An anonymous reader quotes a report from The Verge: The Federal Communications Commission does not have the authority to cap the cost of prison and jail phone calls within states, an appeals court ruled in a decision today, dealing a massive blow to inmates and their advocates who have spent years litigating caps on the cost of such calls. Over several years, the FCC, under Democratic leadership, moved to cap the cost of calls for inmates. Activists argued that prisoners were effectively being extorted by private companies charging exorbitant rates -- a move that benefited private prisons and the states that got cuts of the revenue. Some of those states joined with companies in appealing the FCC's rules. The agency first moved to cap rates across state lines, and then, later, within states. Today, the court ruled that the FCC had overstepped when it attempted to regulate the price of calls within states. In the majority opinion, the court left little wiggle room for advocates of price-capping, with the possible exception of the cross-state caps, which are a minority of calls made by inmates. The opinion vacated not only the agency's proposed caps for in-state calls, but said the agency also lacked justification to require reports on video calling services. It also vacated a provision that would ban site commission payments.