Federal regulators took sweeping new steps Thursday to lower the cost of calling jail and prison inmates, completing a years-long effort to correct what some top officials have called an "egregious case of market failure" in inmate phone rates.

The rules establish a ceiling for phone calls to jails and prisons that's based on the number of inmates housed by those institutions. For state and federal prisons, rates will be capped at 11 cents per minute. Phone companies serving the nation's smallest jails — those with fewer than 350 inmates — will not be allowed to charge more than 22 cents per minute.

They would prohibit so-called "flat-rate" calling, which charges families the same regardless of how long they talk. And the rules would gradually "phase down" the price of collect calls over the course of several years.

The Federal Communications Commission's new rules would make connecting inmates and their families dramatically more affordable. In some cases, a typical call costs as much as $14 a minute, resulting in conversations that cost families some $54 a call, said Democratic FCC Commissioner Mignon Clyburn, who helped lead a push in 2012 to control the costs of interstate inmate calls. That effort, however, didn't address the cost of prison phone calls within states. The rules the agency approved Thursday does.

"This system has preyed on our most vulnerable for far too long," said Clyburn. "Families are being further torn apart and the cycle of poverty is being perpetuated."

Republicans at the FCC said the rules were "well-intentioned," but didn't address a growing problem at jails and prisons: The use of contraband cellphones. In some cases, said FCC Commissioner Ajit Pai, smuggled-in cellphones have been used by gangs of inmates to extort family members of other inmates. By beating up other prisoners, taking photos of their wounds and sending them to the victims' loved ones, gangs of inmates have been able to demand money from families, said Pai. In addition, inmates use contraband cellphones to run drug operations and are "calling in hits" on other inmates.

"With contraband cellphones, prisons have become a base of operations for criminal enterprise," Pai said.