The modern correctional telecom industry emerged in the 1970s just as legislators began passing dog whistle “tough-on-crime” laws that sent the prison population surging. Initially, AT&T controlled almost the entire correctional telecom market much like the broader telecom market. Though expensive, the costs of collect calls from prisons and jails at the time were comparable to the cost of such calls outside. But, in 1984, when federal regulators broke up the AT&T monopoly, new providers like MCI and Sprint entered the correctional market and other niche competitors quickly followed. They cornered the market by agreeing to share revenue from calls with prison and jail administrators. By the mid-1990s, In the early 2000s, private equity firms began to buy into the prison telecom market and drive consolidation. In 2004, H.I.G. Capital formed Securus Technologies — now one of the country’s largest correctional telecom corporations — through the acquisition and merger of two small niche providers. That same year, The Gores Group bought correctional telecom provider Global Tel*Link (GTL), and two years later, in 2006, acquired and merged it with Verizon’s correctional telecom division to create the country’s largest correctional telecom business. Since then, the two corporations have traded.

In the early 2000s, private equity firms began to buy into the prison telecom market and drive consolidation. In 2004, H.I.G. Capital formed Securus Technologies — now one of the country’s largest correctional telecom corporations — through the acquisition and merger of two small niche providers. That same year, The Gores Group bought correctional telecom provider Global Tel*Link (GTL), and two years later, in 2006, acquired and merged it with Verizon’s correctional telecom division to create the country’s largest correctional telecom business. Since then, the two corporations have traded hands among private equity investors several times. And with their financial backing, GTL and Securus have acquired nearly every major competitor in the industry, creating a virtual duopoly. Today, GTL is owned by American Securities and Securus, restructured under holding company Aventiv Technologies, is owned by Platinum Equity. Notably, The Gores Group and Platinum Equity were founded and are run by brothers Alec and Tom Gores, respectively.

These correctional telecom corporations quickly became notorious for their high rates and exploitative practices. In response, for two decades, families litigated and advocated for change. Perhaps the most persistent was Martha Wright-Reed, a grandmother fed up with paying the high cost of calling her incarcerated grandson whose 2001 lawsuit would eventually come before the Federal Communications Commission (FCC). After more than a decade, the FCC started rulemaking in 2012 and instituted rate caps in 2015, but the industry challenged the agency’s regulations in court.

After the 2016 election, Ajit Pai, an attorney who formerly represented Securus, was appointed Chairman of the FCC and announced that the agency would no longer defend its rate caps in court. The decision effectively doomed the regulation, and rate caps for instate calls — those that originate and end within a state and make up 80 percent of all prison and jail calls— were struck down by a federal court in 2017 on the claim that such rates were state matter and not for the FCC to regulate. Since then, about half a dozen states and cities have passed regulations or legislation to lower or eliminate costs, but rates remain high across the country.

In the past decade, correctional telecom corporations have begun introducing new communication services to the corrections landscape, including video conferencing, electronic messaging, and tablets, as well as surveillance technologies, such as voice printing. These burgeoning products and services, which come along with their own exorbitant price tags, are quickly changing the communications space, necessitating new advocacy efforts.

How Much Money is at Stake?

The correctional telecom sector rakes in an estimated $1.4 billion annually in just phone call revenue, with three corporations controlling 91 percent of the market. Correctional telecom providers sign exclusive contracts with federal, state, and local correctional agencies for monopoly control over communications services in their facilities. These contracts often include profit-sharing clauses that dictate what portion of call revenue the corporation will pay to the contracting agency, often referred to as commissions or kickbacks. To further sweeten the pot, at times, providers offer to prepay these commissions, make technology grants, and even pay signing bonuses. Corporations then charge incarcerated people and their loved ones egregious rates for their products and services to cover these government kickbacks and bake in their own profit margin.

