A federal judge in the Eastern District of California has allowed the California net neutrality law to go into effect. The law was passed in 2017, soon after the FCC killed federal net neutrality along with broadband regulation. Here is a copy of the California statute from 2018.
The California net neutrality law was met immediately by a suit by the US Justice Department that said that California didn’t have the authority to pass a law that impacts interstate commerce. The California law was also challenged in court by America’s Communications Association, CTIA, the NCTA, and US Telecom on behalf of the biggest ISPs in the country. That lawsuit claimed that the California law was a “classic example of unconstitutional state regulation”.
The court placed a stay on the implementation of net neutrality until the lawsuit was resolved. The appeal of the case has bogged down in court and not much progress was made in resolving the issue. Recently, the US Department of Justice withdrew its objections to the California law, leaving only the big ISP suit. Judge John A. Mendez of the federal courts decided to lift the injunction on the law after the Department of Justice withdrew its objection to the law.
Theoretically, the law will go into effect immediately. However, the four telecom associations that brought the original suit may still try to get another injunction against the law going into effect.
Judge Mendez scolded Congress for not dealing with the issue, “When you have to deal with legislation drafted in 1934 in 2021, I don’t think anyone is well served …That is Congress’ job. They have to keep up with what is going on in the real world.” This is a sentiment that almost anybody following broadband regulation will mirror. The judge also said that lifting the injunction was done strictly on legal grounds and that nothing political should be read into his decision.
It’s going to be interesting to see how the big ISPs deal with this ruling. They can’t ignore it since California would be the fifth-largest economy in the world if it was a standalone country. It’s going to be challenging for ISPs to act one way in California and a different way everywhere else. Even if they somehow try to do that, there are several other states that have also passed new net neutrality rules that have been put on hold waiting for the resolution of the California case. It’s not hard to envision dozens of slightly different sets of net neutrality rules.
The California law largely mimicked the original FCC net neutrality rules. It included things like an injunction against paid prioritization. It would mean the end of zero-rating where a company can impose data caps while excluding it’s own content from the practice. One of my favorite aspects of the law is that it forces ISPs to tell customers the actual data speeds they are likely to receive – which is probably the part of the net neutrality order that carriers dislike the most.
This is a nightmare scenario for the big ISPs. The thought of having different net neutrality rules in each state would be a regulatory nightmare, and likely unworkable if the various states adopt different versions of the rules. But ultimately, the fault for this can be laid at the feet of the big ISPs who put tremendous effort into killing the federal rules. Ironically, the CEOs of all of the big ISPs have been on record saying that they could live with net neutrality. But federal net neutrality was killed as part of the effort to kill FCC regulation of broadband. It would be ironic if the big ISPs at some point have to lobby for federal net neutrality rules rather than face multiple state rules.
It should be kept in mind this is fundamentally about federal regulation and specifically the regulation of IP services and whether they are classified under Title I of the Communications Act as informational services per current FCC policy or under Title II, which would regard them as a common carrier telecom utility service and subject to Title II’s anti-redlining and nondiscrimination requirements. The California law does not address that basic question. Nor is it likely any state can or could practically do so since telecom is essentially interstate in nature.