Battle Lines Drawn Over California Net Neutrality Saga

California governor Jerry Brown has signed into law the toughest state-level net neutrality law to date, setting the stage for a battle against the federal Justice Department, which is suing the state in an attempt to block the law from taking effect on January 1, 2019.

The stand-off marks a new chapter in the fight over net neutralityOpens a new window , a face-off that has lasted several years and threatens to carry on for several more as the Trump administration joins forces with the telecoms industry to stop a wave of similar state-level protections.

Brown signed the bill on Sunday, largely reintroducing the Obama administration’s 2015 rules on net neutrality, legislation that prohibited broadband providers from blocking or “throttling” internet traffic and the offer of “fast lanes” for companies willing to pay more to reach consumers more quickly than their competitors.

Broadband was also reclassified as a utility, putting it in the same category as the telecoms networks.

“Today marks a true win for the Internet and for an open society,” said state Senator Scott Wiener, sponsor of the California bill.

Neutrality Unveils a Tangled Web

Net neutrality, a term coined by Columbia University professor Tim Wu, enshrines the principle that internet service providers should provide all online content and services on an equal basis, not discriminating by speed or price.

The decision by the Federal Communications Commission in December 2017 to scrap previous net neutrality rules handed colossal power back to telecoms companies and cable providers, allowing them to prioritize their own content and leading critics to suggest that the “cable-ification” of the internet was underway.

Internet companies, and particularly startups, backed net neutrality, while ISPs like Comcast and mobile carriers including Verizon and AT&T actively opposed it on the grounds that it would lead to higher prices for consumers. AT&T came under fire in June for pressuring Californian politicians to dilute the bill.

FCC chairman Ajit Pai and telecoms groups argue that “zero rating,” the provision of free but conditional Internet access that, for example, only allows access to certain websites or subsidizes services with advertising, allows them to offer better deals. Pai noted that the conditional access had proved particularly popular among lower-income Americans.

Major Carriers Restrict Streaming

Recent research by Northeastern University and the University of MassachusettsOpens a new window found that since the repeal of the laws, YouTube and Netflix had already experienced an increase in throttling, with services from Amazon Prime and NBC Sports also being degraded. The study found the big carriers in the US (AT&T, Verizon, T-Mobile US and Sprint) were all guilty of the practice, although they themselves would be more likely to term it “network management” or “prioritization.”

All four carriers now offer unlimited data plans that restrict streaming video on mobile devices to a resolution default of 480 pixels in an effort to manage network traffic, reduce congestion and ensure they will not have to upgrade network infrastructure unless absolutely necessary.

After Sunday’s ruling, Joan Marsh, an executive vice president of regulatory and state affairs for AT&T, said in a statement that only “a uniform, national law” can protect consumers, innovators and ISPs’ investment in their networks.

“Simply put, state-by-state regulation in this area is insufficient and unworkable,” she said. “Because the Internet is a global network of networks that enables consumers to access and use information, content and services without regard to state, and even national, boundaries.”

The company’s chief executive, Randall Stephenson, on Tuesday said there should be one regulator for the technology, media and telecoms industries, “not 50 different rules of the road across 50 different states.”

US Attorney General Jeff Sessions declared the California law “extreme” and “illegal,” arguing that “states do not regulate interstate commerce — the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy.”

“The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our constitutional order,” Sessions added. “We will do so with vigor.”

Oregon and Washington have already passed net neutrality laws, while New York, Connecticut and Maryland are preparing legislation. The California law goes the furthest, including the ban on zero-rating.

States Enforce Authority

Legal experts point out that when the FCC repealed the 2015 Open Internet Order last year, it said it had no power to regulate broadband internet access providers.

“Courts have consistently held that when the federal government lacks authority to regulate, it cannot preempt [or ban] states from regulating,” said Andrew SchwartzmanOpens a new window , a lecturer in public interest law at Georgetown University.

Next, the bill will go through the California court systemOpens a new window , where, having been approved by the state governor, it is likely to be upheld. But it also is possible that the courts will grant a preliminary injunction while the case is decided.

If California throws it out, the case will go to the Supreme Court, a process that could take several years. The Supreme Court could refuse to hear the case, rather than wade into in increasingly muddy fight over outdated telecoms laws that do not fit around the Internet.