Yesterday morning I went to Farley’s Coffee with my girlfriend. We go every Saturday and read through magazines while sipping our morning coffee.

I picked up The New Yorker and found an article that described a pretty interesting problem with jails. And private equity.

Here’s the scenario: someone goes to jail, and their family wants to visit them. No problem, you can make an appointment and see them.

Well, sometimes people want to communicate with prisoners without actually visiting in person. Say, via a phone call or video meeting.

These jails, however, aren’t exactly competent technologists. They can’t develop their own communication systems, so they need to install a system built by a third party developer. They also can’t use the traditional tools because they have some unique requirements (which I’ll get to later on).

Over the years many small communications technology companies were built to solve this problem for jails. These tools allowed families to chat with the prisoners, usually for a small fee. Over a few more years, private equity rolled them up. They are strong, recession-proof businesses.

None of what I have described so far is “bad” per se. There is a need in the market, and a company built a product to solve it.

The issue, however, is these audio and video services end up crowding out the in-person visits. Sometimes the jails even remove the option for in-person visits because they can earn revenue from the video calls, but they don’t earn revenue from free in-person visits. Visitors often pay over $1 per minute for the video calls. The jails split the revenue with the communications companies. The jails then funnel visitors to the revenue-generating communication channel, and away from the in-person visits.

One example in the article was St. Clair County jail (near Flint, Michigan). In 2017, they had both free in-person visits and the video calls as options. They made $154,132. The next year, they removed the in-person visits, and just had the paid video calls. They made $404,752.

While jail funding often comes from the government, there’s nothing illegal about jails generating additional revenue from other sources. That said, this whole situation creates some sad circumstances. The article outlined two teenage children who couldn’t visit their father in prison. They resorted to sneaking around the outside of the jail to that he could briefly see them outside his window (despite not being able to hear them).

Who is at fault here? In any scenario involving private equity, they are usually the bad guy. And in some ways, they are here too. It’s the technology they provide that’s powering these interactions. And what are families going to do: not pay the money to talk to their incarcerated loved ones? There aren’t any alternatives.

On the other hand, the jails also might be at fault here. If they weren’t revenue-seeking - and instead just wanted to provide the best experience for their prisoners and their families - they would probably have a few different communications options. But they can make more money if they limit the communication channels.

I don’t personally have the power to change any of this: I suspect the answer will be government intervention driven by elected officials. But it’s an interesting justice system story that intertwines with finance.