Telecom Groups Sue to Block New York Low-Cost Broadband Law

(Bloomberg) -- Telecom industry groups representing AT&T Inc. and Verizon Communications Inc. sued to block a New York law that requires internet service providers to offer high-speed broadband service to low-income customers at a discount.

The state enacted the requirement this month as part of its 2022 budget. It caps a basic broadband plan for low-income people at $15 a month and a higher-speed one at $20. The telecom groups seek a declaration that the law is pre-empted by federal law, and a court order blocking it from taking effect.

“New York has overstepped its regulatory authority,” the groups, which include the New York State Telecommunications Association Inc. and the Satellite Broadcasting & Communications Association, said in the lawsuit filed in a Long Island federal court Friday.

“I knew giant telecom companies would be upset by our efforts to level the playing field, and right on cue, they’re pushing back,” Governor Andrew Cuomo said in a statement. “This is nothing more than a transparent attempt by billion-dollar corporations putting profit ahead of creating a more fair and just society.”

“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,” Cuomo said.

Ensuring access to broadband has become a prominent issue, with President Joe Biden proposing a $100 billion effort to connect all Americans. The movement has gained political currency as pandemic lockdowns left families needing internet service for work and education.

On a national level, the major U.S. carriers are discussing ideas about a broadband plan with Washington policy makers. The companies have said it should include adequate federal funding, flexibility on how the service can be delivered -- landline or wireless -- and clarity on who qualifies for subsidized service.

Because the trade groups that filed the suit claim that the federal government has exclusive authority to regulate interstate provision of broadband services, a ruling against New York could affect other states seeking to pass similar requirements.

The case is New York State Telecommunications Association v. James, 21-cv-02389, U.S. District Court, Eastern District of New York (Central Islip).

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