Supreme Court quashes Big Telecom's attempt to avoid New York State's low-income price regulation

[Cal Jeffrey]

A hot potato: A recent Supreme Court decision has cemented a state's authority to regulate internet service providers since the FCC can't. The Supreme Court has denied certiorari in New York Telecommunications v. Attorney General Letitia James. The denial means that New York's hotly contested Affordable Broadband Act stands. More importantly, it sets a precedent for states to regulate broadband providers in the absence of FCC guidance.

On Monday, the US Supreme Court shot down internet service providers' challenge to New York's Affordable Broadband Act (ABA). The contentious law requires ISPs to provide service plans for low-income households. It regulates the monthly rates at $15 for 25Mbps and $20 for 200Mbps for those who qualify.

Lobbyists first challenged the law in 2021, saying that states cannot dictate rates to service providers. A US District judge agreed, effectively blocking the law. However, the Second Circuit US Court of Appeals reversed that ruling in April, upholding the law. The appeals panel said that the FCC stripped itself of regulatory authority when Chair Ajit Pai repealed Title II common carrier provisions for service providers. Therefore, it falls upon the state to make regulatory decisions over the industry within its jurisdiction.

Of course, ISPs hated to hear that, so in August, six trade groups took the matter to the Supreme Court, arguing that the New York law forces service providers to charge "below-market rates" and that other states could follow suit, harming the industry. The petition also noted that the FCC has continually changed its mind regarding whether or not ISPs are common-carrier telecommunications services but has never dictated rates.

The Supreme Court declined to hear the case, which leaves the Second Circuit's decision in place – the law stands. While the SCOTUS did not comment on its denial, it generally only considers cases with an apparent Constitutional conflict. One can assume that the carriers did not present compelling evidence that the law infringed on their constitutional rights or that it conflicts with any existing law.

Additionally, the ABA has exemptions to protect smaller ISPs and caps annual rate increases to two percent. Furthermore, many major carriers in New York already have similar low-income options available. So, the argument that the law hurts the industry falls flat when providers have already been offering plans similar to the ABA's provisions and the industry is in good shape.

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Supreme Court quashes Big Telecom's attempt to avoid New York State's low-income price regulation

 

[human7]

To be clear, the Supreme Court's inaction doesn't "set a precedent": another circuit could rule another way. If that happens, the Supreme Court would likely take up the issue, since a circuit split is one of the factors they use to decide which cases they take.

Still, this case seems pretty clear-cut.

 

[Endymio]

The contentious law requires ISPs to provide service plans for low-income households....

...with the lower costs to be paid by everyone else. Hidden taxes like this should be illegal.

For anyone who disagrees, answer this question. Would you support a law requiring you to sell your home for half price ... if the purchaser was "low income" and could afford no more?

 

[gamerk2]

...with the lower costs to be paid by everyone else. Hidden taxes like this should be illegal.

For anyone who disagrees, answer this question. Would you support a law requiring you to sell your home for half price ... if the purchaser was "low income" and could afford no more?

No, but that would be the equivalent of the state forcing a sale of private property, which would be patently unconstitutional for a number of different reasons.

Regardless, a "better" solution would be to have the internet backbone owned the government, and ISPs being responsible *only* for local hookup. You'd save a ton of cash (as you'd only need to set the infrastructure once), and ISPs would no longer be responsible for building/maintaining their own networks, which in turn would drive down service plans. Everyone wins, except the hardcore believers in Capitalism, of course.

 

[RudyBob]

I agree with the decision except that - $15 for 25Mbps and $20 for 200Mbps. There should be one tier only. Two tiers means that all low income qualifiers are not equal and for something like this there should be one tier one price.

 

[ScottSoapbox]

Reasonable law except there should be 1 tier. The rest of us are subsidizing these prices, so reasonable internet (25) is fine as it is necessary for doing school and work things. But you should pay your own way for premium internet (like 200).

 

[Endymio]

No, but that would be the equivalent of the state forcing a sale of private property, which would be patently unconstitutional for a number of different reasons.

Wrong on two counts. First of all, if you're already placing your property up for sale, the state isn't forcing the sale -- it's forcing the transaction price. Secondly, there is nothing "unconstitutional" about the state forcing the sale of property. It happens all the time under eminent domain ... and a state can even force the sale to a private buyer.

Regardless, a "better" solution would be to have the internet backbone owned the government

If you think socialized control of business works better, I suggest you check out one of the booming consumer paradises of Cuba, North Korea, or a former USSR Republic. Stay a good long while.

