The U.S. Supreme Court closed out 2024 by confirming states’ authority to regulate internet service providers. On December 16, 2024, the Court denied certiorari in New York State Telecommunications Association, Inc., et al. v. Attorney General Letitia James, Case No. 21-1975, allowing New York’s Affordable Broadband Act (ABA) to stand.
The ABA requires broadband providers to offer services to qualifying low-income consumers for $15 or $20 per month and imposes requirements to price increases on those services. The U.S. District Court for the Eastern District of New York quickly enjoined the New York attorney general from enforcing the law based on federal preemption. In short, the district court concluded that the Communications Act of 1934 (the Act) and the Federal Communications Commission’s 2018 order classifying broadband as an information service (the Order) took precedence over the ABA.
That decision was reversed by the Second Circuit in April 2024. The Second Circuit held that the Act does not establish a framework of rate regulation “sufficiently comprehensive to imply that Congress intended to exclude the states from entering this field.” Similarly, the appellate court held that the Order “stripped the [Federal Communications Commission (FCC)] of its statutory authority to regulate the rates charged for broadband internet, and a federal agency cannot exclude states from regulating in an area where the agency itself lacks regulatory authority.”
The internet service providers that appealed the Second Circuit’s ruling argued that broadband internet, as an inherently interstate communications service, is subject to direct regulation under the Act. The petitioners also argued that rate regulation imposed by the ABA would burden the economy by allowing consumers to buy broadband at below-market rates, deterring the investment and expansion of broadband networks.
Why It Matters
By denying certiorari, the Court has effectively cleared the path for states to regulate rates charged by internet service providers. This case also serves as a reminder that, where the federal government takes a step back, states will often step in.
Troutman Pepper Locke State Attorneys General Team
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Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation. |
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Clay Friedman – Co-leader Clayton is a partner in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and co-leader of the State Attorneys General practice, multidisciplinary teams with decades of experience crafting effective strategies to help deter or mitigate the risk of enforcement actions and litigation. |
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Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He focuses his practice on enforcement actions, investigations, and litigation. Stephen primarily represents clients engaging with, or being investigated by, state attorneys general and other state or local governmental enforcement bodies, including the CFPB and FTC, as well as clients involved with litigation, with a particular focus on heavily regulated industries. |
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Michael Yaghi Michael is a partner in the firm’s State Attorneys General and Regulatory Investigations, Strategy + Enforcement (RISE) Practice Groups, nationwide teams that advise clients on consumer protection enforcement matters and other regulatory issues. |
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Samuel E. “Gene” Fishel Gene is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) practice, based in the Richmond office. He brings extensive regulatory experience, having most recently served as senior assistant attorney general and chief of the Computer Crime Section in the Office of the Attorney General of Virginia, and as special assistant U.S. attorney in the Eastern District of Virginia for 20 years. |
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Chuck Slemp Chuck advises clients on a wide range of complex issues that frequently involve government actions, including investigations, inquiries, regulatory matters, and litigation. With a distinguished background in the law and public service, he served as chief deputy attorney general of Virginia before joining the firm. In addition to overseeing the Department of Law and Division of Debt Collection, Chuck managed a team of attorneys who handle complex litigation and investigations. He also directed the attorney general’s legislative affairs and represented the attorney general in various capacities. |
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Tim Bado Tim is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, where he represents corporations and individuals facing potential civil and criminal exposure. Tim’s experience in government investigations, enforcement actions, and white-collar litigation spans a number of industries, including financial services, pharmaceutical, health care, and government contracting, among others. |
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Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology. |
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Chris Carlson Chris Carlson represents clients in regulatory, civil and criminal investigations and litigation. In his practice, Chris regularly employs his prior regulatory experience to benefit clients who are interacting with and being investigated by state attorneys general. |
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Blake R. Christopher Blake collaborates with clients on matters related to government contracting, investigations, and disputes. His senior-level government experience generates valuable insights and strategies for clients across a variety of industries. |
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Nick Gouverneur Nick is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. |
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Natalia Jacobo Natalia is an associate in the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) practice. She focuses her practice on two primary areas: government contracting and state attorney general work. |
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Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. |
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Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general. |
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Lane Page Lane specializes in federal and state regulatory investigations and complex civil litigation. He focuses on representing financial institutions and other businesses, with a particular emphasis on consumer protection and fair lending issues. |
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Trey Smith Trey is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice. He focuses his practice on helping financial institutions and consumer facing companies navigate regulatory investigations and resulting litigation. |
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Daniel Waltz Daniel is a member of the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group and State Attorneys General team. He counsels clients in connection with navigating complex government investigations, regulatory compliance, and transactions, involving state and federal government contracting obligations. Drawing on his broad experience as a former assistant attorney general for the state of Illinois, Daniel is a problem solver both inside and outside the courtroom. |
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Cole White Cole is a member of the firm’s Regulatory Investigations, Strategy and Enforcement (RISE) group. He has a decade of experience working in the attorney general community, having joined the firm from the Wyoming Office of the Attorney General, where he was assistant attorney general. |
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Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department. |