California Enacts State Net Neutrality Rules, Gets Sued Immediately
California's new law is a legal mess.
California Gov. Jerry Brown signed a sweeping new net neutrality bill into law on Sunday. Within minutes, his state was hit with a Department of Justice lawsuit.
"Under the Constitution, states do not regulate interstate commerce—the federal government does," said Attorney General Jeff Sessions in a press release. The release also accused California of unlawfully imposing "burdensome state regulations on the free Internet."
Sponsored by Sen. Scott Weiner (D–San Francisco), the law aims to reimpose the Obama-era net neutrality rules, which the Federal Communications Commission (FCC) repealed this year with its Restoring Internet Freedom order.
California is hardly the first state to take this step. Oregon, Washington, and Vermont have passed similar state-level net neutrality bills, and governors in six states have issued executive orders imposing net neutrality–like requirements on ISPs that contract with the state government.
But California's bill is exceptionally sweeping. Its restrictions on Internet Service Providers (ISPs) include bans on zero-rating (offering certain content or applications for free), paid prioritization (letting consumers pay more for faster download speeds for certain content), or otherwise blocking, slowing down, or speeding up internet traffic because of its content, source, or destination.
Many of these regulations directly conflict with the "light-touch" approach to internet regulation spelled out in the Restoring Internet Freedom order. The order also included a provision preempting state and local net neutrality laws. The Justice Department's lawsuit argues that S.B. 822 therefore "is invalid under the Supremacy Clause and is preempted by federal law."
That should be a pretty straightforward case for the federal government to make, says Tom Struble, an attorney and technology policy expert with the R Street Institute. He expects the feds' lawsuit against California to serve as a vehicle for overturning the other state net neutrality laws as well.
"Because California's [net neutrality law] went the furthest, I think the [Justice Department] was waiting for them to pass that one because it makes the easiest case to win," Struble tells Reason. "I think they're going to win the case. I think it's pretty clear the law is illegal, at least two times over, if not three or four."
Defenders of state-level net neutrality laws argue that the FCC, by choosing not to impose certain regulations on how ISPs treat the content on their networks, has opened up a space that allows states to act.
Washington state Rep. Brian Hansen (D–Bainbridge Island), author of Washington's net neutrality law, told Reason last year, "The FCC is declaring that a certain set of federal statutory provisions do not give it the authority to regulate standards of conduct on the internet. Yet somehow, as if by magic, that same statute gives them the authority to preempt state attempts to regulate standards of conduct on the internet. I'm not sure how that can coexist."
Struble rejects this premise, arguing that the FCC did not abdicate its own authority to regulate broadband internet by repealing the Obama-era rules. Rather, he says, the FCC was merely switching from a more regulatory approach to a less regulatory one, which does nothing to impact its ability to preempt conflicting state laws.
Meanwhile, the Dormant Commerce Clause forbids a state from discriminating against out-of-state companies, or otherwise unduly burdening interstate commercial activity without a strong state interest in doing so, regardless of what the federal regulatory framework is.
By banning things like zero-rating—something mobile service providers are already offering in California—S.B. 822 imposes just such an undue burden on interstate commerce, argues Struble. Even the Electronic Frontier Foundation, which backs net neutrality, has said that state-level net neutrality regulations are vulnerable to challenges on Dormant Commerce Clause grounds.
The obvious legal problems with California's net neutrality law make it as much a political statement against the Trump administration as it is a seriously regulatory proposal.
The law's defenders have certainly been happy to raise the #resistance flag in response to the lawsuit.
"Sessions and his boss Donald Trump aren't satisfied with the federal government repealing net neutrality. In their world, *no one* is allowed to protect an open internet," said Weiner in a statement, adding that California had been "down this road before" in successfully fending off Justice Department lawsuits about its sanctuary city policies. "California fought Trump and Sessions on their immigration lawsuit—California won—and California will fight this lawsuit as well."
This anti-Trump zeal might be good for rallying progressive activists, but appears unlikely to save S.B. 822 from the legal challenge.