California’s Tough Net Neutrality Law and Future Legal Battles

In December 2017, the FCC repealed Obama-era net neutrality laws. Responses were predictably mixed – broadband providers heralded the rollbacks as a necessary removal of burdensome regulations, while consumer groups were considerably less enthused. Legislative response was swift, as 30 states introduced over 72 bills upholding certain net neutrality principles in the aftermath.

Now, California has taken the next step towards instituting their own net neutrality regulations, as state lawmakers pushed back against the FCC’s decision by passing a tough, comprehensive new law on August 31, which we detail below.

The Battle over Net Neutrality

The battle over net neutrality has been raging for some time. In its simplest terms, the back-and-forth is over the so-called “free and open internet” – net neutrality is defined as the open and indiscriminate movement of content over a network. Public interest groups and tech giants alike have found rare common ground supporting the idea that an ISP should not be able to regulate what content users can access, and the speed at which they can access it.

The Obama administration created rules in 2015 that permitted the FCC to classify broadband as a utility – this allowed the FCC to prohibit certain actions harmful to the open internet: blocking (or discriminating against lawful content by blocking websites or apps); throttling (or slowing data transmission for legal content based on the nature of said content); and paid prioritization (meaning no fast lanes for customers who pay a premium, and no slow lanes for those who don’t.)

Lobbying groups for ISPs, like the USTelecom Association, vehemently disagreed with the rules. Repeal supporters believe that FCC regulations hinder the ability of telecom companies to offer customers a wider selection of services at a variety of price points. Trump-era FCC chairman Ajit Pai agreed, accusing the federal government of “micromanaging the internet” with burdensome regulations. He repealed the regulations in December 2017, saying that “the F.C.C. would simply require internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them.”

California’s New Law

The California bill is regarded as “even stronger and more consumer-friendly than the original measures carried out by the Obama administration,” which Governor Jerry Brown signed on September 30. The bill would make California the fourth state to adopt their own net neutrality law. It passed by significant margins in both the State Senate and Assembly, following the state’s comprehensive internet privacy law in June.

The new legislation prevents ISPs from restricting or blocking web traffic to customers in California. It outlaws free streaming promotions from apps, which net neutrality proponents regard as important for maintaining competitive balance. Consumers will not be charged additional fees to access specific websites, and there would be no speed or quality restrictions when streaming video.

What Comes Next?

The world’s fifth-largest economy tends to have outsized influence on not only other states, but the industries affected by their legislation. Jonathan Schwantes, a senior policy counsel for the pro-net neutrality Consumers Union, said in a statement that the bill “would set a tremendous precedent, with the power to shape the internet market not just in California but across the country for the betterment of consumers.”

Telecommunications companies will surely push back, already indicating that they will sue to overturn the law. Jonathan Spalter, president of interest group USTelecom, said in a statement that “the internet must be governed by a single, uniform and consistent national policy framework, not state-by-state piecemeal approaches.” State Rep. Scott Wiener, a Democrat, disagrees, vowing to “fight with everything we have to defend [the new legislation]”; regardless of bluster from both sides, protracted litigation has been the norm in net neutrality cases. Barbara van Schewick, a law professor at Stanford, told the New York Times that telecom companies “have tremendous power and sway in California, so we know the fight is not over.”

But as Washington, Vermont, and Oregon have proven, there is a desire from certain states to institute their own net neutrality provisions. Net neutrality remains a hot-button issue, and Gov. Brown’s decision in California will surely reverberate through state governments around the country. The battle over a free and open internet is still being waged – without a clear long-term winner.

Quandary Peak Research

Based in Los Angeles, Quandary Peak Research provides software litigation consulting and expert witness services. We rapidly analyze large code bases, design documents, performance and usage statistics, and other data to answer technical questions about the structure and behavior of software systems.

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