New York State Telecommunications Association, Inc. v. James

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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NEW YORK STATE

TELECOMMUNICATIONS ASSOCIATION, MEMORANDUM AND ORDER

INC., CTIA – THE WIRELESS

ASSOCIATION, ACA CONNECTS – 2:21-cv-2389 (DRH) (AKT)

AMERICA’S COMMUNICATIONS

ASSOCIATION, USTELECOM – THE

BROADBAND ASSOCIATION, NTCA – THE

RURAL BROADBAND ASSOCIATION, and

SATELLITE BROADCASTING &

COMMUNICATIONS ASSOCIATION, on

behalf of their respective members,

Plaintiffs,

- against -

LETITIA A. JAMES, in her official capacity as

the Attorney General of New York,

Defendant.

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APPEARANCES

MOLOLAMKEN LLP

Attorneys for Plaintiff ACA Connects – America’s Communications Association

600 New Hampshire Ave. N.W., Suite 500

Washington, D.C. 20037

By: Jeffrey A. Lamken, Esq.

Rayiner I. Hashem, Esq.

KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C.

Attorneys for Plaintiffs New York State Telecommunications Association, Inc.,

CTIA – The Wireless Association, USTelecom – The Broadband Association,

and NTCA – The Rural Broadband Association

1615 M Street, N.W., Suite 400

Washington, D.C. 20036

By: Scott H. Angstreich, Esq.

Joseph S. Hall, Esq.

Andrew E. Goldsmith, Esq.

HARRIS, WILTSHIRE & GRANNIS LLP

Attorneys for Plaintiff Satellite Broadcasting & Communications Association

1919 M Street, N.W.

The Eighth Floor

Washington, D.C. 20036

By: Jared Marx, Esq.

Michael Nilsson, Esq.

LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK

Attorney for Defendant Letitia A. James

300 Motor Parkway, Suite 230

Hauppauge, N.Y. 11788

By: Patricia M. Hingerton, Esq.

Susan M. Connolly, Esq.

HURLEY, Senior District Judge:

INTRODUCTION

On May 6, 2021, the captioned Plaintiffs, a group of trade associations whose

members provide broadband internet service to New Yorkers, moved this Court under

Federal Rule of Civil Procedure 65(a) for a preliminary injunction barring New York

State Attorney General Letitia A. James from enforcing the Affordable Broadband

Act, N.Y. Gen. Bus. Law § 399-zzzzz, which would require them by June 15, 2021 to

offer qualifying low-income costumers high-speed broadband service at or below

certain price ceilings. For the reasons set forth below, Plaintiffs’ motion is

GRANTED.

BACKGROUND

Internet access has transcended beyond mere luxury to modern necessity. So

integrated has the Internet become with contemporary American life that our nation

adapted to—if not survived—the COVID-19 pandemic by relying on how easily it

facilitates access to our fundamental needs: e.g., healthcare (“telehealth”), education

(“remote learning”), employment (“work from home”), camaraderie (“social

networking”). Def. Mem. in Opp. at 5 [DE 19] (“Def. Opp.”). But the Internet’s

promise of access is only as promising as its accessibility – which depends in part on

whether individuals can afford it.

The New York State Affordable Broadband Act’s (the “ABA”) stated purpose is

to ensure all New Yorkers have access to affordable Internet. Signed into law April

16, 2021, the ABA regulates every New York “broadband service,” defined as

[a] mass-market retail service that provides the capability to transmit

data to and receive data from all or substantially all internet endpoints,

including any capabilities that are incidental to and enable the

operation of the communications service provided by a wireline, fixed

wireless or satellite service provider, . . . [excluding] dial-up service.

N.Y. Gen. Bus. Law § 399-zzzzz(1). The ABA covers every broadband service provider

operating in New York except those serving “no more than twenty-thousand

households” whose compliance, as determined by the New York State Public Service

Commission (the “PSC”), “would result in unreasonable or unsustainable financial

impact.” Id. § 399-zzzzz(5). Plaintiffs are trade associations whose members provide

“wireline, fixed wireless, or satellite broadband service”; they are “broadband service”

providers. Compl. ¶¶ 12–18, 26.

The ABA mandates such providers offer, by June 15, 2021, all qualifying low-

income households at least two Internet access plans: (i) download speeds of at least

25 megabits-per-second at no more than $15-per-month, or (ii) download speeds of at

least 200 megabits-per-second at no more than $20-per-month. N.Y. Gen. Bus. Law

§§ 399-zzzzz(2)–(4). A household qualifies if it:

(a) is eligible for free or reduced-priced lunch through the National

School Lunch Program; or (b) is eligible for, or receiving the

supplemental nutrition assistance program benefits; or (c) is eligible for,

or receiving Medicaid benefits; or (d) is eligible for, or enrolled in senior

citizen rent increase exemption; or (e) is eligible for, or enrolled in

disability rent increase exemption; or (f) is a recipient of an affordability

benefit from a utility.

Id. § 399-zzzzz(2). These qualifications cover approximately “[7] million New Yorkers

and 2.7 million households,”1 the latter of which exceeds one-third of all New York

State households.2

Providers may raise prices only according to a statutory formula and only once

every five years (for the $15 monthly plan) or two years (for the $20 monthly plan).

Id. §§ 399-zzzzz(3)–(4). These Internet plans must be offered “on the same terms and

conditions . . . as for the regularly priced offerings for similar service[s]” and on a

standalone basis, i.e., separate from any “bundled cable and/or phone services.” Id.

§§ 399-zzzzz(3), (5). Providers must “make all commercially reasonable efforts to

promote and advertise” the plans. Id. § 399-zzzzz(7). The ABA empowers the New

York State Attorney General, Defendant Letitia A. James, to seek injunctive relief

against and civil penalties up to a $1000 per violation from any noncompliant

providers. Id. § 399-zzzzz(10).

1 Press Release, Governor Cuomo Signs Legislation Establishing First-in-the-

Nation Program to Provide Affordable Internet to Low-Income Families (Apr. 16,

2021), https://on.ny.gov/2QZqDtl.

2 U.S. Census Bureau, QuickFacts: New York, https://www.census.gov/

quickfacts/fact/table/NY/HSD410219 (last accessed June 11, 2021) (7,343,234

households).

Plaintiffs brought this action on April 30, 2021, [DE 1], and on May 6, 2021

moved for a preliminary injunction barring Defendant from enforcing and giving

effect to the ABA, Pls. Mem. in Support [DE 16] (“Pls. Mem.”). Declarations from six

executives at Plaintiffs’ member organizations accompany Plaintiffs’ briefs. See

Declaration of Jim Baase (“Empire Tele. Decl.”), Ex A. to Pls. Mem. [DE 16-1];

Declaration of Matthew Kramer Coakley, (“Verizon Decl.”), Ex. B. to Pls. Mem. [DE

16-2]; Declaration of Glen Faulkner (“Heart of the Catskills Decl.”), Ex. C to Pls. Mem.

[DE 16-3]; Declaration of Jennifer Manner (“Hughes Network Decl.”), Ex. D to Pls.

Mem. [DE 16-4]; Declaration of Jason Miller (“Delhi Tele. Decl.”), Ex. E to Pls. Mem.

[DE 16-5]; Declaration of Mark T. Webster (“Champlain Tele. Decl.”), Ex. F to Pls.

Mem. [DE 16-6].

