When the FCC Falters, States Gain Power to Enact Broadband Laws
New York's law mandating Internet service providers (ISPs) offer broadband for $15-$20 per month has sparked similar legislative initiatives in other states, aiming to guarantee affordable service for low-income residents.
Christopher Morrow, a Democratic legislator in Vermont, has proposed a bill modeled on New York's law, requiring ISPs to offer broadband plans with speeds of at least 25 Mbps for $15 or 200 Mbps for $20 for income-eligible individuals.
Despite industry efforts to block such regulations, courts have clarified that states can impose stricter requirements on ISPs when the Federal Communications Commission (FCC) is not classifying them as common carriers. This is the current situation after an appeals court blocked the FCC's attempt to reinstate net neutrality rules.
New York's Bold Step Beyond FCC Rules
While California and other states had previously implemented their own net neutrality rules, New York's law requiring specific pricing plans was unprecedented and has been upheld in court for the same reason that California's net neutrality law succeeded.
Similarly, Maine's broadband privacy law was based on FCC regulations that were overturned by Congress and Trump; however, ISPs' challenge to the Maine law was unsuccessful.
ISPs' Resistance and Activism
ISPs have consistently opposed FCC regulations classifying them as common carriers and argue against a "patchwork" of state laws regulating broadband. They have also urged the Supreme Court to overturn New York's law, arguing that it will lead to other states adopting similar laws and depriving them of revenue from below-market broadband plans.
However, the Supreme Court declined to review the law in December, leading New York to begin enforcement. Optimum, a cable company, initially failed to comply with the required plans but later updated its marketing materials and processes.
AT&T's Exit
AT&T responded to the New York law by discontinuing its 5G home Internet service in the state. However, it would be more difficult for AT&T to withdraw from states where it offers copper or fiber-based Internet service.
AT&T's prior claim that it could not comply with California's net neutrality law was undermined by Verizon's data-free streaming service, which it offered nationally but not in California.
“AT&T’s Claims Were and Continue to Be False”
AT&T has maintained its stance that it would be impossible to comply with California's net neutrality law nationwide. However, Barbara van Schewick, a Stanford Law School professor and net neutrality advocate, believes that ISPs can comply with state-level regulations while implementing different policies in other states.
ISP Lobby Groups and California's Response
ISPs are again using AT&T's exit from New York to argue that state laws could lead to reduced broadband availability. A lobby group, USTelecom, claims that broadband prices have been dropping, basing this on an analysis of prices for plans between 100Mbps and 940Mbps.
However, a different study by the Technology Policy Institute indicates that the average household spending on Internet services has increased from $54 per month in 2016 to $74 in 2022.
California is considering a proposed law that would require low-cost broadband plans, with specific speeds and prices to be determined later. The proposed legislation aims to address the cost-of-living crisis for California households.
More State Bills Expected
Additional state bills are anticipated, as multiple states are considering filling the void left by the FCC and the expiration of the Affordable Connectivity Program.
While ISPs will likely challenge state laws, states should not view legal challenges as a significant hurdle. Courts have consistently ruled that states can step in to protect their residents when the FCC is unable to do so.
