New York makes T-Mobile drop data caps on low-income home internet

New York says T-Mobile broke the state's Affordable Broadband Act on its home internet plans for low-income households. Three things went wrong, according to the state's investigation.

• A data cap: Each plan came with 50GB of data per month. After that, speeds dropped.
• A speed cut: After the cap, the maximum download speed fell from 25 Mbps to about 600 Kbps. That is a drop of roughly 97%.
• Limited places and hidden pages: The plans were offered only in areas with 5G, and the web page about them was coded so search engines could not list it.

A data cap is a monthly limit on how much you can download before the provider slows you down or charges more. Throttling is the slowdown itself.

The state says a typical customer could reach 50GB in about four days. After that, the plan was close to unusable for the rest of the month.

Internet speed is counted in bits per second. One Mbps (megabit per second) is a million bits. One Kbps (kilobit per second) is a thousand.

So 25 Mbps is roughly 40 times faster than 600 Kbps. At 25 Mbps you can stream video and join a video call at the same time. At 600 Kbps a web page loads slowly and a video call stutters.

In real life Picture a family of four on one of these plans. Two kids stream school videos, a parent works from home, and by the end of the first week the cap is gone and the internet barely loads.

New York passed the law in 2021. It says any home internet provider with at least 20,000 customers in the state must offer a low-cost plan to households that qualify.

There are two price tiers:

• $15 a month: speeds of at least 25 Mbps.
• $20 a month: speeds of at least 200 Mbps.

Providers must also make "reasonable efforts" to tell people these plans exist. The law does not use the words "data cap". New York's argument is that a plan whose speed falls far below 25 Mbps after a few days does not meet the speed minimum at all.

A household can sign up if anyone living in it receives certain public benefits. The state's list includes:

• Medicaid and SNAP (food assistance)
• HEAP or other utility assistance
• Free or reduced-price school lunch
• SCRIE or DRIE, New York City's rent freeze programs for seniors and people with disabilities

Households can also qualify by income level. The state points people to broadband.ny.gov/consumer-resources to enroll.

Under the agreement, T-Mobile must make several changes. The company has 120 days to remove its speed limits and expand availability.

• No data caps on plans offered under the law.
• 25 Mbps for every subscriber, except during network congestion.
• Plans in every area where T-Mobile sells home internet in New York, including 4G-only areas.
• A findable web page, so search engines can list the details.

The catch: T-Mobile neither admits nor denies the state's findings. That is common in settlements. It lets a company agree to change without accepting blame.

T-Mobile says it has a long history of helping New York customers stay connected through low-cost broadband. In a statement it said it is updating its plan to meet the state's requirements while keeping the same low price.

The company also said the agreement "makes the plan available to more eligible customers". It did not explain why it had set the caps in the first place.

Attorney General Letitia James put it more bluntly. "Reliable and affordable internet service is a basic need for all New Yorkers, but T-Mobile flouted the law designed to help vulnerable New Yorkers access it," she said. She also urged eligible New Yorkers to enroll in a low-cost plan.

T-Mobile's home internet is called fixed wireless. It uses the same cell towers as phones, but a small receiver at your home picks up the signal and turns it into Wi-Fi. There are no cables to your house.

That makes it quick to set up and often cheaper than cable. It also means the carrier is sharing tower capacity between phones and homes, which is one reason carriers like to put limits on heavy use.

The settlement applies only to this fixed wireless service. It does not cover T-Mobile's mobile phone plans. For more on how the big carriers are rethinking coverage, see our story on the carrier satellite venture.

New York's Department of Public Service contacted the attorney general's office in June 2025 with concerns about T-Mobile's plan. That began an investigation of about 18 months.

The law itself had a longer road. Broadband industry groups, including CTIA, the wireless industry association, sued to stop it. A federal judge blocked it in 2021. An appeals court reversed that in 2024, and the Supreme Court declined to hear the industry's challenge. The state began enforcing the law in January 2025.

A group of 22 states backed New York in that case, which shows how closely other states are watching. This settlement is one of the first signs of how the law is being enforced in practice.

This part of the story is easy to miss. T-Mobile offered the low-income plans only at homes eligible for its 5G home internet. The state says T-Mobile also sold full-price home internet plans in 4G areas, and those could deliver 25 Mbps.

In other words, the network could do the job in those places. The cheap plan just was not offered there. Now T-Mobile has to offer it wherever it sells home internet in the state.

The hidden web page is a similar story. The state says T-Mobile coded the page so search engines would skip it. Someone searching for "low-income internet New York" would not have found the plan's details, which made it much harder for a family to learn it existed.

The 120-day clock is the main thing. By then, the speed limits should be gone and the plans should be available across the state.

Eligible households can enroll through the state's site before then. Anyone already on the plan should see the cap lift without doing anything. If your speeds still fall off after heavy use once the deadline passes, the state's consumer resources page is the place to start.

• If you are on the plan: Expect the cap and the speed limit to go away within 120 days. You do not need to do anything, but check your speeds.
• If you might qualify: Check whether anyone in your household gets Medicaid, SNAP or another listed benefit, then apply through the state's site.
• If you live in a 4G area: The plan should now be available to you, which it was not before.
• If you live elsewhere: Look for the fine print. A cheap plan with a cap can cost you more in lost speed than it saves in dollars.