Defendant opposed on May 17, 2021 and advised that the PSC scheduled a

hearing for May 19, 2021 to address pending exemption applications. Def. Opp. at

10. At the hearing, the PSC granted “temporary exemption[s] to allow for the orderly

review and evaluation of the exemption requests” to several companies, four of whose

executives submitted declarations in support of Plaintiffs’ motion. Order Granting

Temporary Exemptions attached to Def.’s May 20, 2021 Ltr. [DE 21] (“PSC Order”).

The PSC issued a “Notice Soliciting Comment” on May 28, 2021, inviting public

comment “on the criteria and factors that may be considered by the [PSC] in

evaluating” the ABA’s “unreasonable or unsustainable financial impact” exemption

criteria. Ex. B to Pls. June 1, 2021 Ltr. [DE 24-2].

Plaintiffs submitted their Reply brief on May 21, 2021. Pls. Reply in Support

[DE 23] (“Pls. Reply”). Oral argument was held on June 3, 2021.

DISCUSSION

“To obtain a preliminary injunction against government enforcement of a

statute, [a plaintiff] must establish (1) that it is likely to succeed on the merits,

(2) that it is likely to suffer irreparable harm if the injunction is not granted, (3) that

the balance of the equities tips in its favor, and (4) that the injunction serves the

public interest.” SAM Party of New York v. Kosinski, 987 F.3d 267, 273–74 (2d Cir.

2021).

First, the Court will address irreparable injury. “[T]he moving party must first

demonstrate that such injury is likely before the other requirements for the issuance

of an injunction will be considered,” Grand River Enter. Six Nations, Ltd. v. Pryor,

481 F.3d 60, 66 (2d Cir. 2007), for imminent, irreparable injury is “the single most

important prerequisite for the issuance of a preliminary injunction.” Yang v.

Kosinski, 960 F.3d 119, 128 & n.32 (2d Cir. 2020)

Second, the Court analyzes Plaintiffs’ likelihood of success on the merits,

despite Plaintiffs’ availment also of the alternative “serious questions” standard. Pls.

Mem. at 6–7, 24. The Second Circuit “ha[s] repeatedly stated that the serious-

questions standard cannot be used to preliminarily enjoin governmental action,”

Trump v. Deutsche Bank AG, 943 F.3d 627, 637 (2d Cir. 2019), rev’d on other grounds

sub nom., Trump v. Mazars USA, LLP, 140 S.Ct. 2019, 207 L.Ed.2d 951 (2020), and

the ABA is the product of New York State’s legislative process, see Able v. United

States, 44 F.3d 128, 131 (2d Cir. 1995) (instructing not to apply serious-questions

standard to “governmental policies implemented through legislation or regulations

developed through presumptively reasoned democratic processes [because they] are

entitled to a higher degree of deference and should not be enjoined lightly”).

Third, the Court balances the equities and weighs the public interest.

Pharaohs GC, Inc. v. U.S. Small Bus. Admin., 990 F.3d 217, 225 (2d Cir. 2021)

(quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172

L.Ed.2d 249 (2008)). The Court finishes by addressing Federal Rule of Civil

Procedure 65(c).

I. Imminent, Irreparable Harm

In the context of a preliminary injunction motion, irreparable harm must be

“actual and imminent,” not “remote,” not “speculative,” and not capable of remedy

should “a court wait[] until the end of trial to resolve” the matter. Grand River Enter.

Six Nations, Ltd., 481 F.3d at 66. If redressable through monetary damages, an

injury ordinarily will not justify preliminary injunctive relief, Moore v. Consol. Edison

Co. of New York, 409 F.3d 506, 510 (2d Cir. 2005) (citing Morales v. Trans World

Airlines, Inc., 504 U.S. 374, 381, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)), unless the

Eleventh Amendment precludes recovery of monetary damages, United States v. New

York, 708 F.2d 92, 93 (2d Cir. 1983) (per curiam)).

A. Parties’ Arguments

Plaintiffs ground irreparable harm in a “Hobson’s choice” whereby they suffer

injury whether or not they comply with ABA. Should they choose noncompliance,

they face civil penalties and the Governor’s “promise” that they “will lose [their]

franchise in the State of New York.” Should they comply, the ABA will “likely”

require them to provide these services at a loss, raise advertising expenditures,

impose administrative costs due to providers’ need “to develop a system for validating

customers’ eligibility,” force them to cancel preexisting business plans for upgrades

to, and expansion of, their broadband networks, and inflict reputational harm. Pls.

Mem. at 18–20.

Defendant counters that Plaintiffs “speculate” with “conclusory arguments”

about “possible” future events, whose effects may be “long term” and not “imminent.”

Def. Opp. at 8–10. Defendant says Plaintiffs fail to consider the “benefits” providers

“are likely to gain from the ABA,” such as new customers and increased goodwill. Id.

Defendant also notes an uncertainty as to whether or not certain of Plaintiffs’ member

organizations must comply with the ABA, considering the specific services they offer

and the availability of exemptions. Id. With respect to the latter, Defendant notified

the Court that the PSC granted four organizations whose executives submitted

declarations “temporary exemption[s] . . . pending complete review of individual

exemption applications.” PSC Order at 7.

B. Analysis

Plaintiffs have adequately demonstrated imminent irreparable injury largely

due to the monetary harm they would suffer. Though monetary damages would

usually supply an adequate remedy at law negating the availability of preliminary

injunctive relief, the harm takes on special import where, as here, the Eleventh

Amendment precludes redressability. See United States v. New York, 708 F.2d at 93–

94; e.g., UnitedHealthcare of N.Y., Inc. v. Vullo, 2018 WL 4572243, at *2 (S.D.N.Y.

Sept. 21, 2018). “Where [monetary] damages cannot be later collected because the

defendant enjoys [E]leventh [A]mendment immunity, the damages become

irreparable.”3 N.Y.S. Trawlers Ass’n v. Jorling, 764 F. Supp. 24, 25–26 (E.D.N.Y.),

aff’d, 940 F.2d 649 (2d Cir. 1991); e.g., John E. Andrus Mem’l, Inc. v. Daines, 600 F.

Supp. 2d 563, 572 n.6 (S.D.N.Y. 2009) (plaintiffs “unable to collect a judgment for

monetary damages” due to “sovereign immunity under the Eleventh Amendment”

may have irreparable injury “presumed” because “the only relief available . . . is

injunctive.”); Am. Soc. of Composers, Authors, & Publishers v. Pataki, 930 F. Supp.

873, 880 n.15 (S.D.N.Y. 1996). “[A]t least three circuits have held that unrecoverable

damages may be irreparable harm, without reference to the amount of the loss.”

Regeneron Pharms., Inc. v. U.S. Dep’t of Health & Hum. Servs., 2020 WL 7778037, at

*4 (S.D.N.Y. Dec. 30, 2020) (citing Odebrecht Const., Inc. v. Sec’y, Fla. Dep’t of

Transp., 715 F.3d 1268, 1289 (11th Cir. 2013); Chamber of Commerce v. Edmondson,

594 F.3d 742, 770–71 (10th Cir. 2010); and Iowa Utils. Bd. v. FCC, 109 F.3d 418, 426

(8th Cir. 1996)).