Rates vary widely across the market based on federal, state, and local regulations, or lack thereof, and the negotiating intentions and aptitude of each contracting agency. While the FCC has capped the cost of interstate phone calls from both prisons and jails at $0.21 per minute for prepaid calls and $0.25 for collect calls, instate calls — which make up over 80 percent of all calls — remain unregulated at the federal level and inconsistently regulated at the state level. As a result, instate call rates can run as high as a dollar a minute in some states and counties. The highest rates are most commonly charged in local jails, which are often more reliant and interested in kickbacks and receive less scrutiny.

While many other sectors in the prison industry still have room for growth, telecom is quite a saturated and mature market. Nearly every single correctional agency in the country contracts with a private telecom provider for calling services. But thanks to decades of advocacy and recent wins, call rates are declining. In just the last two years, the national average cost for a 15-minute call from jails dropped by 28 percent from $5.71 to $4.14. Several jurisdictions are now taking on the cost of calls directly rather than passing it through to incarcerated people and their families or considering doing so. And one, San Francisco, recently prevented providers from even bidding with the industry’s antiquated, but standard, per minute pricing model, and instead implemented a cost per phone line model that better aligns with the pricing structure of the broader telecom market.

As a result, telecom corporations are introducing new product and service lines to diversify and grow their businesses, including video conferencing, electronic messaging, and tablets, which are often bundled in with their calling services to justify increased costs and avoid procurement.

Getting its start in 1995, video conferencing began to reach critical mass in the 2010s. As of 2016, over 600 facilities had introduced some form of video conferencing and, as was often required contractually by the corporations, 74 percent of agencies scaled back or eliminated visits after implementation to drive up usage. While corporations in the space have stopped contractually mandating that facilities eliminate visits, they continue to benefit from these prior practices since few facilities have reinstated visits.

Electronic messaging, often misrepresented as “email,” is not yet as common in prisons and jails, but its availability has grown quickly over the past decade. Corporations charge incarcerated people and their loved ones for “stamps” to exchange electronic messages with limited character counts and extra costs for attachments like photos. While complete data about electronic messaging services across the correctional landscape is not available, in 2014, before Securus acquired it, JPay brought in $8.5 million on its electronic messaging product, a 77 percent increase over the year before.

These communication services and others are growingly provided through tablets. In many facilities, providers charge incarcerated people to purchase tablets. For instance, in Pennsylvania, GTL charges people $147 per tablet. In other facilities, tablets are provided to incarcerated people for free, but they are then charged either a subscription to use it or for each product or service used on it, or both, which creates a steady revenue stream for providers. In New York, for example, the state’s contract with JPay, which included free tablets, was expected to generate $8.8 million over the five-year term. In recent years, the largest telecom corporations have also expanded into the payment processing business by acquiring the largest private correctional payment processors in the nation.

What Corporations Are Involved?

The correctional telecom market is essentially a duopoly, with GTL and Securus controlling 82 percent.36 GTL is the largest prison telecom provider in the country with service contracts for 479 counties and 23 prison systems that together hold roughly 960,000 people, giving it control of 43 percent of the market by population served. The corporation has been owned by a string of private equity firms.

• Market Share35
• Global Tel Link: 43%
• Securus: 30%
• Securus (CenturyLink): 9%
• ICSolutions: 4%
• ICsolutions (CenturyLink): 5%
• Other: 9%

Founded in 1980, GTL was first acquired by conglomerate Schlumberger Technologies in 1993.38 In 2004, The Gores Group acquired GTL for an undisclosed amount and sold it to Veritas Capital and Goldman Sachs in 2009 for $345 million. Just two years later, the private equity firm put the business back up for sale hoping to collect $800 million for it. The winning bid came in at $1 billion from American Securities, which continues to own the corporation. Today, GTL generates $654 million in revenue from its total suite of communication and other services.

