Net Neutrality! (Just in California)

Benton Institute for Broadband & Society

Friday, February 26, 2021

Weekly Digest

Net Neutrality! (Just in California)

 You’re reading the Benton Institute for Broadband & Society’s Weekly Digest, a recap of the biggest (or most overlooked) broadband stories of the week. The digest is delivered via e-mail each Friday.

Round-Up for the Week of February 22-26, 2021

Kevin Taglang

How do we ensure that broadband service providers enable access to all lawful content and applications regardless of the source, and without favoring or blocking particular products or websites? This now-decades-long debate added a new chapter this week when Judge John Mendez of the U.S. District Court for the Eastern District of California denied a request by broadband trade associations, including the American Cable Association, CTIA-The Wireless Association, NCTA-The Internet & Television Association, and USTelecom, to delay net neutrality rules adopted in California. The ruling clears the way for California to enforce broadband consumer protections similar to those adopted by the Federal Communications Commission in 2015 but subsequently repealed in 2018.

Seeds of Defeat Planted in Restoring Internet Freedom Order

The Restoring Internet Freedom Order championed by former-FCC Chairman Ajit Pai and adopted by his Republican colleagues went farther than just repealing the previous net neutrality protections. The FCC ruled that Congress did not give the Commission the authority to create net neutrality regulations in the first place. The FCC only required broadband providers to be transparent about their practices and called on the Federal Trade Commission to act when those practices were anti-competitive.

"In any area where the Commission lacks the authority to regulate, it equally lacks the power to preempt state law." - US Court of Appeals for the District of Columbia

In 2018, the FCC's repeal of net neutrality protections also included a decision that states can't enforce their own net neutrality protections either. "We conclude that regulation of broadband Internet access service should be governed principally by a uniform set of federal regulations, rather than by a patchwork that includes separate state and local requirements," the order reads. But when the 2018 order was challenged in court, the United States Court of Appeals for the District of Columbia Circuit rejected the FCC’s ability to preempt state laws. The court found that the FCC could not preempt intrastate communications, “over which Congress expressly ‘deni[ed]’ the Commission regulatory authority.”  The judges wrote, "At bottom, the Commission lacked the legal authority to categorically abolish all 50 States' statutorily conferred authority to regulate intrastate communications."

Meanwhile, California was adopting the California Internet Consumer Protection and Net Neutrality Act of 2018. At the time, the law was noted to be the strongest net neutrality law in the US. The Electronic Frontier Foundation called the legislation “a gold standard net neutrality bill.” The law actually went past the FCC's previous net neutrality protections by banning a practice called "zero-rating" (the commercial practice whereby a broadband service provider doesn’t count the use of an app or service against your monthly data cap potentially to the advantage of some companies over others). 

Broadband service companies and the U.S. government, represented by the Department of Justice (DOJ), sued to block the California law in September 2018, soon after the bill was passed. Those lawsuits, and enforcement of the California law, were put on pause as the challenge to the Restoring Internet Freedom Order was considered by the federal appeals court. That decision did not come until October 1, 2019. In August 2020, after an appeals window on the federal case closed, the Department of Justice and broadband industry renewed their challenge against California. The DoJ argued California's net neutrality law "is preempted by federal law and therefore violates the Supremacy Clause of the United States Constitution." The state law "violates the division of regulatory authority between states and the Federal Government" in which the FCC has "exclusive responsibility" for regulating interstate communications "while leaving states with responsibility for intrastate communications," the DOJ said. The California law violates that division because "Internet communications are inherently interstate," the DOJ said.

Elections Matter

A funny thing happened on the way to the decision in the California case, however: the U.S. conducted the most secure elections in its history. And voters overwhelmingly chose a new administration. With the change in leadership at the DoJ came a new course in the California net neutrality case. On February 8, 2021, the DOJ abandoned its lawsuit, and the court quickly dismissed that case.

The case brought by the broadband service providers continued, however. Enter this week's news: Judge John Mendez of the US District Court for the Eastern District of California denied the trade associations' motion for a preliminary injunction against the California rules. The broadband industry argued that the California law isn't necessary because broadband providers haven't been blocking or throttling internet traffic.

"I have heard that argument and I don't find it persuasive," said Judge Mendez. "It's going to fall on deaf ears. Everyone has been on their best behavior since 2018, waiting for whatever happened in the DC Circuit. I don't place weight on the argument that everything is fine and we don't need to worry." California Attorney General Xavier Becerra, who is now President Biden's nominee for Secretary of Health and Human Services, praised the ruling, saying it means that "California can soon begin enforcement" of the net neutrality law. "The ability of an internet service provider to block, slow down, or speed up content based on a user's ability to pay for service degrades the very idea of a competitive marketplace and the open transfer of information at the core of our increasingly digital and connected world."

Industry Faces Worst Nightmare

The California ruling points to a scenario in which many, or even all, of the states might be able to adopt their own net neutrality rules that would withstand judicial challenge.  To date, six states—California, Colorado, Maine, Oregon, Vermont, and Washington—have already passed legislation relating to net neutrality. Further, the governors of six other states—Montana, New York, Hawaii, New Jersey, Rhode Island, and Vermont— have already issued executive orders requiring internet service providers that do business with the state to comply with net neutrality rules. The prospect of multiple statutes with somewhat different provisions is a reason why the trade associations are likely to appeal this week's ruling to a higher court, namely the U.S. Court of Appeals for the Ninth Circuit.  

Benton Senior Counselor Andrew Jay Schwartzman put all this into perspective. "Of course, this a lower court decision that directly applies only to California’s statute," Schwartzman said. "However, the decision in this case, and the probable appeal, will undoubtedly influence how the courts look at similar statutes in other states.”

In the short-term, the broadband industry cannot seek a national solution from the FCC. The Commission is split 2-2; Acting Chairwoman Jessica Rosenworcel and Commissioner Geoffrey Starks favor strong net neutrality protections while Commissioners Brendan Carr and Nathan Simington do not. 

A final solution may have to come from Congress. And the creation of a state-by-state patchwork of rules created by the court ruling could be the impetus for the industry to finally back legislation. But in a narrowly-divided Washington, who knows what kind of bill might make it to President Biden's desk.

As is the caution in any net neutrality update ... watch this space. 

Quick Bits

Weekend Reads (resist tl;dr)

ICYMI from Benton

Upcoming Events

Mar 1 — Fixing Section 230 Without Breaking the Internet (The Verge)

Mar 2 — The Future of Telehealth: How COVID-19 is Changing the Delivery of Virtual Care (House Commerce Committee)

Mar 2 — Lifeline and Emergency Broadband Benefit Program Webinar for Service Providers (USAC)

Mar 4 — How to Take Advantage of Recently Enacted Broadband Grant and Subsidy Programs, and What's on the Horizon (Keller & Heckman)

Mar 12 — Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (FCC)

Mar 17 — NTIA Grant Programs in the Consolidated Appropriations Act of 2021 (NTIA)

Mar 17 — Open Federal Communications Commission Meeting (FCC)

Mar 25 — Misinformation and Disinformation Plaguing Online Platforms (House Commerce Committee)

Mar 25 — Increasing Digital Access (Federal Reserve Bank of Richmond)

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Kevin Taglang

Kevin Taglang
Executive Editor, Communications-related Headlines
Benton Institute
for Broadband & Society
727 Chicago Avenue
Evanston, IL 60202
headlines AT benton DOT org

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