TR Daily DoJ Challenges Calif. Net Neutrality Bill After Brown Signs
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Monday, October 1, 2018

DoJ Challenges Calif. Net Neutrality Bill After Brown Signs

California Gov. Jerry Brown (D.) late yesterday signed into law what has been called the “gold standard” for net neutrality in the country, while the U.S. Department of Justice swiftly filed a lawsuit to challenge the state law, arguing that it “unlawfully imposes burdens on the federal government’s deregulatory approach to the Internet.”

“Under the Constitution, states do not regulate interstate commerce — the federal government does,” Attorney General Jeff Sessions said in a statement. “Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our constitutional order. We will do so with vigor. We are confident that we will prevail in this case — because the facts are on our side.”

The bill was signed without a statement from the governor, but the main sponsor of SB 822, Sen. Scott Wiener (D.), and others hailed the adoption of the law. Sen. Wiener said Gov. Brown’s signature marked “a historic day for California” and was a “true win for the Internet and for an open society.”

“While the Trump administration does everything in its power to undermine our democracy, we in California will continue to do what’s right for our residents. Net neutrality, at its core, is the basic notion that we each get to decide where we go on the Internet, as opposed to having that decision made for us by Internet service providers. It’s also about ensuring a level playing field for ideas and for businesses trying to compete,” he said.

Sen. Wiener also vowed that the state of California would prevail in 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. We’ve been down this road before: when Trump and Sessions sued California and claimed we lacked the power to protect immigrants. California fought Trump and Sessions on their immigration lawsuit — California won — and California will fight this lawsuit as well. I have complete confidence that Attorney General Xavier Becerra will do a great job defending this law,” Sen. Wiener said in a statement.

In a tweet yesterday, California AG Becerra said California would “not allow a handful of power brokers to dictate sources for information or the speed at which websites load.”

The California Internet Consumer Protection and Net Neutrality Act of 2018 prohibits “blocking lawful content, applications, services, or nonharmful devices, impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service, or use of a nonharmful device, and specified practices relating to zero-rating.”

The new law will prohibit fixed and mobile Internet service 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 the above-described prohibitions or negatively affect the performance of broadband Internet access service.”

The Justice Department said the FCC’s 2015 order to protect net neutrality was a departure from Congress’s decision that the “Internet should remain ‘unfettered by federal or state regulation,’” and the FCC’s more recent decision returns to the federal government’s “light-touch framework, ensuring that Internet access services are free and guided by a uniform set of federal rules, rather than by a patchwork of state and local regulations.”

“The United States concluded that California, through Senate Bill 822, is attempting to subvert the federal government’s deregulatory approach by imposing burdensome state regulations on the free Internet, which is unlawful and anti-consumer,” according to the DoJ.

In the lawsuit filed with the U.S. District Court for the Eastern District of California, the Justice Department argues that SB 822 is invalid under the federal Constitution’s supremacy clause and is preempted by federal law. California, according to the lawsuit, is seeking to “second-guess the federal government’s regulatory approach by enacting SB 822.”

“As the state acknowledges, SB 822 ‘codif[ies] portions of the recently-rescinded’ 2015 order and imposes ‘additional bright-line rules’ that not even ‘the FCC opted’ to embrace in 2015. … As such, SB 822 squarely falls within the preemption provision of the 2018 order and is unlawful,” the DoJ alleges in the lawsuit.

The DoJ is seeking a preliminary injunction to enjoin enforcement of the new law, “in order to avoid ongoing, irreparable harm to the United States and its interests.”

According to the motion for a preliminary injunction, the DoJ argues that “due to its size and weighty impact on the Internet economy, California effectively has dictated a broadband Internet access policy for the entire nation. Given the nature of Internet communications, which frequently straddle multiple jurisdictions, Internet service providers (ISPs) cannot apply two separate and conflicting legal frameworks to Internet communications—one for California and one for everywhere else. This means that California’s rules in this area, for all practical purposes, are the only ones that matter. California’s nullification of federal law—with the concomitant regulatory uncertainty and instability of the Internet marketplace created—is not in the public’s interest, not otherwise justified, and thus should be immediately enjoined.”

FCC Chairman Ajit Pai issued a statement in support of the Justice Department’s lawsuit. He said that state regulation of the Internet was illegal and that the new law hurts consumers by prohibiting many free-data plans that are “enormously popular in the marketplace, especially among lower-income Americans.”