Securus, the other major player in the market, has calling service contracts for 692 counties and 18 prison systems that together hold about 860,000 people, or 39 percent of the market. However, due to the recent diversification of its products and services, Securus rakes in roughly $700 million annually. Like its largest competitor GTL, Securus has also changed hands between various private equity firms. Securus was formed out of the 2004 acquisition and merger of two smaller correctional telecom corporations by H.I.G. Capital. In 2011, Castle Harlan acquired Securus for $440 million. Abry Partners joined Castle Harlan in 2013 when it acquired a 67 percent stake in the corporation at an estimated valuation of $700 million. Within just four years, the corporation more than doubled in value, selling for $1.6 billion in 2017 to Platinum Equity, a firm founded by Tom Gores, the brother of Alec Gores, founder of The Gores Group. But in 2019, Securus’ valuation dropped hundreds of millions of dollars as the leveraged loan debt propping up the corporation plummeted percent under activist pressure.In response, Platinum Equity restructured the corporation, separating out all its business lines under a new holding company: Aventiv Technologies, and launched an unsuccessful public relations campaign to clean up the corporation’s image.

For the past decade, GTL and Securus have bitterly competed for market dominance through costly patent litigation and corporate acquisitions fueled largely by their private equity backing. Since 2012 alone, Securus has spent almost $600 million acquiring competitors and new business lines, including its 2015 acquisition of JPay, which offers tablets and financial services. GTL has also made sizable acquisitions, including its 2017 purchase of Telmate, the fifth-largest provider in the market at the time.

In 2019, their race to dominance came to a halt when advocates blocked Securus’ attempt to acquire Inmate Calling Solutions (ICSolutions), the last independent player that could compete on a national scale. They argued that the deal would destroy competition and lead to higher prices for incarcerated people and their families. The FCC agreed, rejecting the deal after determining that it was not “in the public interest.” GTL and Securus have also pressured smaller competitors into signing licensing agreements that allow them to expand their reach without attracting the attention of regulators, obscuring the true nature of the market landscape. Securus, for instance, used the threat of litigation to bully dozens of smaller competitors into signing patent licensing agreements to achieve what it called “patent peace.”

But the corporate melding does not end there. GTL and Securus both serve as the customer-facing partner for competitors providing only backend telecom infrastructure, often major telecom corporations sensitive to public headlines. For instance, publicly traded CenturyLink stays out of the critical limelight by providing only the backend telecom infrastructure and partnering with Securus and ICSolutions for its customer-facing needs, namely payment collection. In fact, up until 2020 when it sold most of its correctional telecom business to ICSolutions, CenturyLink held the third largest foothold in the market. GTL serves a similar role for Unisys and Talton Communications, the exclusive telecom contractor for immigration detention facilities. Today, ICSolutions is the third largest correctional telecom provider, earning $171 million annually. The corporation accounts for roughly 12 to 15 percent of TKC, a prison services conglomerate owned by H.I.G. that provides financial, commissary, food, laundry, and maintenance services across
the corrections landscape. After its sale to Securus fell through, H.I.G. made a desperate attempt to offload ICSolutions to management with a $280 million loan, $60 million of which was interest-free. But with roughly half of its business controlled by CenturyLink, the deal could not secure credit financing. To create a viable standalone asset, H.I.G. was forced instead to buyout CenturyLink’s correctional telecom business — except its contract with the Texas prison system, one of the nation’s largest, that it holds in partnership with Securus.
The rest of the market is split among smaller providers like NCIC, Paytel, and City Tele Coin.67 These smaller players compete largely for jail contracts, which tend have fewer requirements.

Top Market Players
	GTL	Securus	ICSolutions
Annual Revenues	$654 M	$700 M	$171 M
States Served	23	18	9
Counties Served	479	692	220
Incarcerated People	959,000	862,000	197,000
Average 15-Minutes Jail Call	$2.93	$3.72	$2.63
Max 15-Minute Jail Call	$16.35	$14.97	$3.65

PHONE CALLS

Connecting with others, especially loved ones, is a core human need. For people behind bars, travel time and costs as well as arbitrary visit restrictions often impede on the ability to connect with loved ones in person. Consequently, in many cases, phone calls are the primary way that incarcerated people stay in regular contact with their loved ones in the outside world. And communication for incarcerated people is about more than interpersonal relationships. Regular communication between incarcerated people and their loved ones is the easiest, cheapest, and most effective way to reduce hopelessness and promote positive behavior during incarceration and improve reentry success upon release. It is also critical to mitigating the trauma children with incarcerated parents face.

