«Every call placed is recorded,» he said. «A computer clicks on and records it.»

That requires a special kind of phone system, and the state and many Montana counties sign contracts with companies specializing in prison phone systems to provide the service. Some of the increase in costs is to pay for the necessary recording equipment, Willems said.

«It’s a very technical system,» he said, adding that the cost of telephone calls is one of the most common complaints that the department hears.

The department also gets half the money generated from inmate calls. Last year, that amounted to $302,655 for the men’s prison and $37,573 from the Montana Women’s Prison in Billings, department statistics show.

All the money goes to a special account managed by the inmates and used for things to make life behind bars easier. That includes purchases such as microwave ovens for inmates or to refinish the floor of the gymnasium at the men’s prison, Willems said.

None of the money goes to the department’s coffers or to offset expenses such as guards’ salaries or other necessary fees, he said.

Montana’s rates are higher than those charged in other states. The Idaho prison system, for example, charges a $2.25 connection fee for the first minute and 30 cents a minute after that, said Teresa Jones, spokeswoman for the Idaho Department of Correction. That’s about 61 percent cheaper than rates charged Montana inmates.

Idaho also mandates inmates must call collect and any money returned to the state from the calls also goes into an inmate welfare fund, Jones said.

California inmates pay a $2 connection fee and 28 cents a minute after the first minute, said Matt Grey, head of the Voters Corrections Reform Coalition, headquartered in that state. That’s about 64 percent cheaper than rates charged Montana inmates, although the state of California funnels all the money back into the state’s general fund, or checkbook, Grey said, meaning inmates don’t benefit from the high cost of phone calls.

Montana prisons aren’t the only lockdowns that rely on companies that charge higher rates for inmate phone calls — all of which are recorded. Inmates at the Yellowstone County Detention Facility pay a flat $2.76 to make a local phone call no matter how long they talk, said Jim Kraft, director of Disaster and Emergency Services for Yellowstone County.

But, if Yellowstone County inmates want to make a long-distance call to Helena, for example, the call recipient will pay a $3.95 cent connection fee and 50 cents for every minute, including the first one, according to rate information from Correctional Billing Services, the company that holds the Yellowstone County contract. That makes a 15-minute phone call cost $11.45.

Rates at the Lewis and Clark County Detention Center in Helena are slightly higher, said Capt. Dave Rau of the Lewis and Clark County Sheriff’s Department. They pay a $3 connection fee and 59 cents a minute. But there’s a caveat, Rau said. Inmates are not charged more than $11.85 no matter how long they talk on the phone.

All the money goes to pay for the medical bills of inmates, Rau said.

Inmates at the Butte Silver Bow Detention Facility pay the same fees as those in Billings: $2.76 for local calls and a $3.95 connection fee plus 50 cents a minute for long distance, said Capt. Jerome McCarthy of the Butte Silver Bow Law Enforcement Department.

But Butte inmates are not forced to make collect calls. The inmates can buy a phone card for $5, McCarthy said.

Rates at the Missoula County Detention Facility are the cheapest: a $2.76 connection fee and 50 cents a minute, according to information from Correctional Billing Services, which also handles the phone service at the Missoula lock-up.

All the money at every county jail contacted goes into services for inmates. All inmates, save for those at the Butte Silver Bow Detention Facility, must call collect.

Lewis and Clark County Sheriff Cheryl Liedle said her county relies on the fees from inmate phone calls to provide medical care for inmates.

«We use to offset and reduce the amount of bill taxpayers have to foot for inmate care and custody,» she said.

While those uses are laudable, California activist Grey said the idea of high fees charged to inmate families is generally a bad idea. Inmates with a strong family and support network fare better after they are released, he said. What’s more, he said, the families of inmates are often poor, and it’s unfair to make them pay what amounts to a tax.

«The more ties you have to your community and the stronger your family relations are, the more likely you are to stay out of prison,» he said.

Some of the fees charged to those receiving calls from Montana prison inmates actually exceed a rate cap set by the Montana Public Service Commission, said PSC Chairman Bob Rowe.

