By: Andrew Regitsky
In a big win for ISPs, a Judge from the Eastern District of New York filed a temporary injunction stopping New York state’s Broadband Affordability Act (“Act”) from taking effect. The Act which was passed by the New York state legislature in April, would have required ISPs to offer download speeds of at least 25 megabits-per-second at no more than $15-per-month or download speeds of at least 200 megabits-per-second at no more than $20-per-month.
Once passed, the Act was immediately challenged in court by ten organizations including USTelecom, CTIA – The Wireless Association and NTCA – The Broadband Association. They alleged that New York has no control over broadband rates because broadband is an interstate information service that is solely under the authority of the FCC. Moreover,
The Federal Communications Commission (“FCC”) has consistently — both in 2015 when it regulated broadband as a common-carrier service and in 2018 when it re-established the current, non-common-carrier federal framework — rejected ex ante rate regulation for broadband. Indeed, the broadband service that New York seeks to regulate has never been subject to rate regulation at the federal or state level. (New York Case No. 21-cv-2389, Complaint for Declaratory Judgment and Permanent Injunctive Review, filed May 30, 2021, at para. 2).
The broadband providers already noted that they make broadband affordable through discount programs.
In addition to continuing to build out their networks to reach underserved communities, broadband providers have developed their own, lower-priced offerings specifically designed for low-income households. In addition, broadband providers participate in federal programs that provide subsidies to make broadband more affordable. These include both established programs like Lifeline and the newly created Emergency Broadband Benefit, which takes effect on May 12, 2021. More than 50 broadband providers in New York are making broadband available to low-income households in New York through the Emergency Broadband Benefit. New York recognizes that, as a result of providers’ offerings and these federal programs, there are already “multiple options” for New Yorkers to purchase “affordable internet plans. (Id., at para 3).
In response, the Verge website reported that the temporary injunction was granted by Judge Denis Hurley because the Act would cause “irreparable harm” and “unrecoverable losses” to smaller telecom companies who would face penalties if they failed to meet the requirements or would have to significantly cut their revenues by charging customers less. He also said that the New York law interferes with the scope of the FCC because it “regulates within the field of interstate communications.” And while New York Governor Andrew Cuomo intends to appeal the decision to the federal appeals court, Judge Hurley believes the ISPs would win on the merits there.
On June 11, 2021, the ISP coalition that filed the appeal issued the following response to the Judge’s decision:
The broadband industry is committed to working with state and federal policymakers on sustainable solutions that will serve the needs of all low-income Americans. While well-intended, the state’s law ignored the $50 monthly broadband discount Congress enacted, as well as the many commitments, programs and offerings that broadband providers have made for low-income consumers.
While ISPs might have won a victory here, it could always be reversed by a higher court. That danger will continue to exist until or unless the DC Court of Appeals or the Supreme Court makes it clear that states have no jurisdiction to control broadband. In the meantime, expect more states to attempt to implement their own broadband rules or prices including reinstating net neutrality rules. For example, the stringent California Net Neutrality Law was allowed to take effect in April and is diametrically opposed to the FCC’s Restoring Internet Freedom Order which is still the law of the land. Of course, once a new FCC Commissioner is appointed, ISPs will have their work cut out for them trying to stop implementation of a federal broadband law that would put any state law to shame with its stringent Internet regulations.