April 28, 2024 A recent decision by the U.S. Court of Appeals for the 2nd Circuit has overturned a previous ruling, thus allowing New York to enforce a law that mandates Internet service providers (ISPs) to offer $15 broadband plans to low-income consumers. This development reverses the 2021 decision by a U.S. District Court judge, who had declared the state’s Affordable Broadband Act (ABA) as preempted by federal law, specifically citing it as a form of rate regulation.
The ABA aims to make broadband more accessible by requiring ISPs to provide service at significantly reduced rates—$15 per month for speeds of 25Mbps, and $20 per month for 200Mbps—to individuals qualifying for government benefits. This directive also includes provisions for periodic price adjustments and exemptions for smaller ISPs with fewer than 20,000 customers.
The appeals court’s decision emphasized that the ABA is neither preempted by the Communications Act of 1934 nor by the FCC’s 2018 order which reclassified broadband as an information service under Title I, thereby relinquishing FCC’s authority over broadband rates. The court articulated that a federal agency cannot prevent states from regulating a domain where the agency itself does not have regulatory authority.
This ruling is a setback for the six trade groups representing ISPs who argued against the state law, claiming it was overridden by federal mandates. The court’s decision highlighted the strategic error of these groups in lobbying the FCC to classify broadband under a less strict regulatory framework to escape federal regulation, which inadvertently opened the door for state-level regulations.
The significance of this ruling extends beyond New York, offering a robust precedent for other states to enact similar measures, especially in scenarios where federal oversight might recede. Legal experts suggest that this decision strengthens state authority, ensuring that protective measures can be instituted at the state level if federal regulations are rolled back.
As the legal battles potentially progress— with possibilities of appeals to the Supreme Court or a full bench rehearing in the 2nd Circuit—the implications of this ruling could influence future regulatory landscapes and the ongoing dialogue about affordable broadband access and state versus federal jurisdiction over internet services.
