T-Mobile illegally imposed 50 GB cap on low-income home internet plan in New York as state regulators crack down on non-compliance

New York state officials have reached a significant settlement with T-Mobile following allegations that the telecommunications giant failed to comply with the Affordable Broadband Act (ABA). The state’s investigation concluded that the company restricted access for low-income residents by imposing restrictive data caps and throttling internet speeds, effectively undermining the legislative intent of the state’s mandate to provide affordable, high-speed connectivity to vulnerable populations. Under the terms of the settlement, T-Mobile is required to eliminate these performance bottlenecks, expand its geographic reach for these plans, and improve the discoverability of these services for eligible households.

The Affordable Broadband Act, a landmark piece of New York legislation that faced years of industry-led litigation before it could be fully enforced, mandates that internet service providers (ISPs) with a subscriber base of at least 20,000 customers offer high-speed home internet to income-eligible households. The statutory requirements are specific: providers must offer a $15-per-month plan with speeds of at least 25 Mbps, or a $20-per-month plan with speeds of at least 200 Mbps.

Investigation Findings and Operational Violations

The Office of the New York Attorney General (OAG), in coordination with Governor Kathy Hochul’s administration, launched an investigation in June 2025 after receiving reports that T-Mobile’s implementation of these required plans did not meet the state’s baseline standards. The probe revealed that T-Mobile had implemented a 50 GB-per-month data cap on its low-income home internet offering. Once a subscriber exceeded this threshold, the company throttled their download speeds from the mandated 25 Mbps down to a sluggish 600 Kbps.

Officials noted that the cap was so restrictive that a typical household—engaging in routine digital activities such as streaming, remote learning, or telehealth—could exhaust the 50 GB limit in as few as four days. By reducing the speed to sub-megabit levels, the service became effectively unusable for modern high-bandwidth requirements, rendering the "broadband" label functionally void.

Beyond data caps and throttling, the state found that T-Mobile had restricted the availability of these plans geographically. The company limited the ABA-compliant plans to homes within its 5G coverage footprint, effectively excluding residents in areas where only 4G (LTE) service was available. This was particularly egregious, investigators noted, because the company continued to sell its full-priced, non-ABA internet products to customers in those same 4G-only areas, demonstrating that the technical capability to provide service existed, but the company chose not to extend the mandated low-cost option to those specific subscribers.

Furthermore, the investigation uncovered a deliberate attempt by the company to limit public awareness of the program. T-Mobile had allegedly programmed its website with "noindex" tags, a technical directive that prevents search engines like Google or Bing from cataloging the page. This practice effectively hid the information from New Yorkers searching for low-cost internet solutions, ensuring that only those with direct knowledge of the URL could find the sign-up page.

A Chronology of the Affordable Broadband Act

The path to this settlement began in 2021 when New York first passed the Affordable Broadband Act. The telecommunications industry, led by major trade groups such as CTIA (The Wireless Association), launched a multi-year legal offensive to strike down the law, arguing that states lacked the authority to impose such pricing regulations on internet services.

• 2021: The New York Affordable Broadband Act is signed into law.
• 2021–2024: Broadband industry groups, including CTIA, engage in prolonged litigation against New York state, seeking to block enforcement on the grounds of federal preemption.
• December 2024: The U.S. Supreme Court denies the industry’s petition, effectively ending the challenge and clearing the way for the law to take effect.
• January 2025: New York formally begins enforcing the ABA.
• June 2025: The New York Department of Public Service alerts the Attorney General’s office to potential compliance failures regarding T-Mobile’s service features.
• November 2026: The OAG and T-Mobile reach a formal settlement agreement to rectify the identified violations.

Regulatory and Industry Implications

The settlement underscores the persistent friction between state-level consumer protection initiatives and the business models of large national telecommunications providers. While T-Mobile did not formally admit to violating the law in the settlement document, the company agreed to a series of corrective actions that must be completed within 120 days.

These actions include removing the data caps, ensuring speeds remain at the statutory minimum, and removing the technical barriers that previously prevented search engines from indexing the plan’s landing page. T-Mobile is also required to integrate the ABA plan information into the main home internet section of its website, providing equal prominence to the low-income option alongside its premium offerings.

The case also highlights the broader national debate regarding state authority. As the federal government prepares to distribute $42 billion through the Broadband Equity, Access, and Deployment (BEAD) program, tensions remain high. The current federal administration has argued that states should not be permitted to enforce price regulations on ISPs that receive federal grants. However, states like New York and California continue to maintain that protecting their residents from predatory pricing and discriminatory service tiers is a primary function of state consumer protection law.

T-Mobile’s Response and Recent Regulatory History

In a statement provided following the announcement, T-Mobile emphasized its history of providing connectivity options and expressed a willingness to align its practices with the state’s requirements. "We have a long history of helping customers in New York stay connected through low-cost broadband, and we’re updating our plan to meet the state’s requirements while maintaining the same low price," the company said.

However, this is not the first time T-Mobile has faced regulatory scrutiny in New York regarding its pricing promises. Only a month prior to this settlement, the Attorney General’s office secured a deal with T-Mobile regarding the company’s "Price Guarantee Plans." Investigations found that T-Mobile had marketed plans between 2017 and 2019 with a "lifetime price guarantee," only to unilaterally raise prices by approximately $5 per line in 2024. That agreement resulted in a package of reimbursements and price locks for roughly 250,000 New York subscribers.

Analyzing the Impact on Vulnerable Populations

The consequences of these practices are not merely financial; they are exclusionary. The digital divide remains a significant barrier to economic mobility, educational attainment, and healthcare access. When an ISP, which has a legal mandate to serve low-income populations, employs "dark pattern" web design (like hiding pages from search engines) or implements restrictive data caps, the burden falls disproportionately on those who rely on the internet as a vital utility.

For a household living at or below the income eligibility threshold, the difference between a 25 Mbps connection and a throttled 600 Kbps connection is the difference between a student being able to participate in a Zoom classroom and being disconnected entirely. By forcing T-Mobile to bring its 4G and 5G service tiers into full compliance, New York has ensured that the "affordable" label is not just a marketing term, but a functional guarantee of service quality.

The state’s enforcement mechanism remains a potent tool for future compliance. Under the current settlement, any future failure by T-Mobile to adhere to these terms could trigger a new lawsuit, potentially resulting in civil penalties of up to $1,000 per violation. This high penalty threshold serves as a warning to other ISPs operating within New York that the state’s regulatory patience for non-compliance is thin, and that the Affordable Broadband Act will be enforced with full legal rigor to ensure that all New Yorkers, regardless of their income, have access to the digital infrastructure of the 21st century.