California’s Tough New Net Neutrality Law Takes Another Step Forward

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In the wake of the Trump FCC’s attack on net neutrality last December (which formally takes effect on June 11), more than half the states in the country are now exploring their own net neutrality rules. Some states (like Oregon and Washington) have passed state laws, while others (like New York and Montana) have embraced new executive orders that limit ISP ability to strike state contracts if they violate net neutrality. All told, it’s not exactly the outcome AT&T, Verizon, and Comcast lobbyists were hoping for, and it’s a pretty solid indication they really didn’t think this entire thing through particularly well.

But at the moment, most eyes rest on California, where one of the tougher new state-level replacement laws just took a major step forward.

Senator Scott Wiener’s SB 822 would prevent ISPs in California from engaging in blocking, throttling, or paid prioritization. The EFF has called the bill the “gold standard” for state-level net neutrality law. The proposal actually goes a bit further than the FCC rules it’s intended to replace, in part because it more tightly polices things like zero rating and usage caps, which have long been used anti-competitively by incumbent ISPs as a way to make life more difficult for companies trying to elbow in on traditional TV revenues.

Despite a major push by industry lobbyists, SB 822 last week was approved 23-12 by the California Senate and will now head to the state Assembly (sometime before the end of this month). If it passes there, it will be on to the desk of Governor Jerry Brown for signing.

California’s law will be one to watch. Comcast, AT&T and Verizon successfully lobbied the Trump FCC to include language in their net neutrality repeal attempting to ban states from protecting broadband consumers, language companies like Charter are already using to try and tap dance out of lawsuits for substandard service. But the FCC’s authority here is shaky, and some legal experts (like Stanford Professor Barbara van Schewick) have argued that when the FCC rolled back its Title II authority over ISPs, it also dismantled its right to tell these states what to do:

“The bill is on firm legal ground.

While the FCC’s 2017 Order explicitly bans states from adopting their own net neutrality laws, that preemption is invalid. According to case law, an agency that does not have the power to regulate does not have the power to preempt. That means the FCC can only prevent the states from adopting net neutrality protections if the FCC has authority to adopt net neutrality protections itself.

But by re-classifying ISPs as information services under Title I of the Communications Act and re-interpreting Section 706 of the Telecommunications Act as a mission statement rather than an independent grant of authority, the FCC has deliberately removed all of its sources of authority that would allow it to adopt net neutrality protections. The FCC’s Order is explicit on this point. Since the FCC’s 2017 Order removed the agency’s authority to adopt net neutrality protections, it doesn’t have authority to prevent the states from doing so, either.”

ISPs have promised to “aggressively sue” any states that try to pass rules protecting net neutrality or broadband consumer privacy. And while this will only disgust the majority of Americans even more, the combination of limited competition and rubber stamp regulators like Ajit Pai means there’s not much in the way of punishment for the tech policy equivalent of giving a giant middle finger to the nation’s consumers, small businesses, and healthy competition.

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