> This comes as the two largest market players, Aventiv and ViaPath, each navigate financial crises. Aventiv recently effectively defaulted on its $1.3 billion debt after a year of failed refinancing efforts. ViaPath was reportedly closing in on a $1.5 billion refinancing deal until news of the regulations killed the deal.
This suggests that either they overestimated how big the kickbacks they can pay to the prisons were, or the whole business model wasn't actually that lucrative, and providing phone services to prisoners is actually expensive (likely primarily due to the surveillance requirements).
This regulation doesn't just remove the exploitation of a captive market, but also makes prisons shoulder the cost of surveillance. Which, for the reasons explained in the article (better connections to society = better chances of rehabilitation) is likely a good idea, but I can see why people would make an argument that this part of the cost of incarceration should be borne by the inmates/families, not the rest of society (the obvious counterargument would be that we don't make inmates pay the full cost of their incarceration either).
> This suggests that either they overestimated how big the kickbacks they can pay to the prisons were, or the whole business model wasn't actually that lucrative, and providing phone services to prisoners is actually expensive (likely primarily due to the surveillance requirements).
Another option: those in charge extracted too much money from the business too fast, perhaps believing their days are numbered (or perhaps just out of run of the mill greed).
They already do. After I left prison I was hired to tidy up the transcripts of the calls as the AI they used wasn't great on prison slang. All the calls were flagged by the prosecutor's office for illegal activity, but they were all the opposite when I listened to them. It was sad.
They already are cheap VOIP services too, you can hear the high level of digital compression on all the calls.
There is a high cost probably in maintaining all the handsets inside the facilities.
> This comes as the two largest market players, Aventiv and ViaPath, each navigate financial crises. Aventiv recently effectively defaulted on its $1.3 billion debt after a year of failed refinancing efforts. ViaPath was reportedly closing in on a $1.5 billion refinancing deal until news of the regulations killed the deal.
This suggests that either they overestimated how big the kickbacks they can pay to the prisons were, or the whole business model wasn't actually that lucrative, and providing phone services to prisoners is actually expensive (likely primarily due to the surveillance requirements).
This regulation doesn't just remove the exploitation of a captive market, but also makes prisons shoulder the cost of surveillance. Which, for the reasons explained in the article (better connections to society = better chances of rehabilitation) is likely a good idea, but I can see why people would make an argument that this part of the cost of incarceration should be borne by the inmates/families, not the rest of society (the obvious counterargument would be that we don't make inmates pay the full cost of their incarceration either).