Apr 30, 2021 - Technology

Scoop: Telecom goes to war with New York over low-income broadband law

Andrew Cuomo

Photo: Mike Segar-Pool/Getty Images

Trade groups representing AT&T, Verizon and other telecom companies are opening fire on a new law requiring them to provide discounted internet service to low-income households in New York.

Why it matters: New York's first-in-the-nation law could be adopted by other states at a time when the White House has signaled it wants to reduce broadband prices for all Americans.

Driving the news: Trade associations USTelecom, CTIA, the New York State Telecommunications Association and others representing smaller companies filed a lawsuit Friday against New York's new law requiring providers in the state to offer broadband service for $15 a month to low-income households.

  • New York estimates that 7 million people in 2.7 million households will qualify for the discounted service.

What they're saying: The trade groups say the state doesn't have the authority to mandate broadband prices, and warn it could undermine companies' ability to invest and upgrade their networks.

  • “While well-intended, this bill is preempted by federal law and ignores the $50 monthly broadband discount recently enacted by Congress, as well as the many unprecedented commitments, donations and accommodations that broadband providers have made for low-income consumers since the pandemic began," the coalition of broadband groups said in a statement.
  • "We urge state policymakers to coordinate with their federal counterparts, and with the broadband industry, to better serve the needs of New Yorkers.”

The other side: New York Gov. Andrew Cuomo told the trade groups to "bring it on" in a statement in response to the lawsuit.

  • "This is nothing more than a transparent attempt by billion-dollar corporations putting profit ahead of creating a more fair and just society," Cuomo said in the statement.
  • "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."

Between the lines: Many of the large providers already have low-income service options, but they offer them on their own terms.

Meanwhile, Congress created a $3.2 billion program to help low income households pay for internet during the pandemic, with the $50 a month subsidy program set to launch in May.

  • According to the lawsuit, more than 50 providers in New York intend to participate in the subsidy program, known as the Emergency Broadband Benefit.

What's next: There's a fear from providers that other states could adopt the New York law.

  • "The states have seen in the last four years the federal government do almost nothing to get people online," Gigi Sohn, a former FCC adviser told Axios. "They’re stepping in and stepping up. I don’t think this is going to be the last state that does this."

Editor's note: This story has been updated to include a statement from the New York governor and additional detail from the lawsuit.

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