New Law Sets Up Federal-State Showdown Over Net Neutrality

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Will California’s net neutrality law survive the federal challenge filed by the Department of Justice?

Within an hour of Governor Jerry Brown’s signature on SB 822, restoring the federal net neutrality rules in California, the DOJ filed suit to block the new law.

The battle over net neutrality has long been anything but neutral. In 2015, the Federal Communications Commission 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, revoking the 2015 order.

However, the federal repeal spurred the states, including California, to take action on their own, with multiple state governors signing executive orders requiring Internet service providers (ISPs) to follow net neutrality principles. Lawsuits were also filed by 21 state attorneys general and the District of Columbia seeking to have the repeal order invalidated.

But the federal government isn’t taking passage of the California Internet Consumer Protection and Net Neutrality Act of 2018 lying down. Decrying the state’s effort to “second guess” the federal government’s regulatory approach, the DOJ’s complaint argues that its repeal of the 2015 order expressly pre-empted any state or local measure that attempted to impose more stringent rules or requirements for the aspects of broadband service addressed in the order.

According to the complaint, “SB 822 conflicts with the 2018 Order’s affirmative federal ‘deregulatory policy’ and ‘deregulatory approach’ to Internet regulation, which the FCC adopted in furtherance of United States’ policy ‘to preserve the vibrant and competitive free market that presently exists for the Internet … unfettered by Federal or State regulation. SB 822 ‘impose[s] far greater burdens’ than the FCC’s ‘calibrated federal regulatory regime,’ and threatens to ‘significantly disrupt the balance’ the agency struck.”

In addition, the new California law “contributes to a patchwork of separate and potentially conflicting requirements from different state and local jurisdictions, and thereby impairs the effective provision of broadband services, as ISPs generally cannot comply with state or local rules for intrastate communications without applying the same rules to interstate communications,” the DOJ told the court. “In short, SB 822 conflicts with and otherwise impedes the accomplishment and execution of the full purposes and objectives of federal law.”

The DOJ requested a declaratory judgment that SB 822 is invalid, null and void, as well as a preliminary and permanent injunction against the state and its officers from enforcing the law.

To read SB 822, click here.

To read the complaint in United States v. California, click here.

Why it matters: California’s attempt to circumvent the federal repeal of the net neutrality rules faces a tough battle against the DOJ’s pre-emption argument, although the state does not appear to be backing down. Attorney General Xavier Becerra responded to the lawsuit with a statement that his office remains “deeply committed to protecting freedom of expression, innovation and fairness.” However, the feds aren’t alone in their challenge to SB 822. Just a few days later, four broadband industry organizations also filed suit against the new law, calling it “a classic example of unconstitutional state regulation.”