You're saying "the government" a lot, but AFAIK there's no specific federal mandate of any kind to the effect of requiring a specific company handle calls at all jails and prisons. If anything that is the consequence of an absence of any specific regulation rather than the presence of one, which is completely the opposite of the point you seem to be making.
In reality, a variety of completely separate state and local correctional facilities put the service out to bid. If anything, it is federal level prisons that would most fit the description of "the government" where you have the best regulations, where there is scrutiny of the bidding process, where there are already caps to limit the expenses associated with calls.
At the county and municipal level, companies that tend to win the contracts have special deals in the form of a "site commission" payments, which are a kickback to the prisons, incentivizing them to give a monopoly to whichever company charges the most and kicks back the most to the prison.
Edit: I feel like I (1) spoke directly to what the parent commenter was saying (2) stated uncontroversial facts, (3) echoing a point a chorus of other commenters are making about what "the government" really means, but I'm seeing a bunch of drive-by downvotes. Would appreciate if anyone wants to chime in and help me understand what I'm missing.