Oddly enough, your statements are directly contradicted by the story.  It was under a monopoly -- a <i>national</i> monoply, regulated closely by the federal government -- that the system was, in this case, far better:<p>&quot;AT&amp;T was the exclusive service provider in the industry, and costs for inmates were comparable for similar services outside. But in the 1980s, an antitrust agreement pulled the Bell System apart. Meanwhile, America’s incarceration rate was booming, driven by the war on drugs and more stringent sentencing guidelines.<p>&quot;With AT&amp;T in pieces, upstart phone providers saw dollar signs in the bevy of new &quot;customers&quot; waiting to be served. First, other major telecommunications companies, such as MCI and Sprint, moved in. Then came the specialists — dedicated outfits, like Pay Tel Communications and Global Tel<i>Link, willing to appeal to the specific needs of the corrections industry. Providing communications to a literally captive audience was highly profitable, and as these companies grew, they popularized a new kind of contract with local governments. These agreements hinged on an idea formally known as the &quot;site commission contract,&quot; though critics often describe them using another word: kickback.&quot;<p>&quot;Free market&quot; doesn&#x27;t by itself sprinkle Magickal Pixiy Duste over all problems and make them go away.  A guy wrote a long book about this once, and how unregulated laissez-faire markets tended strongly to special interests and plutonomy.  He was named Smith, title is </i>An Inquiry Into the Nature and Causes of the Wealth of Nations*.  Recommended reading.