Last week, the nation’s largest prison and jail telecom corporation, Securus, effectively defaulted on more than a billion dollars of debt. After decades of preying on incarcerated people and their loved ones with exploitative call rates and other predatory practices that have driven millions of families into debt, Securus is being crushed under the weight of its own. In March, the company’s creditors gave the corporation an eight-month extension to pay up, urging its sale to a new owner to stave off an otherwise imminent bankruptcy.
Securus is one of two corporations that dominate roughly 80 percent of the U.S. prison telecom industry, forming an effective duopoly that thrives on the captive markets found inside the nation’s lockups. Both companies are owned by private-equity firms: Securus, by Platinum Equity, and ViaPath (previously Global Tel Link), by American Securities.
The slow death of the largest player in this space is not accidental. It follows six years of intense advocacy to expose the vulnerability of the prison telecom industry’s business model on both ethical and economic grounds. Organizers have waged a strategic war against Securus, educating investors and the public about the company’s predatory practices while successfully advocating for legislation and regulation to rein them in.
With Platinum now on the hook to pay $1.3 billion of Securus debt this year following a series of failed attempts to refinance, bankruptcy seems inevitable. The company’s failure would represent a remarkable victory for advocates—and a potential beginning of the end for the prison telecom industry as we know it. {read}