I think you can go on to the article without arguing with me about the summary. The issue at hand is that 12 states challenged FCC because those states did not approve a set of companies to be lifeline broadband providers, and then FCC went ahead and approved them. Unlike Chairman Pal, I believe this is indeed a Federal responsibility due to the Postal Clause of the Constitution and the Communications Act of 1934.
I am at the moment lacking information regarding what other internet providers those states approved, whether they approved any at all, and what the grounds for not approving a company to provide lifeline service (which can't be a profit-maker) could be except to deny access to the potential customers. In other words, I'm really suspicious of the states in question.