A U.S. federal appeals court decided Tuesday to strike down a rule that capped the amount inmates could be charged on interstate phone calls made to lawyers, family members and friends.

The U.S. Court of Appeals for the District of Columbia Circuit sided with prison phone company Global Tel*Link in its lawsuit against the Federal Communication Commission after the FCC decided to drop its defense of the price caps.

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The three-judge panel ruled 2-1 the caps on intrastate phone calls implemented by the FCC during the Obama administration overstepped the commission's authority under the Telecommunications Act as the government body is generally forbidden from regulating any communications services that take place within the same state.

While the FCC is the body that originated the cap, it chose not to defend it. Chairman Ajit Pai, who was appointed by President Donald Trump, instructed the commission’s lawyers to drop the defense of the policy.

“Today, the D.C. Circuit agreed with my position that the FCC exceeded its authority when it attempted to impose rate caps on intrastate calls made by inmates,” Pai said in a statement. “Looking ahead, I plan to work with my colleagues at the commission, Congress and all stakeholders to address the problem of high inmate calling rates in a lawful manner.”

While Pai praised the decision, Commissioner Mignon Clyburn called the ruling “deeply disappointing,” and said, “It is a sad day for the more than 2.7 million children in this country with at least one incarcerated parent.”

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“I remain committed to doing everything I can from working with my colleagues at the commission to supporting the efforts of Congress and those in the states to bring relief to millions who continue to suffer from the greatest form of regulatory injustice I have seen in my 18 years as a regulator in the communications space,” Clyburn said.

Under the leadership of former Chairman Tom Wheeler, the FCC voted in October 2015 to impose rate caps of 11-22 cents per minute on calls from prisons. Prior to the cap, inmates were subject to call rates as high as $14 per minute.

Despite the ruling, the FCC still can cap the prices of interstate calls. The government agency has limited the charges of those calls to 21-25 cents per minute.

In addition to undoing the FCC’s caps on intrastate calls made by inmates, the court also created uncertainty for limits on “ancillary fees” tacked onto phone calls — another rule that was passed during the Obama administration.

The limits prevent prison phone companies from adding excessive fees for handling phone calls. However, the appellate court’s decision asked the commission to re-examine the caps to “determine whether it can segregate proposed caps on interstate calls [which are permissible] and the proposed caps on intrastate calls [which are impermissible]."