Family on computers at home

The state of New York’s plan to require broadband providers to offer a $15 monthly internet plan to low-income households is on hold—at least for now. The U.S. Eastern District Court of New York issued a preliminary injunction to prevent the state from enforcing the rule while awaiting a final decision on the legality of the $15 plan requirement.

The $15 plan had its genesis in New York’s Affordable Broadband Act (ABA), which New York Governor Andrew Cuomo signed into law in mid-April. The requirement was scheduled to go into effect this week, requiring broadband providers to offer 25 Mbps broadband for $15 to households eligible for food stamps, discounted school lunches or certain other households.

According to the ABA, providers with fewer than 20,000 customers have the option of petitioning for an exemption if they can show that offering the plans would be a financial hardship. Providers also have the option of offering a 100 Mbps plan for $20 a month.

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Service provider associations sued the state soon after the ABA was adopted, arguing that the state does not have the authority to regulate internet rates.

According to the lawsuit filing, about 35% of households in the state would qualify for the $15 service.

The provider groups that made the filing include the New York State Telecommunications Association, CTIA, USTelecom and ACA Connects.

“Both an FCC order that the D.C. Circuit upheld and the federal Communications Act preclude New York from regulating broadband rates,” the 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.”

The battle over the mandatory New York $15 internet plan comes at a time when broadband affordability is getting more attention.

The Emergency Broadband Benefit program adopted earlier this year pays $50 a month toward the cost of internet service for low-income households or those that have experienced economic hardship amidst the COVID-19 pandemic. The limited-time program signed up 2.3 million households in its first three weeks.

As federal legislators work on a budget for infrastructure investment, some argue that any such legislation should address broadband affordability. More permanent subsidies have been discussed, as have efforts to improve competition, but as of now it does not appear that rate regulation would be part of that plan – and broadband providers hope to keep it that way.

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