The U.S. Justice Department vs. California on Net Neutrality

As expected, California Governor Jerry Brown signed the state’s comprehensive net neutrality bill into law on September 30. His signature opened the door for the expected flurry of lawsuits from opponents, including one filed the same day in the District Court for the Eastern District of California by one of the state’s recent nemeses – the current administration’s Justice Department.

The Justice Department’s lawsuit against California is not their first in 2018 against the nation’s most populous state – the two have already gone toe-to-toe this year over land use and immigration laws. The latest legal battle between them represents the most recent chapter in a contentious, ever-shifting nationwide brawl.

Net Neutrality’s Political Backdrop

The fight over net neutrality revolves around the idea of a “free and open internet,” where content can move indiscriminately. Proponents believe that an internet service provider (ISP) should not be able to regulate what content users can access, and the speed at which they can access it.

To this end, the Obama administration created rules in 2015 that permitted the FCC to classify broadband as a utility, allowing the FCC to prohibit certain actions harmful to the open internet.
ISPs (and their representative lobbying groups) argue that FCC regulations hinder the ability of telecom companies to offer customers competitive pricing and service selection. Trump-era FCC chairman Ajit Pai agreed; he repealed the regulations in December 2017, saying that “the FCC would simply require internet service providers to be transparent about their practices so that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 Position

Some legislators around the United States disagreed with the FCC’s decision under Ajit Pai – 30 states introduced over 72 bills upholding certain net neutrality, with numerous states (including Washington, Vermont, and Oregon) enacting their own pro-net neutrality legislation into law.

California’s law is intended to allow smaller startups a better opportunity to compete with existing, clout-wielding internet giants, while also offering strong protections for consumers. It not only prevents ISPs from restricting or blocking web traffic to customers in California. It also outlaws free streaming promotions from apps, prohibits ISPs from charging consumers to access specific websites, ensures consumers will not be charged additional fees to access specific websites, and forbids speed or quality restrictions for streaming.

California has the world’s fifth-largest economy, and its economic diversity and pure size means it wields outsized domestic and international political influence. The state has been especially active recently in addressing online issues – in June it passed a comprehensive internet privacy law, and their new net neutrality law is regarded as stronger than the Obama administration’s legislation. As a nationwide standard-bearer, their decision stands to inspire other states to enact similar legislation – much to the chagrin of ISPs and the indignation of the Justice Department.

The Justice Department’s Response

The Justice Department, led by Attorney General Jeff Sessions, wasted little time disputing the legality of California’s bill. Sessions claimed that the FCC (and by extension, the federal government) is the only body authorized to create binding rules for internet providers. “States do not regulate interstate commerce – the federal government does,” stated Sessions, before calling the law “an extreme and illegal [attempt] to frustrate federal policy.”

Pai issued a statement saying he was “pleased” with the Justice Department’s efforts, pledging 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.” “The Internet is inherently an interstate information service,” said Pai. “Not only is California’s Internet regulation law illegal, it also hurts consumers…[by prohibiting] 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.”

What’s Next?

California Attorney General Xavier Becerra vowed to vigorously defend the new law, remaining “deeply committed to protecting freedom of expression, innovation and fairness.” He is not alone, as 20 state attorney generals have filed suits fighting the FCC’s decision.

Numerous legislators and consumer advocacy groups said they are united in opposition to the FCC; Jonathan Schwantes, a senior policy counsel at the pro-net neutrality lobby Consumers Union, said that California’s law is righting a wrong created “when the FCC chose to ignore the millions of consumers who urged them not to repeal net neutrality protections last year.” “It left a void that state lawmakers are now rightly filling,” said Schwantes. “California’s law sends a strong message to internet service providers and has the potential to shape the market across the country.”

USTelecom, a powerful, telecom-backed interest group, was critical of a state-by-state approach to net neutrality, calling instead for binding federal action. “We need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all,” said USTelecom president and CEO Jonathan Spalter. “This bill is neither the way to get there, nor will it help advance the promise and potential of California’s innovation DNA.”

More lawsuits are sure to follow, with neither side displaying a willingness to back down. In the absence of comprehensive nationwide law, additional state governments seem set to pass their own protections. For now, the back-and-forth battle continues – with no indisputable 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.

Leave a Reply