The PSC set a cap of 83 cents a minute for inmate calls several years ago, he said. But inmates at the Montana State Prison are paying 89 cents a minute. Rowe said the PSC staff would follow up on the situation when staff members learn the name of the company charging the fees.

As for whether the fees are fair, Rowe said regulators must make tough choices. The money goes to reduce the overall tax burden on Montanans and provide valuable services for inmates, and all that is good.

«The balance is made even more complicated because, on the one hand, the individual customer may be low income, may be in a distressful situation,» Rowe wrote in a prepared statement, adding that some people in county jails haven’t been convicted of anything. «It would make sense for the commission and the consumer counsel to examine other approaches.»

From a feast to family photos and free long-distance telephone calls, about 350 people who otherwise might have no place to go for the holidays enjoyed all the pleasures of a traditional Thanksgiving get-together Tuesday at the Friendly House in Davenport.

Chris Pruden of Davenport said he attended the free party, sponsored by the Davenport Noon Optimist Club and Oscar Mayer Foods Corp., „because I was hungry.“ The thin 21-year-old filled up on turkey, mashed potatoes, green beans and all the other fixings typically found at a Turkey Day dinner.

„I think it’s great that they do this,“ he said. „Some people aren’t fortunate enough to have a family. People who live in shelters have no place to go.“

Pruden attended the meal with his housemates. The young man said he has been homeless for past Thanksgivings, adding, „I go to these kinds of dinners every year.“

U. S. Cellular set up a table filled with cell phones so attendees could make long-distance calls to loved ones. Pruden said he called his grandmother in Florida. „We talked about the weather down there and how things are going for me up here,“ he added.

Like Pruden, Mae Bernier of Davenport said she does not have a phone with long-distance service. She called her sister who lives in St. Thomas, the U. S. Virgin Islands. „We probably haven’t talked for a year,“ she said. „She was shocked to hear from me. I told her what I’ve been up to and wished her a happy Thanksgiving.“

Lynn Wescott, the sales supervisor for the U. S. Cellular store on Brady Street in Davenport, said one man called his sister in hopes of tracking down a brother who was given up for adoption when they were children.

In addition to making free phone calls, many who attended the event had free family photos taken by volunteers. Others shot hoops in the Friendly House gymnasium in hopes of winning a free turkey.

Christina Castaneda of Davenport held her 8-month-old daughter, Amelia Garcia, while her other child, 2-year-old Alex Garcia, lobbed basketballs toward the hoop. „We heard about this through family and friends and have been having a real good time,“ Castaneda said.

Kinsey Miller of Davenport said she came to Friendly House with several aunts and uncles. „Thanksgiving is all about spending time with your family and eating pie,“ she said. „I’m 10, but you can say I’m 11 because my birthday is in December.“

Betty Kertai, the president of the Davenport Noon Optimist Club, grinned from ear to ear as small children raced through the halls of Friendly House wearing animal balloons on their heads. „Seeing these kids happy makes us happy,“ she said. „That’s why we do it. Our motto is that we’re a friend of youth and, of course, that includes their family and their friends also.

Kertai said the club raises money for events such as the Thanksgiving dinner by maintaining American flags for area residents. For $35, the club will raise and lower a flag each day at someone’s home for a year.

Gabrielle Belz of Davenport brought her four children to the party. They played in the gymnasium while mom relaxed with friends upstairs. „We come to this every year,“ she said. „It’s a nice, family-type thing to do.“

By Jessica Hall

PHILADELPHIA (Reuters) — Shares of long-distance phone companies AT&T Corp. and MCI Inc. have plunged about 20 percent this year, but potential buyers seem to be holding out for clearance sales.

For now, Verizon Communications Inc., the largest U.S. telephone company, and its Baby Bell peers have dismissed the idea of buying a long distance carrier, quelling speculation of a long-awaited industry consolidation.

