ISPs Get Injunction Against New York Price Reg Law

(Image credit: Future)

A New York court has blocked a law that would have required ISPs to provide low-cost broadband to low-income households, issuing an injunction that temporarily blocks the enforcement of the new law and signaling that the ISPs are likely to win the underlying case that the law should not go into effect at all.

The court signaled that ISPs are likely to prevail on the argument that imposing such rate regulation was a form of common carrier regulation that conflicted with the FCC's most recent decision that internet access is a Title I information service not subject to common carriers regs, and so the New York State law is preempted. "To be clear, the ABA is rate regulation, and rate regulation is a form of common carrier treatment," said Judge Denis R. Hurley of the U.S. District Court for the Eastern District of New York.

Seeking the injunctions were ACA Connects, CTIA, The New York State Telecommunications Association, USTelecom, NTCA-the Rural Broadband Association, and the Satellite Broadcasting & Communications Association.

Affordable Broadband Act was to have gone into effect June 15. It would require ISPs in the state to offer low-income households high-speed broadband--at least 25 Mbps download speeds-- for $15 per month, or of 200 Mbps for no more than $20. About 2.7 million households would qualify, or more than a third of all the households in New York. The service had to be offered as a standalone and must be advertised and promoted so people know it is available.

Prices could be raised according to a statutory formula, but only once every five years.

The associations sued to block the law April 30 and sought the injunction May 6.

In granting the injunction, Judge Hurley also agreed with ISPs that they would suffer irreparable harm--potentially facing civil penalties or losing their franchise if they don't comply with the law, or if they do, having to supply broadband at a loss, which would "raise advertising expenditures, impose administrative costs due to providers’ need 'to develop a system for validating customers’ eligibility,' force them to cancel preexisting business plans for upgrades to, and expansion of, their broadband networks, and inflict reputational harm," said the court.

The court concluded the harm was actual and imminent not remote or speculative, one of the tests for a preliminary injunction.

Hurley said the threat of monetary harm was most persuasive argument since trying to redress that harm later by getting money back from the state government would be difficult since it has sovereign immunity. "Though monetary damages would usually supply an adequate remedy at law negating the availability of preliminary injunctive relief, the harm takes on special import where, as here, the Eleventh Amendment precludes redressability."

ISPs are already offering a variety of low-cost broadband plans using the FCC's Lifeline broadband subsidies, and will be offering more with COVID-19 aid money.

Notably absent from the suit was NCTA-the Internet & Television Association. A spokesman had no comment on the injunction and said NCTA had not signed on to the suit because "plenty of others already had."

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.