When Brian Prins was released from prison on May 3, 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 the small office in Rockville Center, Long Island, that a friend had set up for him. It was a mess, but Prins was “overlyjoyed” because it would soon house the business venture he’d dreamed up while behind bars. With his new company, Outside Connection Inc., he planned to reduce the crippling phone rates prisoners’ families are forced to pay to keep in touch with their loved ones.

Prins spent five years in prison, from age 29 to 34, serving out charges of aggravated assault and criminal possession of stolen car transmissions, which he intended to sell to support his cocaine addiction. He managed to kick that habit in prison, and instead became obsessed with the steep charges his parents incurred each time he called home.

New York State prison rules require inmates to make collect calls through MCI WorldCom’s “Maximum Security” service. The plan charges Rolls Royce rates that add up quickly for inmates’ families. The result, says Prins’ father: phone bills as high as $1,000 a month.

So Prins devised a way to cut costs in half. With his “call routing technologies,” he could provide a family with a telephone number local to their relative’s prison. When the inmate dials that number, Outside Connection then re-routes the call to the family’s home number, sparing them MCI’s hefty long-distance rates.

The idea appealed to inmates’ families. Within his first few months in business, Prins says he signed up “hundreds” of customers. Their call rates shrank from up to 38 cents a minute to an average of 12 cents.

But in late August 2002, a powerful alliance of big business and state government took aim at Prins’ operation. First, MCI began blocking inmates’ calls to Outside Connection customers. Then, pointing to security concerns, the New York State Department of Corrections declared the company illegal and, says Prins, initiated its own series of blocks: The agency refused to place Outside Connection phone numbers on its list of approved call numbers, effectively barring those inmates from calling home.

Within no time, families began canceling their accounts with Outside Connection.

Then in February, the Corrections Department took its most severe steps: It threatened inmates with solitary confinement if they used Prins’ phone service. The agency also declared Outside Connection solicitation letters “contraband,” and in a memo ordered prison superintendents to return the letters to the sender “at the expense of the inmate” or destroy them.

The company now has one-third the number of customers it had at its height last fall, and Prins has laid off two of his seven employees and taken a 75 percent pay cut.

In retrospect, this crackdown should have come as no surprise to Prins. Since 1996, MCI has held a contract with the Department of Corrections that gives the company exclusive control over prison telephone services and allows it to jack prices as high as 38 cents a minute and charge $3.95 hook-up fees. In exchange, the state keeps over 60 percent of MCI’s revenues. The state expected to net roughly $24 million last year (actual figures were not available).

The state prison system defends this policy, explaining that its cut goes into the Inmate Benefit Fund to provide additional services to prisoners. Critics counter that the money initially filters into the state’s general fund, and that the dollars that do end up in the fund pay for services–like AIDS medication and treatment–that the department is already required to supply.

“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. In 2000, Olshansky filed two class action lawsuits on behalf of inmates’ families in New York State against MCI and the Department of Corrections. In seeking $90 million in damages for the families and an end to the contract, she charges that the arrangement violates freedom of speech, imposes taxation without representation and allows monopolistic business practices.

“The whole thing is done in a very anti-competitive way so that MCI can charge the highest price and the state can get a kickback,” she says. Noting that most of her clients are low-income, she adds that MCI and New York State “are preying on the most disenfranchised part of the population. They actually prevent you from talking to people you love.”

The state case is in claims court and the federal case is still awaiting a decision.

This exclusive deal between a major telecom company and a state prison system is by no means an isolated phenomenon. Most states, with a few notable exceptions like Missouri and Nebraska, have struck similar agreements with major telephone carriers.

And indeed, throughout New York State, thousands of families have had to ration phone calls with loved ones, or else forego food, clothing, medication, or other necessities to pay their bills. When neither of those solutions has worked, many have simply had their phone service cut. “Basically, I work two jobs,” says Gillian Bennett of Albany, who spends between $300 and $600 a month to talk to her husband at the Mohawk Correctional Facility in Rome, New York. “My paycheck goes into my phone bill, but I don’t want to work to pay a phone bill.”

So, Bennett was relieved when she discovered Outside Connection. Within one month, 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. It was only after he pleaded guilty to call-forwarding charges that prison officials agreed to reduce his punishment to 30 days without commissary, TV, recreation, phone or package privileges.

The Corrections Department acknowledges punishing a number of inmates for using what it calls an “illegal call-forwarding service.”

“Any inmate violating telephone rules is disciplined,” says Linda Foglia, spokesperson for the agency. To avoid undermining prison telephone security measures, she says, “There is no third-party calling.”

But Prins bristles at these explanations. “Please make this very clear: Outside Connection does not offer a call-forwarding feature for customers to change the location of calls at will,” he says. “This is a point-A to point-B product.”

As for the department’s security concerns, Prins describes them as more ruse than reality. “I designed the system not to interfere with security,” he says, explaining that he offered to supply the agency with billing information for inmate calls on a daily basis. “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.”

He is still hopeful that he can get back to building up his business. In March, he 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. While the FCC has previously called for more competition in the prison telephone industry, Prins fears that a decision will not come soon enough (it is expected by November).

Meanwhile, cancellations continue. “If I don’t get help from the FCC, I’m destroyed,” he says. “And it means that New York State and MCI are going to be free to rip people off even more.”

Lizzy Ratner is a Manhattan-based freelance writer.