By Ian Simpson

WASHINGTON (Reuters) - The U.S. Federal Communications Commission voted on Friday to reduce prison telephone rates that had made it far more expensive for prison inmates to make phone calls than it is outside prison walls.

The commission voted 2-1 to reduce interstate phone rates for inmates that it said had been as high as $17 for a 15-minute call when extra fees were added in, the panel said in a statement.

The lower fees were aimed at helping prisoners maintain contact with family and friends, which lowers the probability that inmates will return to prison after release, the FCC said.

The new rates will also allow about 2.7 million children who have a parent in prison or jail to remain in touch, the statement said.

"The Commission's reforms adopt a simple and balanced approach that protects security and public safety needs, ensures providers receive fair compensation while providing reasonable rates to consumers," it said.

In an interim move, the FCC limited per-minute rates to 25 cents for long-distance collect calls, meaning that a 15-minute call cannot top $3.75. Debit and prepaid calls were capped at 21 cents a minute, or $3.15 for 15 minutes.

Extra fees and commissions to connect calls also are banned. The new rules go into effect immediately, the agency said.

The FCC's vote ends a practice in 42 of 50 U.S. states where a handful of phone companies were awarded the bulk of prison contracts.

The issue had been pending at the FCC for nearly a decade, when District of Columbia resident Martha Wright, who had a grandson in prison, petitioned for relief from high phone rates.

A May study by the Prison Policy Initiative, an advocacy group, showed that fees made up 38 percent of the $1 billion paid for prisoners' phone calls.

Acting Chairwoman Mignon Clyburn and Commissioner Jessica Rosenworcel, both Democrats, voted in favor of the change. Republican Commissioner Ajit Pai dissented.

Pai said in a statement that the new rules would be difficult to administer and have "unintended consequences," since the rates would be too low for prisons to offer full phone service.

(Reporting by Ian Simpson; Editing by Scott Malone and L Gevirtz)

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