TR Daily Parties Seek to Stay Challenge of Calif. Net Neutrality Law
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Friday, October 26, 2018

Parties Seek to Stay Challenge of Calif. Net Neutrality Law

The U.S. Department of Justice and broadband Internet service provider (ISP) industry groups challenging California’s new net neutrality law, along with California Attorney General Xavier Becerra (D.), Gov. Jerry Brown (D.), and the state as the named plaintiffs, have asked the U.S. District Court for the District of Eastern California to stay proceedings in the case until federal judicial review of the FCC’s December 2017 restoring Internet freedom (RIF) order is completed.

As part of the agreement they reached to jointly seek a stay, the plaintiffs agreed to withdraw motions for preliminary injunctions, and the defendants agreed not to enforce the law “until 30 days after the later of: (1) the expiration of the stay, or (2) a decision has been rendered on any renewed motion for preliminary injunctive relief that Plaintiffs may file within 30 days after the expiration of the stay.”

The California net neutrality law is scheduled to take effect Jan. 1, 2019.

The FCC’s RIF order overturned nearly all of the provisions of the open Internet order adopted by a Democratic-controlled Commission, including the classification of broadband Internet access service (BIAS) as a telecommunications service subject to common carrier regulation under Title II of the Communications Act; the classification of mobile broadband as a commercial mobile service subject to Title II regulation; bright-line conduct rules against blocking, throttling, and paid prioritization; and the Internet general conduct standard.

The FCC’s RIF order also stated that BIAS is an interstate service and explicitly preempted “any state or local measures that would effectively impose rules or requirements that [the FCC has] repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for any aspect of broadband service that we address in this order.”

The FCC order is facing challenges at the U.S. Court of Appeals for the District of Columbia Circuit in consolidated cases beginning at “Mozilla Corp. et al. v. FCC and United States of America” (case 18-1051) from 22 state attorneys general and various other state and local government entities that are arguing the preemption of state laws that impose net neutrality protections violates the Communications Act of 1934, as amended, which established “a system of dual state and federal regulation” (TR Daily, Aug. 21). It is also being challenged by non-governmental entities — including telecom and tech sector companies and trade groups, purchasers of BIAS, and public interest groups — that are arguing that the FCC misinterpreted the statute in its regulatory reclassification of BIAS, and that “the FCC’s failure to consider the evidence, abandonment of the open Internet rules, and denial of motions to introduce additional evidence, violates the Administrative Procedure Act or is otherwise contrary to law” (TR Daily, Aug. 21).

The parties to the case in the Eastern District of California have asked that the stay remain in place “until the later of the following: (a) the D.C. Circuit issues its opinion in the petitions for review currently pending in ‘Mozilla Corp. v. FCC,’ Nos. 18-1051 et al. (D.C. Cir.) and the period for seeking further review from the D.C. Circuit and the U.S. Supreme Court has expired; or (b) a final decision has been issued by the D.C. Circuit or the U.S. Supreme Court in response to any petition for rehearing or certiorari, either denying such petition or issuing a final decision.”

In their joint stipulation filed with the court today in consolidated cases beginning as “U.S. v. State of California, et al.” (2:18-cv-02660-JAM-DB), the parties noted that “although Defendants maintain that Senate Bill 822 is constitutional, and do not concede any liability, the Hobbs Act has been construed by the United States Court of Appeals for the Ninth Circuit to mean that: (1) a federal district court must presume the validity of a final FCC order until its validity has been finally determined by a federal appeals court; (2) the Hobbs Act precludes district courts from considering an affirmative defense to the extent such defense is based on a challenge to the validity of a final FCC order.”

They added that “under controlling authority in the Ninth Circuit, the Hobbs Act precludes the district court in these related actions from determining the validity of the FCC’s decision to preempt state and local net neutrality requirements, including but not limited to Senate Bill 822” and that “Plaintiffs rely extensively on the FCC Order — both in support of their substantive claims and their motions for preliminary relief — and, as a result, the decision in Mozilla Corp. v. FCC, Nos. 18-1051 et al. (D.C. Cir.), will significantly shape the scope and conduct of these related actions depending on whether the FCC Order is ultimately upheld or vacated in whole or in part.”

Proceeding with the challenge of the California law under those circumstances could be “a waste of judicial and party resources,” they said.

The California Internet Consumer Protection and Net Neutrality Act of 2018 (SB 822) signed by Gov. Brown on Sept. 30 prohibits BIAS providers from “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 California law also prohibits 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.”

In a statement today, FCC Chairman Ajit Pai said, “I am pleased that California has agreed not to enforce its onerous Internet regulations. This substantial concession reflects the strength of the case made by the United States earlier this month. It also demonstrates, contrary to the claims of the law’s supporters, that there is no urgent problem that these regulations are needed to address. Indeed, California’s agreement not to enforce these regulations will allow Californians to continue to enjoy free-data plans that have proven to be popular among consumers.”

Chairman Pai added, “The Internet is inherently an interstate information service, as the Supreme Court has recognized, which means that only the federal government can set policy in this area. A patchwork of state laws only introduces uncertainty in the broadband marketplace that will slow investment and deployment of infrastructure and hurt consumers. I am confident that the FCC’s authority to preempt such state laws will be upheld, along with our proven market-based framework for protecting Internet openness, investment, and innovation nationwide.”

In a joint statement, the trade associations challenging the California law — the U.S. Telecom Association, CTIA, NCTA, and the American Cable Association — said today, “California’s decision not to enforce its law regulating certain portions of the internet while the D.C. Circuit reviews the FCC’s 2017 Restoring Internet Freedom order is a win for consumers that will allow continued innovation and investment while these deliberations continue. Our companies support an open internet, and we urge Congress to resolve this issue by passing a national framework to protect that principle for all Americans.” —Lynn Stanton, [email protected]

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