States regulating broadband ISPs fear wave of state laws after New Yorks $15 broadband mandate When the FCC isn't regulating, states have more power to impose broadband laws. Jon Brodkin Feb 24, 2025 7:00 am | 10 Credit: Getty Images | metamorworks Credit: Getty Images | metamorworks Story textSizeSmallStandardLargeWidth *StandardWideLinksStandardOrange* Subscribers only Learn moreNew York's law requiring Internet service providers to offer broadband for $15 or $20 a month has spurred legislative efforts in other states to guarantee affordable service for people with low incomes. So far, legislators in Vermont, Massachusetts, and California have proposed laws inspired by the New York requirement.Christopher Morrow, a newly elected Democratic state legislator in Vermont, introduced a bill on January 29 that is modeled on New York's law. "Affordability is a big issue in Vermont and there are many stories of children who couldn't study properly during COVID for lack of Internet," Morrow told Ars. "It exposed the digital divide. This is a small gesture to help folks out."Despite industry attempts to block the New York law and other broadband regulations, courts have made it clear that states can impose stricter requirements on Internet service when the Federal Communications Commission isn't regulating Internet providers as common carriers under Title II of the Communications Act. That's the situation right now after a federal appeals court blocked a Biden-era FCC order that classified ISPs as common carriers and imposed net neutrality rules.Even if the FCC had won that case, it likely would have deregulated the industry again under Brendan Carr, the new chair selected by President Trump. Broadband was also deregulated at the federal level during Trump's first term when then-Chairman Ajit Pai led a vote to rescind net neutrality rules and Title II regulation.New York goes beyond FCC rulesBack then, California and other states stepped in to impose their own net neutrality rules. In that case, the California net neutrality law was pretty much identical to the abandoned federal rules.By contrast, New York's law ordering ISPs to offer plans at specific prices was unlike any requirement imposed by the FCC. But the New York law survived court challenges for the same basic reason that saved the California net neutrality law: When the FCC isn't regulating, states can step in.It's not just net neutrality and price laws. Maine approved a broadband privacy law in 2019 that was similar to FCC regulations that were overturned by Congress and Trump in 2017. ISPs sued to block the Maine law but gave up in 2022 after losing court decisions.ISPs and their lobby groups opposed every FCC attempt to regulate broadband as a common carrier service but also argue there shouldn't be a "patchwork" of state laws regulating broadband. They urged the Supreme Court to strike down New York's law, saying that "other States are likely to copy New York once the Attorney General begins enforcing the ABA [Affordable Broadband Act] and New York consumers can buy broadband at below-market rates."The Supreme Court rejected the industry petition to review the law in December, and New York started enforcement the next month. Cable company Optimum failed to offer the required plans at first and had to update its marketing materials and internal processes after Ars pointed out that it wasn't complying.AT&Ts New York exitAT&T stopped offering its 5G home Internet service in New York entirely instead of complying with the law. But it would be much harder for AT&T to pull out of states where it offers copper or fiber-based Internet service. New York is outside AT&T's 21-state wireline territory.We asked AT&T if it plans to lobby against similar bills in other states and whether it would also pull service out of states that impose similar rules. The company declined to comment.This isn't the first time AT&T ended a service in protest of a state law. When California's net neutrality law prohibited ISPs from charging websites and online services for data cap exemptions (so-called "zero-rating"), AT&T ended its "sponsored data" program nationwide.AT&T claimed at the time that it was impossible to follow the law in only one state. "We regret the inconvenience to customers caused by California's new 'net neutrality' law," AT&T said in March 2021. "Given that the Internet does not recognize state borders, the new law not only ends our ability to offer California customers such free data services but also similarly impacts our customers in states beyond California."AT&T's claim was undermined by Verizon advertising data-free streaming on Verizon Wireless with a note that it is "not available in California." It seems that Verizon figured out a way to offer different features in different US states.AT&Ts claims were and continue to be falseWe asked AT&T if it still believes that it would be impossible to comply with the zero-rating rule only in California. We also asked AT&T if it is complying with all of the requirements in the California net neutrality law throughout the US since it argued that the Internet does not recognize state borders. AT&T declined to answer our questions, and a spokesperson said that "most of the things you asked about are industry-wide issues not specific to AT&T.""AT&T's claims were and continue to be false," Stanford Law School professor Barbara van Schewick, a prominent net neutrality supporter, told Ars. Van Schewick is also director of Stanford's Center for Internet and Society.The California net neutrality law is the only state-level law that matches all of the protections in the FCC rules that are no longer enforced, van Schewick said. But contrary to AT&T's claims, she says it's possible for ISPs to comply in California and implement other policies in different states."If an ISP decides to comply with California's net neutrality law nationwide, that's its choice. California's net neutrality law does not demand that," and "implementing net neutrality state by state isn't a technical challenge," she said.The credibility of AT&T's claims about the effects of a state law is relevant again because the broadband industry is using AT&T's exit from New York in a renewed attempt to get the Supreme Court's attention. Lobby groups filed a supplemental brief on January 17 urging the court to reconsider its denial of their petition."As we noted in our petition for rehearing, [New York's law] created a 'serious risk that... some providers will cease offering broadband service in New York rather than sell at a loss.' That risk has come to pass," the brief said. "AT&T has withdrawn its 5G fixed wireless home internet offeringAT&T Internet Airfrom New York because of the