This week's issue of the Economist highlighted a frustration of mine that has bothered me ever since I started doing prison ministry two years ago. Namely, the monopolies inside prisons are able to exploit what is literally a captive market.
Prisoners’ families tend to be poor. Talking to a brother, son or father behind bars can incur an upfront fee as high as $4.99; per-minute charges may reach $0.89. Americans at liberty, even if they don’t have Skype, can easily get unlimited domestic calls for $9.99 a month. That would buy one six-minute call from a state prison in Georgia to a neighbouring state.
Outside prison, phone companies compete fiercely for customers. Inside, they don’t have to. Each state typically grants a single company a monopoly over telephones in any given prison. The result is high prices and a booming trade among inmates in contraband mobile phones.
As the above example shows, the monopoly on phone calls is a classic example of an abuse of monopolistic behavior - AT&T was broken up for less back in the 1980s.
I should also note, this is true of most merchandise (printed books being one of the few exceptions.)
What I don't understand is how legally such a scheme does not run afoul of the Sherman Anti-Trust Act and other legislation that specifically bars the abuse of monopolistic power. How is it that a state can legally grant monopoly - especially in a situation where the barriers to entry are no longer intrinsically hard to overcome - in situations like these?
Knowing prisoners as I do, I guarantee you that these "resident lawyers" will literally make a Supreme Court case if they can. What legal argument would be used to say that anti-monopolistic laws do not apply in this situation?