 

[Tantor]

Wrong on two counts. First of all, if you're already placing your property up for sale, the state isn't forcing the sale -- it's forcing the transaction price. Secondly, there is nothing "unconstitutional" about the state forcing the sale of property. It happens all the time under eminent domain ... and a state can even force the sale to a private buyer.

Not quite correct. The question you posed was about forcing sale at 'half the price' which violates the constitutional requirement for just compensation.

[/QUOTE]
If you think socialized control of business works better, I suggest you check out one of the booming consumer paradises of Cuba, North Korea, or a former USSR Republic. Stay a good long while.
[/QUOTE]

Well, it's more complicated than than. Cuba and North Korea are bad examples because they are under hellacious sanctions specifically intended to destroy their economies. You might look at Nazi Germany (national socialism). They were the only Western power to recover from the 1929 depression before WW2. By 1939 German unemployment dropped below 2% whereas the US was inching back up to 20%. That's why Time magazine declared Hitler the 'man of the year' in 1939.

Regarding the ability of socialism to beat capitalism, look at the famous Chinese high-speed rail system. https://www.cnn.com/travel/article/china-fastest-maglev-train-intl-hnk/index.html

Note that I am NOT a fan of socialism, which has a whole slew of problems.

 

[Jyrkz]

Once https://worldmobile.io/en expands to USA, prices will fall a lot faster

 

[gamerk2]

Wrong on two counts. First of all, if you're already placing your property up for sale, the state isn't forcing the sale -- it's forcing the transaction price. Secondly, there is nothing "unconstitutional" about the state forcing the sale of property. It happens all the time under eminent domain ... and a state can even force the sale to a private buyer.

First: There are significant restrictions on the use of Eminent domain.
Second: By your own admission, government can't force a sale. Part of a sales agreement between two parties is price; if the seller doesn't agree with the sell price, they can choose to "not sell".

If you think socialized control of business works better, I suggest you check out one of the booming consumer paradises of Cuba, North Korea, or a former USSR Republic. Stay a good long while.

At no point did I advocate for direct ownership of a telecom. What I advocated for was ownership of the "infrastructure"; the telecoms would be free to compete for customers for who can provide the cheapest access to said infrastructure.

I also note on this point you didn't even bother to rebuke my arguments, other then the typical "socialism bad". Explain to me how having each individual ISP lay the same (often already obsolete) infrastructure, often subsidized by the federal government is a better deal for consumers then doing it *once* at cost by the government and freeing the service providers to...provide service.

Right now, consumers are footing the bill for not only the subsidies paid to ISPs to lay the infrastructure, but also the cost of maintaining/upgrading it. And because of the cost involved ISPs have a really nasty tendency to decide to not compete, which generally leads to higher prices/worse service (as anyone forced to use Spectrum or Comcast is *very* well aware).

 

[gamerk2]

To be clear, the Supreme Court's inaction doesn't "set a precedent": another circuit could rule another way. If that happens, the Supreme Court would likely take up the issue, since a circuit split is one of the factors they use to decide which cases they take.

Still, this case seems pretty clear-cut.

Yeah, for crying out loud, if there was *ever* going to be a case decided on purely 10th Amendment grounds, this is it. Once the Federal government gives up its regulatory authority, it defaults back to the states. And if the ISPs don't like the costs of having to implement 50 differing sets of requirements, well, this is what they wanted.

 

[magoid]

I pay less than $20 dollars for 700mbps internet, here in Brazil. And the government tax services like no one else.

I cannot say what you guys could do to get a better service, but here the solution was not subsidies, it was competition. The good old capitalism. The market is open for any swinging **** that want a concession, so there are several ones ready to undercut the bigger ones and gain market.

 

[Endymio]

Not quite correct. The question you posed was about forcing sale at 'half the price' which violates the constitutional requirement for just compensation.

Forcing the sale of property at half price is no different than forcing the sale of a product or service at half price. You're admitting this law is unconstitutional.

Cuba and North Korea are bad examples because they are under hellacious sanctions specifically intended to destroy their economies. You might look at Nazi Germany (national socialism). They were the only Western power to recover from the 1929 depression before WW2. By 1939 German unemployment dropped below 2%... That's why Time magazine declared Hitler the 'man of the year' in 1939.

Hitler opened some 1,000 forced-labor concentration camps. That's a great way to lower unemployment .. if you don't mind the side effects.