3 At oral argument, Defendant pointed to the availability of state remedies,

notwithstanding the Eleventh Amendment. Tr. of Oral Arg. at 24:10–14. Yet “in

deciding whether a federal plaintiff has an available remedy at law that would make

injunctive relief unavailable, federal courts may consider only the available federal

legal remedies.” United States v. New York, 708 F.2d at 93–94 (emphasis in original)

(citing Petroleum Expl., Inc. v. Commissioner, 304 U.S. 209, 217 & n.8, 58 S.Ct. 834,

82 L.Ed. 1294 (1938)).

Beginning June 15, 2021, Plaintiffs will suffer unrecoverable losses increasing

with time, and the enormity of the matter—six plaintiffs with multiple member

organizations attacking a statute affecting one-third of all New York households—

portends a lengthy litigation. See, e.g., Regeneron Pharms., Inc., 2020 WL 7778037,

at *4 (quoting Jayaraj v. Scappini, 66 F.3d 36, 40 (2d Cir. 1995)). The bulk of these

losses will stem from lost income. Three of Plaintiffs’ declarants estimate the ABA

will reduce annual net income by at least $1 million each. Empire Tele. Decl. ¶ 8

(“net income loss of approximately $2 million per year”); Heart of the Catskills Decl.

¶ 17 (“top-line revenue will decrease by $1,364,000, and net cash flow will decrease

by $1,031,000,”); Delhi Tele. Decl. ¶ 7 (“net income loss of about $1 million per year

(or $90,000 per month)”). 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%] of [its] existing broadband

customers will qualify for discounted rates,” with each such customer “caus[ing] a

monetary loss.” Champlain Tele. Decl. ¶¶ 4, 6–7.

Beyond decreasing revenue, the ABA will increase costs. Providers must

“make all commercially reasonable efforts” to advertise the ABA offers, N.Y. Gen.

Bus. Law § 399-zzzzz(7), an ad campaign estimated to cost one provider (Verizon)

between $250,000 and $1,000,000, Verizon Decl. ¶ 10. These advertising costs, like

lost income, will continue in perpetuity. And the ABA also imposes upfront, one-time

administrative costs – namely, those necessary to develop an eligibility verification

system (as New York State has not provided one of its own) estimated to start at

$125,000, id. ¶ 8 – to say nothing of administrative costs to check on a participant’s

continuing eligibility, likely a perpetual obligation as well. Because providers will

begin to face these consequences (revenue losses, additional costs) and bear these

responsibilities (advertising logistics, eligibility determinations) on June 15, 2021,

Plaintiffs’ harms are therefore imminent.

Defendant impugns Plaintiffs’ figures by arguing “none are supported by

financial records of any sort.” Def. Opp. at 8. Defendant cites no cases identifying

the form of Plaintiffs’ evidence as a problem, and courts have long granted

preliminary injunctive relief by relying on affidavits supplying specific financial

figures to demonstrate the magnitude of irreparable monetary injury. E.g.,

Nationwide Auto Transporters, Inc. v. Morgan Driveaway, Inc., 441 F. Supp. 755, 760

(S.D.N.Y. 1977); see Regeneron Pharms., Inc., 2020 WL 7778037, at *4–5; see also

Mullins v. City of New York, 626 F.3d 47, 52 (2d Cir. 2010) (“[H]earsay evidence may

be considered by a district court in determining whether to grant a preliminary

injunction.”). Moreover, the declarants provide these figures under the penalty of

perjury, see 28 U.S.C. § 1746, which their positions qualify them to assert, Empire

Tele. Decl. ¶ 1 (Chief Operating Officer); Verizon Decl. ¶ 1 (Executive Director of

Home Segment Marketing); Heart of the Catskills Decl. ¶ 1 (President and General

Manager); Hughes Network Decl. ¶ 1 (Senior Vice President for Regulatory Affairs);

Delhi Tele. Decl. ¶ 1 (Vice President/General Manager); Champlain Tele. Decl. ¶ 1

(Controller). Plaintiffs have met their burden of proof.

To the extent Defendant faults Plaintiffs’ declarants for predicting these harms

as “likely,” Def. Opp. at 8 & n.5, the law does not demand absolute prescience. The

Supreme Court’s “frequently reiterated standard requires plaintiffs seeking

preliminary relief to demonstrate that irreparable injury is likely in the absence of

an injunction.” Winter, 555 U.S. at 22 (emphasis in original). Further, to the extent

Defendant contests irreparable harm by relying on the purported “benefits” some

providers “are likely to gain from the ABA,” Def. Opp. at 9, these “benefits” actually

exacerbate Plaintiffs’ harms. Plaintiffs’ declarants aver, and Defendant does not

dispute, that many providers will furnish broadband service at ABA-mandated rates

at a loss, meaning every “new customer” who takes advantage of the offer pushes a

provider closer to (if not deeper in) the red. E.g., Heart of the Catskills Decl. ¶ 15;

Hughes Network Decl. ¶ 6.

The availability of exemptions similarly offers little in refute at this juncture.

Once the ABA goes into effect, later exemption requests “do[] not relieve [a provider]

from its obligations under the [ABA] until such time as the request is granted by the

Commission.” PSC Order at 4, 6. The granted temporary exemptions to some, but

not all, of Plaintiffs’ member organizations do not guarantee that such organizations

will avoid irreparable injury. The temporary exemptions merely give the PSC more

time to decide (viz. potentially deny) the requests, pursuant to “criteria and factors”

not yet identified. Id. at 5; N.Y. Gen. Bus. Law § 399-zzzzz(5). Providers serving

fewer than 20,000 households are eligible for, not entitled to, an exemption and

require the PSC to find “compliance” would “result in unreasonable or unsustainable

financial impact.” N.Y. Gen. Bus. Law § 399-zzzzz(5). How the PSC makes

determination will remain unknown until after June 25, 2021 – the deadline to

submit public comment to the PSC on the issue. Ex. B to Pls. June 1, 2021 Ltr.

Accordingly, when considered alongside the obvious downsides to

noncompliance, which include possible initiation of dissolution proceedings,4

Plaintiffs have demonstrated the ABA going into effect on June 15, 2021 compliance

will result in irreparable injury absent preliminary injunctive relief.

II. Likelihood of Success

Plaintiffs’ likelihood of success depends on the strength of their preemption

arguments, namely whether the ABA (a) conflicts with federal law by standing as an

obstacle to the accomplishment and execution of the full purposes and objectives of

Congress (“conflict preemption”), or (b) invades a field of regulation entirely occupied

by federal law, with no room left for state law (“field preemption”).

4 At an April 7, 2021 press conference, Governor Cuomo indicated that the

failure to comply with ABA would result in the loss of the provider’s franchise in the

State of New York. The Court notes that the New York Attorney General has long

wielded the power to dissolve businesses which, “by the abuse of [their] powers

contrary to the public policy of the state[,] ha[ve] become liable to be dissolved.” See

People v. Oliver Sch., Inc., 206 A.D.2d 143, 147–48, 619 N.Y.S.2d 911 (N.Y. App. Div.,

4th Dep’t 1994) (citing People v. Buffalo Stone & Cement Co., 131 N.Y. 140, 29 N.E.

947 (N.Y. 1892) and People v. N. River Sugar Ref. Co., 121 N.Y. 582, 24 N.E. 834 (N.Y.

1890)).