Hopes for the return of the telecommunications megadeal had been stoked at the start of the year by the auction of AT&T Wireless Services Inc., which attracted several bidders and a winning offer of $41 billion from Cingular Wireless.

Yet the industry remains unmotivated.

So far this year, there have been only 778 deals worldwide in the telecommunications sector, down 24 percent from last year and a 65 percent drop from the boom in 2000, according to a report by Banc of America Securities.

AT&T and MCI had seemed like prime takeover targets, given their shrinking stock prices, prized high-speed communications networks and stable of lucrative corporate customers.

But even Baby Bells craving a stronger foothold in the business sector have stood by as AT&T and MCI struggle with double-digit declines in revenues.

The carriers have been slammed as the Baby Bells forged into the long-distance market with discounted packages of service that also included local, wireless and Internet access. Price wars and corporate downsizing, which lessened the demand and volume of services, also ate into sales.

«We believe that potential acquirers are aware of the old warning against ’catching a falling knife’ and might like to see at least a quarter or two of stability before bidding in earnest,» said Prudential Equity Group LLC analyst Chris Larsen.

The Baby Bells and some private equity firms eyeing the telecom industry may be wise to wait for AT&T and other long-distance carriers to cut jobs, pare debt and shake free of the low-margin residential phone business.

«It’s a question of timing,» said a telecommunications investment banker who requested anonymity. «The longer you wait, the cheaper they get. But the fear is that if you wait too long, someone else will grab them.»

Ian Thompson’s Ancaster to Winona

stretch ’unreasonable,’ chair agrees

A Hamilton-Wentworth District School Board trustee is hoping to convince his colleagues to review their ward representation for the next election.

Ian Thompson, whose wards 11 and 12 stretch from Winona through Glanbrook to the furthest reaches of Ancaster, said he believes a review is needed to better reflect geographic proximity and changes in schools and population.

Until recently, his constituents in Winona had to call long distance to reach him, he said — a situation he resolved by moving to Ward 5.

«If I lived in Ancaster, people in Winona would have to phone long distance to call me. So it’s not fair to people to pay those bills,» said Mr. Thompson, who jumped to his current post last election after being acclaimed as Dundas trustee in 2000.

«And it’s not fair even for taxpayers to have to pay that long-distance when I call them back,» he said. «I’m not complaining the way it is, I just think there might be a better solution.»

The board already has its maximum 11 trustees under provincial legislation that amalgamated its Wentworth County and Hamilton predecessors in 1998. But the new City of Hamilton has 15 wards.

Mr. Thompson’s constituency is the second biggest in area and contains about 46,000 residents. Only Flamborough Trustee Reg Woodworth’s wards 14 and 15 are larger in size, holding about 40,000 residents.

Two other trustees have dual ward responsibilities: Judith Bishop, whose wards 1 and 2 contain nearly 70,000 residents, and Stoney Creek’s John Davidson, whose wards 9 and 10 have about 50,000 residents.

Mr. Thompson, who will seek approval for a formal review next month, said trustees may want to realign boundaries or share responsibilities over a larger area.

He suggested, for instance, that Ancaster and Dundas might be served by one trustee, particularly since the latter is set to lose schools. Trustees presently represent between eight and 16 schools each.

«We haven’t reviewed it since amalgamation, so I think it’s time to take a look at it,» Mr. Thompson said. «Do we want to go by schools, because some wards have more schools?»

«Maybe we have too many trustees or maybe we need more trustees. It’s just something that needs to be looked at to make it better representation for the public and for the trustees.»

Ms. Bishop said a review is warranted because different geographic challenges and workloads make proper representation difficult.

First elected solely as a Ward 1 trustee with the old Hamilton board, she now covers 15 schools in two wards that before amalgamation had four trustees. Her pay meanwhile dropped to $5,000 per year from $12,000.

«It also means I’m not as visible. You cannot get to every school council meeting. It’s impossible with 15 schools,» Ms. Bishop said.

School board chair Ray Mulholland, whose Ward 4 has a dozen schools, agrees and said he recently raised the possibility of giving the board a twelfth trustee in a meeting with Education Minister Gerard Kennedy.

