Statue of LIberty

Just about everyone saw this coming. A group of broadband industry associations have sued New York in an effort to stop the state’s recent mandate to provide a $15 tier for broadband service to low income residents. Plaintiffs in the suit include the New York State Telecommunications Association (NYSTA), CTIA, USTelecom, NTCA, and ACA Connects, among others.

The New York mandate was passed last month as a part of a state budget bill, and gave ISPs operating in the state of New York 60 days to offer a $15 broadband plan to households that include a member eligible for discounted school lunches or receive Supplemental Nutrition Assistance Program (SNAP) benefits, commonly referred to as food stamps. There are other qualifying factors as well.

The mandate defined broadband for the $15 service as at least 25 Mbps. Smaller broadband providers who serve 20K households or fewer could gain an exemption, based on demonstrated financial hardship.

The lawsuit filing argues that New York does not have legal authority to regulate internet pricing and therefore the mandate is unenforceable.

“Both an FCC order that the D.C. Circuit upheld and the federal Communications Act preclude New York from regulating broadband rates,” the lawsuit filing argues. “The Court should declare that New York’s Rate Regulation is preempted and should permanently enjoin Defendant from enforcing or giving effect to it.”

According to the lawsuit filing, New York estimates about 35% of households in the state – about 2.7 million households —will qualify for the $15 mandated broadband service.

New York Governor Andrew Cuomo had some harsh words regarding this mandate, threatening to ban companies who don’t comply with it from serving New York.

“To these internet companies, I say, again, you don’t operate in the state of New York by an act of God — you operate in the state of New York by the will of the people,” said Cuomo at a press briefing last month. “If you do not do this, you will lose your franchise in the state of New York and that’s a promise.”

The pandemic has exposed the critical need for broadband and local, state, and federal government authorities have been reacting in various ways to address not only availability, but affordability. There have been a variety of new funding programs enacted to address affordability.

The broadband industry is fearful of the precedent this New York mandate could set, with other states, and possibly even the federal government following its lead. The Biden administration has identified affordability as a key issue for broadband public policy and called it out as something to address with its infrastructure plan that calls for $100 billion in broadband funding.

The broadband industry is also quick to point out that many larger ISPs like Comcast already provide a discounted service for low-income households.

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