This is not to suggest a violation of law should go unremedied. Rather, it lends

credence to Plaintiffs’ asserted “Hobson’s choice” through which they face irreparable

injury via the destruction of the business regardless of their choice to comply or not

to comply. Dissolution constitutes irreparable harm because it threatens the viability

of a provider’s business. See Tom Doherty Assocs., Inc. v. Saban Ent., Inc., 60 F.3d

27, 38 (2d Cir. 1995); John B. Hull, Inc. v. Waterbury Petroleum Prod., Inc., 588 F.2d

24, 28–29 (2d Cir. 1978).

A. Preemption Generally

“The purpose of Congress is the ultimate touchstone in every preemption case.”

Altria Grp., Inc. v. Good, 555 U.S. 70, 76, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008)

(quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700

(1996)). Accordingly, a court’s analysis begins “with the assumption that the historic

police powers of the States [are] not to be superseded by [federal law] unless that was

the clear and manifest purpose of Congress.” Id. at 77 (alteration in original)

(internal quotation marks omitted) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S.

218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). However, if “a local government

regulates in an area ‘where there has been a history of significant federal presence,’”

a purported exercise of historic police powers is not afforded deference. N.Y. SMSA

Ltd. P’ship v. Town of Clarkstown, 612 F.3d 97, 104 (2d Cir. 2010) (quoting United

States v. Locke, 529 U.S. 89, 108, 120 S.Ct. 1135, 146 L.Ed.2d 69 (2000)).

“Federal regulations have no less preemptive effect than federal statutes.”

SPGGC, LLC v. Blumenthal, 505 F.3d 183, 188 (2d Cir. 2007) (internal quotation

marks omitted) (quoting Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141,

153, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982)). A statute or regulation with plausible

alternative preemption readings requires a court “to accept the reading that disfavors

preemption.” Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449, 125 S.Ct. 1788, 161

L.Ed.2d 687 (2005).

There are two types of preemption asserted here: conflict preemption and field

preemption. The Court begins with conflict preemption.

B. Conflict Preemption

“[F]ederal law must prevail” over state law pursuant to the doctrine of conflict

preemption if “‘compliance with both state and federal law is impossible’ or [if] ‘the

state law stands as an obstacle to the accomplishment and execution of the full

purposes and objectives of Congress.’” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377,

135 S.Ct. 1591, 191 L.Ed.2d 511 (2015) (quoting California v. ARC America Corp.,

490 U.S. 93, 100, 101, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989)).

Before addressing the merits, it is necessary to review broadband service under

the Federal Communications Act of 1934 (the “Communications Act”), 47 U.S.C. § 151

et seq., as amended by the Telecommunications Act of 1996, Pub. L. No. 104-104, 110

Stat. 56 (1996). The Federal Communications Commission (the “FCC”) has classified

broadband internet under the Communications Act as either a Title I “information

service” or a Title II “telecommunications service.” The two classifications are

mutually exclusive. 47 U.S.C. §§ 153(24), (53) (“The term ‘information service’ . . .

does not include any use of any such capability for . . . the management of a

telecommunications service.”). “These similar-sounding [classifications] carry

considerable significance: Title II [telecommunications services] entails common

carrier status,” whereas Title I information services do not. Mozilla Corp. v. FCC,

940 F.3d 1, 17 (D.C. Cir. 2019) (per curiam); see 47 U.S.C. § 153(51) (permitting

treatment “as a common carrier . . . only to the extent that [an entity] is engaged in

providing telecommunications services”).

Prior to 2015 the FCC classified, and since 2018 has classified, broadband

internet as a Title I “information service.” 2015 Order ¶ 308;5 2018 Order ¶¶ 2, 26.6

In the interim between 2015 and 2018, the FCC classified broadband as a Title II

“telecommunications service.” Its present “information service” status prevents the

FCC from imposing common carrier obligations on providers. 2018 Order ¶¶ 26–64;

see Mozilla Corp., 940 F.3d at 17 (“‘[I]nformation services’ are exempted from common

carriage status and, hence, Title II regulation.”).

1. Parties’ Arguments

Plaintiffs contend the ABA conflicts with Congress’s purposes and objectives

in the Communications Act, as interpreted by the FCC and embodied in the FCC’s

2018 Order. The ABA, they say, “subjects the same broadband service that the

Communications Act says should not be subject to common-carrier obligations to a

form of per se common-carrier regulation: rate regulation.” Pls. Mem. at 12. Plaintiffs

compare the 2018 Order, in which the FCC announced a policy to “further[] its goal

of making broadband available to all Americans” and exempted broadband from

common carrier treatment, with the ABA, in which New York purported to reach the

same goal through contradictory means. Compare 2018 Order ¶¶ 86–87, and 2015

Order ¶¶ 382, 451 (“[W]e do not and cannot envision adopting new ex ante rate

5 Report and Order on Remand, Declaratory Ruling, and Order, Protecting and

Promoting the Open Internet, 30 FCC Rcd. 5601, ¶ 25 (2015) (“2015 Order”).

6 Declaratory Ruling, Report and Order, and Order, Restoring Internet Freedom,

33 FCC Rcd. 311, ¶ 21 (2018) (“2018 Order”).

regulation of broadband Internet access service in the future . . . .”), with N.Y. Gen.

Bus. Law § 399-zzzzz.

Defendant casts the ABA not as common carrier rate regulation, but as an

“accessible pricing scheme.” Def. Opp. at 17–18. By choosing a Title I classification,

she says, the FCC does not deregulate broadband internet but, rather, “disclaim[s]”

authority to regulate it altogether. Def. Opp. at 23; see also Hr’g Tr. at 65:16–23, ACA

Connects v. Becerra, No. 18-cv-2684 (E.D. Cal. Feb. 23, 2021), Ex. H to Pls. Mem. [DE

16-8] (“Becerra Tr.”) (“[R]einterpret[ting] broadband Internet as an information

service covered by Title I . . . place[s] it outside the FCC’s regulatory ambit . . . , a

decision by the FCC that it lacked authority to regulate in the first place.”). She reads

the Communications Act’s prohibition of common-carrier treatment of “information

services” not to limit states, see 47 U.S.C. § 153(51), and argues that finding Congress

intended preemption of state law there contravenes the express manner in which it

did so elsewhere in the statute, Def. Opp. at 20 (citing 47 U.S.C. § 160(a)). Defendant

contends the FCC’s 2018 Order fails to express a policy preference strong enough to

overcome New York’s “historic police powers.” Def. Opp. at 17–18.

2. Analysis

Plaintiffs have demonstrated a likelihood of success on the issue of conflict

preemption. The Court rejects Defendant’s contention that the FCC disclaimed “its

authority to regulate broadband at all.” Tr. of Oral Arg. at 17:15–17. In reclassifying

broadband internet as a Title I information service, the FCC made the affirmative

decision not to treat it as a common carrier. The FCC’s affirmative decision is

different from an abdication of jurisdiction writ large, even though Title I may not

confer as expansive of powers as, say, Title II and its grant to impose common-carrier

obligations. Ray v. Atl. Richfield Co., 435 U.S. 151, 178, 98 S.Ct. 988, 55 L.Ed.2d 179

(1978) (“The Court has previously recognized that where failure of . . . federal officials

affirmatively to exercise their full authority takes on the character of a ruling that no

such regulation is appropriate or approved pursuant to the policy of the statute,

States are not permitted to use their police power to enact such a regulation.”