rate-regulation law."California mulls similar lawAT&T pulling its 5G home Internet service out of New York is nowhere near as significant as a wireline provider pulling service out of a state. The industry brief acknowledged that the service's availability in New York was limited to 10 cities and towns.AT&T would have a particularly tough time pulling wireline service out of California, which is the only state that hasn't granted AT&T's request for deregulation of old copper telephone networks. AT&T is trying to exit the copper business, even though it won't build fiber home Internet in half of its wireline footprint. But AT&T is still classified as a Carrier of Last Resort (COLR) in California, so its copper retirement could take much longer in that state.AT&T's fiber and copper-based Internet services could fall under a proposed California law to require low-cost plans. The California proposal is vague right now, thoughit doesn't yet specify required speeds or prices.The California bill submitted by Democratic Assemblymember Tasha Boerner on January 30 leaves those decisions for later. "It is the intent of the Legislature to enact legislation that would require broadband internet service providers to offer affordable home Internet to California residents," the bill says.A spokesperson for Boerner told Ars that the legislator's team is gathering more details as it waits to see what happens with the Supreme Court.One bill seeks 100Mbps requirementThe New York law requires ISPs with over 20,000 customers in the state to offer $15 broadband plans with download speeds of at least 25Mbps, or $20-per-month service with 200Mbps speeds. The plans must be offered to people who meet income-eligibility requirements.Morrow's bill in Vermont adopts the same speeds and prices. The Massachusetts bill submitted by Democrat Pavel Payano goes further, proposing that ISPs provide at least 100Mbps speeds for $15 a month or 200Mbps for $20 a month.Boerner's press release announcing the vaguer California bill said the "legislation comes at a pivotal time as roughly three million California households lost federal support" when Congress allowed the Affordable Connectivity Program (ACP) and its $30 low-income discounts to expire last year. "Finding the right solution for California will require thoughtful engagement and collaboration from all sides of this issue," Boerner said.The nonprofit California Community Foundation will be involved in discussions. "We look forward to working with the Assemblymember to develop and pass the legislation," Shayna Englin, who directs the group's Digital Equity Initiative, said in Boerner's press release. Englin said the "bill offers the legislature an opportunity to swiftly respond to the cost-of-living crisis plaguing residents and reduce their financial burdens long-term."USTelecom claims ISPs are lowering pricesBroadband lobby groups can be expected to fight any state-level bills that require offering plans at specific prices to people with low incomes. "Any attempt by individual states to regulate prices or other parts of the broadband market will undermine all of the connectivity progress we have made, discourage investment, and end up hurting consumers," lobby group USTelecom told Ars.USTelecom represents AT&T, Verizon, Lumen (aka CenturyLink) and other telcos. It defended its members' prices. "Despite overall inflation soaring, broadband prices have been dropping while speeds are getting faster in today's extremely competitive communications market. Consumers get tremendous value from their broadband subscriptions," the group said.USTelecom's claim of dropping prices is based on an analysis the lobby group commissioned. The analysis uses a "BPI-Speed" index created by USTelecom, which is said to include "providers' most popular services between 100Mbps and 940Mbps."USTelecom says that real prices for offerings between 100Mbps and 940Mbps have dropped nearly 60 percent since 2015, but this is no surprise given the rising numerical value of what most people consider to be modern Internet speeds. Back in 2015, the cable industry opposed a plan to increase a federal broadband standard from 4Mbps to 25Mbps. The FCC now uses a standard of 100Mbps.A different price analysis by the Technology Policy Institute, an independent think tank, is based on government data and said that "from 2016 to 2022, average household spending on Internet services increased from about $54 per month to approximately $74. The increase could reflect changing preferences as people move to higher, more expensive tiers or price increases that we cannot observe in advertised plans."More state bills are expectedMorrow told Ars he is concerned about his bill facing opposition from Internet providers, though he noted Comcast already offers a low-cost plan in Vermont that "just needs to be advertised better." Morrow said he modeled his bill on the New York law and that he is optimistic about its passage."I am optimistic, but there is a lot going on right now, so it is certainly not guaranteed," he said.More state bills are expected. "A number of states will consider stepping into the vacuum left by the FCC and the courts deciding that the FCC does not have jurisdiction over broadband networks and Congress letting the ACP expire," New Street Research Policy Advisor Blair Levin told Ars. Levin was chief of staff to FCC Chairman Reed Hundt during the Clinton years and oversaw the writing of the US National Broadband Plan during the Obama administration."I expect more [states] will focus on helping low-income households than on net neutrality," Levin continued. "There may be other broadband-related issues that states may explore, including but not limited to network resiliency, public safety, and billing transparency."ISPs will fight the laws at the state level and urge the FCC to preempt them, Levin noted. But the FCC lost an attempt to preempt all state net neutrality laws during the first Trump administration, with a federal appeals court saying that "in any area where the Commission lacks the authority to regulate, it equally lacks the power to preempt state law."States should not view legal challenges as a major roadblock, van Schewick told Ars. "The case law is now abundantly clear that when the FCC is powerless to protect consumers online, the states can step in to protect their residents," she said. "They can create their own net neutrality protections, like California and others do, require affordable broadband options like New York, and institute broadband privacy protections like Maine. All of these laws have been upheld in court."Jon BrodkinSenior IT ReporterJon BrodkinSenior IT Reporter Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry. 10 Comments