DOJ and ISPs Sue to Stop California Net Neutrality Law

October 4, 2018 | by Andrew Regitsky

DOJ and ISPs Sue to Stop California Net Neutrality Law

Just minutes after Governor Jerry Brown signed California’s net neutrality bill into law Sunday night, the Department of Justice (DOJ) announced that it was suing the state, calling the law “unlawful and anti-consumer.” The lawsuit was filed with a federal district court in Sacramento, and without Congressional intervention, will almost surely be fought all the way to the Supreme Court. The law is scheduled to become effective on January 1, 2019. The DOJ suit seeks to prevent the law from taking effect.

On Wednesday the entire ISP industry, including USTelecom, the American Cable Association (ACA), the Internet and Television Association (NCTA) and CTIA (representing wireless carriers) filed a separate joint lawsuit also seeking a stay of the California law. 

As we discussed before, the California net neutrality law is the most restrictive in the country. Not only does it prohibit blocking, throttling and paid prioritization of traffic, it also prohibits such consumer-friendly offerings as “zero-rating data” service. According to several observers, the law will now serve as a model for the other 20+ states proposing their own net neutrality laws. 

For more information about the California net neutrality law, click here.

In tandem with its lawsuit, the DOJ issued the following statement:

In 1996, a bipartisan Congress decided that the Internet should remain “unfettered by Federal or State regulation.” Since 2002, the FCC has accordingly classified broadband Internet access as an “information service” that is exempt from public-utility regulations. The FCC briefly departed from this classification in a 2015 Order, which imposed restrictions on the freedom of the Internet. In 2018, the FCC returned to its prior 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. 
Attorney General Jeff Sessions added:

Under the Constitution, states do not regulate interstate commerce—the federal government does. 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.

FCC Chairman Ajit Pai issued his own statement:

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. 

Not only is California’s Internet regulation law illegal, it also hurts consumers. The law prohibits many free-data plans, which allow consumers to stream video, music, and the like exempt from any data limits. They have proven enormously popular in the marketplace, especially among lower-income Americans. But notwithstanding the consumer benefits, this state law bans them. 

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.

In a neutral court, the DOJ and ISP lawsuits would almost surely prevail. In the Restoring Internet Freedom Order, the Commission included specific language preempting states from imposing their own net neutrality laws. And as Pai was quick in noting the Eighth Circuit Court recently affirmed Federal primacy over information services. Moreover, a court that rules against the FCC would be establishing a horrible precedent where any time a state feels so moved, it can simply ignore a Federal mandate.

This case now joins the appeal of the Restoring Internet Freedom Order already under review at the DC Circuit Court. The oral argument in that case is scheduled for February 1, 2019. It is possible the California court will stay the state’s net neutrality law until the DC Circuit releases its opinion on the appeal. Regardless of whether a stay is granted, we are likely to have years of litigation ahead. What a waste of time and resources!