One day after California enacted sweeping state legislation which provides net neutrality protections not only to California residents but, effectively, to broadband users throughout the country, the Department of Justice (DOJ) filed suit Monday to block the new state law on grounds that it “unlawfully imposes burdens on the federal government’s deregulatory approach to the Internet.” On the heels of the DOJ lawsuit, four trade groups—the American Cable Association (ACA), wireless association CTIA, television and Internet association NCTA, and the U.S. Telecom Association (USTA)—filed a similar legal complaint on behalf of the broadband Internet access service (BIAS) industry, claiming that the California law represents “a classic example of unconstitutional state regulation” which is “preempted under the supremacy clause of the United States Constitution.”
Signed on Sunday by California Governor Jerry Brown (D), the California Internet Consumer Protection and Net Neutrality Act (SB 822) restores net neutrality protections that were repealed by the FCC last year through the “Internet Freedom” order. Specifically, SB 822 prohibits California BIAS providers from “blocking lawful content, applications, services, or non-harmful devices, impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service, or use of a non-harmful device, and specified practices related to zero-rating.” Going a step beyond net neutrality rules that were enacted by the FCC in 2015 but repealed last year, SB 822 also bars fixed and mobile BIAS providers from “offering or providing services other than broadband Internet access service that are delivered over the same last-mile connection as the broadband Internet access service, if those services have the purpose or effect of evading” net neutrality protections that include prohibitions against blocking, degrading, and zero-rating. Although several other states have enacted (or are in the process of enacting) laws or executive orders with the goal of restoring net neutrality protections that were repealed by the FCC, observers say the size and importance of the State of California to the broadband industry means that any law enacted by that state is bound to impact BIAS network operations on a national scale.
Arguing that SB 822 “squarely falls within the pre-emption provision of the [Internet Freedom] order and is unlawful,” the DOJ filed suit with U.S. District Court for the Eastern District of California just weeks after the Eighth Circuit Court ruled that state regulation of interconnected Voice over Internet Protocol service is preempted under federal law. In a statement to reporters, U.S. Attorney General Jeff Sessions accused California state legislators of enacting “an extreme and illegal state law attempting to frustrate federal policy.” Emphasizing that the DOJ has “a duty to defend the prerogatives of the federal government and protect our Constitutional order, Sessions vowed: “we will do so with vigor.” Meanwhile, in their joint legal complaint filed with the same district court, ACA, CTIA, NCTA and USTA charged that SB 822 “was purposely intended to countermand and undermine federal law by imposing on BIAS the very same regulations that the FCC expressly repealed in its 2017 Restoring Internet Freedom Order . . . despite the fact that both the FCC decision and the federal Communications Act of 1934, as amended, prohibit states from taking such action with respect to jurisdictionally interstate services like BIAS.” Lamenting, “it is impossible or impracticable for an ISP offering BIAS to distinguish traffic that moves only within California from traffic that crosses state borders,” the trade groups also advised the court that “both the Supremacy Clause and the dormant Commerce Clause protect ISPs from a patchwork of inconsistent regulations that are unduly burdensome and impossible to comply with as a practical matter.”
Voicing his support for the lawsuits, and declaring that the Internet “is inherently an interstate information service” which falls under federal purview, FCC Chairman Ajit Pai agreed: “only the federal government can set policy in this area.” As he characterized SB 822 as “incredibly detrimental to American consumers and the continued growth of the Internet,” FCC Commissioner Michael O’Rielly remarked: “the DOJ’s action to challenge this overreach is both appreciated and appropriate.” However, as House Minority Leader Nancy Pelosi (D-CA) praised California for “leading the nation to guarantee that a free and open Internet is here to stay,” FCC Commissioner Jessica Rosenworcel welcomed California’s effort “to get right what the FCC got so wrong when it rolled back open Internet protections last year.” While praising the California law, Chip Pickering, the CEO of Incompas (formerly Comptel), stressed that “a nationwide solution is necessary, and [we] urge Congress to take immediate action to preserve these essential components of open Internet freedom without delay.”