A move that was designed to force providers to offer lower rates has been found to be punitive to some telecoms, according to The Register. New York lawmakers had attempted to mandate a low cost $15 per month fee for qualified households, but United States District Judge Denis R. Hurley on Friday ruled in favor of the trade associations who brought the suit. Industry trade groups CTIA, the New York State Telecommunications Association and USTelecom took the state to court in April, contending they lacked the authority to determine broadband prices.
“While a telecommunications giant like Verizon may be able to absorb such a loss, others may not: the Champlain Telephone Company, for example, estimates that nearly half [approximately 48 percent] of [its] existing broadband customers will qualify for ‘discounted rates, with each such customer’ caus[ing] a ‘monetary loss,’” states the legal action presented by the telcos. If compelled to accept minimal fees, the providers would “suffer unrecoverable losses increasing with time” and the “bulk of these losses will stem from lost income,” the argument read.
Disappointed by the turnaround, New York Governor Andrew Cuomo said, “I knew giant telecom companies would be upset by our efforts to level the playing field, and right on cue, they’re pushing back. This is nothing more than a transparent attempt by billion-dollar corporations putting profit ahead of creating a more fair and just society.”
In an official statement, USTelecom wrote, “The broadband industry is committed to working with state and federal policymakers on sustainable solutions that will serve the needs of all low-income Americans. While well-intended, the state’s law ignored the $50 monthly broadband discount Congress enacted, as well as the many commitments, programs and offerings that broadband providers have made for low-income consumers.”
The legal team representing the telecoms noted that “New York has overstepped its regulatory authority.”