California's net neutrality law dodges Big Telecom bullet

Federal appeals court upholds decision not to block connection protection rules


The US Ninth Circuit Court of Appeals on Friday upheld a lower court's refusal to block California's net neutrality law (SB 822), affirming that state laws can regulate internet connectivity where federal law has gone silent.

The decision is a blow to the large internet service providers that challenged California's regulations, which prohibit network practices that discriminate against lawful applications and online activities. SB 822, for example, forbids "zero-rating" programs that exempt favored services from customer data allotments, paid prioritization, and blocking or degrading service.

In 2017, under the leadership of then-chairman Ajit Pai, the US Federal Communications Commission tossed out America's net neutrality rules, to the delight of the internet service providers that had to comply. Then in 2018, the FCC issued an order that redefined broadband internet services, treating them as "information services" under Title I of the Communications Act instead of more regulated "telecommunications services" under Title II of the Communications Act.

California lawmaker Scott Wiener (D) crafted SB 822 to implement the nixed 2015 Open Internet Order on a state level, in an effort to fill the vacuum left by the FCC's abdication. SB 822, the "California Internet Consumer Protection and Net Neutrality Act of 2018," was signed into law in September 2018 and promptly challenged.

In October 2018, a group of cable and telecom trade associations sued California to prevent SB 822 from being enforced. In February, 2021, Judge John Mendez of the United States District Court for Eastern California declined to grant the plaintiffs' request for an injunction to block the law. 

So the trade groups took their case to the Ninth Circuit Court of Appeals, which has now rejected their arguments. While federal laws can preempt state laws, the FCC's decision to reclassify broadband services has moved those services outside its authority and opened a gap that state regulators are now free to fill.

"We conclude the district court correctly denied the preliminary injunction," the appellate ruling [PDF] says. "This is because only the invocation of federal regulatory authority can preempt state regulatory authority.

The FCC no longer has the authority to regulate in the same manner that it had when these services were classified as telecommunications services

"As the D.C. Circuit held in Mozilla, by classifying broadband internet services as information services, the FCC no longer has the authority to regulate in the same manner that it had when these services were classified as telecommunications services. The agency, therefore, cannot preempt state action, like SB 822, that protects net neutrality."

The Electronic Frontier Foundation, which supported California in an amicus brief, celebrated the decision in a statement emailed to The Register.

"EFF is pleased that the Ninth Circuit has refused to bar enforcement of California's pioneering net neutrality rules, recognizing a very simple principle: the federal government can't simultaneously refuse to protect net neutrality and prevent anyone else from filling the gap," a spokesperson said.

"Californians can breathe a sigh of relief that their state will be able to do its part to ensure fair access to the internet for all, at a time when we most need it."

There's still the possibility that the plaintiffs – ACA Connects, CTIA, NCTA and USTelecom – could appeal to the US Supreme Court.

In an emailed statement, the organizations told us, "We're disappointed and will review our options. Once again, a piecemeal approach to this issue is untenable and Congress should codify national rules for an open Internet once and for all." ®


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