California Pauses Nation's Toughest Net Neutrality Law

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Last month California passed the country’s toughest net neutrality law. It was supposed to come into effect in January. However, the law is now on hold because on Friday California attorney general Xavier Becerra reached a deal with the DOJ to delay implementing the law until a federal lawsuit over net neutrality is resolved. That could take more than a year. In the meantime, Congress can pass a federal law to either restore the FCC rules or create new federal-level regulations to render the California law moot.

CA net neutrality law prohibits internet service providers from slowing down or blocking access to websites or charging companies like Netflix extra to deliver their services faster. California’s law also outlaws some zero-rating offers, such as an AT&T offer that exempts its own streaming services from its wireless customers’ data caps.

The law is based on Obama-era FCC net neutrality protections that the Republican-led FCC repealed earlier this year. Not only the FCC repealed them, it also declared that states are prohibited from passing their own laws to impose net neutrality restrictions. 

The DOJ filed a lawsuit against California within hours of its net neutrality law signed by the Governor. Several broadband and wireless industry groups joined the DOJ in arguing that CA law interferes with interstate commerce which only the federal gov’t can regulate, not any one state.

Nevertheless, several other states moved forward with their own net neutrality laws. Attorneys general from 22 states and the internet browser company Mozilla have sued the FCC over the repeal of the rules.

Lawsuit raises some novel questions about the balance of power between the federal and the states’ governments:

1) Can the FCC preclude the states from adopting their own net neutrality laws?
2) Can a state impose net neutrality rules at all? Both the DOJ and the broadband industry argue that, since Internet is, by its nature, interstate, it means that only the federal government can regulate broadband services.

Supporters of state net neutrality laws argue they don’t conflict with federal regulations because there aren’t any federal net neutrality regulations to conflict with. Preemption is normally invoked against states trying to implement rules that conflict with a federal rule.

It’s possible for the federal government to preempt state law when those laws conflict with federal policy, even if that federal policy is not to regulate. Such was the case with the Airline Deregulation Act, which banned states from reimposing federal airline regulations. But that was an act of Congress, which carries a lot more legal weight than an act of a federal agency.

Court decisions upholding the FCC’s moves to block the state of Minnesota from regulating internet phone services like Vonage like traditional telephone carriers. But the Vonage cases differ from the California net neutrality case in that the FCC’s authority to regulate internet phone services wasn’t in doubt. It’s less clear that the FCC still has authority to regulate broadband in the same way.

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