Mr. Mulholland said while Mr. Thompson represents fewer schools and people than some other trustees, his geographic constituency is «unreasonable.»

By Richard Leitner
News Staff

A Hamilton-Wentworth District School Board trustee is hoping to convince his colleagues to review their ward representation for the next election.

Ian Thompson, whose wards 11 and 12 stretch from Winona through Glanbrook to the furthest reaches of Ancaster, said he believes a review is needed to better reflect geographic proximity and changes in schools and population.

Until recently, his constituents in Winona had to call long distance to reach him, he said — a situation he resolved by moving to Ward 5.

«If I lived in Ancaster, people in Winona would have to phone long distance to call me. So it’s not fair to people to pay those bills,» said Mr. Thompson, who jumped to his current post last election after being acclaimed as Dundas trustee in 2000.

«And it’s not fair even for taxpayers to have to pay that long-distance when I call them back,» he said. «I’m not complaining the way it is, I just think there might be a better solution.»

The board already has its maximum 11 trustees under provincial legislation that amalgamated its Wentworth County and Hamilton predecessors in 1998. But the new City of Hamilton has 15 wards.

Mr. Thompson’s constituency is the second biggest in area and contains about 46,000 residents. Only Flamborough Trustee Reg Woodworth’s wards 14 and 15 are larger in size, holding about 40,000 residents.

Two other trustees have dual ward responsibilities: Judith Bishop, whose wards 1 and 2 contain nearly 70,000 residents, and Stoney Creek’s John Davidson, whose wards 9 and 10 have about 50,000 residents.

Mr. Thompson, who will seek approval for a formal review next month, said trustees may want to realign boundaries or share responsibilities over a larger area.

He suggested, for instance, that Ancaster and Dundas might be served by one trustee, particularly since the latter is set to lose schools. Trustees presently represent between eight and 16 schools each.

«We haven’t reviewed it since amalgamation, so I think it’s time to take a look at it,» Mr. Thompson said. «Do we want to go by schools, because some wards have more schools?» he said. «Maybe we have too many trustees or maybe we need more trustees. It’s just something that needs to be looked at to make it better representation for the public and for the trustees.»

Ms. Bishop said a review is warranted because different geographic challenges and workloads make proper representation difficult.

First elected solely as a Ward 1 trustee with the old Hamilton board, she now covers 15 schools in two wards that before amalgamation had four trustees. Her pay meanwhile dropped to $5,000 per year from $12,000.

«It also means I’m not as visible. You cannot get to every school council meeting. It’s impossible with 15 schools,» Ms. Bishop said.

«We do have some disparities in terms of population. Some people have far more schools and far more constituents than others, so I think it’s sensible for us to be looking at these things.»

School board chair Ray Mulholland, whose Ward 4 has a dozen schools, agrees and said he recently raised the possibility of giving the board a twelfth trustee in a meeting with Education Minister Gerard Kennedy.

Existing legislation only allows for a maximum of 12 trustees outside of Toronto, which has 20, and Hamilton is about 40,000 people short of the population needed for an additional trustee, he said.

Mr. Mulholland said while Mr. Thompson represents fewer schools and people than some other trustees, his geographic constituency is «unreasonable.»

«It’s always healthy to look at your structure every two or three years, and if there’s anything we can do to reallocate responsibilities, that’s always healthy,» he said.

ST. PAUL — Attorney General Mike Hatch has sued a long-distance telephone company, accusing it of switching the long-distance service of thousands of Minnesota businesses and residents without their permission.

Hatch accuses Michigan-based LCR Telecommunications of consumer fraud for «slamming,» the industry term for switching phone service without permission. The lawsuit, filed Wednesday in Ramsey County District Court, seeks unspecified restitution and damages.

An LCR spokesman, Martin Tibbitts, said he hadn’t seen the court filings and couldn’t immediately comment.

