Broadband Industry Challenges NY Law Requiring $15 Monthly Service

Late last month, New York Governor Andrew Cuomo signed legislation requiring broadband providers to offer service to some low-income customers at rates of no more than $15 a month.

Now, a coalition of broadband industry associations is suing to invalidate Cuomo's move, arguing that the state isn't entitled to set broadband prices.

“In short, New York has overstepped its regulatory authority,” the New York State Telecommunications Association, CTIA -- The Wireless Association, ACA Connects--America's Communications Association, US Telecom -- The Broadband Association, NTCA -- the Rural Broadband Association, and Satellite Broadcasting & Communications Association allege in a complaint filed Friday in U.S. District Court for the Eastern District of New York. “The court should declare that New York’s rate regulation is preempted and should permanently enjoin defendant from enforcing or giving effect to it.”

The groups contend that only the federal government can regulate the broadband industry, and argue that the Federal Communications Commission has declined to do so.



But Harold Feld, senior vice president at advocacy group Public Knowledge, says the lobbying organizations “have the analysis exactly backwards.”

Feld says the federal Communications Act doesn't prevent states from regulating rates charged by providers of “information services” -- which is how broadband has been classified since 2018, when the Federal Communications Commission repealed the national net neutrality rules.

“We generally presume that states have the authority to regulate the operation of business within their borders,” he says.

He adds that if the Obama-era net neutrality rules had not been revoked, then broadband would still be classified as a telecommunications service and exempt from state regulation.

The New York legislation is expected to affect 7 million state residents. The rate bill, signed by Cuomo on April 16, requires broadband providers to offer $15-a-month service to some low-income households -- including those eligible for reduced-price lunch, the supplemental nutrition assistance program and Medicaid.

Internet service providers have recently attempted to invalidate laws regarding broadband in other states, including California and Maine.

In California, broadband providers are challenging a state net neutrality law that prohibits carriers from blocking or throttling traffic, from charging higher fees for prioritized delivery, and from exempting certain content from customers' data caps.

In February, a trial judge refused to block that law. The carriers recently asked the 9th Circuit Court of Appeals to invalidate the measure.

In Maine, a coalition of broadband carriers are challenging an opt-in privacy law that prohibits them from “using, disclosing, selling or permitting access to customer personal information” without subscribers' explicit consent. It also prohibits carriers from either refusing service to people who don't consent to tracking or charging different rates to people based on whether they consent to tracking.

Last July, a federal judge in Bangor refused the industry's request to immediately strike down the law.

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