Federal Court Bars Enforcement of New York's Price Controls on Broadband Internet Services

On June 11, the U.S. District Court for the Eastern District of New York granted a preliminary injunction barring New York State Attorney General Letitia James from enforcing that state's new law imposing rate controls on broadband Internet access services.  

In a May 5 blog post, I called attention to the legal challenge to the New York law that was filed by broadband Internet service providers in New York Telecommunications Association v. James. The case was assigned to Senior Judge Denis Hurley. Although provided in the context of a motion for preliminary relief and substantial likelihood of success on the merits standard, Senior Judge Hurley's ruling rightly recognized that New York's law is federally preempted -- on conflict preemption as well as field preemption grounds:

Putting it all together, the ABA conflicts with the implied preemptive effect of both the FCC's 2018 Order and the Communications Act. The ABA's common carrier obligations directly contravenes the FCC’s determination that broadband internet "investment," "innovation," and "availab[ility]" best obtains in a regulatory environment free of threat of common-carrier treatment, including its attendant rate regulation… the ABA thereby stands as an obstacle to the FCC's accomplishment and execution of its full purposes and objectives and is conflict-preempted. 

…

Plaintiffs have demonstrated a likelihood of success on the merits based on field preemption. The ABA is not a "purely intrastate affordable-pricing scheme," nor is it reasonable to read its statutory text in that manner: It covers providers with "the capability to transmit data to and receive data from all or substantially all internet endpoints."… The ABA’s plain terms apply (absent an exemption) to the telecommunications provider transmitting this interstate communication. In other words, the ABA is not confined to intrastate communications services. 

Free State Foundation scholars may have more to say about this well-reasoned decision by the Eastern District of New York. Stay tuned.