Isn't it possible to separate the trafic? I'm not versed in the GSM standard, but there must be some form of authentication. It might be possible to recognize to whom the signal belongs. (In the worst case, cooperation of the cell service providers could be mandated by law in the network cells covering the prison premises.)
I don't think so, or at least non-trivially anyway. Same reason jammers are prohibited as they have a potential spillover, as you can't definitively say 'this is the range it'll work in'.
On the part of service providers also monitoring it it's difficult, a fair few prisons are actually within reasonably populated areas so it'd have to be pretty accurate signal tracking so you didn't get some spillover.