New York affordable internet law revived by federal appeals court

By Jonathan Stempel

NEW YORK (Reuters) - A divided federal appeals court revived a 2021 New York state law intended to provide affordable high-speed internet service to low-income families, setting aside a permanent injunction and handing a defeat to service providers.

In a 2-1 decision on Friday, the 2nd U.S. Circuit Court of Appeals in Manhattan said federal telecommunications law dating to the Great Depression did not pre-empt states from regulating broadband rates.

"Congress intended for the states to retain their regulatory authority over many interstate communications services - and to play a role in regulating the rates charged for such services - unless it said otherwise," Circuit Judge Alison Nathan wrote.

The majority also said a 2018 Federal Communications Commission order classifying broadband as an information service stripped that agency of authority to regulate rates.

New York's first-in-the-nation law required broadband providers to offer plans as low as $15 a month, benefiting an estimated 7 million New Yorkers in 2.7 million households.

It was signed in April 2021 by former Governor Andrew Cuomo, after the COVID-19 pandemic forced many students and employees to work from home.

U.S. District Judge Denis Hurley in Central Islip, New York, blocked enforcement two months later. Friday's decision set aside his injunction.

The law had been challenged by several trade groups including CTIA-The Wireless Association, on behalf of internet providers such as AT&T and Verizon.

In a joint statement, the groups said Friday's decision "not only discourages the needed investment in our nation's infrastructure, but also potentially risks the sustainability of broadband operations in many areas. We urge Congress to maintain support for low-income Americans on a nationwide basis."

The office of New York Attorney General Letitia James defended the law. It had no immediate comment.

The case is New York State Telecommunications Association Inc et al v. James, 2nd U.S. Circuit Court of Appeals, No. 21-1975.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)