The FCC decision, originally slated to take effect later this year, would have made it difficult or impossible for tribal residents to obtain a $25-per-month Lifeline subsidy that reduces the cost of internet or phone services for poor people.

In November, a vote eliminated the $25 subsidy entirely for tribal residents who live in urban areas, claiming that the subsidy isn't required to make service affordable in urban settings. All tribal residents are still eligible for a $9.25 monthly subsidy through Lifeline.

In rural areas, the FCC vote barred tribal residents from using the $25 subsidy to buy telecom service from resellers. Most wireless phone users who get Lifeline subsidies buy their plans from resellers rather than from "facilities-based" telecoms that operate their own networks. The FCC vote would thus dramatically limit rural tribal residents' options for purchasing subsidised service.

Now a US court has stayed the FCC decision pending appeal, saying that tribal organisations and small wireless carriers are likely to win their case against the commission.

"Petitioners have demonstrated a likelihood of success on the merits of their arguments that the facilities-based and rural areas limitations contained in the Order are arbitrary and capricious", said the stay order issued by the US Court of Appeals for the District of Columbia Circuit. “Petitioners contend that the Federal  Communications Commission failed to account for a lack of alternative service providers for many tribal customers."

The tribes and small carriers that sued the FCC "have shown a substantial risk that tribal populations will suffer widespread loss of vital telecommunications services absent a stay", the court said.

The FCC hasn't proven that its plan won't result in "mass disconnection" the court also said.

The court ruling was welcomed by the Crow Creek Sioux Tribe and Oceti Sakowin Tribal Utility Authority, which are among the groups suing the FCC. Several small carriers and the non-profit National Lifeline Association are also plaintiffs in the lawsuit.