Telecom Giants Head To Court To Kill NY State’s Demand They Give Poor People $15 Broadband

Recently, New York State passed a new law (pdf) demanding that regional broadband providers (Verizon, Charter Spectrum, and Altice) provide low-income consumers $15, 25 Mbps broadband tiers to help them survive COVID. The goal: to try and help struggling Americans afford the high cost of broadband during an historic health crisis. Under the proposal ISPs are also allowed to offer $20, 200 Mbps tiers, with any price increases capped at two percent per year.

U.S. Regulators engaging in anything even close to price regulation of regional monopolies is, again, said monopolies’ worst nightmare. As a result, the broadband industry quickly sued New York, insisting that the state is forbidden from passing such a law thanks in part to the Trump administration’s net neutrality repeal (which basically attempted to lobotomize state consumer protection authority in addition to killing popular net neutrality rules).

As the case heads to court, it could have broader implications for other state efforts to mandate lower costs for consumers (in times of crisis or not):

“The industry fear is that other states might impose requirements far more onerous than what New York requires, such as by further lowering the price, raising the speed requirements, or expanding the eligibility pool to make broadband ‘affordable’ for middle-class customers,” added Levin.

These are, of course, the same regional telecom monopolies recently busted for charging low income Americans significantly more money for what’s often slower service. Why? Because they can. There’s very little competition in many of these neighborhoods, and in most states lawmakers and regulators are little more than glorified rubber stamps for telecom monopoly interests.

These are also many of the same regional telecom monopolies recently caught ripping off COVID relief programs to their own financial benefit. They want to ruthlessly derail any competitive disruption then exploit the end result. When government rarely steps in to try and address market failure, it runs into a court system that generally tends to favor monopolization over the public interest, and into politicians who are blindly loyal to companies tethered to our first responder and domestic surveillance networks.

Ideally, you’d prefer pro-competitive policies to price caps. New York State is attempting that as well by embracing community broadband networks and community-owned middle mile networks designed to drive down overall access costs. Entrenched telecom monopolies are busy trying to crush those efforts as well in a bid to maintain the very broken, but very profitable, status quo.

Unfortunately for the nation’s monopolies, COVID ignited an unprecedented sense of policy urgency after Americans got a dramatic crash course in the importance of reliable, affordable broadband. That motivation isn’t expected to wane anytime soon. Americans are sick of substandard broadband, and industry efforts to protect themselves from disruption and reform are much harder than they used to be.