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Securus Technologies provides phone services to more than 2,200 correctional facilities, including the York Community Reintegration Center in Niantic, Conn.

This Call May be Monopolized and Recorded

Advocates say prison phone companies’ merger diminishes competition

South Woods State Prison was two-and-a-half hours from home. With work Monday through Friday and no car, C.B. could only make the trip once a month to visit her boyfriend, J.S. (their names are withheld out of fear of retribution.) Letters were delayed or sometimes not delivered at all. This left telephone calls as the last way for J.S. and C.B. to meaningfully communicate. But an automated voice warning, “you have 30 seconds left,” followed by a dial tone reminded them that their relationship was different.

For each minute they spent in conversation, their account would be docked another 21 cents, the maximum allowed under FCC rate caps. Calls would cut off at 30 minutes as if to notify them how much they had already spent. And every time J.S. called back, they would both be reminded of who was collecting the check with a simple pleasantry, “Thank you for using Securus.”

A year into J.S.’s sentence, C.B. had paid Securus hundreds of dollars. Still, she considered herself lucky. Though the rate she paid was the maximum allowable for interstate calls under FCC rate caps, family and friends with instate phone numbers were paying $3.40 for the first minute and $0.40 for each minute after that.

Securus has similar contracts with over 2,200 facilities, serving a significant portion of the nation’s 2.2 million incarcerated individuals and their support networks. And its reach just got broader.

In May, Securus announced that it would acquire Inmate Calling Solutions (ICS), a smaller competitor, for $350 million — extending its reach to over 260 new facilities. The deal may seem like just the latest in a series of acquisitions that have cost the company nearly $600 million in the past six years. But this purchase marks a turning point for the company that raises grave concerns for the industry and those it serves.

Before the deal, Global Tel Link (GTL), Securus’ main competitor, led the $1.2 billion correctional telecom industry in revenue. The ICS purchase will make Securus the largest provider by nearly every measure — revenue, contracts, and facilities served.

If the FCC approves the ICS deal, then 47 state prison systems will contract with just three companies for telephone services: Securus, GTL or CenturyLink. As much as 90 percent of the market will be split between Securus and GTL. The remaining piece will be controlled by smaller competitors, with many of whom Securus has signed licensing deals for use of its large and growing portfolio of patents. In fact, according to the company’s CEO, these Securus licensees represent over 95 percent of the revenue generated in the outbound inmate calling sector.

Yet, these statistics understate the degree of control that Securus will have over the industry after the deal. CenturyLink, although nominally independent, has a long-standing partnership with ICS in its correctional services, giving Securus a stake in the company’s market share after the deal. That leaves Securus and GTL as the only two independent competitors, raising critical antitrust concerns.

Securus now has an immense competitive advantage over its competitors. In states where ICS and Securus used to compete, the deal will remove a key rival from the bidding process. In new markets with smaller regional providers, these competitors will be less and less likely to compete with Securus’ ever-expanding suite of services. And in still other areas, Securus will be the only national provider competing for a contract. With fewer businesses making offers, officials cannot turn to other bids for better terms.

Once Securus has won a bid, it can wield its extensive bargaining power to secure favorable terms for the company. While officials may bemoan these contracts, they may not have any other options. But in the end, it is incarcerated individuals and their support networks that will bear the costs of higher rates and fees or less communication.

This deal is not inevitable. The FCC is currently examining the deal, and the public has until July 16 to submit comments opposing the merger. In order to approve the deal, the FCC must find that it “serves the public interest” and preserves competition.

Left holding the bill, people like J.S. and C.B. already know, all too well, that it does not.

Bianca Tylek is director and Connor McCleskey is an associate with the Corrections Accountability Project, a non-profit criminal justice advocacy organization dedicated to eliminating the influence of commercial interests on the criminal legal system. It is a project of the Urban Justice Center.