A 15-minute phone call from a prisoner to his or her family can cost as much as $17. Both the state and the phone company, which the state awards the contract to, profit from these enormous charges.
States are motivated to award their prison phone contracts to the company that charges the most, because the state will get kickbacks from the phone rate, reports PrisonPolicy.org.
So-called "free market" Republicans have not raised any objections to this blatant price fixing, but last Thursday, the Federal Communications Commission annouced that it would ask for public comment on prison phone rules and rates.
Exorbitant calling rates make the prison telephone industry one of the most lucrative businesses in the United States today. This industry is so profitable because prison phone companies have state-sanctioned monopolistic control over the state prison markets, and the government agency with authority to rein in these rates across the nation has been reluctant to offer meaningful relief.
Prison phone companies are awarded these monopolies through bidding processes in which they submit contract proposals to the state prison systems; in all but eight states, these contracts include promises to pay “commissions” — in effect, kickbacks — to states, in either the form of a percentage of revenue, a fixed up-front payment, or a combination of the two.