A Troubling Decision on Rates

The 2nd US Circuit Court of Appeals in Manhattan ruled recently that federal telecommunications law does not stop states from regulating broadband rates. This was in relation to a 2018 law passed by the State of New York that required internet service providers (ISPs) to offer low-income rate plans for as low as $15 per month. ISPs appealed the new law, and a US District Court issued an injunction against the law. The recent ruling overturned that injunction and puts the law back into effect. The law allows ISPs with less than 20,000 customers to appeal the the implementation of lower rates, but there is no guarantee that ISPs will be relieved from the law. This court ruling comes at an interesting time. The Federal Communications Commission (FCC) just passed new rules that put Title II regulation and net neutrality back into play. One of the interesting provisions of the new rules is that the FCC purposefully decided to forebear the right to regulate broadband rates, meaning the FCC didn’t invoke the portions of Title II regulations that give the agency the ability to regulate rates. Every ISP ought to be concerned about this New York ruling. However, there is no way to guess how the big ISPs and the FCC will react to the Court order. It’s unusual to encounter a regulatory ruling that is as challenging as this one for both ISPs and the FCC.