Despite the undeniable personal, familial, and public benefits of providing incarcerated people with regular access to communication with loved ones, correctional administrators and their corporate vendors have spent decades conspiring to exploit this most basic need by charging exorbitant call rates. Correctional administrators often negotiate against the interest of those in their custody, and the public, to collect hefty kickbacks on calls. An estimated 85 percent of state correctional systems collect kickbacks on prison phone calls, with some kickback commitments topping 90 percent of call rates. In exchange for these kickbacks, administrators sign exclusive contracts with providers. They then build in their generous profit margin, leaving families no alternative to their costly calls.

“People don’t call home… It’s just too expensive. I feel like this is separating families…”
Casey Cormani, incarcerated person in Millard County, Utah

While interstate calls, also known as long-distance calls, are regulated federally, instate, or local, calls — which make up 80 percent of prison and jail calls — are a state matter. Unfortunately, not all states have a government agency with the authority to regulate prison and jail calls, especially as providers begin using cheaper but often unregulated internet protocols, and of those with proper regulatory authority, few use it, leaving providers to charge what they wish in most jurisdictions. And they do.

However big or small, $0.009 here or $1.00 there, these costs add up with detrimental consequences for incarcerated people and their loved ones. One in three families with an incarcerated loved one goes into debt trying to pay for calls and visits alone. These costs are overwhelmingly borne by women, and as a result of the racist policing and the disproportionate criminalization and incarceration of Black, Brown, and Indigenous communities, they are largely women of color. Sadly, many families lose contact over lengthy sentences because the financial burden is untenable. Others are left struggling with the financial burden for years after their loved one’s release. Some have even plead guilty while awaiting trial in jail because they could not afford calls with their attorneys. And still others risk new charges and long sentences to use contraband cellphones to stay in touch with loved ones and connected to a world they hope will not forget them.

Diane’s Story
My son was incarcerated for almost 15 years before I even realized the burden that phone call fees were placing on my family and me. I just hadn’t thought about it. But my Securus bill is the first one I pay every month, and it often means that I can’t afford our gas or light bills. Yet, I know the cost of not keeping in touch with my son would be even higher.
I’ve seen the difference between my son, who has a lot of support, and others in prison who can’t make phone calls or never have family visits. There’s a big difference, and it’s why they struggle while inside and often go back after. It’s the anger and depression that comes with doing time by yourself, and the lack of practical support needed when you get out.
I’m constantly forced to make sacrifices to pay Securus’ high prices, and those sacrifices have consequences for my family. The week my sister fell ill and ultimately passed away, I spoke to my son on the phone every day, four or five times, just to keep him posted on what was happening, so that he could still feel like he was with us. My sister was his favorite aunt; I had to help him mourn. I encouraged him to place as many calls as he wanted and had to shoulder the added financial burden alongside the emotional burden of my own grief.
The absurd call rates and rushed nature of 15-minute conversations are a result of political decisions and corporate business practices that ignore our humanity. And it pains me when the media reinforces them. People think that just because my son committed a crime, he doesn’t deserve to know his family or feel love. It burns me not just for him, but because it ignores me too. A mother is a mother regardless of where her child is or what they’ve done. My love shouldn’t be exploited.
A dollar a minute strikes me as a fair price. I guess it depends what viewpoint you’re coming from. The way I look at it, we’ve got a captive audience. If they don’t like [the rates], I guess they should not have got in trouble to begin with.

Diane Lewis

Video Conferencing

Introduced in the mid-1990s, video conferencing has only recently taken hold in the correctional landscape. It was marketed as a technology service that would augment family bonds by allowing for connections that are more accessible than visits and more intimate than phone calls. Instead, video conferencing has further separated families with incarcerated loved ones in many cases by replacing, rather than supplementing, visits at costs that top the high cost of phone calls — an intentional ploy by correctional telecom providers.

