Captive Audiences: A Case Study of Phone Rates for Incarcerated Persons

Phone calls from prisons and jails are extremely costly for inmates and their families. In this article, we examine the market structure of inmate calling services and the inherent market failures that lead to such high calling rates. We determine that there is a classic anticompetitive problem involving vulnerable populations captive to a monopolist service provider, and discuss the Federal Communications Commission’s attempts to lower these rates. In addition to phone call expenses, we discuss other costs such as the disproportionate effects on People of Color and lower-income individuals, the impact on recidivism and inmate mental health, and other welfare harm, and show that lowering these rates would further the goal of inclusive competition.

By Coleman Bazelon & Paroma Sanyal¹

The concept of Inclusive Competition means that antitrust should not improve or preserve competitive dynamics to the benefit of only certain parts of the population, but rather, takes into account how competitive dynamics may be improved for the benefit of all segments of the population. Indeed, it might look particularly at vulnerable populations captive to certain providers of goods or services or market dynamics, who are not reaping the benefits of competition that antitrust seeks to provide. In this article, we discuss our experience analyzing the competitive dynamics that impact one such captive audience.

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