T-Mobile Illegally Imposed 50 GB Cap on Low-Income Home Internet Plan in New York Says Attorney General
In a significant legal development concerning digital equity, T-Mobile has entered into a formal settlement with the New York Attorney General’s office following allegations that the telecommunications giant systematically violated the state’s Affordable Broadband Act (ABA). New York officials, led by Governor Kathy Hochul and Attorney General Letitia James, alleged that the company circumvented mandatory low-income service requirements by imposing restrictive data caps and throttling internet speeds, effectively undermining the legislative intent of providing high-quality, affordable connectivity to vulnerable populations.
The settlement, announced this past Monday, mandates that T-Mobile eliminate these restrictive practices, expand the availability of its low-income home internet plans, and improve transparency for consumers seeking these essential services. The agreement follows a lengthy state-led investigation into how the carrier managed its fixed wireless home internet offerings in the region.
The Legislative Mandate and the Conflict
The New York Affordable Broadband Act (ABA) was designed to bridge the digital divide by ensuring that low-income households have access to reliable, high-speed internet at a price point that does not become a financial burden. Under the statute, internet service providers (ISPs) operating in the state with a subscriber base exceeding 20,000 customers are legally required to offer specific, high-speed broadband tiers to eligible households. The law mandates a $15-per-month tier providing at least 25 Mbps download speeds, or a $20-per-month tier offering at least 200 Mbps.
State investigators determined that T-Mobile’s implementation of these requirements was fundamentally flawed. While the company technically offered a plan, it coupled the service with a 50 GB monthly data cap. Once a household reached this threshold—a limit that many modern households, especially those with multiple students or remote workers, could exhaust in less than a week—the company throttled connection speeds to a near-useless 600 Kbps. By degrading the service to such an extreme degree, the state argued, T-Mobile failed to provide the "high-speed broadband" mandated by the law.
Chronology of the Dispute
The friction between New York regulators and the telecommunications industry is not new; it is the culmination of a four-year legal battle.
- 2021-2024: The broadband industry, including major lobbying groups like CTIA (the Wireless Industry Association), launched a multi-year legal campaign to invalidate the Affordable Broadband Act, arguing that it overstepped state authority.
- December 2024: The Supreme Court of the United States declined to hear the industry’s final appeal, effectively upholding the law and allowing the state to proceed with enforcement.
- January 2025: New York officially commenced full enforcement of the ABA.
- June 2025: The New York Department of Public Service identified significant discrepancies in T-Mobile’s compliance, noting that the carrier was placing arbitrary barriers on the low-income plans.
- November 2026: Following an intensive 18-month investigation by the Office of the Attorney General, T-Mobile agreed to a settlement, acknowledging the need to realign its services with state law within a 120-day window.
Operational Barriers and Market Exclusion
Beyond the data caps and speed throttling, the investigation uncovered a pattern of behavior that appeared designed to minimize the number of enrollees in the affordable plans. Officials found that T-Mobile restricted the availability of the ABA-compliant plans exclusively to areas where it had deployed 5G infrastructure. This practice excluded thousands of low-income residents in areas where T-Mobile only provided 4G LTE service, despite the company offering full-price 4G internet plans that easily met the 25 Mbps minimum speed requirement at those same locations.
Furthermore, the investigation revealed that T-Mobile had intentionally configured its website to prevent search engines from indexing the specific landing page for its ABA-compliant offerings. By using "noindex" tags, the company effectively made it difficult for New Yorkers to discover that these affordable plans existed, creating a barrier to entry that favored the company’s more profitable standard consumer packages.
Official Responses and Corporate Stance
In the settlement document, T-Mobile neither admits nor denies the findings presented by the Attorney General’s office. However, the company has committed to a series of corrective actions. In an official statement, a T-Mobile spokesperson emphasized the company’s "long history of helping customers in New York stay connected," adding that they are "updating our plan to meet the state’s requirements while maintaining the same low price."
The settlement requires the company to:
- Remove the 50 GB data cap and the 600 Kbps throttling mechanism for ABA plans.
- Expand the offer to all addresses where T-Mobile provides fixed wireless service, regardless of whether the local infrastructure is 5G or 4G.
- Remove technical blocks on search engine indexing to ensure the plans are discoverable.
- Provide prominent, clear links to the ABA program on its primary home internet marketing pages.
Broader Implications for Digital Equity
The enforcement of the Affordable Broadband Act represents a significant test of state power against the telecommunications industry. As broadband access becomes increasingly vital for participation in the modern economy—from education and healthcare to employment—the ability of states to enforce quality and pricing standards is under intense scrutiny.
Some legal experts note that the situation remains fluid. The incoming administration has indicated a preference for deregulation, with some federal officials suggesting that states should be barred from enforcing price regulations or net neutrality-adjacent policies on ISPs that receive federal funding through the $42 billion Broadband Equity, Access, and Deployment (BEAD) program. While the federal government has yet to distribute these grants, states like California and New York are positioning themselves to defend their authority to mandate affordable internet access for their citizens.
A Pattern of Regulatory Friction
This settlement marks the second time in recent months that T-Mobile has faced regulatory repercussions in New York regarding its consumer practices. In October 2026, the state secured a multi-million dollar resolution regarding the company’s "Price Guarantee" plans. T-Mobile had previously marketed certain mobile plans with a "lifetime" price lock, only to raise rates by approximately $5 per line in 2024. The resulting agreement provided reimbursement options and extended price protections to over 250,000 affected New Yorkers.
Together, these two cases highlight a growing trend of state-level oversight into the "fine print" of telecommunications contracts. As ISPs continue to navigate the transition toward fixed wireless as a primary home internet solution, the balance between network management and consumer protection remains a primary point of contention.
Looking Ahead
The 120-day implementation period for the new T-Mobile settlement serves as a critical grace period for the carrier to overhaul its systems. If the company fails to adhere to the terms of the agreement, the New York Attorney General retains the authority to initiate litigation. Such a move could result in significant civil penalties, with fines of up to $1,000 per violation.
For the average consumer in New York, the outcome of this investigation is a victory for transparency. By removing the technical and informational hurdles that T-Mobile had erected, the state has ensured that low-income families are not relegated to a "second-class" version of the internet, but rather receive the high-speed access they were promised under the law. As the digital divide continues to impact economic mobility, the enforcement of the ABA serves as a baseline expectation for how telecommunications companies must operate within the public sphere.