Some shady phone companies get consumers to switch service with misleading pitches or trick e-mails, but LCR took a novel approach, Minnesota officials said: Its telemarketers posed as business owners and OK’d the switches.

«This is definitely the most offensive case we have ever seen,» Chief Deputy Attorney General Kris Eiden said at a news conference. «It’s just beyond belief.»

Officials played recordings of several phone conversations in which telemarketers hired by LCR posed as the account holder and agreed to switch phone service. One telemarketer identified himself as Richard Lambert, owner of R. C. Lambert & Associates of St. Paul. When asked to verify his date of birth, he said it was in January.

But the real Richard Lambert, who was present at the news conference, said that’s not true.

«I’m the real Dick Lambert, and actually, my business is in Roseville, not St. Paul,» Lambert said. «I wasn’t born in January. The conversation was obviously totally bogus.»

LCR’s tactics enabled it to grow its Minnesota customer base from four accounts in January 2003 to more than 2,700 customers 16 months later, Eiden said. The total amount due to affected consumers could approach $1 million.

Hatch’s office cannot bring criminal charges, but Eiden said she would refer the case to the proper authorities for prosecution.

Hatch said the case is a lesson to consumers.

«With telephone companies and telemarketing, it’s buyer beware,» he said. «Don’t trust these people. They’re there to take your money.»

A cable interruption in a «fiber tub» on Bentonville Road in western Wayne County caused sporadic interruptions of long-distance telephone service around Wayne and Randolph counties Tuesday.

Some customers received a busy signal when trying to call long distance.

The interruption was apparently due to settling of soil in the area, Verizon manager Andy Digenova said.

Digenova said the number of customers affected was impossible to determine.

Service has been restored.

By Christopher Stern
Washington Post Staff Writer

MCI Inc. disclosed yesterday that it may have to reduce the value of some of its assets to reflect the continuing decline of its consumer long-distance business.

Any write-down is likely to be regarded on Wall Street as a sign the telecommunications giant has lost confidence in its core long-distance business, analysts said. However, in the short run, the accounting would help the carrier’s financial profile by lowering the depreciation costs it must carry on its balance sheets related to equipment.

MCI, based in Ashburn, revealed the potential write-down in filings with the Securities and Exchange Commission. The filing comes just one week after AT&T Corp., one of its largest rivals, made a similar statement in its own regulatory filing.

MCI and AT&T are suffering from an influx of competition, chiefly from the large regional phone companies that have been freed by regulators to offer long-distance service. Regional phone companies such as Verizon Communications Inc. and BellSouth Corp. have been able to take millions of customers away from AT&T and MCI by bundling local and long-distance service in a single package.

At the same time, MCI and AT&T are being undermined by fledgling entrepreneurs who have launched services that allow consumers to make calls over high-speed Internet connections at deeply discounted rates.

MCI, which emerged from bankruptcy in April, has already written off $8o billion in assets. It currently values its assets at just over $14 billion. In contrast, AT&T still values its assets at over $40 billion and is likely to take a much larger write-down, according to analysts.

In announcing their write-downs, MCI and AT&T referred to a recent decision by the Federal Communications Commission that lifted government mandates governing the rates phone companies charge one another. They said the decision effectively forced them to abandon efforts to market local telephone service in a bundle with long distance. Such bundles have become hugely popular since they were introduced about three years ago. Verizon estimates that 40 percent of its customers have signed up for a local and long-distance service.

Verizon is one of the nation’s largest long-distance carriers, with more than 16 million long-distance customers. MCI, which just two months ago claimed more than 20 million customers, now says it has fewer than 9 million subscribers.

In its SEC filing, MCI stopped short of saying that it would follow AT&T’s lead and abandon consumer marketing efforts. «Some competitors have announced their exit from this market, and [MCI] intends to de-emphasize its consumer business and reduce efforts to acquire new customers,» MCI said. MCI officials declined further comment on the filing.

Most of MCI’s write-down would affect assets directly related to its consumer business. It’s not clear how big the write-down would be because the company does not separately identify its consumer-related assets.

