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State governments has gone along with US phone companies charging regional jail or prison inmates up to $14 a minute to make calls.
That changed last week when the FCC voted 3-2 to cap the rates and fees phone providers can charge for service in US prisons and jails.
"Voting to endorse today's reforms will eliminate the most egregious case of market failure I have ever seen in my 17 years as a state and federal regulator," said FCC commissioner Mignon Clyburn.
The FCC started looking at the issue in 2013 because of a Washington DC grandmother who was spending $1,000 a year to talk to her incarcerated grandson.
The move caps rates at 11 cents per minute for prisons and 14 to 22 cents per minute for jails and limits fees.
The change was supported by 26 civil and human rights groups.
Rate caps were strongly opposed by the phone providers who call the vote a "business-ending event" and are threatening legal action. The National Sheriffs' Association says it may have to eliminate alL inmates' access to phones .
Under the old system, prisons and jails received what have been called "kickbacks" in return for giving contracts to phone providers.
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