ALBANY — Two weeks after a law was enacted to require telecom companies to offer discount broadband plans to low-income New Yorkers, industry groups went to federal court Friday in an effort to block the legislation.
Gov. Andrew Cuomo has hailed the law as a trailblazing effort to make broadband services affordable for impoverished families.
By June 15, telecom companies doing business in New York must offer income-eligible households basic high-speed internet service for $15 per month. The discount rate for very high speed service is set at $20 per month.
Now, consumers getting the basic broadband are charged at least $50 a month on average in New York.
The industry argues the mandate could harm efforts to enhance broadband services in the future. It also contends the state is overstepping its authority by trying to control the rates charged to consumers.
"New York's rate regulation intrudes into an exclusively federal field," states the lawsuit filed by the New York State Telecommunications Association, CTIA, which represents the wireless communications industry, and several other organizations. Named as the defendant in the case was state Attorney General Letitia James, New York's chief legal officer.
According to the lawsuit, an estimated 2.7 million households — more than 35% of households in the state — would be eligible for the low-cost broadband plans.
The legal brief also states broadband providers are already participating in federal programs that provide subsidies to make the services more affordable, such as Lifeline and the Emergency Broadband Benefit. The latter program takes effect May 12.
The new law was tucked into the state budget that took effect in early April. It is supported by consumer advocates, including Richard Berkley, executive director of the Public Utility Law Project.
"The pandemic showed that affordable broadband for all low-income households is more vital than ever — because of the need for telemedicine, education and looking for work," Berkley told CNHI.
The litigation, Berkley said, reflects the telecom industry's "lack of concern for the well being of the most vulnerable customers."
Responding to the lawsuit, Cuomo said internet service is now essential and should not be denied to people who can't afford the industry's pricing plans.
"I knew giant telecom companies would be upset by our efforts to level the playing field, and right on cue, they're pushing back," 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."
A Pew Research Center survey last year found 44% of American adults with household incomes below $30,000 a year lack home broadband services while 46% don't own a computer.
Joe Mahoney covers the New York Statehouse for CNHI's newspapers and websites. Reach him at email@example.com