The US Federal Communications Commission voted on Thursday to lower price caps on prison phone calls and closed a loophole that allowed prison telecoms to charge high rates for intrastate calls. The vote will cut the price of interstate calls in half and set price caps on intrastate calls for the first time.

The FCC said it “voted to end exorbitant phone and video call rates that have burdened incarcerated people and their families for decades. Under the new rules, the cost of a 15-minute phone call will drop to 90 cents from as much as $11.35 in large jails and, in small jails, to $1.35 from $12.10.”

The new rules are expected to take effect in January 2025 for all prisons and for jails with at least 1,000 incarcerated people. The rate caps would take effect in smaller jails in April 2025.

Worth Rises, a nonprofit group advocating for prison reform, estimates that the new rules “will impact 83 percent of incarcerated people (about 1.4 million) and save impacted families at least $500 million annually.”

New Power Over Intrastate Calls

The FCC has taken numerous votes to lower prison phone rates over the years, but Thursday’s is particularly significant. While the FCC was previously able to cap prices of interstate calls, an attempt to set prices for intrastate calls was struck down in court in 2017.

Prison phone companies could sue again. But the FCC said it now has authority over intrastate prison phone prices because of the Martha Wright-Reed Just and Reasonable Communications Act, which was approved by Congress and signed by President Biden in January 2023. The new law “empowered the FCC to close the final loopholes in the communications system,” the commission said.

The 2023 law—named for a grandmother who campaigned for lower prison phone rates—“removes the principal statutory limitations that had prevented the commission from setting comprehensive just and reasonable rates,” the FCC said. Specifically, the law removed “limits to the commission’s ability to regulate rates for intrastate calls and video communications.”

More than half of prison audio call traffic is intrastate, with the calling and called parties both in the same state, according to data in a draft of the FCC order released before the meeting.

The FCC’s work to reduce prison phone rates “was not always embraced by the courts,” FCC chair Jessica Rosenworcel said. “We were told—over and over again—that the commission did not have the authority to address every aspect of these rates, because while interstate calls fell within our jurisdiction, intrastate calls did not.”

Previously, the FCC imposed price caps on interstate calls ranging from 14 to 21 cents per minute for audio calls, depending on the size of the facility. Going forward, a uniform set of price caps ranging from 6 to 12 cents per minute will apply to both interstate and intrastate calls.

Ban on Other Fees

The FCC also adopted video call rate caps for the first time. The video call caps range from 11 to 25 cents per minute. These caps are classified as “interim” and could be lowered in the future.

Other fees will be prohibited, too. “Using this new law, we fix what has been wrong for too long,” Rosenworcel said. “We reduce calling rates by more than half. We stop tacked-on costs like ancillary fees and prohibit special fees for site commissions. We make clear these policies apply to both interstate and intrastate rates. We also set rates for video calls for the first time. On top of that, we strengthen accessibility requirements for incarcerated people with disabilities and improve consumer disclosures.”

Site commissions are payments that phone companies make to prisons and jails in exchange for the exclusive right to offer service to inmates. FCC Commissioner Geoffrey Starks said that banning the commissions will “end the practice of provider kickbacks to correctional facilities and payments for costs irrelevant to providing services so callers will no longer be forced to bear the financial burden of these costs.”

The nonprofit Prison Policy Institute said that prison phone companies charge ancillary fees for things “like making a deposit to fund an account.” The ban on those fees “also effectively blocks a practice that we have been campaigning against for years: companies charging fees to consumers who choose to make single calls rather than fund a calling account, and deliberately steering new consumers to this higher-cost option in order to increase fee revenue,” the group said.

The ancillary fee ban is a “technical-sounding change” but will help “eliminate some of the industry’s dirtiest tricks that shortchange both the families and the facilities,” the group said.

FCC: Revenue Will Still Exceed Costs

The FCC’s draft order said that even with the new caps, potential “revenues for eight out of 12 [Incarcerated People’s Communications Services] providers exceed their total reported costs when excluding site commissions and safety and security categories that generally are not used and useful in the provision of IPCS. These eight firms represent over 90 percent of revenue, 96 percent of [average jail and prison population], and 96 percent of billed and unbilled minutes in the data set.”

Worth Rises said that the “primary factors driving the FCC’s lower rate caps is the exclusion of security and surveillance costs as well as the exclusion of commissions. For decades, the cost of an ever-expanding suite of invasive surveillance services has been passed on to incarcerated people and their loved ones. With [the] new rules, prison telecoms will be barred from recovering the cost of the majority of such services from ratepayers.”

The price-cap order was fully supported by the FCC’s three Democrats and Republican Nathan Simington. Republican Brendan Carr approved in part and concurred in part, saying he had concerns about the rate structure.

This story originally appeared on Ars Technica.