Federal Judge Puts New York’s Affordable Internet Law on Hold

In a huge win for internet service providers, a federal judge on Friday granted a preliminary injunction to stall a New York law mandating affordable internet for low-income households.

Lobbying groups representing AT&T, Verizon, T-Mobile, and other telecom companies have fiercely pushed back against the legislation, known as the Affordable Broadband Act, and sued New York shortly after it was signed and passed by Governor Andrew Cuomo in April. Initially scheduled to go into effect next week, the bill would require ISPs serving more than 20,000 households to offer two low-cost plans to qualifying customers: one with download speeds of a least 25 Mbps for no more than $15 per month, and another offering download speeds of at least 200 Mbps at no more than $20 monthly. The state’s attorney general would be able to issue penalties to providers of up to $1,000 per violation.

The bill isn’t dead yet, but this eleventh-hour injunction is not a good sign. In his ruling, New York’s Eastern District Judge Dennis R. Hurley described internet access as a “modern necessity.” However, he also agreed with the argument from ISPs that the law is likely to result in “imminent irreparable injury” to their bottom line either from lost revenue or penalty payments.

Three of the companies told the court the law would cut annual net income by at least $1 million each. The bill also mandates that companies promote these new affordable plans to low-income customers, an ad campaign that Verizon estimated would cost between $250,000 and $1 million.

“While a telecommunications giant like Verizon may be able to absorb such a loss, others may not,” Hurley wrote. “The Champlain Telephone Company, for example, ‘estimates that nearly half of its existing broadband customers will qualify for discounted rates,’ with each customer ‘causing a monetary loss.’”

However, state attorneys pushed back that these stats aren’t supported by any financial records. Cuomo spokesperson Rich Azzopardi said Friday that New York plans to continue defending the bill.

“We always knew big telecom would pull out all the stops to protect their profits at the expense of the New Yorkers who need access to this vital utility the most,” Azzopardi said in a press statement via Axios. “We are going to continue to fight for them.”