ISPs Sue NY for Requiring Low-Price Broadband
New York Gov. Andrew Cuomo (D) vowed to fight six telecom associations challenging the state for requiring all ISPs to sell a $15 monthly internet plan to low-income households. Claiming the program is preempted rate regulation, the New York State Telecommunications Association, CTIA, ACA Connects, USTelecom, NTCA and Satellite Broadcasting & Communications Association sued Friday in the U.S. District Court for Eastern New York (case 21-cv-2389). Industry is “turning a blind eye to the needs of its most vulnerable customers once again,” said New York Public Utility Law Project (PULP) Executive Director Richard Berkley.
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“While well-intended, this bill is preempted by federal law and ignores the $50 monthly broadband discount recently enacted by Congress, as well as the many unprecedented commitments, donations and accommodations that broadband providers,” the associations said. "We urge state policymakers to coordinate with their Federal counterparts, and with the broadband industry, to better serve the needs of New Yorkers.”
"I knew giant telecom companies would be upset by our efforts to level the playing field, and right on cue, they're pushing back,” responded Cuomo, who enacted the plan this month through the state budget (see 2104160050). “This is nothing more than a transparent attempt by billion-dollar corporations putting profit ahead of creating a more fair and just society.” Selling internet in New York “is not a god given right,” he said. “If these companies want to pick this fight, impede the ability of millions of New Yorkers to access this essential service and prevent them from participating in our economic recovery, I say bring it on.”
The state unlawfully “seeks to regulate broadband rates,” said the associations, seeking preliminary and permanent injunctive relief. “The broadband service that New York seeks to regulate has never been subject to rate regulation at the federal or state level.” The $15 program conflicts with the FCC 2018 net neutrality decision that “broadband is an interstate information service.” The rate regulation now “intrudes into an exclusively federal field,” they added. The groups noted their members have their own lower-price services and participate in federal programs including Lifeline and the emergency broadband benefit.
Plaintiffs are right “that the legislation was well intended” and that “other states can and will copy New York's pathbreaking move to require affordable broadband service, which has been shown to be vital to public health and safety, among other things, all of which are central to core duties of state government,” said PULP’s Berkley. "What the industry continues to get wrong is demonstrated by its historic failure to provide comprehensive, affordable high-speed and high-quality internet access with first-class customer service without being ordered to.”
“The problem for carriers” is that “unless there is an explicit authority at the FCC to preempt the states, then it’s not preempted,” said Public Knowledge Senior Vice President Harold Feld in an interview. A state can use its police powers to regulate within its jurisdiction, as long as it doesn’t try to regulate interstate commerce outside the state, he said.
This "rate regulation law is clearly preempted by federal law and should never become effective," said Free State Foundation President Randolph May. The state may provide subsidies on top of Lifeline and the EBB, he said: It "can’t regulate broadband rates because this would directly contravene federal law determining that broadband Internet services are interstate information services not subject to common carrier regulation."