DoJ Slaps California With Net Neutrality Suit
After California Governor Jerry Brown signed a tough network neutrality bill into law Sunday, the US Department of Justice moved ahead swiftly with a lawsuit that aims to snuff out that state-backed effort.
The lawsuit, filed by US Department of Justice with the US District Court, Eastern District of California, claims that the state's bold move "unlawfully imposes burdens on the Federal Government's deregulatory approach to the Internet."
The suit also argues that the California law (SB-822) is invalid under the Supremacy Clause, holding that it is pre-empted by federal law that takes precedence over state law, referring to the Federal Communications Commission (FCC) 's Restoring Internet Freedom order released in January. The DoJ is seeking an order that "preliminarily and permanently" enjoins enforcement of the provisions of SB-822. (See US DoJ Files Net Neutrality Suit Against California and States Challenge FCC 'Internet Freedom' Order.)
The bill just signed by Governor Brown cleared the California State Assembly in late August and was drafted to counter the FCC's order to roll back the network neutrality rules developed under previous FCC Chairman Tom Wheeler. (See FCC Nixes Net Neutrality Rules on June 11.)
California's law takes a hard stance on network neutrality with some so-called "bright line rules" that extended beyond those that were included in the FCC rules before being rolled back. In addition to banning blocking and throttling and paid prioritization, SB-822 also takes aim at paid interconnection agreements and zero-rating policies, which are used by some ISPs, including mobile carriers, to exempt certain traffic (such as music and video) from the service provider's data usage policy.
With respect to paid interconnections, those are commonplace today and include deals such as those signed between Netflix Inc. (Nasdaq: NFLX) and such ISPs as AT&T Inc. (NYSE: T), Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Verizon Communications Inc. (NYSE: VZ). The FCC had earlier declined to target zero-rating policies across the board, opting instead to look at them on a case-by-case basis. (See Netflix, TWC Sign Pay-to-Peer Deal and Netflix Adds AT&T to Pay-to-Peer List.)
The DoJ also fears that SB-822's focus on Specialized Services Provisions are so broad that they could "even apply to a provider prioritizing its co-packaged pay-TV services," an apparent reference to managed IPTV services.
In a statement, FCC Chairman Ajit Pai, who has led the FCC's effort to roll back its previous net neutrality rules, held that the Internet "is inherently an interstate information service" so "only the federal government can set policy in this area." He also argued that the prohibition on zero-rating policies could be harmful to lower-income Americans.
Last month, AT&T Chairman and CEO Randall Stephenson urged Congress to develop federal laws for network neutrality in part because it would be difficult, if not impossible, for ISPs and other Internet companies to adhere to multiple (and likely different) state laws. (See Congress Must Act on Network Neutrality, AT&T CEO Says .)
"I don't even know how companies like ours or Google or Facebook … operate in an environment like that. The need for legislation is pressing," he said then.
The American Cable Association (ACA) , a group that represents the interests of smaller, independent cable operators, supports the DoJ lawsuit. The ACA also called for Congress to step in and adopt national legislation that would codify the "three bright line rules" of no blocking, no throttling and no unreasonable paid prioritization.
"[I]f 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 President and CEO Matthew Polka said in a statement.
— Jeff Baumgartner, Senior Editor, Light Reading