“I’m pleased the Department of Justice has filed this suit. The Internet is inherently an interstate information service. As such, only the federal government can set policy in this area. And the U.S. Court of Appeals for the Eighth Circuit recently reaffirmed that state regulation of information services is preempted by federal law,” Chairman Pai said in a statement today.

Chairman Pai continued, “The Internet is free and open today, and it will continue to be under the light-touch protections of the FCC’s Restoring Internet Freedom Order. I look forward to working with my colleagues and the Department of Justice to ensure the Internet remains ‘unfettered by federal or state regulation,’ as federal law requires, and the domain of engineers, entrepreneurs, and technologists, not lawyers and bureaucrats.”

FCC Commissioner Mike O’Rielly also released a statement in support of the Justice Department lawsuit.

“While not surprising, California’s net neutrality effort reaffirms its leaders’ total lack of understanding of how technology or our economy actually works, particularly its ban on paid prioritization,” Commissioner O’Rielly said in a statement today.

“If allowed to stand the law would be incredibly detrimental to American consumers and the continued growth of the Internet,” he said. “Thankfully, this is precisely why our nation’s founding fathers crafted a Commerce Clause to the U.S. Constitution and why I pushed so hard for the Commission’s December action to include strong preemption provisions. The DoJ’s action to challenge this overreach is both appreciated and appropriate.”

FCC Commissioner Jessica Rosenworcel, on the other hand, praised California’s effort to “get right what the FCC got so wrong when it rolled back open Internet protections late last year.”

House Democratic leader Nancy Pelosi (Calif.), who has publicly supported the legislation, said today that “California is once again proudly leading the nation to guarantee that the free and open Internet is here to stay.”

“Each day, the Trump administration and House Republicans continue their all-out assault on net neutrality. States now must follow the example of California and pass robust net neutrality protections that keep our communities safe, help students and small business thrive, create the good-paying jobs of the 21st century and strengthen the entrepreneurial American spirit that is the envy of the world,” Rep. Pelosi said in a statement today.

Sen. Ed Markey (D., Mass.) called the enactment of California’s net neutrality law a “huge victory for the free and open Internet,” while urging support for his Congressional Review Act resolution to reinstate net neutrality on the federal level.

“Despite overwhelming bipartisan support for the open Internet, the Trump administration, along with the big broadband behemoths, will stop at nothing to prevent strong net neutrality rules from being put on the books on the state and national levels,” Sen. Markey said in a statement. “That’s why we must continue our efforts, both in the halls of Congress and in the courts, to promote a free and open Internet. I strongly encourage my colleagues in the House of Representatives to pass my Congressional Review Act resolution to restore federal net neutrality rules.”

Incompas Chief Executive Office Chip Pickering also applauded California’s efforts while calling for net neutrality to be reinstated nationwide.

“While we welcome California’s leadership, and praise them for including the four corners of net neutrality — no blocking, no throttling, no paid prioritization and strong interconnection — we believe a nationwide solution is necessary and urge Congress to take immediate action to preserve these essential components of open Internet freedom without delay,” he said.

“Poll after poll shows support for net neutrality around 80%. Conservatives in red states are outraged by the idea of giving control of the Internet to cable companies, like AT&T and Comcast, who are raising prices and lobbying for slower speeds. Young conservatives were raised in an era of Internet freedom and know that net neutrality makes it easier to start a business. Congressional leaders should move immediately to restore net neutrality, and pass legislation like Rep. Mike Coffman’s (R., Colo.) bill to cement the four corners of net neutrality into law,” he said.

Consumer advocates also lauded the new net neutrality state law.

“Today marks a huge victory, not only for Californians but for the future of the Internet. California’s net neutrality law will ensure that competition and the free market — not backroom agreements by Internet providers — determine success on the Internet, with all voices having equal chance to be heard online. And despite FCC Chairman Pai’s claims, this law will ensure that the Internet as we’ve known it for years can continue to flourish as a level playing field,” said Jonathan Schwantes, senior policy counsel for Consumers Union.

Greenlining Institute spokesman Bruce Mirken said, “Strong net neutrality protections are essential for Americans of color. If allowed to charge companies for preferential treatment and essentially pick winners and losers on the Internet, Internet service providers will inevitably curate a 'priority' Internet filled with bland, mass-market options -- the information equivalent of a mall food court -- and relegate content by and for communities of color to the slow lanes and sidelines. Without net neutrality, only rich and powerful companies will be able to afford preferential treatment while those who cater to communities of color or uplift non-mainstream ideas won’t be able to afford this priority treatment.”