Regarding the ability of socialism to beat capitalism, look at the famous Chinese high-speed rail system. https://www.cnn.com/travel/article/china-fastest-maglev-train-intl-hnk/index.html

China under pure socialism had a per-capita annual income of some $600 per year, with the vast bulk of the population peasant farmers. China then switched to a mixed-market "managed socialism" model incorporating capitalist, free-market elements, and it's economy went into hyperdrive.

Still, for anyone inane enough to believe it has "bested capitalism", let's not forget their current per-capita income of $24K/year is still only one quarter what it is here in the USA.

 

[Endymio]

By your own admission, government can't force a sale. Part of a sales agreement between two parties is price; if the seller doesn't agree with the sell price, they can choose to "not sell".

So ISPs in New York can choose "not to sell" service to these low income households? Care to try that one again?

At no point did I advocate for direct ownership of a telecom. What I advocated for was ownership of the "infrastructure"; the telecoms would be free to compete for customers

Um, the infrastructure IS the telecom -- 80%+ of operating costs go to building and maintaining the network. Turn that over to government's inefficiencies and prices skyrocket. Then the populace complains, government subsidizes it further to lower visible costs, and you wind up with yet another hidden tax.

Explain to me how having each individual ISP lay the same (often already obsolete) infrastructure, often subsidized by the federal government is a better deal for consumers then doing it *once* at cost by the government

It's been explained many times, by countless economists. If you doubt their expertise, remember this is exactly the situation we had before Internet deregulation -- one single government-controlled (or in some cases, outright-government owned) cable company in all areas, with competitors legally banned from providing service. Do you remember how atrociously bad that was? And how you and everyone else complained about the poor service and the lack of alternatives? And -- most ironically of all -- blamed it all on "capitalism"?

 

[zecoeco]

$15 = 25Mbps
$20 = 200Mbps

Pay $5 more to get almost 10x the speed? This is ridiculous and not logical.

 

[gamerk2]

Um, the infrastructure IS the telecom -- 80%+ of operating costs go to building and maintaining the network. Turn that over to government's inefficiencies and prices skyrocket. Then the populace complains, government subsidizes it further to lower visible costs, and you wind up with yet another hidden tax.

Except you ignore, again, the fact consumers are subsidizing the construction/maintenance of MULTIPLE networks. And for those of us where the infrastructure is buried, that leads to additional costs every time a telecom builds out (since the roads need to get dug up and repaved every, single, time.) Even if the government is more inefficient, it still ends up cheaper to do it once and eat the efficiency hit then to, again, pay to do the same infrastructure work (which as you admit is 80% of the total cost) three or four times.

It's been explained many times, by countless economists. If you doubt their expertise, remember this is exactly the situation we had before Internet deregulation -- one single government-controlled (or in some cases, outright-government owned) cable company in all areas, with competitors legally banned from providing service. Do you remember how atrociously bad that was? And how you and everyone else complained about the poor service and the lack of alternatives? And -- most ironically of all -- blamed it all on "capitalism"?

Counterpoint: Basically every locally run ISP has been able to undercut the telecoms; Chattanooga's network is a prime example. Hell, the network is run *so* cheaply the telecoms don't even bother to compete. Running at cost (or even at a small profit) is automatically going to be cheaper then running it at cost + 30% profit margin, even factoring in government overhead.

 

[ScottSoapbox]

I pay less than $20 dollars for 700mbps internet, here in Brazil. And the government tax services like no one else.

I cannot say what you guys could do to get a better service, but here the solution was not subsidies, it was competition. The good old capitalism. The market is open for any swinging **** that want a concession, so there are several ones ready to undercut the bigger ones and gain market.

This is the way.

Internet and wireless are much higher in the US because of little (in wireless) to no (in internet) competition.

Cable and internet providers are literally business textbook examples of mutual forbearance (fancy words for legal collusion).

 

[Endymio]

Except you ignore, again, the fact consumers are subsidizing the construction/maintenance of MULTIPLE networks. And for those of us where the infrastructure is buried, that leads to additional costs every time a telecom builds out (since the roads need to get dug up and repaved every, single, time.)

You may want to learn a little about communications networks. First of all, the Internet itself works only because it's composed of multiple networks providing redundancy. Secondly, the truly expensive long-haul cables are shared by multiple providers -- it's only the so-called "last mile" that's wholly built out separately.