(internal quotation marks omitted)); Bethlehem Steel Co. v. New York State Labor

Relations Board, 330 U.S. 767, 774, 67 S.Ct. 1026, 91 L.Ed. 1234 (1947) (holding

federal nonregulation was not an “administrative concession that the nature of these

appellants’ business put” the particular subject matter “beyond reach of federal

authority”). “Information-service providers . . . are not subject to mandatory

common-carrier regulation under Title II, though the Commission has jurisdiction to

impose additional regulatory obligations under its Title I ancillary jurisdiction to

regulate interstate and foreign communications.” Nat’l Cable & Telecomms. Ass’n v.

Brand X Internet Servs., 545 U.S. 967, 976, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005)

(emphasis added); Am. Libr. Ass’n v. FCC, 406 F.3d 689, 692–93 (D.C. Cir. 2005) (The

FCC’s “general grant of jurisdiction under Title I . . . encompasses ‘all interstate and

foreign communication by wire.’” (quoting United States v. Southwestern Cable Co.,

392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968)). “In a statutory scheme in which

Congress has given an agency various bases of jurisdiction and various tools with

which to protect the public interest, the agency is entitled to some leeway in choosing

which jurisdictional base and which regulatory tools will be most effective in

advancing the Congressional objective.” Computer & Commc’ns Indus. Ass’n v. FCC,

693 F.2d 198, 212 (D.C. Cir. 1982) (emphasis in original) (quoting Phila. Television

Broadcasting Co. v. FCC, 359 F.2d 282, 284 (D.C. Cir. 1966)). The FCC’s 2018 Order

chooses Title I “information service” treatment for broadband internet and, in doing

so, does not tender jurisdiction to the States to regulate interstate broadband

providers as common carriers. Rather, the FCC binds itself to the confines of Title I

jurisdiction, cementing its long-standing policy choice concerning the propriety of

imposing common-carrier rate regulations upon broadband internet service.7 The

ABA stands as an obstacle to the accomplishment and execution of the FCC’s

reasoned decision to assure interstate broadband providers that no common-carrier

rate regulations await them beyond the horizon.8 Crockett Tel. Co. v. FCC, 963 F.2d

1564, 1566 (D.C. Cir. 1992) (“The FCC has exclusive jurisdiction to regulate interstate

common carrier services including the setting of rates.” (internal citation omitted)).

To be clear, the ABA is rate regulation, and rate regulation is a form of common

carrier treatment. In Defendant’s words, the ABA concerns “Plaintiffs’ pricing

7 Previous to the 2015 Order, the FCC treated broadband internet as a Title I

information service for “almost twenty years.” 2018 Order ¶¶ 1–2. And even though

Title II gave it the power to impose common-carrier rate regulations on broadband

internet between 2015 and 2018, the FCC expressly decided against doing so. 2015

Order ¶¶ 382, 451 (“[B]ecause we do not and cannot envision adopting new ex ante

rate regulation of broadband Internet access service in the future, we forbear from

applying sections 201 and 202 to broadband services to that extent.”).

8 The FCC reclassified broadband internet service under Title I “due to concerns

that the [FCC] could reverse course in the future and impose [pursuant to Title II] a

variety of costly regulations on the broadband industry—such as rate regulation.”

2018 Order ¶ 101.

practices” by creating a “price regime” that “set[s] a price ceiling,” which flatly

contradicts her simultaneous assertion that “the ABA does not ‘rate regulate’

broadband services.” Def. Opp. at 1, 6, 14, 18 (capitalization omitted). “Price ceilings”

regulate rates. E.g., AT&T Co. v. FCC, 974 F.2d 1351, 1352 (D.C. Cir. 1992) (“The

FCC issued an order adopting a new method for regulating the rates charged by

AT&T . . . that established a ‘price cap index,’ that serves as a price ceiling for each of

three “baskets” of AT&T services.” (emphasis added)); see, e.g., In re Permian Basin

Area Rate Cases, 390 U.S. 747, 758–60, 768, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968)

(recognizing the Federal Power Commission, “for purposes of rate regulation,”

devised a “rate structure” by setting “two area maximum prices,” using the

“legislative power to create price ceilings” (internal quotation marks omitted)); see

also, e.g., Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467, 486–87, 122 S.Ct. 1646, 152

L.Ed.2d 701 (2002) (“The regulatory response in some markets was adoption of a rate-

based method commonly called ‘price caps,’ as, for example, by the FCC’s setting of

maximum access charges paid to large local-exchange companies by interexchange

carriers.” (internal citations omitted)).

And rate regulation is a long-accepted method of regulating common carriers.

E.g., MCI Telecomms. Corp. v. AT&T Co., 512 U.S. 218, 231–32, 234, 114 S.Ct. 2223,

129 L.Ed.2d 182 (1994) (“[T]he [Communications] Act establishes a rate-regulation,

filed-tariff system for common-carrier communications.” (emphasis added)); Maislin

Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 119, 110 S.Ct. 2759, 111 L.Ed.2d

94 (1990) (“The ICC regulates interstate transportation by motor common carriers to

ensure that rates are both reasonable and nondiscriminatory.” (emphasis added)).

Defendant resists by noting the ABA is “limited to a discrete subset of customers,”

whereas common carriers offer service to the public indiscriminately and on general

terms. Def. Opp. at 18. But “common carrier status” does not turn on a provider’s

offered service being “practically . . . available to the entire public.” Nat’l Ass’n of

Regul. Util. Comm’rs v. FCC, 525 F.2d 630, 641 (D.C. Cir. 1976). A regulation may

impose common carrier obligations even if a service is “of practical use to only a

fraction of the population” as a result of the obligation “limit[ing]” its benefits to those

“eligible[].” Id. at 642. “The key factor is that the operator offer indiscriminate

service to whatever public its service may legally and practically be of use.” Id.

Putting it all together, the ABA conflicts with the implied preemptive effect of

both the FCC’s 2018 Order and the Communications Act. The ABA’s common carrier

obligations directly contravenes the FCC’s determination that broadband internet

“investment,” “innovation,” and “availab[ility]” best obtains in a regulatory

environment free of threat of common-carrier treatment, including its attendant rate

regulation. 2018 Order ¶¶ 86–87, 101; see Mozilla Corp., 940 F.3d at 49–55

(upholding the FCC’s determination); the ABA thereby stands as an obstacle to the

FCC’s accomplishment and execution of its full purposes and objectives and is

conflict-preempted.9

9 As Defendant would have it, the FCC’s 2018 Order reflects so profound a

misunderstanding of Communications Act that, instead of protecting broadband

internet providers from common carrier treatment and its attendant threat of rate

regulation, it actually exposes them to fifty states-worth of such regulations.

The D.C. Circuit holding in Mozilla Corporation does not convince the Court

otherwise. The Mozilla Court upheld the FCC’s 2018 Order with the exception of the

“Preemptive Directive,” 940 F.3d at 19, 74–109, through which the FCC attempted to

expressly preempt “any state or local requirements that are inconsistent with [its]

deregulatory approach,” 2018 Order ¶¶ 194–204. The Mozilla Court held that the

FCC could not expressly preempt such state or local requirements pursuant to its

Title I authority because Congress did not vest therein the power to expressly preempt.

See Mozilla Corp., 940 F.3d at 83 (“[N]othing [] empower[s] the [FCC] to engage in

express preemption in the 2018 Order.”). The FCC may regulate only so far as

Congress grants it “express statutory authority” and “ancillary authority,” each of

which the FCC lacked in trying to expressly preempt under Title I. Id. at 74–76. The

Preemptive Directive’s reach was all-the-more-so ultra vires because it entered the

intrastate communications hemisphere “over which Congress expressly denied the

[FCC] regulatory authority.” Id. at 77–78 (internal quotation marks omitted); id. at

82 (noting the Preemptive Directive purported to make “a categorical determination

Moreover, if Defendant’s reading of Mozilla Corporation is correct, the FCC’s

decision to “reclassif[y broadband] away from public-utility style regulation” survived

the D.C. Circuit’s application of the “arbitrary-and-capricious” standard of review

despite causing more public-utility style regulation. 940 F.3d at 50–55 (emphasis

added) (internal quotation marks and citations omitted). The Court has its doubts.

How could the FCC’s 2018 Order make a “rational connection between the facts found

[i.e., public-utility style regulation impedes investment, innovation, and availability]

and the choice made [i.e., to classify broadband under Title I]” if, as a matter of law,

Title I treatment unfetters fifty state sovereigns to impose their own public-utility

style regulations? See id.

that any and all forms of state regulation of intrastate broadband would inevitably

conflict with the 2018 Order”).

Mozilla’s holding does not preclude or revoke the 2018 Order’s implicit

preemptive effect. The D.C. Circuit concluded its decision by noting “it would be

wholly premature to pass on the preemptive effect, under conflict or other recognized

preemption principles, of the remaining portions of the 2018 Order.” Id. at 86. Those

same preemption principles are implicated by the ABA. And parallel to the D.C.

Circuit’s prediction, when faced with the ABA, Plaintiffs have “explain[ed] how [that]

state practice actually undermines the 2018 Order,” thus “invok[ing] conflict

preemption.” Id. at 85.10

C. Field Preemption

Field preemption reflects a congressional decision “‘to foreclose any state

regulation in the area,’ irrespective of whether state law is consistent or inconsistent

with ‘federal standards.’” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377, 135 S.Ct.

1591, 191 L.Ed.2d 511 (2015) (quoting Arizona v. United States, 567 U.S. 387, 401,

132 S.Ct. 2492, 183 L.Ed.2d 351 (2012)). Where “federal law occupies a ‘field’ of

regulation ‘so comprehensively that it has left no room for supplementary state

10 To the extent Defendant relies on the Eastern District of California’s Oral

Ruling in ACA Connects v. Becerra, No. 18-cv-2684 (E.D. Cal. Feb. 23, 2021), for its

holding on conflict preemption, such reliance is misplaced. The California Attorney

General defeated the preliminary injunction motion by, in part, “pointing out” that

the statute there did “not regulate how much providers can charge their customers

because providers can charge the user as much or as little as they like for the service

and, thus, there is no conflict with the Act.” Becerra Tr. at 67:18–21. The ABA’s

express goal is to regulate how much providers can charge.

legislation,’” it may not only impose federal obligations “but also confer a federal right

to be free from any other [state law] requirements.” Murphy v. Nat’l Collegiate

Athletic Ass’n, 138 S.Ct. 1461, 1480–81, 200 L.Ed.2d 854 (2018) (quoting R.J.

Reynolds Tobacco Co. v. Durham County, 479 U.S. 130, 140, 107 S.Ct. 499, 93 L.Ed.2d

449 (1986)).

Laws governing “interstate communication services” comprise the field

purportedly preempted here.

1. Parties’ Arguments

Plaintiffs argue federal law preempts the field of interstate communications

services, citing precedent finding Congress’s “intent” in the Communications Act’s

“broad scheme” of regulation over “interstate service by communications carriers.”

Ivy Broadcasting Co. v. AT&T Co., 391 F.2d 486, 490–91 (2d Cir. 1968) (citing

Supreme Court cases); see Cap. Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699–700, 104

S.Ct. 2694, 81 L.Ed.2d 580 (1984) (discussing Southwestern Cable Co., 392 U.S. 157

(1968)). Plaintiffs’ asserted “field” is demarcated in 47 U.S.C. § 152:

(a) The provisions of this chapter shall apply to all interstate and foreign

communication by wire or radio . . . , which originates and/or is received

within the United States, and to all persons engaged within the United

States in such communication . . . .

(b) . . . [N]othing in this chapter shall be construed to apply or to give

the Commission jurisdiction with respect to (1) charges, classifications,

practices, services, facilities, or regulations for or in connection with

intrastate communication service by wire or radio of any carrier . . . .

47 U.S.C. §§ 152(a) & (b) (emphasis added). Because the ABA defines “broadband

service” in the exact same way as the FCC, Plaintiffs say, New York impermissibly

seizes jurisdiction outside its “intrastate services” boundary. Compare N.Y. Gen. Bus.

Law § 399-zzzzz(1), with 2018 Order ¶ 21 (explaining that the FCC “continue[s] to

define” broadband services in the same manner as it did in (now-repealed) 47 C.F.R.

§ 8.11(a) and reciting the definition), and 2015 Order ¶ 25 (defining “broadband

internet access service”).

Defendant opposes by observing “[t]he [Communications] Act establishes . . . a

system of dual state and federal regulation,” Louisiana Pub. Serv. Comm’n v. FCC,

476 U.S. 355, 360, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986), with states retaining

jurisdiction over intrastate communication services and through which New York

may enact the ABA’s “purely intrastate affordable-pricing scheme,” Def. Opp. 14.

Defendant contends that Plaintiffs’ reading of 47 U.S.C. § 152(a) impermissibly

renders other Communications Act provisions “superfluous.” Id. at 15. Defendant

also cites circuit court precedent outside the Second Circuit that rejects field

preemption even where “states seek to regulate interstate telecommunications

services.” Id. at 13 (capitalization and emphasis removed) (citing Tennessee v. FCC,

832 F.3d 597 (6th Cir. 2016); Johnson v. American Towers, LLC, 781 F.3d 693 (4th

Cir. 2015); In re Universal Serv. Fund Tel. Billing Prac. Litig., 619 F.3d 1188 (10th

Cir. 2010); In re NOS Commc’ns, 495 F.3d 1052 (9th Cir. 2007)).

2. Analysis

Plaintiffs have demonstrated a likelihood of success on the merits based on

field preemption. The ABA is not a “purely intrastate affordable-pricing scheme,” nor

is it reasonable to read its statutory text in that manner: It covers providers with

“the capability to transmit data to and receive data from all or substantially all

internet endpoints.” N.Y. Gen. Bus. Law § 399-zzzzz(1) (emphasis added). As implied

by a cousin term, the “world wide web,” broadband internet connects New York State

users to internet endpoints well beyond New York’s borders. For example, the

household from which this New York-based federal Court, working from home, can

so-order the parties’ briefing schedule on the Internet-based ECF docket, and, in

doing so, communicate with Plaintiffs’ Washington, D.C.-based counsel, with proof

documented on the Notice of Electronic Filing receipt. E.g., Order entered May 5,

2021. The ABA’s plain terms apply (absent an exemption) to the telecommunications

provider transmitting this interstate communication. In other words, the ABA is not

confined to intrastate communications services.

Indeed, the ABA borrowed its definition the “broadband services” from the

FCC. The FCC before 2015, between 2015 and 2018, and since 2018 has

continue[d] to define “broadband Internet access services” as a mass-

market retail service by wire or radio that provides the capability to

transmit data to and receive data from all or substantially all Internet

endpoints,

2018 Order ¶ 21 (footnote omitted); see 2015 Order ¶ 25 (“Consistent with the [FCC’s]

2010 Order . . .”), which is reprinted in N.Y. Gen. Bus. Law § 399-zzzzz(1). While the

Court need not, and will not, at this stage hold that all broadband internet services

are categorically interstate, it suffices to say that the ABA clearly wanders beyond

the intrastate communications line, with no provisions reasonably inferable as

limiting (or even trying to limit) its reach.

Defendant calls this view “mistaken” because the ABA is not “an interstate-

communication statute” but, rather, “an intrastate pricing regulation.” How the ABA

is “purely intrastate” is counterintuitive, if not implausible. See Def. Opp. at 14–15.

It covers broadband internet communications from “all Internet endpoints,” including

those sent from or to endpoints outside New York State’s borders; the ABA is not

confined to communications between two New York endpoints. It covers every

provider “engaged” in “interstate and foreign [broadband internet] communication,”

47 U.S.C. § 152(a), so long as the provider serves New York customers, not just the

“many” providers operating “exclusively within the State” who thus serve only New

York customers, Def. Opp. at 14. The sole basis on which Defendant relies to call the

ABA “intrastate” is its applicability only to “[c]ompanies that have chosen to provide

service in New York.” Id. But any state law can be construed as applicable only to

those subject to that state’s jurisdiction, which, accordingly, does not make it

“intrastate.” “The key to [the FCC’s] jurisdiction,” the line between inter- vs.

intrastate, “is the nature of the communication itself rather than the physical location

of the technology” or the consumers served. See New York Tel. Co. v. FCC, 631 F.2d

1059, 1066 (2d Cir. 1980).

Because the ABA regulates within the field of interstate communications, it

triggers field preemption. Binding Second Circuit decisions are clear: the

Communications Act’s “broad scheme for the regulation of interstate service by

communications carriers indicates an intent on the part of Congress to occupy the

field to the exclusion of state law.” Ivy Broadcasting Co., 391 F.2d at 490–91

(emphasis added) (analyzing Postal-Tel. Cable Co. v. Warren-Godwin Lumber Co.,

251 U.S. 27, 40 S.Ct. 69, 64 L.Ed. 118 (1919) and Western Union Tel. Co. v. Boegli,

251 U.S. 315, 40 S.Ct. 167, 64 L.Ed. 281 (1920)); e.g., GTE Serv. Corp. v. FCC, 474

F.2d 724, 730–31 (2d Cir. 1973) (“The courts, however, have uniformly and

consistently interpreted the [Communications] Act to give the [FCC] broad and

comprehensive rule-making authority in the new and dynamic field of electronic

communication.”); cf., Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 416 (2d Cir. 2002)

(“When federal law preempts state law, it prohibits a state or local governmental

entity ‘from regulating within a protected zone, whether it be a zone protected and

reserved for market freedom . . . or for [federal agency] jurisdiction.’ Federal

regulation of interstate and foreign communications plainly preempts much of the

field of wireless broadcasting.” (ellipses and alteration in original) (quoting Bldg. &

Constr. Trades Council v. Associated Builders & Contractors of Mass./R.I., Inc., 507

U.S. 218, 226–27, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993))).

Defendant contends that subsequent courts have called these Second Circuit

decisions’ “reasoning into question,” id. (citing Marcus v. AT&T Corp., 138 F.3d 46

(2d Cir. 1998)), a contention with which the Court disagrees based on the arguments

presented.11 However, it is not this Court’s prerogative to disregard Ivy Broadcasting

when assessing Plaintiffs’ likelihood of success.

11 In Global NAPs, Inc. v. Verizon New England, Inc., for example, the Second

Circuit noted that Vermont Public Service Board “made no attempt to set rates or

charges for” an interstate communication service and therefore “narrowly

sidestepped encroachment on the FCC’s jurisdiction to set rates on interstate

communications.” 454 F.3d 91, 102 n.10 (2d Cir. 2006) (citing Ivy Broadcasting); see

also Cap. Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700, 104 S.Ct. 2694, 81 L.Ed.2d

580 (1984) (FCC has “comprehensive authority” and “‘broad responsibilit[y]’ to

regulate all aspects of interstate communication by wire or radio by virtue of . . . 47

U.S.C. § 152(a)”); United States v. Southwest Cable Co., 392 U.S. 157, 167–68, 88 S.Ct.

And while complete preemption12 and field preemption “must be

distinguished,” Sullivan v. Am. Airlines, Inc., 424 F.3d 267, 272–73 & n.7 (2d Cir.

2005), despite Defendant’s reliance on cases involving the former to contest the latter,

see Def. Opp. at 16–17; see Pls. Reply at 7 & n.7, the Ivy Broadcasting Court held

Congress both field-preempted and complete-preempted the realm of interstate

communications:

It seems reasonable that the congressional purpose of uniformity and

equality of rates should be taken to imply uniformity and equality of

service. The published tariff rate will not be uniform if the service for

which a given rate is charged varies from state to state according to

differing state requirements. It seems to us that the congressional

purpose can be achieved only if a uniform federal law governs as to the

standards of service which the carrier must provide and as to the extent

of liability for failure to comply with such standards.

391 F.2d at 490–91. In other words, Congress set aside interstate communications

as an area in which a uniform federal law governs “standards of service” (field

preemption) and “extent of liability” (complete preemption). See id.

1994, 20 L.Ed.2d 1001 (1968) (FCC “expected to serve as the single Government

agency with unified jurisdiction and regulatory power over all forms of electrical

communication, whether by telephone, telegraph, cable, or radio” and

Communication Act’s “terms, purposes, and history all indicate that Congress

formulated a unified and comprehensive regulatory system for the (broadcasting)

industry” (internal quotation marks omitted)).

12 “Complete preemption is distinct from ordinary or ‘defensive’ preemption,

which includes express, field, and conflict preemption.” Whitehurst v. 1199SEIU

United Healthcare Workers E., 928 F.3d 201, 206 n.2 (2d Cir. 2019); see Sullivan v.

Am. Airlines, Inc., 424 F.3d 267, 272–73 & n.7 (2d Cir. 2005) (“The complete-

preemption doctrine must be distinguished from ordinary preemption.”). Complete

preemption is where “certain federal statutes are construed to have such

‘extraordinary’ preemptive force that state-law claims coming within the scope of the

federal statute are transformed, for jurisdictional purposes, into federal claims.”

Sullivan, 424 F.3d at 273.

Defendant’s position stems from reading 47 U.S.C. § 152(a) to speak “entirely

on federal—not state—authority.” Def. Opp. at 15; see also Becerra Tr. at 63:3–65:7.

The Court finds it hard to square that view with the Supreme Court’s decision in

Louisiana Public Service Commission v. FCC, which described the Communications

Act as dividing communications services into “two hemispheres—one comprised of

interstate service, over which the FCC would have plenary authority, and the other

made up of intrastate service, over which the States would retain exclusive

jurisdiction.” 476 U.S. 355, 357, 106 S.Ct. 1890, 90 L.Ed.2d 369 (1986) (emphasis

removed);13 Crockett Tel. Co., 963 F.2d at 1566 (“The FCC has exclusive jurisdiction

to regulate interstate common carrier services including the setting of rates.” (citing

47 U.S.C. § 152)). The FCC’s jurisdiction would hardly be “plenary” if it loses, to the

states’ gain, the right to make rules regarding certain interstate communications

services when the FCC alters, through formal rulemaking procedure, the Title of the

Communications Act under which it continues to effect its longstanding policy of

nonregulation of those communications. See 83 Fed. Reg. 7852 (Apr. 23, 2018);

13 The Supreme Court observed “the realities of technology and economics belie

[] a clean parceling of responsibility” between federal interstate matters and state

intrastate matters.” Louisiana Pub. Serv. Comm’n, 476 U.S. at 360 (where

infrastructure “provid[ing] intrastate service is also used to provide interstate

service” it is “conceivably within the jurisdiction of both state and federal

authorities”). But any unavoidable overlap is not an invitation for concurrent state

regulation of interstate communications because the “impossibility exception” gives

the FCC jurisdiction where it is “not possible to separate the interstate and the

intrastate components of the asserted [FCC] regulation.” Mozilla, 940 F.3d at 77

(quoting Louisiana Pub. Serv. Comm’n, 476 U.S. at 375 n.4). Defendant does not

suggest the ABA operates within the overlap and, even if she had, the ABA is plainly

interstate regulation.

Plenary, Black’s Law Dictionary (11th ed. 2019) (“Full; complete; entire”); cf.

Bethlehem Steel Co., 330 U.S. at 776 (holding there is no state-federal “concurrent

jurisdiction” where a federal agency “has jurisdiction of the industry” because,

otherwise, “action by one necessarily denies the discretion of the other. The second

to act either must follow the first, which would make its action useless and vain, or

depart from it, which would produce a mischievous conflict”). The field of interstate

communications gets no smaller, and no less exclusive, when the FCC does so.

Mozilla Corp., 940 F.3d at 77 (holding that § 152(a) identifies “communications

matters falling under the [FCC’s] authority” and § 152(b) identifies “those remaining

within the States’ wheelhouse,” with “the impossibility exception” helping to “police

the line between” the two (emphasis added)). The 2018 Order does not say broadband

internet no longer reflects an interstate communication service.

For that reason, this Court respectfully believes the Eastern District of

California in ACA Connects v. Becerra has it backwards. The Communications Act

does not “specifically le[ave] out certain types of interstate communications [e.g.,

those transmitted by information services] from the FCC’s jurisdiction.” Becerra Tr.

at 63:18–20. Rather, the Communications Act specifically leaves out certain types of

jurisdiction (e.g., Title II authority to impose common carrier obligations), but not

jurisdiction writ large, over interstate communications transmitted by information

services.

Therefore, Plaintiffs has demonstrated a likelihood of success on the issue of

field preemption.14

III. Balance of Equities and the Public Interest

Second Circuit precedent suggests that a plaintiff “may be able to show that a

preliminary injunction is warranted on the strength of these first two factors alone,”

i.e., without considering the “balance of the equities” and the “public interest.” New

York v. United States Dep’t of Homeland Sec., 969 F.3d 42, 86 n.38 (2d Cir. 2020).

Plaintiffs likely have done so here. But pursuant to Supreme Court instruction, see

id. (citing Winter, 555 U.S. at 20); Pharaohs GC, Inc., 990 F.3d at 225, the Court

nevertheless analyzes these last two factors, which “merge when the Government is

the opposing party,” Nken v. Holder, 556 U.S. 418, 435, 129 S.Ct. 1749, 173 L.Ed.2d

550 (2009).

The Court also holds these two factors favor preliminary injunctive relief.

While the stated purpose of the ABA is to expand access to broadband internet, that

is not to say it is the sole legislative effort doing so. Plaintiffs discuss several federal

programs allocating billions of dollars to achieve that same end: the Lifeline program,

the Emergency Broadband Connectivity Fund, the American Rescue Plan. Pls. Mem.

14 At oral argument, Defendant contended that Communications Act provisions

“expressly preempt[ing] state action would [] not be required if there was field

preemption,” suggesting the former rules out the latter. Tr. of Oral Arg. at 25:20–22.

But a federal law’s express preemption clause “does not immediately end the

[preemption] inquiry because the question of the substance and scope of Congress’

displacement of state law still remains. Preemptive intent may also be inferred if the

scope of the statute indicates that Congress intended federal law to occupy the

legislative field, or if there is an actual conflict between state and federal law.” Altria

Grp., Inc., 555 U.S. at 76–77.

at 21–24; Pls. Reply at 9–10. While Defendant argues that the New York Legislature

determined these federal benefits were insufficient, that determination was made

prior to the FCC’s April 29, 2021 announcement that the Emergency Broadband

Benefit would become on effective May 12, 2021.15

Additionally, the evidence before the Court suggests the ABA may not achieve

its desired effect – and in fact reduce Internet access statewide. Empire Telephone

Corporation’s declarant avers that Empire will have to cancel expansion projects

which, if completed, would result in Empire “serv[ing] more than 20,000 households,”

thereby disqualifying Empire from an exemption. Empire Tele. Decl. ¶ 10. These

projects include “building out the network to reach the City of Binghamton” and

“building more than 330 miles of fiber optic network that would be capable of

servicing nearly 1,100 homes” in Livingston County. Id. ¶¶ 6–7. Likewise Delhi

Telephone Company will “be forced to abandon efforts to expand its rural broadband

coverage, . . . set[ting] it back in terms of growing its subscriber base.” Delhi Tele.

Decl. ¶ 2. Heart of the Catskills Communications Inc. would have to “forgo expansion

of its network” which would have reached unserved customers. Heart of the Catskills

Decl. ¶¶ 3, 19.

Given the foregoing, a balance of the equities and the public interest support a

preliminary injunction keeping the status quo.

15 Public Note, FCC, Wireline Competition Bureau Announces Emergency

Broadband Benefit Program Launch Date (Apr. 29, 2021),

https://docs.fcc.gov/public/attachments/DA-21-493A1.pdf.

IV. Rule 65(c) Security

A court “may issue a preliminary injunction . . . only if the movant gives

security in an amount that the court considers proper to pay the costs and damages

sustained by any party found to have been wrongfully enjoined or restrained.” Fed.

R. Civ. P. 65(c). “Rule 65(c) gives the district court wide discretion to set the amount

of a bond, and even to dispense with the bond requirement where there has been no

proof of likelihood of harm . . . .” Doctor’s Assocs., Inc. v. Distajo, 107 F.3d 126, 136

(2d Cir. 1997) (internal quotation marks omitted). The Court exercises its discretion

not to require Plaintiffs’ to post a bond. Defendants have neither requested one, nor

is there any “proof of a likelihood of harm” to New York that could result from

granting the injunction. E.g., Regeneron Pharms., Inc., 2020 WL 7778037, at *14;

Town of Brookhaven v. Sills Rd. Realty LLC, 2014 WL 2854659, at *11 (E.D.N.Y.

June 23, 2014).

CONCLUSION

For the reasons discussed above, Plaintiffs’ motion for a preliminary injunction

is granted. The Court will enter a separate Preliminary Injunction Order enjoining

Defendant from enforcing the ABA.

SO ORDERED.

Dated: Central Islip, New York s/ Denis R. Hurley

June 11, 2021 Denis R. Hurley

United States District Judge