New York's Affordable Broadband Law Upheld: Get 200Mbps Internet for Just $20/Month

New York's Affordable Broadband Law Upheld: Get 200Mbps Internet for Just $20/Month

By: CE Critic

A federal appeals court has delivered a significant victory for affordable internet access in New York, upholding a state law mandating ISPs provide low-income households with broadband plans capped at $15/month. While the legal battle is far from over, this decision could have far-reaching implications for the streaming industry.

A Brief History of the Legal Battle

  • The Affordable Broadband Act (ABA): New York enacted the ABA to bridge the digital divide. It requires ISPs to offer qualifying low-income consumers a minimum of 25Mbps broadband for $15/month or 200Mbps for $20/month.
  • ISPs Pushback: Six trade groups representing ISPs immediately challenged the ABA, arguing that it encroached on federal regulatory authority and was preempted by the FCC's 2018 reclassification of broadband as an "information service".
  • District Court Blocks ABA (2021): A US District Court agreed with the ISPs, issuing an injunction preventing the ABA's enforcement.
  • Appeals Court Reverses (2024): The US Court of Appeals for the 2nd Circuit overturned the injunction, finding that states retain the right to regulate in areas where the FCC lacks the authority to do so.

Key Takeaways for the Tech Sector

  • Preemption Arguments Fail (Again): ISP trade groups leaned heavily on the FCC's prior rollback of net neutrality and "light-touch" regulatory approach to argue for preemption. However, courts have repeatedly rejected this, highlighting that an agency cannot preempt state law in an area where it surrendered its own authority.
  • The Streaming Angle: Affordable broadband laws directly impact streaming services like Netflix, Disney+, Apple TV+, and others. Widely accessible, low-cost internet expands the potential customer base, particularly in lower-income and underserved areas where data plans prove financially prohibitive.
  • Counteracting the Digital Divide: The ABA targets the financial hurdle often preventing streaming access. Such legislation, if replicated, promotes a more inclusive digital landscape where cost isn't a major barrier to content consumption.
  • Potential for Similar Legislation: New York's success creates a blueprint for other states. The potential rise of more affordable broadband acts nationwide could lead to a surge in streaming subscribers, ultimately benefiting the sector.

The Fight Isn't Over

ISPs still have options:

  • Appeal to the Supreme Court: This remains a likely move by ISP trade groups.
  • Lobby the FCC: ISPs may push the FCC to directly preempt state-level broadband affordability laws. The current FCC's stance on net neutrality could make such an effort more successful than in the past.
  • Pressure for Federal Legislation: ISPs might lobby Congress to establish a national framework addressing broadband affordability, potentially precluding state-level laws.

What This Means for Streaming Providers

  • Short-Term Uncertainty: The ongoing legal challenges create a degree of instability for streaming providers' long-term planning in relation to pricing adjustments and market expansion.
  • Long-Term Growth Potential: Should the New York law stand, or if similar laws are adopted elsewhere, streaming providers stand to gain substantially from increased access to their platforms.
  • Focus on Affordability: Laws like the ABA could pressure streaming services to consider more budget-conscious subscription tiers or partnerships with low-cost ISPs to boost accessibility.

The Bottom Line

The New York case highlights the complex dance between states, federal regulators, and industry in shaping the future of internet access. While the legal battle will undoubtedly continue, its outcome has the potential to significantly reshape how streaming services operate and reach consumers.