Prison Phones Prove Captive Market for Private Equity

U.S. prisoners pay as much as $17 for a 15-minute call with their families in a jailhouse phone market dominated by two private equity-backed companies, and that cost now is drawing scrutiny from regulators.

Global Tel*Link Corp., Securus Technologies Inc. and smaller competitors in the $1.2 billion inmate-phone industry bid for exclusive contracts to provide telephone service, agreeing to pay as much as two-thirds of calling charges to government or private prison operators. Those commissions can drive fees to levels that make it difficult for prisoners to maintain contact with spouses, children and parents.