Finally, where did you get the absurd idea that these cables require "the roads to be dug up and repaved every single time"? I currently have a choice of three separate ISPs at my location ... just last month a fourth provider (my local electric co-op!) ran an additional set of cabling -- all without digging up a single street, using a special tool to dig underneath from both sides. I did lose a couple spots of grass ... but the utility promises me if they don't grow back by summer, they'll pay to replant.

Running at cost (or even at a small profit) is automatically going to be cheaper then running it at cost + 30% profit margin,

It's fun to make up numbers, isn't it? No provider gets anywhere a 30% net profit margin. Verizon is currently running 7.25%. AT&T last year was running a negative profit margin -- it was losing money. It may top 8% this year as a result.

 

[Jroc187]

...with the lower costs to be paid by everyone else. Hidden taxes like this should be illegal.

For anyone who disagrees, answer this question. Would you support a law requiring you to sell your home for half price ... if the purchaser was "low income" and could afford no more?

LMFAO! sir that's a great take and you are not wrong

 

[Jroc187]

No, but that would be the equivalent of the state forcing a sale of private property, which would be patently unconstitutional for a number of different reasons.

Regardless, a "better" solution would be to have the internet backbone owned the government, and ISPs being responsible *only* for local hookup. You'd save a ton of cash (as you'd only need to set the infrastructure once), and ISPs would no longer be responsible for building/maintaining their own networks, which in turn would drive down service plans. Everyone wins, except the hardcore believers in Capitalism, of course.

I will help you to understand. if you own a restaurant and the government forces you to provide a 50% discount for low-income people who qualify.

 

[gamerk2]

I will help you to understand. if you own a restaurant and the government forces you to provide a 50% discount for low-income people who qualify.

Counterpoint: In your example, the restaurant takes a loss on all the consumable items (food) that is has to purchase at a loss. By contrast, the infrastructure the ISPs would be providing access to already exists, so the only cost to said ISPs would be the lower profit margins on monthly payments.

 

[Endymio]

By contrast, the infrastructure the ISPs would be providing access to already exists, so the only cost to said ISPs would be the lower profit margins on monthly payments.

Criminally inept reasoning. Telecomm infrastructure requires continual maintenance and upgrades, costs which must be borne somewhere. Adding a customer even when spare capacity exists isn't entirely free, as there are billing, support, and other costs ... and when that takes a particular neighborhood over capacity, just that one customer can cost millions in upfront costs. It's even worse when one considers that low-income customers aren't randomly distributed -- they correlate geographically. Meaning this law can result in the tripling, quadrupling, or even more of capacity demands for certain neighborhoods. What then?

Finally-- you dodged the crucial point. You admitted that forcing a sale at a certain price is unconstitutional. Now you're saying it's OK ... as long as it doesn't cost the seller "too much".

 

[gamerk2]

Criminally inept reasoning. Telecomm infrastructure requires continual maintenance and upgrades, costs which must be borne somewhere. Adding a customer even when spare capacity exists isn't entirely free, as there are billing, support, and other costs ... and when that takes a particular neighborhood over capacity, just that one customer can cost millions in upfront costs. It's even worse when one considers that low-income customers aren't randomly distributed -- they correlate geographically. Meaning this law can result in the tripling, quadrupling, or even more of capacity demands for certain neighborhoods. What then?

Finally-- you dodged the crucial point. You admitted that forcing a sale at a certain price is unconstitutional. Now you're saying it's OK ... as long as it doesn't cost the seller "too much".

Providing a service != the sale of a physical good.

 

[Endymio]

Providing a service != the sale of a physical good.

No, it's even worse. Services always involve labor -- forcing the sale of a service at a government-mandated price is nothing but slavery in fancy clothing.

From your syntax I assume you're some sort of coder. How would you react to a law forcing you to design websites for low-income customers at $5/hour ... because "that's all they can afford"?

 

[wiyosaya]

Um, the infrastructure IS the telecom -- 80%+ of operating costs go to building and maintaining the network. Turn that over to government's inefficiencies and prices skyrocket. Then the populace complains, government subsidizes it further to lower visible costs, and you wind up with yet another hidden tax.

Except this has not proven true in all cases, and the dolts in power made it "unlawful" for government to own an ISP - probably because they were extensively lobbied by the telecom industry. https://www.techspot.com/news/68941-residents-rural-chattanooga-almost-had-10-gbps-internet.html
But, what the hell? Why put ISP ownership in the hands of an entity that would make it cheaper when we can have it controlled by the whims of private owners?