Susan Kalla, a telecommunications analyst with Friedman, Billings, Ramsey Group Inc., said a write-down suggests the carriers don’t expect to win back customers.

«It means that it is over and they don’t see it coming back and they are getting rid of all the expenses related to it,» Kalla said.

DENVER — Qwest began a 14-state ad campaign Sunday seeking to lure customers of AT&T’s long-distance service.

Last week AT&T announced it would stop seeking new residential customers, though it would continue to serve existing ones.

The ad campaign features a letter from Qwest CEO Richard Notebaert promising long-distance users that they can count of his company to keep its long-distance service «and continue to invest in our world-class network…»

Notebaert said, ’It’s kind of an open-ended letter. It is really addressed to customers who might have left Qwest to go to AT&T or other carriers."

By Fran Daniel
JOURNAL REPORTER

KERNERSVILLE

An introduction-to-business course at Forsyth Technical Community College takes economic-development assistance to a new level.

Classes in the 10-week course, which ends Tuesday, are being taught at the college’s Swisher Center in Kernersville and in Ulyanovsk, Russia, by way of live audio and video using the computer. A wide screen is used at the Swisher Center for better viewing.

Local and Russian students learn more than just basic business terms and concepts.

«What has resulted is the opportunity for job creation here in the Piedmont Triad in terms of assisting the Russians in various projects,» said Suzanne Stafford, the professor of the class and the international-programs officer for Forsyth Tech.

For example, a group of Russians wants to build a golf course in Ulya-novsk, but have no idea how to go about it.M

Stafford said that Herb Burns, a student in the class who is an architect and the chairman of the architect-construction technologies department at Forsyth Tech, has friends who design golf courses. The Russians are interested in having Burns’ friends visit their city.

«That’s income-generation for here,» Stafford said.

Mike Hazen, a professor of communications at Wake Forest University, who has been observing the class regularly, said that he has not seen much of the technology that Stafford is using in her class for «live» intercultural communication.

«This is such a unique and essential kind of interaction,» Hazen said. «There are so many parts of Russia that we call ’the regions’ that don’t have contact with the West.»

He described the technology as a cost-effective way for people to communicate, considering the fact that it would be expensive to fly just two business people to Russia for one trip and that the local business class has students and guests with an array of business backgrounds and experience.

«If this technique works, it can work all over the world,» he said.

Stafford often invites people from the business community to speak to the students.

Yesterday, the Russian students were able to ask questions of Richard Poole, a retired chairman of ClubCorp/CCA, which owns nearly 200 golf courses, country clubs, private businesses clubs and golf resorts, including Pinehurst.

Poole, who linked up with the class by way of the telephone, suggested that the Russians find out what the market might be for a golf course in their community before they design one.

When asked how to create passion for the game of golf, he suggested developing a driving range.

Stafford said that the link-up with the Russians didn’t start out as an economic-development tool.

«We started out with trying to link up these students so that our students could be culturally enriched by having international students ask them questions, and their students were very anxious to learn as much as they can about U.S. and Western business economics,» she said. «So the interesting thing is that it’s been a win-win for everyone, and then it has this wonderful side benefit of generating these business opportunities.»

Dmitry Ablayev, a co-owner of a design company in Ulyanovsk and the Russian class’s coordinator, said that people in Ulyanovsk also want fast-food, consulting and industrial companies to open in their city.

«I know in America it’s becoming more service-oriented, but in Russia with the lower labor costs, it is still a good enterprise for any agricultural and industrial business,» he said.

Stafford said that people in Ulyanovsk, a city of 750,000 on the Volga River, 250 miles due east of Moscow, are extremely interested in foreign franchises such as McDonald’s.

There’s just one foreign franchise open there now: a Baskin-Robbins with three flavors on offer.

The Kernersville Chamber of Commerce is applying to provide link-ups with the Russians every two weeks, beginning in September, Stafford said.

Pending approval, the chamber would bring in a group of retired business executives and other professionals to talk to the Russians about such topics as accounting and marketing.