Big Telecom Is Terrified Of New State Laws Demanding They Make Broadband Affordable To Poor People
During peak COVID lockdowns, New York State passed a law requiring that ISPs (with more than 20,000 subscribers) offer low-income state residents (and low income residents only) a 25 Mbps broadband tier for $15. Big Telecom didn’t much like that, but their multi-year effort to kill the law, first passed in 2021, recently fell apart when the Trump Supreme Court refused to hear their challenge.
Now telecom giants, long fat and comfortable thanks to regional monopolies, are worried by the fact that other states are following suit. Vermont, California and Massachusetts recently proposed their own versions of New York’s law requiring ISPs make broadband affordable for poor people.
For a generation, the U.S. government largely looked the other way as big telecom companies like AT&T and Comcast crushed all competition underfoot, then lobbied or literally bribed lawmakers to look the other way. The result: Americans pay significantly more for patchy, slower broadband than in most developed nations. With terrible customer service to match.
Telecom lobbyists have long insisted that having government do anything to address this competitive logjam is radical overreach. Whether net neutrality, privacy oversight, or most notably price caps. Yet at the same time, they’re on the cusp of a generational victory that has the Trump administration effectively destroying the entirety of what’s left of federal consumer protection.
So not too surprisingly, states are rushing to fill that void federal regulators are leaving. And telecom giants are whining about a problem they created; first by dismantling competition and jacking up consumer rates, second by dismantling federal oversight:
“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.”
When New York passed its law, AT&T lobbyists put on a little performance where they pretended they were leaving New York state due to a “hostile business environment.” In reality, the company barely did business in the state in the first place; its home 5G service in question having extremely limited availability.
AT&T engaged in the ploy in the hopes that the Supreme Court would reconsider its refusal to hear the case. But, apparently busy doing other favors to AT&T (like eviscerating the entirety of U.S. federal consumer protection oversight), the Supreme Court again this week refused to hear the case. That opens the door to other states following suit, much to Comcast, AT&T, Verizon, and Charter’s chagrin.
As with everything (net neutrality, privacy, basic transparency requirements), telecom will insist that any government action to lower broadband prices is radical overreach. But requiring they provide a cheap, slow tier to poor people isn’t a huge ask. In the gigabit era, providing a 25 Mbps tier costs big providers a tiny pittance of their fat, captured revenues.
It’s also worth noting that companies like AT&T are massively politically powerful in state legislatures, and the Vermont, California and Massachusetts bills haven’t passed yet. And despite kicking this all off with its own law mandating affordable broadband to the poor, New York has yet to actually enforce its own law, so the full scope and impact of this will be nowhere as dramatic as telecom lobbyists will claim.