[co-authors: Stephanie Kozol*, Nick Gouverneur**]
The U.S. Supreme Court closed out 2024 by confirming states’ authority to regulate internet service providers. On December 16, 2024, the Court denied certiorari in New York State Telecommunications Association, Inc., et al. v. Attorney General Letitia James, Case No. 21-1975, allowing New York’s Affordable Broadband Act (ABA) to stand.
The ABA requires broadband providers to offer services to qualifying low-income consumers for $15 or $20 per month and imposes requirements to price increases on those services. The U.S. District Court for the Eastern District of New York quickly enjoined the New York attorney general from enforcing the law based on federal preemption. In short, the district court concluded that the Communications Act of 1934 (the Act) and the Federal Communications Commission’s 2018 order classifying broadband as an information service (the Order) took precedence over the ABA.
That decision was reversed by the Second Circuit in April 2024. The Second Circuit held that the Act does not establish a framework of rate regulation “sufficiently comprehensive to imply that Congress intended to exclude the states from entering this field.” Similarly, the appellate court held that the Order “stripped the [Federal Communications Commission (FCC)] of its statutory authority to regulate the rates charged for broadband internet, and a federal agency cannot exclude states from regulating in an area where the agency itself lacks regulatory authority.”
The internet service providers that appealed the Second Circuit’s ruling argued that broadband internet, as an inherently interstate communications service, is subject to direct regulation under the Act. The petitioners also argued that rate regulation imposed by the ABA would burden the economy by allowing consumers to buy broadband at below-market rates, deterring the investment and expansion of broadband networks.
Why It Matters
By denying certiorari, the Court has effectively cleared the path for states to regulate rates charged by internet service providers. This case also serves as a reminder that, where the federal government takes a step back, states will often step in.
*Senior Government Relations Manager
**Associate
