• by Wendy Davis  @wendyndavis, April 26, 2024

Siding against the broadband industry, a federal appellate court on Friday reinstated a New York law requiring carriers to offer service for no more than $15 a month to some low-income households.

In a 2-1 decision, a panel of the 2nd Circuit Court of Appeals rejected industry groups' contention that the Trump-era Federal Communications Commission prohibited states from regulating broadband in 2018, when it r

Instead, the panel ruled that the Republican-led FCC stripped itself -- not states -- of authority to regulate rates by revoking the prior net neutrality rules.

“A federal agency cannot exclude states from regulating in an area where the agency itself lacks regulatory authority,” Circuit Judge Alison Nathan wrote in an opinion joined by Sarah Merriam.

Broadband carriers are “weighing next steps,” an industry spokesperson said Friday.

The ruling comes in a dispute dating to May 2021, when a coalition of broadband lobbying groups challenged New York's Affordable Broadband Act, a then-new law that required carriers to charge no more than $15 a month for broadband service to low-income households.

The organizations (including CTIA -- The Wireless Association, ACA Connects--America's Communications Association, US Telecom -- The Broadband Association and NTCA -- the Rural Broadband Association) claimed that only the federal government can regulate the broadband industry.

They specifically argued that New York's law conflicted with the FCC's 2018 repeal of the Obama-era net neutrality rules. As part of that deregulatory move, the FCC reclassified broadband from a “common carrier” service, governed by Title II of the Communications Act, service to an “information” service, subject to Title I. (On Thursday, the FCC voted to reinstate the Obama-era rules; that move, which hasn't yet taken effect, is likely to be challenged in court by broadband providers.)

U.S. District Court Judge Denis Hurley in Central Islip, New York -- an appointee of President George H. W. Bush -- agreed with the lobbying groups and blocked New York's law. He ruled that the FCC prevented states from regulating broadband prices by reclassifying broadband as an information service.

Attorney General Letitia James appealed that ruling to the 2nd Circuit, arguing that the federal Communications Act doesn't prevent states from passing their own consumer protection laws.

Advocacy groups including Public Knowledge and the Benton Institute for Broadband & Society backed the appeal.

Those organizations said in a friend-of-the-court brief that the FCC “chose to relinquish almost all authority over broadband” when it repealed the Obama-era net neutrality order.

“Declining authority is not the same as crafting a regime of deregulation designed to exclude other actors,” they wrote.

Nathan noted in her opinion that some of the same organizations that challenged New York's law also “vociferously lobbied the FCC to classify broadband internet as a Title I service in order to prevent the FCC from having the authority to regulate them.”

“The plaintiffs now ask us to save them from the foreseeable legal consequences of their own strategic decisions. We cannot,” she wrote.

Circuit Judge Richard Sullivan dissented from the decision.

The lobbying groups that sued said in a joint statement that they are “disappointed” by the ruling.

“It not only discourages the needed investment in our nation’s infrastructure, but also potentially risks the sustainability of broadband operations in many areas,” the groups stated.

But consumer advocates cheered the decision.

Net neutrality proponent Barbara van Schewick, a Stanford law professor and director of the Center for Internet and Society, stated Friday that the appellate ruling “clearly establishes states’ ability to protect their constituents against misbehavior by the internet service providers they pay to get online when the FCC says it has no authority.”