(Bloomberg) -- The US Supreme Court rejected a broadband industry appeal and let New York become the first state to cap rates for low-income households.
The high court, without comment, refused to consider industry arguments that a federal telecommunications law precludes New York and other states from regulating the rates charged for internet service.
Business groups told the court that other states are now likely to follow New York’s lead, creating a patchwork of rules around the country.
The New York law, which had been on hold during the court fight, will cap rates for qualifying low-income low-income households at $15 per month, or $20 for higher-speed service.
The New York-based 2nd US Circuit Court of Appeals upheld the law on a 2-1 vote.
The appeals court ruling “threatens to spark a nationwide, state-by-state race to dictate the prices at which broadband service is sold to consumers,” industry groups led by the New York State Telecommunications Association told the Supreme Court in their unsuccessful appeal.
New York Attorney General Letitia James urged the Supreme Court to reject the appeal.
“The 2nd Circuit properly rejected petitioners’ remarkably sweeping argument that Congress intended to preempt states from regulating the entire field of interstate communications services,” James argued.
The industry is separately challenging so-called net neutrality rules put in place by the Federal Communications Commission to bar broadband providers from giving preferential treatment to some web traffic. A different federal appeals court has put those rules on hold.
In the event the net neutrality rules survive in court, they are likely to be targeted by Brendan Carr, whom President-elect Donald Trump has tapped to be the next FCC chair.
The case is New York Telecommunications Association v. James, 24-161.
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