While video conferencing was originally introduced by two small players, VuGate and Renovo, it was not until the nation’s largest correctional telecom providers, GTL and Securus, began selling video conferencing services in the last decade that the product really gained meaningful traction. Since few prisons and jail systems were procuring video conferencing services, they started by tacking the new product onto existing telecom contracts and enticing correctional administrators with promises of more kickbacks. In fact, 84 percent of video conferencing services are contractually bundled with phone, electronic messaging, or commissary services.

These larger corporations also have the capital to front the cost of installing video kiosks, recouping their expenses and far more over the course of lengthy contracts. In the early years of the product roll out, they contractually required administrators to eliminate or limit visits to force the use of their costly systems, going as far as to call the new product “video visitation” to grossly suggest that video calls were comparable to visits. Their plan worked and the term stuck.

By 2016, more than 600 facilities in 46 states were using some form of video conferencing. Jails, which hold largely local people, were the early adopters and 74 percent of them ended or significantly reduced visits after implementing the technology. It is devastating to families who can no longer look into their loved ones eyes or give them a hug during a visit. It is even worse for those who do not have access to a phone or computer and now have no way to communicate at all. The corporations retired the contractual prohibitions on visits after widespread outrage, but continue to benefit as few facilities have reinstated visits since.

Unlike free video conferencing services in the outside world like Facetime, Zoom, or Google Hangouts, video conferencing in prisons and jails are quite costly. More expensive than phone calls on average, video calls run as high as a dollar per minute. However, video calls are often prepaid for a set length of time — often in 10, 20, or 30-minute intervals — and refunds are rarely issued when a call is interrupted or prematurely terminated, which are common occurrences. Some jails offer free onsite video conferencing, which requires families travel to the jail to use a kiosk to have a video call with their incarcerated loved one who is likely in the same building or on the same premises.
And in addition to threatening visits and imposing high costs on families, video conferencing services are often poor in quality. Grainy or blank video, distant or static audio, and live monitoring further frustrate efforts to connect using video conferencing.

In the end, while video conferencing can be a powerful supplementary tool for incarcerated people to connect with their loved ones, especially when held in distant facilities, correctional telecom providers deploy it in the
most exploitative and inhumane way, significantly undermining its beneficial value.The majority of the company’s profit comes from the inmates and their family.

Electronic Messaging

Electronic messaging has been in the correctional landscape for roughly a decade. However, like many other technology products and services, it has picked up steam in recent years. For many with access to technology, electronic messaging offers an easy and effective, though costly, substitute for postal mail. But electronic messaging in prisons and jails is not comparable to email, though correctional telecom providers attempt to suggest it is.

In prisons and jails, these corporations force incarcerated people and their families to buy “stamps” that range from $0.05 to $1.25 and are sold both individually and in bundles to send electronic messages. Each stamp is good for a one message with a character or page limit — typically one-page typed or 5,000 characters. An additional stamp must be added for longer messages and for each attachment. Videos require several stamps. For inexplicable reasons, outbound stamps can cost more than inbound stamps. The cost of stamps can also fluctuate, often around holidays. And like other prepaid telecom services, there are also often fees for purchasing stamps that add to the overall cost of electronic messaging. When added together, these costs can quickly surpass the cost one would bear to send the same content through U.S. postal mail, let alone email, which is free.

And unlike email, electronic messages are not delivered instantaneously. They are surveilled and reviewed much like regular mail in prisons and jails before they are delivered and can take days to reach the intended recipient. And it is also not always easy for incarcerated people to access their emails. While some facilities have individual tablets that incarcerated people can use to access their emails — generally at an additional one-time or subscription cost — in many facilities, incarcerated people must access their emails on communal kiosks, which are often busy and have limited privacy.

Tablets

In an increasing number of systems across the country, incarcerated people are being allowed to purchase tablets, which resemble knockoff iPads with basic software that cannot access the internet, through which people can purchase communication, education, and entertainment products and services. Despite their poor quality, these tablets can cost north of $140, an enormous amount of money for many incarcerated people often earning pennies per hour.
Telecom providers claim that tablets offer ready communication access, educational opportunities, and solutions to idleness, bringing incarcerated people closer to their families and making institutions safer. And while modern technology is welcome in facilities generally devoid of it, these claims ignore the unprecedented exploitation that these devices facilitate.

