The fight over government-mandated net neutrality is heating up again as states resurrect rules discarded last year by Republicans on the Federal Communications Commission.
The clash is likely to unfold in court, as FCC Chairman Ajit Pai declares a bill that passed California’s legislature “illegal,” and as Democratic state Sen. Scott Wiener, the bill’s sponsor, fires back that Pai is “parroting” false corporate talking points.
California’s legislation incorporates about 300 pages of repealed federal definitions and explanations, aiming to fully revive Obama-era FCC rules. It would be the boldest state law yet following the FCC’s December repeal of a 2015 regulation.
“There’s a lot of confusion about why people care so much about what California is doing,” said Barbara van Schewick, director of the Center for Internet and Society at Stanford University’s law school.
“California is the fifth largest economy in the world and the most populous state. So if all of California is covered by net neutrality, that makes a big difference,” she said. “But the California net neutrality bill is the first one that includes all of the protections in the 2015 order.”
Washington state passed a law that took effect in June, but didn’t include specific repealed wording, van Schewick said, such as banning Internet service providers from charging websites “access fees,” or evading restrictions when traffic enters a network.
Wiener said he believes the legislation would be challenged in court, regardless of whether Pai leads the charge.
“The industry does not want this out there,” he said.
The back story
Net neutrality simply means that ISPs should not block or prioritize content. Supporters argue rules are essential to keep the Internet an open platform. Opponents argue it’s needless regulation.
The details are complex, however, with a web of legal precedent and regulatory interpretations.
The FCC approved net neutrality twice under President Barack Obama, first in 2010 and again in 2015.
Judges found the FCC exceeded its authority in 2010, as the agency deemed the Internet an “information service” under Title I of the Communications Act. The 2015 rules reclassified the Internet as a telecommunications service under Title II, and were upheld in 2016 by the U.S. Court of Appeals for the D.C. Circuit.
When the Pai-led FCC repealed the rules, it again determined the Internet an information service, and declared states could not go their own way.
What’s ahead
One of the top fights over California’s net neutrality law would focus on preemption, the notion that federal policy overrides state law.
The matter already is tied into a lawsuit filed this year by 23 states, arguing the FCC violated legal processes repealing the 2015 regulation.
In a brief, van Schewick and other scholars argue the FCC “cannot have it both ways. It cannot on the one hand disclaim authority to regulate while on the other hand claim vast authority to preempt.”
But a recent ruling from an 8th Circuit appeals panel cuts the other way, and judges found the FCC preempts a Minnesota law governing voice-over IP technology.
Nebraska College of Law professor Gus Hurwitz said Pai is “probably feeling particularly emboldened about the commission’s position about preemption right now.”
“Of course, California isn’t in the 8th Circuit, but that holding is certainly a strong endorsement of the chairman’s position and arguments against state legislation,” he said.
California’s Democratic Gov. Jerry Brown has until Sept. 30 to sign or veto the bill. The state legislature hasn’t overridden a veto since the 1970s, making his decision final.
Van Schewick said an industry lawsuit challenging the legislation could focus on various arguments aside from preemption.
Jonathan Spalter, president of the ISP trade group USTelecom, said, “net neutrality cannot and should not be solved by the states. Gov. Brown should veto this bill and Congress should step up with a pro-consumer, national framework.”
It’s unclear why Washington state’s law, or a similar law recently passed in Oregon, have not been challenged in court, though a possible explanation is that the laws haven’t been used much yet.
Will anything change?
Anticipated effects of state legislation vary based on perceptions of the status quo and how much customers have suffered.
“It’s been happening for years, it’s real — as much as the industry wants to pretend it’s a fantasy,” Wiener said, listing several instances in which ISPs restricted access to pages or services.
“The industry likes to claim there’s never been a problem. Of course if that was the case the industry would not be opposing the bill,” he said.
Harvard Business School professor Shane Greenstein, however, said the legislation may not have an immediate effect.
“The firms today behave in ways that largely do not vary from the past rules, so there is a sense in which this does not bind behavior much yet,” Greenstein said.
“Down the road it might matter,” he said. “If the California [Public Utilities Commission] brought a case against a carrier, and had the authority to do so, then it would get enormous attention from the wireless and the broadband carriers. But right now? … It is not obvious the California PUC has the legal authority, and that is going to depend on lots of legal precedents about when states do or do not have authority to regulate local services. You do not have to have any legal training to see that.”