“As is often the case, California is setting a strong example for Congress and other states on the type of net neutrality protections an overwhelming majority of Americans expect. Only in Washington, D.C., is this controversial due to the influence of broadband provider lobbyists. Even in California, that influence was strong, but an outpouring of support from consumers and small businesses helped to remind policy-makers just how popular net neutrality protections are,” said Chris Lewis, vice president of Public Knowledge, in a statement.

“It seems incredibly tone deaf that the Trump administration is filing a lawsuit to eliminate these protections. Without net neutrality rules, broadband providers will continue to be free to prioritize some web traffic and services over others, especially when it’s content they own. Even in the short time we’ve been without the federal rules, there are multiple reports of ISPs slowing content. If the FCC had not abdicated its authority to protect consumers over broadband, these reports could be investigated,” Mr. Lewis added.

Other groups and companies voiced support for the DoJ’s lawsuit.

“The American Cable Association supports the lawsuit brought by the Department of Justice against California to overturn the state’s Internet regulation legislation. The California law seeks to regulate interstate commerce and plainly intrudes on federal authority,” said American Cable Association President and CEO Matthew Polka. “Moreover, if the California law were permitted to go into effect, it would harm consumers by stymying small and medium-sized ISPs’ investments in broadband networks in the state and the deployment of innovative services.”

“ACA believes the best means of addressing any consumer concerns about having an open Internet is for Congress to step in and adopt national legislation codifying the three bright line rules (no blocking, no throttling, no unreasonable paid prioritization) -- not for California and other states to adopt a patchwork of open Internet rules that would end up imposing different requirements based on where consumers access the Internet.”

AT&T, Inc., reiterated its commitment to a free and open Internet and said it supported the Justice Department’s lawsuit.

“Consumers want and deserve an open and transparent Internet, free of gatekeepers. They want an Internet that is free from censorship, blocking, and discriminatory throttling. They want to access content when, where, and how they want to. AT&T is unequivocally committed to meeting these customer demands,” said Joan Marsh, AT&T executive VP-regulatory & state external affairs. “That is why we repeatedly have encouraged the U.S. Congress to end the back and forth and confusion surrounding open Internet protections once and for all by writing a uniform, national law that protects all American consumers, innovation, and investment by treating all Internet platforms equally. Simply put, state-by-state regulation in this area is insufficient and unworkable because the Internet is a global network of networks that enables consumers to access and use information, content, and services without regard to state, and even national, boundaries. Accordingly, we support the Justice Department’s lawsuit to preempt the California statute.”

TechFreedom also supports the DoJ’s lawsuit because “the U.S. Constitution sharply limits states’ ability to regulate Internet services.”

“California is wasting everyone’s time and taxpayers’ money by provoking an entirely predictable legal battle over obviously unconstitutional legislation,” said Berin Szóka, president of TechFreedom. “The Internet is an inherently interstate medium — indeed, it transcends even national borders. The states have no business regulating such services. Both the Communications Act and the FCC’s 2017 Restoring Internet Freedom Order (RIFO) preempt state regulation of broadband services, and even if they did not, such regulation would violate the dormant Commerce Clause by impairing interstate services. The RIFO is right: ‘it is impossible or impracticable for ISPs to distinguish between intrastate and interstate communications over the Internet or to apply different rules in each circumstance.’ That’s why TechFreedom will be supporting the DoJ’s lawsuit as an amicus curiae.”

“Even the strongest supporters of net neutrality should recognize that state-by-state regulation of the Internet is a terrible idea,” Mr. Szóka added. “They should focus their efforts on building bipartisan support for federal legislation — the only way this debate will ever be resolved.”

Free State Foundation President Randolph May said that the state law is “highly unlikely to survive judicial scrutiny.”

“There is no doubt that Internet services are national, even transnational, in scope. Internet communications do not respect state boundary lines drawn on a map and California does not, and could not, maintain otherwise. And there is no doubt that the California law conflicts with the clearly-articulated national policy that this form of interstate commerce should not be subject to stringent state regulation that deters investment and innovation in Internet services, thereby harming consumers,” Mr. May said today. —Carrie DeLeon, [email protected]

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