Arguing between "oh is it the government, or the market? don't know let's have a long discussion about it". The article clearly shows there isn't much of a separation between. These companies (in this case single company) is heavily lobbying and bribing government officials with kickbacks and such tricks.
I wouldn't be surprised that when some prison official retires she/he gets to work as a "consultant" for JPay.
Hell, these people are infants compared to what is going on in the rest of the industries -- military, healthcare, agrobiz, telecoms.
Repeat after me "the there is no effective difference between the governmental agencies and the large companies and conglomerates". It is the same people just playing musical chairs. FDA chairman worked for Monsanto (as an example). Ex procurement general works for Northrop Grumman and so on.
Objectively, can anyone say that isn't a rational outcome of a the "free market"? I can't. The best and easiest way to turn a profit at that scale is regulatory capture. A few millions in bribes have a chance of getting back billions in profits in the future.
Moreover, laying all the blame at the feet of government for these companies being scumbags is precisely why I said private industry has the wrong culture for this sort of thing.
No, the government is the entity making a selection among several choices, and is the entity in the position to negotiate the rates.
Therefore they could bargain for lower rates if they wanted.
Misrepresenting the choices isn't making your case.
The government is the entity with power here. The government regularly dictates all kinds of terms for their contracts. All the time.
JPay’s rapid rise stems in part from the generous deal it offers many prison systems. They pay nothing to have JPay take over handling financial transfers. And for every payment it accepts in these states — prisoners typically receive about one per month — the company sends between 50 cents and $2.50 back to the prison operator.
The government does have the power, and they most likely are outsourcing this part of their non core infrastructure like most other companies do, to save money.
But Lower rates for whom? Inmates. Why would prison officials care if inmates get lower rates?
You can't answer the question for a reason bub.
There are a lot of prisons out there, state, local, federal, private and public and they use a wide range of companies. However, they have little incentive to allow multiple venders at the same time so there is little real completion after the fact.