Top prison communications firms make killing, while families are crushed by costs

Global Tel Link is the nation’s largest prison communications provider. Like it’s arch nemesis, Securus Technologies, the company has grown up over the last decade. Both companies have generated billions of dollars per year in revenues and both have changed hands among high-flying hedge funds multiple times in recent history. GTL recently handled over 300 million phone calls in one year and reported that it had paid out over $500 million in commissions to the penal institutions where it does business. The prison calling industry has become big business.

 

But not everyone in reaping the windfall. Throughout the country, there are still hundreds of thousands of families who are forced to shell out extreme amounts of money, just to stay in touch with their incarcerated loved ones. In one example, a mother of two was paying well over $2,000 per year in phone charges, so that her sons could have their father in their lives. But even after having paid so much, her children were scarcely able to talk with their father more than once a week. And her story is far from the worst.

 

In Arizona, inmates pay some of the highest phone rates in the country. The state average for outgoing phone calls is more that $1 per minute, an incredible sum of money, many times what the free market rates would be for similar services. Opponents of the current calling regime say that because inmates are literally a captive market, these companies and the prisons that employ them are charging monopoly prices, clearly in contravention of various anti-trust laws.

 

In summer of 2016, the Prison Policy Initiative and other advocacy groups presented essentially this same argument to the Federal Communications Commission. They argued that the rent seeking that was being seen throughout various states was extremely harmful to inmates and their families and that it was only being made possible by the total monopoly that the companies enjoyed on calling services within any given prison. The FCC agreed. It passed new regulations that would have capped all prison phone rates to just $.21 cents per minute.

 

Within hours, GTL and Securus Technologies were taking action. They jointly filed a motion for an injunction against the FCC in a D.C. circuit court. The presiding judge agreed that the FCC had hastily promulgated the new regulations, without duly considering the implications they would have on the market as a whole. The judge issued an injunction, ordering the FCC to show cause before the court. The plaintiffs argued that had the regulations gone through, much of the prison calling system in the United States would have been put in jeopardy, placing at risk the ability of up to half of the nation’s inmates to have any access to phones at all.

 

But hard-line law-and-order types, such as Joe Arpaio, have a point when they say not to commit crimes if inmates and their families don’t like paying the going rates. The hard truth is that, in modern America, no one sympathizes much with the incarcerated.