To push back on this narrative, correctional telecom providers now offer free tablets in many jurisdictions, but this is not just an empty gesture, it is actually a doubly exploitive ploy. In negotiating free tablet contracts, providers are often successful in convincing correctional administrators that to recoup the cost of the tablets, the products and services sold on them — books, music, movies,electronic messages, and calls — must be priced higher. In other words, these contracts trade in a one-time fixed cost for higher rates into perpetuity, which cost incarcerated people and their loved ones much more in the long run.

Since 2016, tablet providers like JPay and GTL have executed free tablet contracts in several states, including Connecticut, Indiana, Missouri, and New York. The cost of correctional tablet products and services defy comprehension, and as is commonplace in correctional telecom, correctional administrators often get kickbacks from tablet purchases. A single song on a JPay tablet can cost up to $2.50 and an album as much as $46 — compare that to the price of a monthly Apple Music subscription, which costs $15 and allows up to six users to stream roughly 60 million songs. And incarcerated people routinely lose their purchases when correctional administrators switch providers.

In Florida, for example, incarcerated users lost $11.3 million in music purchases after administrators switched contractors in 2018. Perhaps the most egregious tablet scam was exposed in 2019 when GTL was found charging incarcerated people to read books available for free online. Worse yet, GTL was charging readers by the minute. The $0.03 per minute rate would make reading too expensive for the average person, nevertheless, people who typically earn little more than pennies for a full hour’s work and who are statistically more likely to have literacy limitations or learning disorders.

Surveillance

Correctional communication has long been monitored, but correctional telecom corporations now lean heavily on new surveillance technology to advertise their products, raising critical concerns for not just incarcerated people, but also the loved ones they are in communication with.

Correctional telecom providers record and store every conversation completed through their systems, and even listen in live at times. They willingly share these recordings with law enforcement and prosecutors. And while privileged communication with attorneys is supposed to be excluded, they have illegally recorded and shared these calls too. In fact, Securus settled a lawsuit in 2016 for recording 57,000 privileged calls between incarcerated people and their attorneys, and has faced several similar lawsuits since.

The providers are now layering new surveillance technologies onto their communications services. For instance, Securus has introduced voice print analysis tools — which were originally developed for the U.S. Department of Defense to identify terroristic threats — to identify and track the voices of not just incarcerated people, but also those who they call on the outside. The corporation has already documented more than 200,000 incarcerated people’s voice prints, raising deep concerns about how their voice databases would be used if sold to law enforcement agencies. Notably, in some systems, incarcerated people can be denied phone access if they refuse to give the corporation a voice print.

Securus, and other corporations like it, then use proprietary programs to recognize specific trigger words, often boasting about the ability to decipher various accents or dialects. Some even claim they have trained their systems to “speak inmate,” presenting serious concerns about the biases of those training the machines.

“We’ve taught the system how to speak inmate.”
James Sexton, executive at LEO Technologies

And it is not just law enforcement who has been given access to private communication between incarcerated people and their support networks,it is also the public. Over the last few years, there have been several major data breaches leaking recorded calls to the public. In 2015, hackers concerned about the constitutional rights of incarcerated people leaked 70 million calls from Securus’ servers, revealing 14,000 recorded privileged attorney calls. A lawsuit was brought, and the corporation quietly settled in 2020, never revealing how many cases were negatively impacted by the recording of those calls.

The correctional telecom industry exploits the fundamental need for human connection. Corporations in the market force families to make impossible choices, such as paying for rent or paying for a child to speak to an incarcerated parent. And the situation was made materially worse by the COVID-19 pandemic and ensuing economic crisis. Families have been barred from visiting incarcerated loved ones, at a time when connection is more necessary and resources lower than ever.

New technologies, like video conferencing and electronic monitoring, have the potential to connect incarcerated people and their loved ones, but, in the hands of prison telecom corporations, have been transformed into yet another tool to extract resources from communities. Behind this exploitation are some of the nation’s most prominent private equity firms, passively building wealth off of over-policed communities.