California’s Net Neutrality Law Remains in Neutral

Advertising Law

In a move hailed by the Federal Communications Commission (FCC), California’s net neutrality law has been put on hold—for now.

The battle over net neutrality dates back to 2015, when the FCC published the Open Internet Order to include broadband access as a utility service regulated under Title II of the Telecommunications Act. As such, it prevented common carriers from accepting payments to prioritize some sites over others and prohibited them from blocking access to legal content or throttling any Internet traffic.

With the change of administration and the FCC under new leadership, the agency passed the Restoring Internet Freedom Order, which revoked the 2015 order. The federal repeal spurred several states to take action, which included a lawsuit filed by a coalition of 21 state attorneys general (AGs)—joined by tech companies such as Mozilla—seeking to have the 2017 order invalidated.

In addition, the California Legislature enacted SB 822, a bill that restored the federal net neutrality rules found in the 2015 order. Within an hour of Governor Jerry Brown’s signature on the law, the Department of Justice filed suit to block the state law. Four broadband industry associations followed up with a second lawsuit, with both sets of plaintiffs seeking a preliminary injunction to halt enforcement of the new law.

Now, the parties have reached a detente.

The FCC’s 2017 order pre-empted “any state or local measures that would effectively impose rules or requirements that we have repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for any aspect of broadband service that we address in this order.”

Although the pre-emption issue was at the center of the lawsuit filed by the state AGs against the FCC, and oral argument had been scheduled for February 1, 2019, in Washington, D.C., the parties agreed to put the matter on hold pending a D.C. Circuit Court ruling on the validity of the FCC’s 2017 order.

“Further proceedings in [the two lawsuits over SB 822] shall be stayed until” a D.C. Circuit opinion is issued and the period for seeking further review from the D.C. Circuit and U.S. Supreme Court has expired or a final decision is issued by the D.C. Circuit or Supreme Court,” according to the stipulation filed in California federal court.

In addition to staying the litigation, California agreed not to “take any action to enforce, or direct the enforcement of, Senate Bill 822 in any respect, including through participation in any private action seeking to enforce Senate Bill 822.”

To read the stipulation regarding a temporary stay of litigation and agreement not to enforce SB 822 in United States v. State of California, click here.

Why it matters: FCC Chair Ajit Pai—a driving force behind the 2017 order to repeal the net neutrality rules and an outspoken critic of California’s SB 822—hailed the news. “This substantial concession reflects the strength of the case made by the United States earlier this month,” he said in a statement. “It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address.”