By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
The Department of Justice (DoJ) yesterday filed a lawsuit against the state of California alleging that its Senate Bill 822, which would restore net neutrality and was signed into law earlier during the day by Governor Jerry Brown, “unlawfully imposes burdens on the Federal Government’s deregulatory approach to the Internet,” according to a DoJ press release.
The California bill is one of several state measures to roll back the Federal Communications Commission’s (FCC) 2017 decision to scupper net neutrality. At least half of US states have introduced bills restoring net neutrality and three states —Oregon, Vermont, and Washington— have already enacted legislation. Governors in six states– —Hawaii, New Jersey, New York, Montana, Rhode Island, Vermont— have signed executive orders to this effect, according to the National Conference of State Legislatures.
The Los Angeles Times in California enacts strongest net neutrality protections in the nation — and the Trump administration sues summarized the California measure:
Experts have said the new law would impose the toughest net neutrality regulations in the country by reinstating the rolled-back federal regulations at the state level. It tasks the state attorney general with evaluating potential evasion of the net neutrality rules.
It also adds new restrictions on some zero-rated data plans, package deals that allow companies such as Verizon or Comcast to exempt some calls, texts or other content from counting against a customer’s data plan. Those limits prohibit plans that exempt content from some companies but not the same type of content from others — video streamed on YouTube but not Hulu, for example.
The California law goes farther than the previously existing federal net neutrality rules on zero rating, and, according, to The Verge in Trump administration sues California over tough net neutrality law:
Zero-rating is an area that has proved particularly divisive. The Obama era’s net neutrality rules did not explicitly ban the practice (it left it open for further study), but California’s new legislation does. Although Pai claims that zero-rating is popular amongst “lower-income Americans,” others argue that it gives incumbent internet services an unfair market advantage, while letting internet providers pick the winners and losers. In other words, what chance does a new streaming media service have if internet providers can bundle free access to Netflix without it impacting users’ data caps?
Trump Administration Policy: Bring It On
Attorney General Jeff Sessions issued the following statement yesterday, according to the DoJ:
“Under the Constitution, 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. We will do so with vigor. We are confident that we will prevail in this case—because the facts are on our side.”
And FCC Chairman Ajit Pai also had his say, according to the DoJ:
“I’m pleased the Department of Justice has filed this suit. The Internet is inherently an interstate information service. As such, only the federal government can set policy in this area. And the U.S. Court of Appeals for the Eighth Circuit recently reaffirmed that state regulation of information services is preempted by federal law.
“Not only is California’s Internet regulation law illegal, it also hurts consumers. The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them.
“The Internet is free and open today, and it will continue to be under the light-touch protections of the FCC’s Restoring Internet Freedom Order. I look forward to working with my colleagues and the Department of Justice to ensure the Internet remains ‘unfettered by Federal or State regulation,’ as federal law requires, and the domain of engineers, entrepreneurs, and technologists, not lawyers and bureaucrats.”
In addition to the latest DoJ action, broadband providers are expected separately to sue states– including California– that enact their own net neutrality rules, the New York Times reports in Justice Department Sues to Stop California Net Neutrality Law:
USTelecom, a trade group representing big broadband providers such as Verizon and Charter, criticized the rules for creating separate rules for California and other states. The group did not reply to questions on immediate plans for a lawsuit but several industry officials say the state rules are likely to be challenged.
And in January, California and other states sued the federal government over the repeal of the federal net neutrality rules. Amazon and Facebook have filed brief s in support of the states’ lawsuits, according to the LA Times.
Back to Congress?
Congress will certainly revisit the net neutrality issue– especially if Democrats capture either chamber in the mid-terms (see my previous post, Net Neutrality: FCC’s Scuppering Will Stand; Meanwhile, India Adopts World’s Most Sweeping Protections). Currently, a resolution seeking to restore net neutrality nationwide has passed the House, but is considered unlikely to clear the House, Politico reports in Trump administration sues California over net neutrality law.
Telecoms providers– which benefit from the FCC’s December 2017 repeal– might support tossing the issue back to Congress, according to the New York Times:
“Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all,” Jonathan Spalter, the president of USTelecom, said in a statement.
And in fact, some Democrats have also endorsed this scenario, according to Politico:
Sensing a winning political issue, congressional Democrats have spotlighted the state’s net neutrality efforts. House Minority Leader Nancy Pelosi had urged Brown to sign the bill and predicted it could lend critical leverage to federal lawmakers.
“Once we establish California as a model of a state taking action, other states may follow, and then I think you may see some of corporate America say ‘OK, let’s have a federal law, because we don’t want to have to do different things in different states,’” Pelosi said at a recent press conference in San Francisco.
So, the saga continues. Pass the popcorn.