California Defends its Net Neutrality Law

This week, California filed its first brief in the lawsuit by the United States and Internet service providers like AT&T and Comcast that seeks to overturn California’s net neutrality law. SB 822, which was signed into law in September 2018, is the only state law that comprehensively restores all the net neutrality protections from the FCC’s 2015 Open Internet Order.

At issue is whether any state can protect its residents from misbehavior by the companies they pay to get online, and thanks to the United States' and the ISPs’ sweeping arguments, even whether states can regulate any online services, including enacting online privacy laws.

Net neutrality is the principle that companies like Comcast, AT&T, and Verizon that connect us to the Internet cannot interfere with what we do online. The Federal Communications Commission (FCC) protected that principle for decades until the Trump administration’s FCC, led by Chairman Pai, repealed all meaningful net neutrality protections in 2018 and said that the FCC didn’t have authority to enact net neutrality, even if it wanted to.

In response, California adopted its own net neutrality law, SB 822. The law, championed by California State Senator Scott Wiener, went into effect on January 1, 2019. As the only state-level law that truly restores all of the 2015 net neutrality protections, it is widely viewed as a model law.

SB 822 ensures that Californians, not the companies they pay to get online, get to be in control of what sites, apps, and services they use. SB 822 bans ISPs from blocking, slowing down, or speeding up websites, charging websites fees for access to the ISPs’ subscribers or for fast lanes to these subscribers, and from circumventing the bill’s net neutrality protections at the point where data enters the ISPs’ networks.

Hours after then-Governor Brown signed the law in September 2018, the United States sued to overturn it. A coalition of trade associations representing the largest ISPs in the country followed a few days later. In October 2018, the parties agreed to pause the lawsuit until a separate court challenge to the FCC’s 2018 repeal order was fully resolved. California agreed not to enforce the law during this time. 

That case, known as Mozilla vs. FCC, was decided in October 2019. The Court of Appeals for the D.C. Circuit narrowly upheld the elimination of net neutrality at the federal level. But the court vacated the part of the repeal order that prohibited states from enacting their own net neutrality laws. The court said that since the FCC has no power over the companies we pay to get online, it has no power to stop the states from stepping in to protect their own citizens and economies.

This cleared a major roadblock for state net neutrality laws.

Now the challenge is back in federal court in California, where the U.S. and the ISPs are seeking a preliminary injunction to prevent California from enforcing the law during the lawsuit. The U.S. and the ISPs filed for the preliminary injunction on August 5. On Wednesday, September 16, California filed its brief opposing the motions for preliminary injunction, along with supporting declarations from a wide range of companies, public entities, and public interest groups.

There are 3 main issues in the ISPs’ and U.S.’s request for an injunction: 

  1. Is there a conflict between the FCC’s decision to eliminate its net neutrality protections and the state’s decision to bring it back for Californians? 

    The answer is no.

    According to case law, an agency’s decision to deregulate can only block the states from stepping in when the agency has the power to regulate and decides not to use it.  

    But when the FCC eliminated net neutrality in 2018, it also removed its own authority over broadband providers. In essence, the agency decided that broadband providers are not telecommunications companies that simply shuttle data back and forth (like a telephone company), but information service providers which interact with and alter data, like a website. 

    This removed any authority that would have allowed the FCC to adopt net neutrality protections. Thus, the elimination of net neutrality did not establish a calibrated federal deregulatory regime, as the U.S. and the ISPs argue; it simply reflected the FCC’s lack of authority. Simply put, the FCC’s 2018 Order created a regulatory vacuum, and you can’t conflict with a vacuum. 

  2. Does the Communications Act ban states from regulating any online service at all?

    The U.S./ISPs claim that the Communications Act itself prohibits the states from regulating any service that falls within the scope of the Communications Act, no matter whether the Act gives the FCC authority to regulate it. It doesn’t even matter, they argue, if there’s any conflict between the state’s action and the FCC’s; states are powerless to do anything.

    This is a sweeping argument that the FCC didn’t even make in its repeal of net neutrality. It is contrary to the case law, and the Communications Act wasn’t written to do so.

    But if accepted by the court, this argument would threaten every state law touching online services, including online privacy laws like California’s, limits on online payday lenders, and more.

  3. Finally, to win a preliminary injunction, the ISPs have to prove two big points: one, that they are likely to win the lawsuit, and two, that without an injunction, they would suffer irreparable harm. 

    To prove the latter, the ISPs say that they will be banned from a number of behaviors. Comcast and AT&T say they want to be paid by the companies that deliver online videos and other content that the ISPs’ customers requested, and the law will interfere with their ability to do so, reducing their profits. As several declarations explain, ISPs are already paid by their Internet service customers to deliver their data to and from the Internet. They don’t need to be paid twice, and only the largest ISPs in the country have been able to leverage their power over millions of Americans into being paid for access to users.

    Cox says it won’t be able to cut back bandwidth to customers who use the upload capacity they pay for. AT&T says it would no longer be able to exempt its own video services like HBO MAX from people’s data caps, while forcing customers who want to watch video from someone else to burn through their data. AT&T claims it would take a huge engineering effort to stop zero-rating its own video services for Californians only. But California’s opposition brief points out that AT&T gives every customer the right to opt-out of such services online, so AT&T could simply opt-out all California customers.

    The ISPs also say it would be impossible to comply with net neutrality laws in different states. Cogent, which runs one of the five largest internet networks in the world, rebuts that, saying in its declaration:

“[S]tate net neutrality laws do not pose any inherent problems. The Internet is a worldwide network. Internet access service is already subject to different net neutrality laws in different countries (e.g., Canada, Mexico, and the U.S. all have different net neutrality regimes), and [ISPs] who offer [broadband internet access] to customers in different countries have no problem complying with these laws. Having to comply with a net neutrality law in California – the fifth largest economy in the world – is no different. Cogent, like every other global transit provider, complies with the laws of every location in which we operate in.”

Finally, California’s brief and numerous supporting declarations point out that free and open access to the Internet is more important than ever: California, like the rest of the country, is in the midst of a pandemic. Kids “go to school” over the internet, adults work remotely, and all of us reach out online to friends and family we can’t see in person anymore. California is also in the worst wildfire season in history. Millions of Californians need robust broadband to check the news, load air quality sensor sites, and get evacuation notices.

This year has made it clearer than ever that the only ones who should get to decide or influence how Californians use the internet are individual Californians themselves. SB 822 ensures that they can.

Professor Barbara van Schewick is a professor of law at Stanford University and the director of Stanford Law School’s Center for Internet and Society.

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