A New York district court judge temporarily blocked a new state law requiring internet service providers (ISPs) to offer a $15 broadband service tier, handing telcos an interim win as a lawsuit challenging the legislation works its way through the courts.
In April, New York state passed a new budget bill which included a “first-in-the-nation” provision mandating ISPs offer the low-cost plans to qualifying low-income households, according to a press release. Later that month telecom groups including CTIA, USTelecom, NTCA – The Rural Broadband Association and the New York State Telecommunications Association filed a lawsuit challenging the law and seeking both preliminary and permanent injunctions to stop it taking effect.
The preliminary injunction issued Friday will prevent the state from implementing the law while the case proceeds.
In identical statements reacting to the ruling, CTIA and USTelecom said “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.” However, they argued the law as written – while “well-intended” – “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.”
The broadband discount is a reference to the Federal Communications Commission’s (FCC) Emergency Broadband Benefit program, which allows eligible households to receive a discount of up to $50 on their monthly broadband bill. The program launched May 12. As of June 7, the FCC said more than 2.3 million households had enrolled.
New Street Research analyst Blair Levin wrote in a note to investors the judge’s decision could help slow “potential efforts in other states” to pass similar laws, but added the outcome of the lawsuit remains “far from definitive” despite the odds favoring ISPs.
“Other states can still move forward in a similar way, hoping that courts in their jurisdictions would reach a different decision,” he said. “The ruling could encourage some in Congress to support a national version and/or provide another context for Democrats on the FCC to strengthen their efforts, if and when they obtain a majority, to reclassify carriers under Title II.”