New York backs off $15/month broadband

New York lawmakers wanted to require broadband providers in the state to offer a $15 per month tier of service to low-income residents. But that likely won't happen after telecom providers sued the state over the new rules.

According to several reports, the state and a group of trade associations reached a settlement last week that will prevent New York from enforcing the law. The state can still appeal the topic, but according to Courthouse News, that likely won't happen anytime soon. "In the interim, New York will continue its efforts to expand broadband service all across the state," New York's Public Service Commission representative Jim Denn told the publication.

At the heart of the issue was whether New York lawmakers could set prices for broadband. Through a lawsuit filed by their trade associations, telecom providers including Verizon argued that such rate regulation was preempted by the FCC. Courthouse News reported that several telecom providers also argued that the law would require them to sell services at a loss.

For example, Empire Telephone noted it would record a net loss of $2 million per year due to the law. An estimated 7 million New Yorkers in 2.7 million low-income households would have benefited from the Affordable Broadband Act, according to NY Governor Andrew Cuomo. The judge in the case appeared to side with that argument. "While a telecommunications giant like Verizon may be able to absorb such a loss, others may not," wrote Judge Denis R. Hurley.

The New York courtroom battle was closely watched among those in the telecom industry who fretted that such legislation would spread to other states and, potentially, The White House. After all, according to President Biden's initial broadband infrastructure spending proposal earlier this year, "Americans pay too much for the Internet – much more than people in many other countries – and the President is committed to working with Congress to find a solution to reduce Internet prices for all Americans, increase adoption in both rural and urban areas, hold providers accountable and save taxpayer money."

The apparent end of New York's efforts to set prices for broadband likely kicks the issue back to the FCC, which currently remains split between two Democratic and Republican commissioners.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano