New York says T-Mobile illegally capped low-income home Internet plan

New York officials alleged that T-Mobile violated the state Affordable Broadband Act by placing a 50GB monthly data cap and cutting speeds on home Internet plans required for low-income customers. The company agreed to a settlement that removes those limits, expands plan availability, and improves access to plan information. The agreement covers T-Mobile's fixed wireless home Internet service, not its mobile plans.

What New York alleged

Governor Kathy Hochul and Attorney General Letitia James announced the settlement on Monday after a state investigation. The law requires providers with at least 20,000 customers to offer income-eligible households home Internet for $15 per month at speeds of at least 25 Mbps, or $20 per month at speeds of at least 200 Mbps. New York said T-Mobile reduced speeds from 25 Mbps to 600 Kbps after customers exceeded the 50GB cap, and that a typical customer could reach the cap after about four days. The company also limited the plans to homes eligible for 5G home Internet and prevented search engines from indexing its detailed eligibility and enrollment page. Although the settlement lists the attorney general's findings, T-Mobile did not admit to any violation.

Settlement terms

T-Mobile agreed to eliminate the speed limits and expand availability within 120 days. It must offer the low-income plans at every address where it offers residential fixed wireless Internet service, including 4G areas where it can deliver the required service. The settlement allows temporary speed reductions solely from network congestion. The state law also includes an exception where 25 Mbps is not reasonably practicable. T-Mobile also agreed not to use a noindex tag on its Affordable Broadband Act webpage and to link prominently to it from the part of its website listing standard home Internet deals. New York could sue T-Mobile if it violates the settlement, with restitution and civil penalties of up to $1,000 per violation.

Background and separate price-lock deal

New York began enforcing the Affordable Broadband Act in January 2025 after a nearly four-year court battle. Broadband industry groups, including CTIA, which represents T-Mobile, failed to block the law, and the Supreme Court rejected the challenge a month before it took effect. Separately, New York struck a deal with T-Mobile last month over mobile plans advertised from 2017 to 2019 as Price Guarantee Plans with a promise never to change the price. In 2024, T-Mobile raised prices by about $5 per phone line, affecting New Yorkers in about 252,957 of those plans. The agreement includes reimbursement options, a price lock until May 2029, an estimated up to $38 million in value, and a state payment of $98,834.75. T-Mobile said the $38 million is an estimate of potential benefits, not refunds or payments.

Sources: Ars Technica · Engadget